27 February
PR 50/04

Stop Fiddling At Edges

Federated Farmers of New Zealand (Inc) is astonished that the government is to peg fuel excise and road user charges to inflation, but refuses to cut the huge amount of transport-related taxes it siphons into the consolidated fund.

Federated Farmers was responding to today’s announcement by the Minister of Finance that the proportion of excise going to fund land transport will be indexed to inflation. Only half of total excise is used to fund land transport, with the remainder used for general government spending unrelated to transport.

"If the Government was genuinely interested in investing in growth, it would take decisive action to facilitate that growth – especially at a time when the productive sector is struggling due to the high New Zealand dollar," said Hugh Ritchie, a National Board member of Federated Farmers.

Federated Farmers calls on the government to dramatically reduce the $650 million it siphons off motorists into the Crown Account.

"This money should be used to avoid future increases in fuel tax, reduce the significant burden placed on farmers who are forced to make large inequitable payments for roads via local body rates, and to build a first-world roading network. This can all be easily done with current funds collected from road users," Mr Ritchie said.

"The Minister of Finance’s statement that transport funding will be put on a 'more secure' funding basis is a joke. The answer lies with making some long overdue, bold, but logical, decisions about transport funding. It is time to stop fiddling at the edges," Mr Ritchie said.

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