Fuel tax gets massive thumbs down in survey

Main points
• Only 14 percent of respondents support a proposed Government fuel tax
• More than half are happy with the amount of income tax they currently pay
• 44 percent support a capital gains or a wealth tax

A poll out today shows New Zealanders are overwhelmingly opposed to the Government’s fuel tax aimed at helping pay for safer and more efficient roads, strongly preferring that the money come from existing budgets.

However, fewer than 10 percent disagreed with the tax’s objective, according to an Ipsos poll, conducted on behalf of Chartered Accountants Australia and New Zealand (CA ANZ) ahead of Thursday’s Budget. Respondents were asked how safer and more efficient roads should be funded.

Just 14 percent were happy to pay a proposed fuel tax of 9 cents to 12c a litre.

Nearly half of the respondents (49.6 percent) wanted the money to come from the current land transport budget, even if that meant spending less on other roading projects.

More than a third (36 percent) thought road improvements should be funded from general taxation while a quarter backed congestion charges, regional fuel taxes and tolls.

CA ANZ Tax Lead for New Zealand, John Cuthbertson says Kiwis’ lack of enthusiasm for paying a fuel tax “should come as no surprise.

“We’ve had targeted excise tax on fuel for a long time and historically excess funds have been diverted to the consolidated fund.

“There is therefore a perception that we’re being asked to pay twice. People will also have different views as to how the excise tax should be allocated.”

Income tax

The exclusive poll also asked about satisfaction with current income tax levels and what taxes should be increased or introduced.

Respondents were questioned about how much income tax they believed they should pay, considering both how much income tax they paid at the moment, and the Government’s current and future spending needs.

More than half (59 percent) were happy with the amount they paid currently; 34 percent wanted to pay less and 7 percent were willing to pay more.

But the survey showed strong, but not overwhelming support, among New Zealanders for increases in other taxes or the introduction of new taxes, something Cuthbertson described as a “nimby effect – no more taxes in my backyard”.

Top of the list was the introduction of a capital gains tax or a wealth tax with 43.7 percent support, followed by increases to excise taxes such as alcohol, tobacco, fuel (31.1 percent), the company tax rate (30.4 percent) and environmental taxes (24.3 percent).

At the bottom was a lift in GST (4.3 percent support). [Note: percentages sum to greater than 100%, because of multiple selections given by each respondent.]

Cuthbertson said that once the family home is taken out of any Capital Gains Tax regime – signaled as a no go zone by the Government in its terms of reference to the Tax Working Group – “most people would not be significantly affected.

“We are also at the limits of what we can squeeze out of some existing taxes.

“Our company tax rate, at 28 percent, is already above the OECD average and there are signs you can only go so far with some excise taxes such as tobacco, and it seems judging by the results of our survey, fuel tax.”

On the income tax front, Cuthbertson said there was also not a lot of room to move with 40.2 percent of all taxes collected coming from individuals and a small percentage of the relatively wealthy paying most of that.

Provincial Growth Fund

A question was also asked to gauge the level of support for the Government’s $1 billion per annum Provincial Growth Fund which aims to boost economic growth in the regions.

Support for regional development was strong with 45.2 percent agreeing with the fund and 21 percent opposed – results which were consistent across metropolitan areas and regional towns and rural areas.
A third of respondents were not sure.

Strongest support came from Northland and Manawatu/Wanganui (both 64 percent) and Hawke’s Bay (61 percent).

Full survey results below.

About Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand is a professional body comprised of over 117,000 diverse, talented and financially astute members who utilise their skills every day to make a difference for businesses the world over.
Members are known for their professional integrity, principled judgment, financial discipline and a forward-looking approach to business which contributes to the prosperity of our nations.
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Full results
Q1. The Government wants to spend more money to make New Zealand roads safer and increase “access to opportunities and markets”. How should this be funded?
• From general taxation 36.05%
• By an increase in fuel tax 13.76%
• From the current land transport budget with less money spent on other projects 49.61%
• Other (for example congestion charges, regional fuel taxes or tolls) 25.02%
• Disagree with the Government objectives 9.20%
Q2. Considering how much income tax you personally pay at the moment, and the Government’s current and future spending needs, do you believe you should pay?
• More income tax 7.22%
• Less income tax 34.03%
• The same income tax 58.76%
Q3. Are there any other taxes you believe should be increased (or introduced)?
• Company tax 30.39%
• GST 4.32%
• Capital gains / wealth taxes 43.74%
• Environmental taxes 24.30%
• Excise taxes (e.g. on alcohol, tobacco, fuel) 31.12%
• None of the above 28.7%
Q4. The Government has announced a $1 billion per annum Provincial Growth Fund to boost economic growth in regions such as Northland, Tairāwhiti-East Coast, Hawke’s Bay and Manawatū-Whanganui and the West Coast of the South Island. Do you agree with this expenditure?
• Yes 45.18%
• No 20.96%
• Not Sure 33.87%
Q5. The Government has re-commenced making contributions to the NZ Super Fund to put money aside for its future NZ Super liabilities. Should this be done:
• Even if it increases the government’s deficit 30.35%
• Once the Government finances can afford it 52.70%
• Not at all 3.33%
• Don’t know - 13.63%

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