Auckland Fuel Tax and Fuel Tax in general

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Geektastic

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#237994 28-Jun-2018 09:57

I could not decide if this constitutes a motoring topic or a political topic so Mods can move if I opted for the wrong choice!

I was reading the Herald website today and a slightly ambiguous piece about fuel tax. What made me laugh out loud however was Phil Twyford claiming that fuel taxes would be paid more by the better off so it was all good.

"And in a startling revelation, the ministers claim that the wealthier a household is, the more it is likely to pay for petrol. They say the wealthiest 10 per cent of households will pay $7.71 per week more for petrol. Those with the lowest incomes will pay $3.64 a week more."

This is presumably because the poor cannot afford more petrol, not because the better off will pay a higher tax rate. This seemed a curious position for a Labour minister to take to justify a tax increase...!

Do we think these fairly significant increases in the cost of living (because everything will go up as a result of this) will actually result in better roads?

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#2045246 28-Jun-2018 10:16

Wealthier people are perhaps more likely to own boats/jetskis, go on road trips etc etc.

Also some of the more expensive vehicles are quite thirsty if you push them.

I don't think regional fuel taxe will improve road transport in a clearly discernible way, nor within a time frame that the public can clearly attribute to them. Also note the Act provides provision for other regions to impose fuel taxes.

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#2045264 28-Jun-2018 10:30

It is certainly a very strange thing to be saying. That's just summarising a consumption tax and saying it's great, and it's a Labour (and typically the view from many in the left) that consumption taxes are unfair because while rich spend more (and therefore contribute more in tax), that the poor end up spending a higher percentage of their income in tax.

Geektastic

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#2045267 28-Jun-2018 10:36

sbiddle:

It is certainly a very strange thing to be saying. That's just summarising a consumption tax and saying it's great, and it's a Labour (and typically the view from many in the left) that consumption taxes are unfair because while rich spend more (and therefore contribute more in tax), that the poor end up spending a higher percentage of their income in tax.

Quite so.

If you buy more of something which is taxed, you will pay more tax. Wow. Who knew?

wellygary

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#2045300 28-Jun-2018 11:22

Geektastic:

"And in a startling revelation, the ministers claim that the wealthier a household is, the more it is likely to pay for petrol. They say the wealthiest 10 per cent of households will pay $7.71 per week more for petrol. Those with the lowest incomes will pay $3.64 a week more."

His whole argument is Bollocks, its exactly the same as the "the rich pay most of the taxes, because they earn most of the income" its simple logic,

What he doesn't reveal is how much the decile groups spend on fuel in total... is the $3.64 extra a 10% increase or a doubling, likewise is the $7.71 increase a small % rise or a huge jump.

Geektastic

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#2045321 28-Jun-2018 11:39

wellygary:

Geektastic:

"And in a startling revelation, the ministers claim that the wealthier a household is, the more it is likely to pay for petrol. They say the wealthiest 10 per cent of households will pay $7.71 per week more for petrol. Those with the lowest incomes will pay $3.64 a week more."

His whole argument is Bollocks, its exactly the same as the "the rich pay most of the taxes, because they earn most of the income" its simple logic,

What he doesn't reveal is how much the decile groups spend on fuel in total... is the $3.64 extra a 10% increase or a doubling, likewise is the $7.71 increase a small % rise or a huge jump.

It also skips what I presume would be a fundamental point for someone whose politics are where his are - namely that the reason the poor spend less on fuel is not perhaps because they want to, it is because they have no spare money to spend more so they have to spend less.

So increasing the fuel cost will....yes....that's right! Mean that they will now be able to afford even less fuel...!

Fred99

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#2045351 28-Jun-2018 11:53

IMO the people hit hardest by the fuel tax:

The suburban working class family with 3 or more kids, needing something large enough to transport the family, not being able to afford a second fuel efficient car as a daily runabout, not able to afford a newer vehicle which would almost certainly be much more fuel efficient than something the average age of the NZ car fleet, probably not able to afford to live close to facilities like supermarkets, schools, work etc, and possibly with one parent working a second job in order to try to make ends meet.

Of course they could (and IMO probably should) move out of Auckland. I was in a minor regional centre last week, 2% unemployment, low crime - the place was booming. Could buy a house within walking distance of everything for a couple of hundred thousand, from what I could see a great supportive community and pretty good facilities. Yes there are downsides, but there are everywhere.

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Geektastic

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#2045355 28-Jun-2018 11:56

Fred99:

IMO the people hit hardest by the fuel tax:

The suburban working class family with 3 or more kids, needing something large enough to transport the family, not being able to afford a second fuel efficient car as a daily runabout, not able to afford a newer vehicle which would almost certainly be much more fuel efficient than something the average age of the NZ car fleet, probably not able to afford to live close to facilities like supermarkets, schools, work etc, and possibly with one parent working a second job in order to try to make ends meet.

Of course they could (and IMO probably should) move out of Auckland. I was in a minor regional centre last week, 2% unemployment, low crime - the place was booming. Could buy a house within walking distance of everything for a couple of hundred thousand, from what I could see a great supportive community and pretty good facilities. Yes there are downsides, but there are everywhere.

As far as I could tell, there were two fuel taxes - one in Auckland and one everywhere. The article was not especially clear though.

BTR

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#2045356 28-Jun-2018 11:56

1st world problems when the largest city starts paying the same price for petrol as the rest of the country........

Aredwood

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#2045794 28-Jun-2018 23:20

BTR:

1st world problems when the largest city starts paying the same price for petrol as the rest of the country........

No guarantee that this would happen. As the fuel companies are only required to pay the tax on fuel sold in Auckland. The end retail price is not regulated. So there is nothing stopping the fuel companies from leaving Auckland prices unchanged. And instead raising prices in the rest of the country to raise the required revenue to pay the tax with.

Also rich people have more options to avoid the petrol tax. For example - A rich person living in say Kingsland, and working in the Auckland CBD. If they drive, they won't use much petrol as their commute is short. They have good access to buses, trains, cycle lanes. And the short commute means that even a cheap EV such as a 1st gen Nissan Leaf will still have plenty of range for the commute. They can buy the EV with cash, and since they own their own home, they can easily get a charging point installed and have space to park it. And they can also use the free public chargers.

A poor person living in say Flat Bush, and also working in the city. Longer commuting distance means more fuel used. No cycle lanes, and even if there were, you would need to have a very high level of fitness to cycle that distance. No trains. Unlikely to be a direct bus, especially one that runs every 10 min or so. Longer distance means that they would need an EV with good range, which costs heaps more to buy, and they would have to get it on finance paying 15%+ interest. They rent their house, so can't get a charging point installed. They don't have a spare off street parking spot for the EV. Or if the current rental does - will the next rental have one? They do shift work, so often whatever public transport doesn't even run at the right times, even if it does go to the right location. And they have to pay (indirectly via rates), directly via the fuel tax and their power bill. For transport subsidies that they can't even use. But rich people can very easily use.

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#2045824 29-Jun-2018 06:34

BTR:

1st world problems when the largest city starts paying the same price for petrol as the rest of the country........

1st world problems when the rest of the country has had infrastructure underwritten by Auckland for decades. It's why we're in the mess that we're in.

tdgeek

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#2045869 29-Jun-2018 08:59

If the roads were maintained incrementally over time, we would not have a big catchup phase now. We could remove these roading levies masked as tax, and reduce roading upgrades, then people complain. We seem to want better roads and also lower funding for those roads. That doesn't work on my calculator

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#2045902 29-Jun-2018 09:49

Fred99:

IMO the people hit hardest by the fuel tax:

The suburban working class family with 3 or more kids, needing something large enough to transport the family, not being able to afford a second fuel efficient car as a daily runabout, not able to afford a newer vehicle which would almost certainly be much more fuel efficient than something the average age of the NZ car fleet, probably not able to afford to live close to facilities like supermarkets, schools, work etc, and possibly with one parent working a second job in order to try to make ends meet.

Of course they could (and IMO probably should) move out of Auckland. I was in a minor regional centre last week, 2% unemployment, low crime - the place was booming. Could buy a house within walking distance of everything for a couple of hundred thousand, from what I could see a great supportive community and pretty good facilities. Yes there are downsides, but there are everywhere.

Remember that in addition to their income they are also claiming Working for Families. From 1 July most families on this (not beneficiaries as they get nothing)they get an additional $70/week on top of their existing working for families tax break. Nothing is what it seems.

Aredwood

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#2046876 1-Jul-2018 16:20

This assumes that they actually qualify for WFF. Friends earn too much to qualify. They can't move out of Auckland due to their jobs. Still have to pay high rents. Their employers thankfully offer them flexible working hours. Which means that they don't have to pay for childcare despite having two kids. But that also mean that they can't use public transport due to the odd hours.

Paying back student loans mean that they have an equivalent tax rate of around 45%. And now they have to pay the increased fuel tax as well. Not everyone can get WFF.

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#2046980 1-Jul-2018 19:00

Gee, fancy Phil 'Hundred Thousand Houses' Twyford playing fast and loose with figures!
In the announcement, did he blame the previous regime in the first two paragraphs? I've taken to timing him, from opening his mouth to blaming the previous government. Never very long.
If the current fuel tax was only spent in the regions where it is burnt, then most South Islanders outside Christchurch and Dunedin would be driving on dirt roads.

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tdgeek

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#2047076 1-Jul-2018 22:33

Dingbatt: Gee, fancy Phil 'Hundred Thousand Houses' Twyford playing fast and loose with figures!
In the announcement, did he blame the previous regime in the first two paragraphs? I've taken to timing him, from opening his mouth to blaming the previous government. Never very long.
If the current fuel tax was only spent in the regions where it is burnt, then most South Islanders outside Christchurch and Dunedin would be driving on dirt roads.

1. https://www.stuff.co.nz/national/politics/opinion/99674132/going-going-gone-national-and-its-legacy?rm=m

The short story is that National made criticising the previous Govt, an art form. This new Govt has eventually caught on. Short memory?

"Part of that will be dismantling the National "legend", in the same way John Key and Bill English picked apart the Clark government's legacy after nine years in power.

National was ruthless in seizing any opportunity after 2008 to feed the narrative of Labour as a wasteful and reckless manager of the country's finances.

Any crisis was an opportunity.

But Labour has not been as organised in its strategy."

2. Does that also apply to the many smaller towns in the North Island? A 10,000 town in S.I. is no different to one in the N.I., or is it?

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