Parliament has passed the law opening the way for the Auckland regional fuel tax to kick in from Sunday and for other regions to apply for the tax from 2021.

The Regional Fuel Tax Amendment Bill passed its final stage after strong opposition from the National Party which has promised to repeal it if it gets back into Government.

It means Auckland Council can charge motorists a further 11.5 cents a litre levy from Sunday in a bid to raise $4.3 billion over 10 years to help pay for projects such as light rail to the airport, public transport and roading.

From September, motorists nationwide also face further yearly increases of 3-4 cents a litre once the Government completes consultation on its transport plan.


Speaking in Parliament, Transport Minister Phil Twyford said it would mean $4.3 billion of extra funding for Auckland's transport, of which $1.5 billion would come from the fuel tax itself.

He criticised the National Party's plan to repeal the tax, saying it had left a $9 billion shortfall in Auckland's transport plan and many of its projects were unfunded.

"Take this regional fuel tax away and Auckland would be back in the position of having empty promises of projects and no money to pay for them."

National's Transport spokesman Jami-Lee Ross said there was little support for the tax in Auckland and much of the funding would go on Labour's plan for light rail – "yesterday's technology."

He said it would have a disproportionate effect on low-income people living in South Auckland that Labour claimed to represent.

"They will be the ones hardest hit by this regional fuel tax. They also won't see any benefits. They won't see any trams going past their doors. They won't see anything in the way of transport efficiency that the minister claims is necessary and will exist."

He warned motorists in other regions that while much of the focus has been on Auckland, their time was coming once the Government's self-imposed ban on further regional fuel taxes lifted after 2020.

National's economic development spokesman Paul Goldsmith said the tax would add to the cost of business and to consumers as business passed on the extra fuel costs.


"It's going to be coming in a few days time and every courier pack, every truck, every concrete truck, all these things, every gallon of milk that's carried to the supermarket, everything that is transported physically has to be paid for in extra fuel prices."

Regional Development Minister Shane Jones said the National MPs' claims were "scaremongering and half-baked truths."

"There is no way that Auckland can unlock its potential unless is can move goods and services and people around."

He said the Government was also working on a rebates system for some and named the vegetable growers around Pukekohe as those likely to benefit.

"So I say to the potato growers, onion growers, not only will I look forward to defending your elite soils but there will be an efficient process to ensure that people who feel that too much of the fuel that they're purchasing with this impost they cannot claim back through a robust rebate system."

Twyford said the law contained measures to ensure Auckland Council was accountable for how it spent the money, including Crown oversight of the spending, controls on the use of revenue and ongoing public reporting.


Councils in several other regions, including Hamilton, have shown an interest in being able to apply a levy but Twyford has ruled out allowing any more until after the 2020 election.

He said Auckland was not the only region where there was a need for greater investment, but he intended to stick to his plan.

"I hear the calls from other councils around this country for greater investment, but for this term of Parliament the regional fuel tax will be limited to Auckland alone. That's what we campaigned on and that's what this Government will deliver."

Jones said a robust process would be followed before any further regional taxes were applied.