Auckland Council's controversial 11.5 cents a litre fuel tax has been approved by councillors at a budget meeting today.
The regional fuel tax will cost the average Auckland motorist an extra $145 a year.
The Automobile Association (AA) warns of a potential backlash if consumers don't see that extra money put to use fast to fix the city's worsening traffic woes.
Meanwhile a north/south divide emerged yesterday amid fears the tax would hit the poor hardest.
Auckland councillors representing South Auckland voiced concerns about the impact of the 11.5c a litre price hike on their constituents.
Councillors voted yesterday by 13 votes to 7 to introduce the tax on July 1, which petrol companies said would be immediately passed on to motorists.
Further increases will follow when the Government increases the national fuel excise by 3-4c a litre later this year, the first of three annual increases.
"The council and the Government are asking for a lot from Aucklander motorists," the AA's Auckland transport spokesman Barney Irvine said.
"The onus is now on the council and the Government to start delivering results."
Irvine and his AA colleague Mark Stockdale calculated the regional fuel tax would add an extra $126 for motorists in a medium-sized vehicle travelling 14,000km a year using 1262 litres of fuel.
GST, which boosts the increase from 10c a litre to 11.5c, means the annual petrol cost estimate climbs to $145 for the average user.
Those driving cars with larger engines would be hit harder by the tax, as would those forced to commute longer distances.
Irvine warned the public mood will turn "really dark" if Auckland motorists didn't see any tangible benefits from the regional fuel tax year's end.
"I don't think anyone's very happy about having to pay more at the pump but I think most Aucklanders would look at this and say, 'Okay, if it's going to help improve the transport system I'm prepared to pay for it, albeit grudgingly'." Big projects would obviously take longer, but Irvine wanted to see small improvements like smart traffic lights and adjustable median barriers implemented within six months. The AA predicted petrol companies would "spread" the impact of the tax by raising prices elsewhere in New Zealand to soften the impact in Auckland, the country's largest fuel market. Further concerns emerged yesterday about the effect of the tax on Auckland's poorest residents.
Despite a decisive number of councillors voting in favour of the tax, the issue caused angst among four councillors representing socially deprived suburbs in South Auckland.
Mayor Phil Goff said rejecting the tax was not an option because it would rip the heart out of a joint council and government transport programme worth $28 billion over 10 years primarily focused on public transport.
That is not fair and I will not vote for it
Manukau councillor Alf Filipaina voted for the tax but said his people could not see the benefits.
"Public transport is still an issue and not an opportunity for our people because it is not going to the jobs they have to."
His colleague in Manukau, Efeso Collins, and Manurewa-Papakura councillors Daniel Newman and John Walker voted against the tax.
Collins said he understood the council wanted to progress transport issues, but when people were "below zero this is taking food off people's tables".
Newman - the only councillor to support higher rates to fund transport - described the tax as a "wholesale redistribution of wealth from some of our poorest blue collar workers who have the least transport choice to fund much of the infrastructure to serve those people who enjoy the greatest wealth".
"That is not fair and I will not vote for it," he said.
Goff told the Herald a package from the Government last year provided $75 a week for low income families and the Automobile Association had estimated the cost of the fuel tax at about $2.30 a week.
Auckland councillor John Walker.
He said much of the money from the fuel tax was going into public transport that would help people who could not afford to run cars, saying the tax would result in an extra $4.3 billion over 10 years that would benefit low income communities.
The tax will raise $1.5b, but with government subsidies and development contributions it takes the total amount of money available for transport to $4.3b.
