Labour’s fuel tax is a case of GST all over again

by Daphna Whitmore

I’m a big fan of rail and will bore anyone who will listen to me about the joy of no longer owning a car in Auckland. I walk five  minutes from home to a train station and travel happily free from the nightmare that is Auckland gridlock.  Auckland as a city for humans needs more electric trains and light rail.

Labour’s plan for transport in Auckland has just been announced and has unashamedly been lifted from the pages of Greater Auckland (formerly TransportBlog). The people from Greater Auckland have done a huge amount of research and have been putting the case every day since 2015 for a world class public transport system in Auckland. It is good to see their ideas being adopted.

What is not great is that Labour will introduce a regional fuel tax to raise money for the programme. This flat tax will mean more indirect taxation, and is inherently anti-working class. Again Labour’s fake concern for the poor is on display.

Auckland’s gridlock is said to cost $1.9b a year in lost productivity. That is a loss for businesses. For the workers stuck in traffic it is a loss in precious time and a loss of enjoyment of life. Labour will lift the financial loss from businesses and have it borne by the people in cars. 

For the working poor, earning minimum wage rates, on precarious hours this tax will cause real hardship. To pay 10 cents or 20 cents more per litre for fuel will be a big percentage of their income gone. For the well-off adding $10 or $20 more to fill the tank will barely be noticed.

Auckland is expensive to live in, and housing costs have pushed the poor to the outer most suburbs. They travel greater distances than the well-off in the inner suburbs. That means the poor will be paying a much bigger share of the fuel tax as they drive greater distances every day. Their older cars are less fuel efficient than the late model cars driven by the well-off, so again the poor will pay more. Low paid workers, with insecure hours are often holding down two or three jobs, and they will be paying more as they go from one job to another.

The poor work all sorts of shifts outside the hours that public transport operates. They don’t have many options to use trains or buses as Auckland does not yet have a network that reaches most parts of the city. The well-off in the inner suburbs have much better public transport options and tend to work daytime hours when public transport is operating.

How telling that Labour opted as its first choice to make the poorest pay. In 2017 the top ten parasites on the Rich List are collectively worth $25 billion. That is $2b more than last year. What about a levy on the Rich Listers? Labour these days doesn’t even come up with faintly social-democratic programmes like tax the rich, or levy the ultra-rich. Instead the poor can wear the cost.

This is no surprise, after all Ardern has signaled loudly that Labour is a friend of the establishment: “We absolutely maintain that economic credibility is key in this election campaign. Whether we like it or not people have a view on Labour and economic credibility. I would of course counter that we have a strong economic record. But that is why we produced the Budget Responsibility Rules and that is why we’ll stick to them.”labour's legacy

Indeed, the ‘strong economic record’ includes Rogernomics  from which the working class has still not recovered.  Then there was the Clark government that ran big budget surpluses, while not increasing social welfare benefits, so those at the bottom stayed there.  Top of the list of Labour’s strong economic record would have to be indirect tax increases – like GST introduced by Labour.  They love indirect taxation just as much as their Act Party brethren. Meanwhile National promises improved public transport in Auckland with no additional tax.  Once again, they are moderately to the left of Labour.

The fuel tax is a case of GST all over again, where Labour gets to introduce a tax on the poor that National probably could not have got away with.

One comment

  1. People often forget that Labour introduced GST. Most of the GST we pay today is tanks to Labour, because they also increased it.

    This latest Labour plan to introduce more indriect taxation would have been cirticised on the left if done by National. Instead, we had a load of liberal-left types falling over each other to be with Ardern when she made the announcement.

Comments are closed.