New Zealand to push ahead with regional fuel tax legislation

The New Zealand government will push ahead with legislation allowing regional fuel taxes, but will not agree to a “full” tax immediately, Finance Minister Michael Cullen says. Cullen said the government remained keen to pass the bill, but any petrol tax would have to be phased in over a period of years so that the initial impact would be small on motorists. The tax is being floated as a way of partly paying for the electrification of Auckland’s rail network. “It would be quite a bad response to the prospect of oil prices remaining very high and challenges around climate change to actually be abandoning one of the major programs to deal with those issues in the Auckland area, he said. The aim was not just the electrification of the current rail network but there was also the potential over the long-term of extending the network, he said. The comments follow Energy Minister David Parker confirming that the government is considering delaying the implementation of parts of the emissions trading scheme (ETS) to cushion its impact on petrol prices. (May 5, 2008)