The creeping cost of indirect taxes

In 1999, indirect taxes netted the Government $11.7 billion. In the year to June 2006, $15 billion in indirect taxes is forecast to be collected.

That doesn't include ACC and other levies, which are forecast to add another $3.2 billion.

Over the last five years under Labour many indirect taxes - with the important exception of GST - have increased.

New levies and charges have also been introduced, with one significant tax - the carbon charge - due to take effect on April 1, 2007 and cost households an estimated $200 a year.

National has compiled a list of about 30 increases in indirect taxes, levies and fees since Labour came to power.

They range from new levies on such things as export education and export/import cargoes, to rises in driver licence fees and cattle slaughtering levies.

Petrol excise - recovered in the pump price - has increased three times to cover roading projects and ACC injury costs.

But while National waves round its list and paints Labour as "tax and spend", it has few plans for changes.

Finance spokesman John Key confirmed that the only indirect tax to go under a National Government would be the carbon tax, and there would be no change to petrol excise imposed by Labour. There would also be no changes to GST, despite his leader, Don Brash, suggesting last week that changes could be looked at.

"We can do something about the overall tax burden through the personal tax regime," said Mr Key.

Only Act promises to reverse any of Labour's additional petrol tax, so it appears arguments that the money is needed to fix the country's infrastructure are being heeded.

But that hasn't stopped National trying to instil the message that Labour wastes "your money", including petrol tax.

Its billboards allege that under Labour, petrol tax goes on "hip-hop tours, welfare bribes, prisoner compo, twilight golf, singalong courses, taniwha, more bureaucrats, NCEA inquires, Treasury lawyers".

Under National it goes on "roads".

Transport Minister Pete Hodgson has been firing his own salvos, claiming in a speech last year that Dr Brash costed National's road policy in terms of axed medical operations.

In the speech, Dr Brash said it was worth remembering that $650 million - the surplus collected in petrol tax over and above what goes on roads - was equivalent "to about 4c in the dollar on the corporate tax rate, or 40,000 hip operations and 65,000 cataract operations".

"Don Brash has costed and spelt out just who will pay for National's roading policy - right down to the last person to have their operation cancelled," Mr Hodgson said. Finance Minister Michael Cullen says the only indirect tax the Government has introduced is the carbon tax, which aims to cut emissions, not raise revenue.

He says the Government has promised to return all income collected through the carbon charge to businesses through the Budget's business tax package.

But the tax will still be passed on to consumers through higher electricity and petrol prices.

The carbon tax on every tonne of carbon emissions will be introduced as New Zealand meets its obligations under the Kyoto Protocol to reduce greenhouse gases.

National argues that the tax harms New Zealand's export competitiveness.

It is expected to collect $88 million in 2007-08, rising to $356 million the year after.

But compared with the overall indirect tax take - projected to be more than $20 billion in the 2008-09 year - that is small change.

More than half of the $20 billion will be taken in GST, and no politician is currently willing to consider doing anything about that tax.

HIDDEN COSTS

Petrol tax

* March 1, 2002: Increased 4.7c a litre for transport projects.
* April 1, 2005: Increased 5.625c a litre for transport projects.
* July 1, 2003: ACC levy on petrol rose 2.3c to 5.08c per litre.

Diesel road-user charges

* April 1, 2002: Increased 30 per cent for vehicles under four tonnes, for transport projects.
* April 1, 2005: Rose 24 per cent for vehicles under five tonnes, for transport projects.

Alcohol

* May 7, 2003: "Sherry Tax" increased duty on beverages with between 14 and 23 per cent alcohol content. Tobacco tax
* May 10, 2000: Increased average cost of a packet of cigarettes from $7.20 to $8.20. Carbon tax
* April 1, 2007: Carbon tax will add 1c per unit of electricity and 4c to a litre of petrol, with estimated household cost per year of $200.