High Tax at the pump, but for what?

For every litre of regular old 91 at the petrol station, the Government clips the ticket for around about $1.29. That might not sound like a lot for one litre, but it builds up quickly.
For an average family with a Toyota Corolla, filling up a 50-litre tank ends up costing you over $60 just in taxes. This is comparable when it comes to diesel for utes, vans and trucking as well. It all stacks up over a year and ends up stinging everyday Kiwis in the pocket. It’s especially bad now, following three years of annual tax hikes and a new Regional Fuel Tax in Auckland.
Now, the beauty of the fuel tax system is that, in theory, all the money we pay in fuel tax goes into building and maintaining the roads we drive our cars and trucks on. So, there’s a fairness to what we pay. But two things have changed recently that make this a little harder to swallow.
First, the current Government has been doing a lot less investing in roading. We have seen a whole bunch of roads rescoped, delayed, or cancelled to make room for a behemoth Auckland light rail project that looks like it might begin construction sometime this decade if we are very lucky. That’s a lot of tax to pay for little return right now.
More immediately for many families though, they will be feeling the sting of increased costs as the cost of living goes up across the board under this Government. Inflation has been hitting record levels recently while the Government has been looking for more ways to pile on costs and compliance.
The wrongly named Clean Car Discount and Clean Car Standard kick in on April Fool’s Day 2022, and will add between $4000 to $8000 to the price of every brand new low-emissions petrol and diesel vehicle, and in a knock on effect, will add around $1500 to used vehicles from 2023.
The problem, then, with the Government’s approach to piling on taxes is that it creates a price floor where, even if costs were to come down, they can only come down so far while taxes stay up.
That’s the opposition stuff. The good news is that there is a way through this, ACT has a plan. We proposed back in May our Battlers Budget for Middle New Zealand that would deliver tax relief to Kiwis who need a break.
ACT would make two changes to our tax system to battle the cost of living. First, we would deliver a middle-class tax cut by abolishing the 30 percent tax rate on income between $48,000 and $70,000. This would deliver up to $2000 a year back to working New Zealanders to help them get ahead of the cost of living.
Second, we would abolish the new 39 percent envy tax introduced by Labour. We need more people who want to bring their skills and invest in New Zealand, not less. The more productive and high skilled we get as a country, the more we see those economic benefits flow through the economy and help us all.

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