Garth George: New petrol tax a rort: it won't do what it's supposed to

The ministers in the Government must think we are all stupid. The "reasons" they give for slapping another 5c a litre tax (plus GST) on petrol are not reasons at all. They are excuses, and specious ones at that.

Both Customs Minister Rick Barker and Finance Minister Michael Cullen have been at pains to try to convince us that this is not a new tax, it is simply an adjustment of an existing one.

Which is downright dissembling. It is a new tax because it is specifically devoted to funding "better roads" to the tune of $2.4 billion over the next 10 years and it brings to just a tad less than 50 per cent the tax component of a litre of fuel.

And this from a Government that is right now sitting on a surplus of at least three times that much. Think about that next time you unscrew the gas cap, put in the nozzle and watch the cents and dollars reel off at an almost unreadable speed.

This is a rort and a rip-off by an Administration which has lost all sense of proportion.

And the irony is that it won't do a hell of a lot for our roading system, which is suffering from decades of neglect while much of the petrol tax - which was introduced solely to pay for roads - has been siphoned off for other things.

Even if that $2.4 billion was made available for roading right now, it would barely make a dent in the amount of work that needs to be done to bring our roads up to 21st-century standard.

By the time that money is spent, over 10 years, our traffic will have increased and our roads will have deteriorated to an extent that we will still be at least 10 years behind the times.

What staggers me is that a Government facing an election would even dream of imposing such a heavy burden on the electorate.

Times have certainly changed from the days when a 2c tax increase on a packet of cigarettes and a 1c increase on a glass of beer cost the Labour Party the Treasury benches, and it didn't reclaim them for donkeys' years.

The Prime Minister and others blithely tell us that the average cost will be about $1.60 a week. Do they not understand that for tens of thousands of people that $1.60 means they will have to go without something else?

And what of the flow-on effects? In a nation so heavily dependent on motor transport for its business and industry and commerce, a fuel price rise must lead eventually to increases in the price of almost everything we buy, including food, and put pressure on mortgage interest rates.

Factor in stiff increases in electricity and gas prices and one has to ask how those on limited incomes or inadequate benefits are going to cope, considering that they can barely make ends meet now?

The one glimmer of hope in this whole sickening business is that this latest example of arrogant Government thievery will give the unions an even stronger bargaining point in their push for a minimum 5 per cent pay rise.

Not that they needed it, for even before the petrol tax increase they had more than enough evidence that the nation's wage and salary earners are slipping further and further down in terms of rewards for their labour and that it's long past time someone broke the finger that's been blocking the trickle-down tap.

If I were the union bosses, I'd increase the claim to a minimum of 10 per cent, which would more closely approximate the loss of discretionary income wage and salary earners have suffered over the past couple of decades and particularly in those years when we have had what is called a "booming economy".

"There's no gain without pain," the politicians and businessmen used to tell us with monotonous regularity.

Well there are hundreds of thousands of Kiwis who have put up with the pain for a long time now and who are still waiting to see any gain.

The only people who seem to have gained from our economic revolution have been the directors, top executives and shareholders of the big companies which hoist ever-increasing big-percentage annual profits, the Government with its ballooning tax take and the politicians and bureaucrats with their ever-fattening salaries and perks.

CTU president Ross Wilson summed it up when he said this week: "Workers have been patient but that patience is running out. By being tight and greedy many employers are forcing greater militancy in their workforces and unions are ready to harness that anger and push for a fairer share."

He might have added that the depredations of a tax-and-spend Government haven't helped, either, and that it might be a good idea to combine the demand for better wages with a demand for cuts in income tax or, perhaps, in GST.

I only hope that this time the union leaders, who have taken long enough to get off their lazy backsides, will stick to their guns and refuse point blank to accept anything less than a 5 per cent wage increase for all the workers they represent.

I just wonder, though, whether the timing of the 5c petrol tax increase isn't a clandestine move on the part of the Labour Cabinet to give their union mates a leg up at the expense of business and thus take the pressure off demands for tax cuts.

I certainly wouldn't put it past them.