19 May 2013

Petrol tax increase defended

5:13 am on 19 May 2013

The Government says an increase in petrol tax will pay for roading projects throughout New Zealand, not just roads of national significance.

Legislation passed under urgency in Parliament on Saturday means petrol tax will increase by 3 cents per litre every year for the next three years.

By July 2015, the total amount of petrol tax per litre will be 59.5 cents.

Transport Minister Gerry Brownlee defended the increase, saying the reality is that a strong transport network is needed for the economy to grow.

Mr Brownlee said the excise will help fund roads that are not just roads of national significance.

The Automobile Association says the Government did not need to raise petrol tax to fund roading projects.

Spokesperson Mark Stockdale said there is an alternative: the Government could make up a shortfall in the transport fund from the eight cents in GST it collects on top of the excise tax.