Government-commissioned survey suggests replacing fuel tax with wealth tax - and people love it

A Government-commissioned paper into replacing petrol taxes and road user charges has thrown up some politically awkward suggestions: wealth taxes, pollution levies, and charging malls and airports.

The reason for this awkwardness is that the Government has ruled out nearly all of these new taxes to various extents - and the Opposition doesn’t want to implement them either.

More awkward still is that the research paper shows that those new taxes, even the wealth tax, were widely supported by people questioned - although the sample used for the survey is small (436) and is not representative of the wider population like a poll, making it less useful as a measure of what the country thinks.

Researchers noted the group sampled leaned towards cycling advocates.

A spokesperson for the Ministry of Transport said that these revenue tools were not suggested by the ministry. The wealth tax tool was suggested by a participant in the survey.

“The Ministry is not yet at the stage of proposing options or ‘tools’ that can be used to collect revenue,” the spokesperson said.

A spokesperson for Transport Minister Michael Wood referred questions back to the ministry.

National finance spokeswoman Nicola Willis said it was wasteful to spend public money researching things the Government had ruled out.

“How loosey-goosey have contracting arrangements got that public money is being used to poll people on a wealth tax that the Government promised it wouldn’t be implementing,” Willis said.

“You’ve got to ask, what went wrong here. Either they got the ‘wink, wink, nudge nudge from public officials’ who thought that there was appetite for a range of new taxes - or they’ve gone off on a new foray and if that is the case, public officials should be asking for their money back,” she said.

The December 2022 paper came from researchers at the University of Auckland and was released to the Herald under the Official Information Act. It was commissioned by the Ministry of Transport as part of a long-running Government programme focused on what should replace fuel taxes and road user charges as the main source of funding for roading.

The Ministry of Transport and Waka Kotahi - NZTA have both warned that transport funding will drive up as people drive less and use EVs.

Beginning under the previous National government, officials looked at possible revenue systems to replace fuel taxes and road user charges.That work accelerated under this Government as transport revenue eroded.

The Auckland University paper used a process called Pol.is. This is a new method of testing what people think about certain issues. It begins by asking people to agree or disagree with various statements. It later broadens out, allowing those people to submit statements of their own.

The researchers were able to separate respondents into three groups: A, B, and C.

Group A was younger, tended to live in cities, and included cyclists and public transport users; Group B was age diverse and had the lowest proportion of public transport users, but tended to walk a lot; Group C was the oldest of the groups and had the highest proportion of car users.

People were asked what the road transport revenue system should be for.

Ninety-four per cent of respondents agreed that road user charges should “reflect the damage that large vehicles do to the roads, with heavier vehicles paying a proportionate share”.

Ninety-two per cent of people wanted to increase “urban density to make public transport and active forms (walking and cycling) of transport more affordable and attractive”.

When it comes to funding, the most popular form of revenue was to use “innovative mechanisms such as congestion charges and pollution pricing to encourage people out of cars and into other forms of environmentally sustainable transport” which had the backing of 88 per cent of people.

Other ideas like raising revenue through parking charges, congestion charging and enforcement, or charging traffic-generating businesses like malls, airports and stadiums, or pollution levies received support between 77-87 per cent.

The statement: “Introduce a wealth tax, to make the ultra-rich pay their fair share & fund public/active transport” was supported by 65 per cent of respondents.

Dr Anne Bardsley, one of the report’s authors, said that at the beginning of the research it was “quite focused on specific options on the future revenue system”.

Bardsley said they pulled back from this and opted for “a much higher level question” that mainly looked at “what people think is fair”.

Bardsley said the Ministry of Transport was open-minded about what revenue options were consulted on.

“We came up with the phrase who should pay for what - they wanted to know really what people think is a fair funding model, but we have to know what people want to be paying for,” Bardsley said.

Bardsley said that the sample was self-selecting and was led by stakeholders.

“In the beginning the ministry was interested in stakeholder groups,” she said.

The group that was involved in the Pol.is skewed towards groups like cycling advocates.

“We would like to test it on a much wider sample of people. It was just an initial ‘how do we frame the question kind of test’”.

“We did have quite a heavy lean towards cycling advocates,” Bardsley said.

“We got a lot a lot of repeated sorts of statements coming in so it did feel like there was a big lean towards cycling infrastructure and fairness for cyclists,” she said.

“That was a bit more strongly represented in that Pol.is than what we’re seeing from the general public,” she said.

Bardsley said the idea behind this research was to look at where people’s views lay, and where consensus could be found.

“It does allow for an argument to be made with the goal of trying - if you’re providing the rationale for a statement - for people to agree,” Bardsley said.

“We’re just looking at where the consensus groups align or don’t,” she said.