Transport Minister Michael Wood hints at fuel tax scrap if congestion charging introduced

There is broad support in Parliament for axing the Auckland Regional Fuel Tax of 10 cents a litre if the Government introduces congestion charging.

The Government is expected to announce next Monday that it will introduce congestion pricing in Auckland. It is not clear when the charges would be in place, but one report from Transport officials said charges of up to $3.50 a trip could be in place by 2025.

Both the National Party and Auckland Mayor Phil Goff have said that if congestion pricing is introduced it should be combined with getting rid of the regional fuel tax, which Goff said should be “phased” out.

Transport Minister Michael Wood was supportive of the idea of cutting the tax, which Labour legislated in its first term.

“If we do move forward with this scheme for Auckland we will consider those things, but I think it is probably widely accepted that it would be a significant impost to have both of those schemes in place at the same time,” Wood said.

He said the Government would only make changes if it could do so “in a way that makes people better off, not worse off”.

“We have to bear in mind the current transport system has many inequities built into it for low-income New Zealanders as well,” Wood said.

Previous reports on congestion pricing, including the Ministry of Transport’s “Congestion Question”, which forms the basis for the current proposals, warned that the primary objective of a congestion charge is to “improve network performance, not to raise additional funds from road users”.

That report said it could be “possible” to replace the regional fuel tax with a congestion charge, but said further research would be necessary.

Wood said that “all advice” on congestion pricing said that “if it was appropriate to proceed with a congestion-charging scheme it should be looked at as a demand management tool, rather than a revenue-raising tool”.

“The revenue you raise to some degree is a positive spinoff, but it is not the main purpose for moving forward with such a scheme,” Wood said.

He said the Government would give “careful consideration” on whether it should cut the regional fuel tax to implement congestion pricing, but he suggested the Government would not want to cut the overall level of revenue raised.

“We’ve got a record amount of investment going into transport both across New Zealand and in Auckland, we can’t afford to slow that down,” Wood said.

The Auckland Regional Fuel Tax is meant to help Auckland Council And transport projects in the ATAP scheme, but it has been criticised for being collected without always necessarily being spent.

National has wanted to scrap the tax since it was introduced. Leader Christopher Luxon repeated this position on Tuesday.

“We do support congestion charging – the key question is it can’t be a tax grab, so you’d want to see things like the removal of the regional fuel tax for example,” Luxon said.

“We are broadly supportive – the devil is in the detail,” Luxon said.

Congestion pricing is expected to be announced on Monday as part of the Government’s emissions reduction plan. It has been recommended in the Government’s draft emissions reduction plan, the Infrastructure Commission’s infrastructure strategy, and the recent select committee on congestion charging.

The Congestion Question proposed establishing a congestion charging cordon in central Auckland coinciding with the opening of the City Rail Link.

Vehicles would be charged as they entered and exited the city at peak times. This would be done by cameras which automatically recognised vehicle number plates to bill people who use the congestion zone.

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