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Taxing Growth

28 February 2002

Additional funds for roading is welcome and long overdue, says Business NZ - but it is disappointing that only 41% of the $227 million revenue to be raised will actually go on roads.

Business NZ Chief Executive Simon Carlaw says it's also disappointing that road improvements should have to come by way of an increased petrol tax when the Government already collects hundreds of millions of dollars that are siphoned off into the Consolidated Fund.

"Importantly, petrol taxes are a very blunt instrument and have no long term sustainability as a revenue-raising option given the increasing fuel efficiency of modern vehicles.

"As well, the fuel tax increases announced today will impact most heavily on small and medium sized businesses, and on the economy as a whole.

"The Land Transport Funding Bill makes no attempt to address the most serious obstacle to improved road infrastructure - impediments caused by problems with the Resource Management Act. No amount of additional funding will help address planning hold-ups.

"The wider context of the Bill introduced today is a classic symptom of low growth and lack of resources for basic infrastructure. Effectively, the country is borrowing to invest offshore for superannuation and increasing taxes to prop up domestic infrastructure. This approach does not complement a balanced growth strategy," Mr Carlaw said.

Ends


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