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Petrol tax hike may backfire

Belinda Vernon National Transport Spokesperson

24 February 2002

Petrol tax hike may backfire

The Government's plans to impose a four cent a litre hike on petrol prices will backfire if all of the extra revenue is not spent on roading projects, says National's Transport spokesperson, Belinda Vernon.

"Government has been softening up the public for its proposed petrol tax hike by claiming it is needed to address roading network failures in Auckland and forestry regions such as the East Coast and Northland."

However, Ms Vernon warns that the country's motorists will feel ripped off if - as has been flagged - up to 40 per cent of the petrol tax increase goes into rail and public transport instead of roading.

"The public already resents the fact that the majority of petrol tax goes into the government's general coffers and not into building and maintaining roading infrastructure. New Zealanders will be justifiably angry when hit with a petrol tax increase, ostensibly to fund roading infrastructure, only to find out that a huge whack of it is not going there."

Ms Vernon says when National increased petrol tax in 1998, it also increased the proportion that went into the National Roads Fund. She says this went some way to addressing the hijacking of petrol tax that has occurred over the years.

"If hiking up petrol tax is the best this Government has come up with for solving the country's roading problems, after more than two years of thinking about it, the future under the Labour/Alliance coalition is not very bright."

Ms Vernon adds that plans to allow private sector funding of roads are also likely to be hamstrung if the Government imposes conditions and caveats, which won't enable them to deliver the pace of change everyone is hoping for.

"Opening up the opportunity for private funding, but imposing restrictions such as unrealistic timeframes on the payback period or preventing access to the Public Works Act is like sending someone into a boxing ring with their arms tied behind their back.

"This Government's roading policy is a classic case of 'one step forward, two steps backwards'," Ms Vernon concluded.

Ends

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