Rural businesses are confused and concerned about how the Auckland fuel tax coming in this Sunday will work for them, given their vehicles don't drive on the road.
Confusion reigns in the business sector over how the fuel tax system, which will come into effect this Sunday, will work for them. Photo: RNZ / Alexander Robertson
The legislation passed last night to allow the Auckland Council to impose an 11.5 cents per litre tax on fuel, including GST.
The likes of Horticulture New Zealand, which represents growers, farmers and market gardeners, had expected an exemption in the law for off-road vehicles.
Many of these businesses rely on fuel to power their equipment - but most of the time that equipment is not used on the roads.
However, Horticulture New Zealand chief executive Mike Chapman said an exemption had been completely left out in favour of a rebate, and the administration cost of that was going to be a real blow for these businesses.
"There's this complicated rebate system which we don't know much about, that's going to come into place on Sunday," Mr Chapman said.
"[You then] have to wait three months before you can even claim the rebate you don't know how to claim for. So you're going to lose three months worth of money, you get no interest for it, and to put this rebate system in our large members are saying they'll have to employ an extra person.
"So we're talking $50,000-60,000 a year to comply with a fuel tax for off-road vehicles. That's just completely wrong."
The Transport Ministry said the plan was to use a rebate system similar to the existing fuel excise refund entitlement - but for diesel as well as petrol.
That would cover the majority of off-road vehicles.
Transport Minister Phil Twyford said he was listening to complaints from business who he agreed were having to use an archaic rebate system - and he promised change.
"It's too narrow, it's not really fit for the modern world. So Cabinet has asked me to do a review of the rebate scheme both for petrol excise and road user charges - as well as the regional fuel tax," Mr Twyford said.
He said he hoped to modernise it and bring it to Parliament within 12 months.
However, Gull general manager Dave Bodger said that was simply not enough detail about the rebate scheme.
"We haven't even seen a draft. I don't know whether it's good regulation or bad, I hope it's good, but how's it going to work?" he asked.
"These people are our customers, and they're going to come to us and ask us questions and we're not going to be able to answer them. It's not a great place to be.
"Again, this is symptomatic of hurried legislation."
The National Party said it proposed exemptions for off-road vehicles throughout the legislative process.
Transport spokesperson Jami-Lee Ross said the minister rejected the proposals at every turn.
"If the minister really believed that off-road usage shouldn't have to pay an Auckland regional fuel tax he should have either come up with a rebate scheme up front, before Sunday, or he should have accepted our amendments to the legislation," Mr Ross said.
He said it showed that the law had been rushed through with little thought when even the likes of recreational boaties were not exempt from paying the tax.
