KEY POINTS:
The Cabinet has confirmed that all tax gathered from petrol and other fuel will be spent on transport.
Transport Minister Annette King said today that full "hypothecation" would start in July 2008.
"This decision ensures that funds collected from road transport users will be used to fund activities which benefit those same users, whether the activities concern roading or public transport," she said.
The announcement was first made in the Budget but was confirmed by Cabinet this week.
Ms King, speaking at a conference in Christchurch today, said that in the 2009-10 year an estimated extra $35 million above what would have been provided under current funding would be provided.
"Road users have been complaining for years about the lack of full hypothecation," she said.
The Government thought it was "important to commit to the principle of full hypothecation from now on".
- NZHERALD STAFF
