The AA has called on the Government to immediately lift the five cent roads levy off the price of fuel to give New Zealand families some relief from high petrol prices.

The call follows the Government announcement of a record surplus of more than $7 billion.

AA Director of Public Affairs, George Fairbairn said today that all road users are seeing their disposable income reduced by record high fuel prices. He said as a consequence of these high prices the Government’s GST take was going up and up.

Mr. Fairbairn said the AA questioned the introduction of the 5 cent level in March, which was when petrol prices started to rise. At the time the Minister of Customs stated “petrol prices were now stabilizing somewhat so it was prudent to avoid delaying the increase”.

“As all road users, and in fact all New Zealanders know, this has not been the case, with pump prices increasing almost weekly. The result is that the GST portion on every litre of petrol is now at 15.99cents. And of that amount, 5.75 cents is GST charged on the excise taxes and levies being collected from fuel – a very clear example of a tax on a tax,” he said.

“In March we recommended to the Government that the 5 cents additional tax should be deferred until oil prices stabilized because of the serious consequences it would have on every family’s disposable income.

Every household in New Zealand is feeling the pinch from higher petrol prices, which include the 5 cent levy and GST. With the size of the current surplus and its expected growth over the next few years, it should be deferred to be reconsidered if / when petrol prices fall.

“The current surplus also means there is funding available to ensure immediate roading construction is not delayed if the levy is dropped”.

For more information contact

George Fairbairn, Public Affairs Director
T. +64 4 931 9984
M. +64 21 279 5249
E. gfairbairn@aa.co.nz
W. www.aa.co.nz/media

The New Zealand Automobile Association is an incorporated society with over one million members. It represents the interests of road users who collectively pay over $2 billion in taxes each year through fuels excise, road user charges and GST.