Farmers say no to diesel tax

6 May 2009

Farmers say no to diesel tax

The National-led Government should swiftly abandon any suggestion of a new tax on diesel, says Donald Aubrey, Federated Farmers transport spokesperson.

Mr Aubrey was commenting on the report of a review into road user charges, which was released today by the Minister of Transport, Hon Steven Joyce MP.

The report puts forward two options for revenue collection. ‘Option A’ is an enhanced road user charges system for all vehicles. While ‘Option B’ is to introduce a diesel tax, plus a system of road user charges for heavy vehicles. The report states a preference for Option A.

“Given the choice, Federated Farmers supports Option A. We agree with the road user charges review that Option B is far less sustainable going forward and would impose significant costs on off-road diesel users,” says Mr Aubrey.

“A diesel tax would require a refund system for off-road use and, if it is anything like the petrol refund system, it would cause a compliance nightmare.

“Overall, about 36 percent of diesel is used off-road. However, the farming sector uses about 91 percent of its diesel off-road. Just imagine the costly and time consuming rigmarole that farmers and other big off-road diesel users would have to go through to claim back any tax on diesel used off-road.

“Mr Joyce and his colleagues made the right call a few weeks ago when they ditched the previous Government’s poorly conceived regional fuel tax. One of the reasons cited for this was its application to diesel and the need to avoid expensive compliance costs.

“Shifting the compliance burden onto the primary sector is simply not fair. Agriculture is one of the few sectors in New Zealand showing economic growth and a diesel tax would surely snuff out any fragile recovery.

“The Federation is still considering the other findings and recommendations contained in the 130 page report. But we agree that improvements need to be made to the road user charges system to reduce compliance and administration costs.

“In fact, an enhanced road user charges system would provide an ideal platform for the adoption of electronic road pricing based on a pay-as-you-use principle. Because of the ever-improving fuel efficiency of vehicles, fuel taxes will not work in the future.

“The Government will respond to the report in June, but in the meantime we want an early commitment that any diesel tax is a dead duck,” concluded Mr Aubrey.

ENDS

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