John MacDonald: Fuel tax increase needs to be back on the table

Yesterday, Treasury released a whole lot of documents showing the advice it gave the Government during the early days of the fuel crisis.

One of the key things was a recommendation not to cut fuel taxes or road user charges, because it didn’t think it was needed.

The Government went with the advice. But, you might also remember, that the Government went a step further than that and said that the fuel tax increase - due to kick in at the start of next year - was unlikely.

Which I thought was a bad move. And I still do.

In the reports I’ve seen about yesterday’s document dump, there’s nothing about any Treasury advice on next year’s increase.

But there’s two reasons for that: 1. This advice was to help the Government deal with things in-the-moment. And 2. When Nicola Willis and Chris Bishop poured cold water on the fuel tax increase, that was just politics.

Because, as you’ll remember, there were all sorts of people crying out for help.

The Government went ahead with the support for low-to-middle income earners. But that was it.

And it knew it wouldn’t be a good look if it said no to everyone else wanting help and, in the same breath, said it was also going ahead with next year’s fuel tax increase.

But that was a bad move by the Government. My view on that hasn’t changed. And that’s why I think the Government needs to bite the bullet and press on with the fuel tax increase early next year. As planned.

There’ll be plenty of people who will say that they couldn’t afford fuel taxes increasing.

But I don’t think the country can afford not to increase them. And I’m not the only one.

Deputy Prime Minister David Seymour thinks the same.

He says the Government shouldn’t do anything to limit its revenue from fuel taxes because of the long-term consequences for the Government’s finances.

And what he’s talking about there, is limiting or restricting the amount of money the Government gets in to pay for road maintenance and construction.

It also helps pay for things like public transport.

The Finance Minister even acknowledged this negative impact when she said a few months back that the fuel tax increase was unlikely to go ahead.

So, in its heart of hearts, the Government knows that increasing fuel taxes is a no-brainer. Which it is.

The Government knows it. We know it. So there’s only one thing for it to do.

It needs to stop being so antsy and it needs to commit to putting the fuel taxes up, as planned, early next year.

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Morning's Podcast with John McDonald
from Newstalk ZB.

Speaker 2 (00:13):
Yesterday, Treasury released a whole lot of documents showing the
advice that gave the government during the early days of
the fuel crisis, and one of the key things was
a recommendation not to cut fuel taxes or road user
charges because Treasury didn't think it was needed. Now the
government went with the advice, but you might also remember

(00:35):
that the government went a step further than that and
said that the fuel tax increase due to kick in
at the start of next year was also unlikely to happen,
which I thought was a bad move and I still
do now. In the reports I've seen about yesterday's document dump,
as they call it, there's nothing about any Treasury advice

(00:58):
on next year's fuel tax increase. But there are two
reasons for that. One this advice was to help the
government deal with things the moment, and two, when Nikola
Willis and Chris Bishop both poured cold water on the
fuel tax increase, that was just politics because as you
will remember, it wasn't that long ago there were all

(01:19):
sorts of people crying up for help, weren't there? I mean,
the government went ahead with the support for low to
middle income earners, but that was it and it knew,
didn't it, that it would not be a good look
of it, said no everyone else s wining help, and
in the same breath said it was also going to
go ahead with next year's fuel tax increase. Not a

(01:42):
good look, not good on the optics front, as they say.
But that was a bad move by the government saying that,
and my view on that hasn't changed, and that's why
I think the government needs to bite the bullet and
press on with the fuel tax increase early next year
is planned, or as was planned before things took off

(02:04):
in the Middle East the prices coming down, press on
with it now. There will be plenty of people who
will say that they couldn't afford fuel taxes increasing. Of
course people will say that, but I don't think the
country can afford not to increase them. And I'm not
the only one. I was accused yesterday. If you are listening,

(02:26):
you will know I was accused yesterday of dismissing everything
Deputy Prime Minister David Seymour says. But that is not
true because I agree with him on this fuel tax business.
He says the government shouldn't be doing anything to limit
its revenue from fuel taxes because of the long term
consequences for the government's finances. And what he's talking about
there is limiting or restricting the amount of money the

(02:49):
government gets in the door to pay for the likes
of road maintenance and construction. This is the money from
fuel taxes, which also helped pay for things like public transport,
and the Finance Minister even acknowledged this negative impact when
she said a few months back that the fuel tax
increase was unlikely to go ahead. So, in it's hard

(03:12):
of hearts, the Finance Minister, of the Transport Minister, the
Deputy Prime Minister, the whole government. In it's hard of hearts,
the whole government knows that increasing fuel taxes is a
no brainer, because that's what it is. It's a no brainer.
The government knows it, We know it. So there's only

(03:34):
one thing for it to do. It needs to stop
being so antsy and it needs to commit to putting
the fuel taxes up as planned early next year.

Speaker 1 (03:43):
Catbory Mornings. For more from Caterbory Mornings with John McDonald,
listen live to news talks, it'd be christ Church from
nine am weekdays, or follow the podcast on iHeartRadio