Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ regional fuel tax comes as global tide turns

NZ regional fuel tax comes as global tide turns on user-pays infrastructure funding

By Paul McBeth

Oct. 27 (BusinessDesk) - A regional petrol tax to help fund Auckland city's transport infrastructure comes amid a global change in the air for user-pays funding for major projects, provided the benefits stack up for those footing the bill.

US President Donald Trump is reportedly toying with the idea of hiking fuel taxes as a means to fund his promised US$1 trillion of infrastructure investment, which was a key policy plank in his successful bid for the White House last year. That would end a 24-year freeze on US petrol taxes and marks "a massive shift" for user-pays funding models, says KPMG's Americas and India head of global infrastructure Stephen Beatty.

"It will send a signal to all politicians it is possible to raise charges as long as you're prepared to provide something to the people that you are charging," Beatty told Infrastructure New Zealand's building nations symposium in Wellington today. "Our credibility as public servants is not high because we aren't delivering the value we need to and we are apologising when we raise any charges for it, and so I would urge everybody in the room to turn to the new government and say don't apologise but make sure you deliver benefits at the same time."

Both major political parties made big-spending infrastructure promises in the lead-up to the September election to meet New Zealand's expanding population, which has seen a shortfall of housing drive up property prices and increase traffic congestion, while at the same time local authorities are hamstrung in their ability to pay for upgrades to municipal infrastructure.

Beatty told the conference that the big questions for policymakers to answer is funding projects, which is whether the taxpayer or users foot the bill over an extended period of time, rather than financing, which is simply where the immediate cash comes from. "It's not about financing, it's about funding. Does the base business case actually work?" he said.

That means the project has to have a sound business case that strongly links the benefits to the people paying for it, he said.

One way to change that is to look at projects as assets, rather than liabilities, in that they create value and aren't just "things to be funded and obligations we've got to fulfill," he said.

KPMG New Zealand's Jesse Phillips told the conference that local authorities, in particular, had limited options in funding municipal infrastructure and new tools are needed to put the deep pools of capital available to pay for that work.

"We need to be smarter about how we fund our infrastructure and this is particularly true now we have had a change of government," he said.

The lack of local government funding options was touched on during a panel session at the conference, where there was general agreement councils needed to have access to a wider tool-kit.

During that session, Bell Gully partner Hugh Kettle told the conference he was optimistic the new government will continue to use public-private partnerships to deliver "asset heavy deals" with the Labour party having already "come out in support of transport PPPs in the future.

HRL Morrison & Co executive director Steven Proctor paid tribute to the New Zealand Transport Agency in selling its projects to the world, which means "they get a better outcome" and was "great procurement."


© Scoop Media

Business Headlines | Sci-Tech Headlines


Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>


Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>


Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>


MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>


NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>


Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>