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Auckland transport chiefs are easing back the throttle on plans to impose a special regional fuel tax of 5c a litre from January to pay for electric trains and improved bus and ferry services.
They are now having to contemplate a far gentler regime, starting at 1c a litre in July next year.
Even that is subject to the passage of controversial legislation due to be reported back to Parliament this month.
Disclosing the compromise yesterday, Auckland Regional Council chairman Mike Lee said it was in recognition of the pain being faced by motorists by successive rises in fuel prices ahead of a range of new imposts.
But while insisting the council was motivated by concern at the impact of an extra fuel tax on "ordinary motorists and households" in the region, he acknowledged it had been in close consultation with the Government.
He emphasised the tax had been the Government's idea in the first place for closing a $700 million funding gap between regional resources and the cost of providing electric trains and other infrastructure needed to double public transport patronage in Auckland by 2016.
Prime Minister Helen Clark said yesterday an immediate 5c levy was not something the Government was prepared to allow.
She added later that the Government had "made that plain to Auckland and I understand they are working now on a phasing which would see a much-reduced amount asked for in the first year of operation".
"I'm making it plain that any suggestion of five cents being levied by Auckland next year is just not going to happen."
Her declaration came on the same day Finance Minister Michael Cullen said the Government intended spending "hundreds of millions" of dollars upgrading the country's rail rolling stock to make the most of its buy-back of Toll's rail and ferry operations for $665 million.
But Mr Lee played down any perceived contradiction between the two statements, saying he remained confident the Auckland Regional Transport Authority would be able to start ordering electric trains by the end of this year for delivery in time for the 2011 Rugby World Cup.
He said a phased-in fuel tax, starting at 1c a litre next July and possibly being followed by 2c a year after that, would still allow his council to borrow enough money for a fleet of electric trains, estimated to cost just under $500 million.
Because officials were still re-calculating budget figures, he said he was unable to comment on the potential impact of the ease-back on bus and ferry improvements.
He said if it turned out that electric trains were unaffordable under a gradual tax regime, he was confident of Government funding support in some other way.
Despite motorists' pain at the pumps, he said a regional fuel tax had gained support in submissions yet to be considered by his council, by a majority of 96 to 34.
National's transport spokesman, Maurice Williamson, said last week that his party was also committed to providing Auckland with electric trains despite its reservations about a regional fuel tax.
Dr Cullen said yesterday that although such a tax had to be phased in to minimise the impact on motorists and household budgets, the Government would be unable to finance Auckland's electrification without it.
"It would be quite a bad response to the prospect of oil prices remaining very high and the challenges around climate change to be abandoning one of the major programmes that deal with those issues in the Auckland area."
