Kerikeri petrol prices on Monday. A petrol tax, in its impact on working people, is little different to GST. It's an added weekly expense if you have no choice but to use a car to get to work, says Vaughan Gunson. Photo / File
Kerikeri petrol prices on Monday. A petrol tax, in its impact on working people, is little different to GST. It's an added weekly expense if you have no choice but to use a car to get to work, says Vaughan Gunson. Photo / File
No New Zealand government, this one or the next, is going to be able to stop petrol prices going up.
Peak oil may have slipped from the news pages after the oil price fell back from its 2008 high of $US147 per barrel (it's currently $US76), but that didn't change the underlying reality.
Most of the easy oil (the cream you could say) has been located and extracted. What's left, outside of a handful of countries, is lower quality and more expensive to get at. Because it's deep under the seafloor, dispersed with other minerals and gases, or locked up in the tar sands of Alberta, Canada.
There are other factors involved, for sure. The oil companies probably are scamming us. And the NZ dollar dropping in value against the US dollar for reasons best known to currency speculators isn't helping.
Prime Minister Jacinda Ardern, with Energy Minister Megan Woods, announcing on Monday the government will prioritise the passing of the commerce amendment bill, as she is concerned with the rise cost of petrol. Photo / File
But there are inescapable price pressures due to rising costs of getting oil out of the ground, and then refined and transported to petrol stations across the globe.
Over the coming decades, there'll be more price spikes, followed by temporary slumps (mainly because high oil prices causes the oil-dependent global economy to tank). That all said, what should the Government be doing in response? My answer may surprise. GST should come off petrol.
As much as we desperately need to fund affordable public transport options, I don't support taxes that impact on low and middle-income people unfairly.
I've advocated in the past for GST to be removed from food. I led a nationwide campaign that gathered 40,000 signatures and was presented to Parliament in 2011.
To tax necessities, like food and petrol, when capital gains on property and other financial investments aren't taxed is an undeniable injustice.
When GST was first introduced in 1987, it was accompanied by tax cuts for the richest New Zealanders. The same thing when National lifted GST to 15 per cent in 2010, more tax cuts for those who least needed it.
Paying less tax allowed an already well-to-do class of New Zealanders to increase their wealth. GST is the cornerstone of a tax system that favours those who have the means to invest, rather than having to spend all their wages payday to payday.
A petrol tax, in its immediate impact on working people, is little different to GST. It's an added weekly expense if you have no choice but to use a car to get to work.
If there's no carrot (affordable and accessible public transport), then the stick (tax on petrol) is going to hurt and alienate people whose budget won't allow them to go out and buy an electric car tomorrow.
I support the aims of Labour, NZ First, and especially the Greens, around public transport, but they've got to fund it by increasing taxes on those who can most afford it, not on people already struggling.
The Government would be better borrowing to pay for the necessary public transport infrastructure now, then increasing taxes on petrol, once realistic choices are in place.
If Labour and the Greens want the votes of working people, and not have National pick up support from a backlash against rising living costs, then they need to present a convincing vision of tax reform to go with their goals for reducing carbon emissions.
■ Vaughan Gunson is a writer and poet interested in social justice and big issues facing the planet.
