The Government has approved a regional petrol and diesel levy for Auckland, starting at 2 cents a litre. It will rise to almost 10c per litre by July 2011.
The tax will pay for a new highway to the Whangaparaoa Peninsula and the electrification of the suburban rail network and was sought by Auckland Regional Council.
The Government says the levy will also go towards improving ferry terminals and integrating the ticketing system for public transport.
The tax will begin at 2c per litre from next July, rising to 5c in 2010 and to almost 10c by July 2011.
Auckland Regional Council chairman Mike Lee says the announcement marks a fantastic day for the region and arrangements are already under way to ensure that the rail project gets off the ground as quickly as possible.
National leader John Key says if his party came to power after the election it would have reservations about hitting people in the back pocket more than is necessary.
Mr Key says National plans to take a step back and evaluate what the money is being spent on.
However, he says the party is pleased with the inclusion of the new highway to the Whangaparaoa Peninsula.
The Green Party is considering launching a judicial review of that particular project, saying it is not consistent with the Regional Land Transport Strategy.