New Government fuel tax will be higher when GST is added at the pump

April 2018: PM Jacinda Ardern and Hon Phil Twyford discuss the government's draft 10-year land transport plan, focusing on road safety, congestion reduction and public transport access.

Transport Minister Phil Twyford has admitted the Government's proposed fuel tax of 9 cents to 12c a litre does not include GST, which will be added on at the petrol pump.

Motorists will pay between 10.35c and 13.8c a litre when GST is added to the tax, which Prime Minister Jacinda Ardern, Twyford, Associate Transport Minister Julie Anne Genter and Regional Development Minister Shane Jones unveiled on Tuesday.

The Government tax is on top of a regional fuel tax of 11.5c a litre, including GST, planned by Auckland Council.

Twyford's office confirmed to the Herald today that the Government's planned further fuel tax hikes to be phased in over the next three years, and the announcement on Tuesday, did not include GST.

The combined regional and Government fuel tax mean Auckland motorists will pay between 21.85c and 25.3c a litre for petrol after three years.

Twyford said raising petrol by 3c a litre would cost the driver of an average car filling up once a fortnight about 75c a week, or $39 a year.

Raising petrol by 25.3c will cost Auckland drivers $329 a year, or $6.33 a week using Twyford's formula.

The fuel tax is part of the Government's draft transport plan that includes cutting more than $5 billion from state highways and channelling the money into public transport such as light rail, urban cycleways and safety improvements on urban and regional roads in a bid to lower the road toll.

Big-ticket items include about $4 billion over the next 10 years for light rail, or modern trams, in Auckland from the CBD to the airport and the CBD to Westgate in West Auckland.

Twyford is encouraging the public to have a say on the Government's proposal to raise the fuel tax excise, saying it continues the track of recent years of charges going up by 2c or 3c.

"What is being consulted on is a 3-4 cent per litre fuel excise duty increase which would come into effect on September 1, 2018. Then another 3-4 cents per litre increase on September 1, 2019 and a further 3-4 cents per litre increase on September 1, 2020.

"GST applies broadly to a range of goods and services, for example local authority rates and fuel excise duties," Twyford said.

People can make a submission via the Ministry of Transport website at www.transport.govt.nz.