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New Petrol Tax Is Economic Sabotage

The Government's $227 million Land Transport package is an election year bribe but at what price to the economy, says Neil Barton, Federated Farmers' Transport spokesman.

"The Federation recognises the need to address Auckland's congestion problems but by simply throwing more money at the problem fails to address the fundamental flaws with the way we organise and fund our roads," said Mr Barton.

"Taxation is a blunt instrument that will not adequately address Auckland's transport problems and will have significant implications for the wider economy. The increased cost of petrol will be passed onto consumers with the likelihood of the Reserve Bank raising interest rates in response.

"Once again the government see motorists as an easily target for raising extra funds. $600 million of the current petrol tax take is already siphoned off into the Governments coffers. Motorists are rightly angered that they will pay even more into a system that is fundamentally flawed.

"Only 50% of the revenue from this new fuel tax will actually go into roading, the balance diverted to fund projects to appease the Greens, such as the $3million to promote walking and cycling. Once again the Government has seen petrol tax as an easy means of funding pet projects that will not benefit New Zealand's transport infrastructure.

"The Government is threatening New Zealand's economic growth by squandering motorist's money on short-sighted transport solutions. Federated Farmers calls for comprehensive long term national solutions, to minimise the economic damage that this fuel tax will create.

"A new system of managing and funding our roads, including alternative pricing regimes such as congestion pricing and the ability of road authorities to borrow would enable New Zealand's roading problems to be addressed at a lower cost to current motorists.

"Ad hoc solutions to solve long term infrastructure problems will ultimately stifle the very economic growth the Government seeks to achieve."

ENDS


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