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Petrol Tax Increase Fails to Address Road Problems

Media Release: 1 April 2005

AA says Petrol Tax Increase Fails to Address
National Roading Infrastructure Problems

Following the Minister of Transport, Pete Hodgson's, address at the opening of the AA's Annual Conference this morning in Napier, AA President Graeme Nind has spoken out against the lack of Government money invested in the country's roading infrastructure.

"This year the Conference is focusing on Safer Drivers in Safer Cars on Safer Roads as part of the AA's national Safer Roads Project, however there is an unfortunate irony that we address this very issue on the same day as New Zealand motorists are hit with a five cent-plus petrol tax increase," said Mr Nind.

"It also comes the day after the Government released a report on Costs and Charges that claims NZ motorists are not paying enough to use our roads. The report fails to take into account the benefits of road infrastructure investment.

"We know from other reports and overseas experience that better, safer, more efficient roads are not a cost to government because they increase productivity, transport efficiency and importantly, reduce road trauma which currently costs this country $3.3 billion per annum.

"Today's five cent increase in the cost of fuel was endorsed in principal by the AA provided it was to be spent on road infrastructure and at a time when petrol was just over one dollar per litre. The increase has taken petrol prices to around $1.30 per litre and there are now indications from the Draft Transit 10 Year Plan that much of the additional increase could be spent on Traffic Demand Management, not directly on roads.

"It is essential we work toward having a safe, efficient and accessible transport system that can meet the present and future needs of our society, and we would urge the Government to take into account the benefits of investing in better roads," said Mr Nind.


The New Zealand Automobile Association is an incorporated society with over one million members. It represents the interests of road users who collectively pay over $2 billion in taxes each year through fuels excise, road user charges and GST.

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