KEY POINTS:
Auckland's transport agency wants the Government to add inflation adjustments to a regional fuel tax of 10c a litre intended to pay for projects such as rail electrification.
That would be in addition to GST of 12.5 per cent likely to be levied on top of any new fuel tax.
The Auckland Regional Transport Authority told a parliamentary select committee hearing in Wellington yesterday that possible reductions in petrol and diesel sales as oil became scarcer and engine technology more fuel efficient meant relying on tax revenue for loan repayments would carry a financial risk for ratepayers.
That risk could be mitigated partly by indexing a proposed regional fuel tax to inflation, it said in a submission on the Land Transport Management Amendment Bill.
Although fuel excise is adjusted annually for inflation, the authority said the new legislation excluded that provision from the proposed new tax. The bill would allow the Auckland Regional Council to claim 5c a litre from fuel sales for transport projects, and the Government to raise a further 5c for the same purpose.
About 8.3c of the combined amount is expected to be allocated to rail electrification and other public transport projects, leaving 2.5c for new roads such as the western motorway bypass.
Regional councils elsewhere will be allowed to raise 10c a litre, although the legislation includes a 5c limit on how much they could spend on roads.
The new tax is expected to raise about $120 million a year from Auckland motorists, giving the Government and regional council collateral for hefty loans for the $1 billion-plus electrification project and other transport needs.
But the transport authority said its regional council parent estimated that, without inflation adjustments, the potential revenue stream from its 5c share would be reduced by $150 million in net present value terms over 30 years.
The authority, which wants to start ordering electric trains this year, also expressed concern about a "significant" delay to the project if responsibility for the fuel tax was vested in the Auckland Regional Land Transport Committee.
It said the responsibility should rest with the regional council, given strenuous efforts by that body and itself to prepare a case for extra funding for electrification, and the committee's limited involvement in that exercise.
The transport committee accepted in a submission last week that the council should be given that responsibility, subject to consulting the committee.
It also called on the Government to allocate GST on the new fuel tax to Auckland transport projects.
