Fuel tax law passes, more price rises

Parliament has passed the regional fuel tax legislation, just in time for 1 July implementation in Auckland. TYhisn will bump petrol prices up 11.5 cents a litre, but there are claims the real increase in the near future will be double that.

RNZ: Regional fuel tax becomes law

The government’s regional fuel tax changes have become law this evening, ahead of its planned introduction in Auckland on Sunday.

The bill passed 63-57 last night with Labour, NZ First, and Greens in voting in favour, and National and ACT opposed.

It means Aucklanders will be paying another 11.5 cents at the pump, in order to pay for major transport projects.

Transport Minister Phil Twyford told the House he was excited about the possibilities for transport infrastructure, and coming solutions to congestion, once the tax is implemented in New Zealand’s biggest and most congested city.

Mr Twyford told the House that Auckland Council would be accountable for how it uses the money.

But wait, there’s more (increases). NZH: Auckland motorists face two new petrol taxes hiking pump prices by up to 15.5c a litre

The council’s regional fuel tax of 11.5 cents a litre is due to come into effect on July 1.

Weeks later, the Government looks set to increase the fuel excise tax nationwide by between 3c a litre and 4c.

Papers released to the Herald under the Official Information Act show the Government intends to increase the fuel excise tax on September 1.

A spokesman for Twyford today said the tax is part of a draft 10-year transport plan due to finalised shortly.

Raising the excise tax happens often. Over nine years the National government raised excise tax six times, once by 2 cents and five times by 3 cents (that’s a total of 17 cents).

Petrol prices rose to near record highs recently before settling back a little.

Auckland prices look set to rise by 14.5 to 15.5 cents soon, plus GST – this will be on top of normal fluctuations.

Other local bodies are lining up to also get their regional fuel tax, but areas outside Auckland may be hit regardless as petrol suppliers often shift price increases around. Regions with less price competition tend to get whacked with higher prices.


Taxpayers’ Union tobacco tax campaign

The Taxpayers’ Union has been strongly criticising the increase in tobacco excise tax that came into effect today.

It looks a little odd to me. Why are they campaigning on an excise tax scheduled in 2012?

Why haven’t they filed a Financial Statement in since 2014?


Over the last 12 months we’ve had a number of members who smoke ask us to examine the issue of tobacco taxes.  So to coincide with today’s 10% hike in tobacco excise we’ve released a report examining the issue.

Smokers have become the political punching bag over the decade with the current Government hiking excise taxes nearly every year under the guise of health concerns and to pressure low income New Zealanders to give up the habit.

Our members who smoke often feel as though they are treated as cash cows.

“Our members who smoke often feel as though they are treated as cash cows” is a curious statement.

Our research shows that their concerns are justified, with government tobacco excise income around three times the estimated cost of smoking to our health system.

The report details the effect of tobacco excise increases, the failure of the Government to legalise the sale of healthier alternatives which would minimise harm, and the misuse of taxpayers’ money given to not-for-profits which lobby the government.

The timing of this is also curious. These increases have been set in place for some time – this is the last of four annual increases. From May 2012:

Tobacco excise rise part of wider programme

Tobacco excise taxes will increase by 10 per cent a year on 1 January in each of the next four years as part of a wider government programme to prevent young people from taking up smoking and encourage existing smokers to quit, Associate Health Minister Tariana Turia says.

This will be in addition to the annual inflation-indexed increases in tobacco excise, and follows a 40 per cent increase in excise since April 2010.

Budget 2012 also provides $20 million over the next four years for a new innovation fund, Pathway to Smoke-Free 2025, for programmes to discourage smoking uptake and help more New Zealanders give up.

The excise increases will increase the price of an average pack of 20 cigarettes to more than $20 by 2016.

The Taxpayers’ Union:

Politicians claim higher tobacco taxes are necessary to promote better health, but the Government has prevented the sale of new generation smoking alternatives such as e-cigarettes which are 95% less harmful and are the most popular smoking cessation tool used in England.

Rather than anti-tax this campaign seems more pro products.

While politicians cry crocodile tears about the harms of smoking, they are refusing to allow the sale of healthier alternatives. It appears the only reason is to protect the revenue stream from the taxes on traditional cigarettes.

That’s a very odd claim, based on nothing of substance that I can see. In fact statistics that the ‘revenue stream’ isn’t protected, the smoking rate is decreasing:

  • The current smoking rate (adults who smoke at least monthly) has fallen from 20% in 2006/07 to 17% in 2014/15.
  • The most substantial reduction in current smoking rates is for youth (those aged 15–17 years), for whom the rate has more than halved from 16% in 2006/07 to 6% in 2014/15.

Less younger people smoking means less people becoming addicted. And less people dying of smoking related illnesses.

There was an odd exchange on Twitter two days ago.

‘Stock up on cigarettes before New Year’ – only a waste of space organisation would put out a PR with such a bloody ridiculous statement.

Are you seriously suggesting that we shouldn’t remind smokers that taxes are going up on new year’s day?

No, I’m seriously suggesting you shouldn’t encourage people to stock up on cigarettes. Think about it.

The poor are the least likely to respond to tax hikes. ie. families, go without.

Fine, you could have said all of that and not bothered with the stock up comments – that was unnecessary nonsense.

Might as well just say ‘hey taxpayers, go kill yourselves’.

I can’t find the original that initiated this.

Is there really a strong enough call from smokers who are members of the Taxpayers’ Union to justify doing a report on excise taxes that were scheduled in 2012?

Who are the members of the Taxpayers’ Union?

The Executive Director and PR pusher is Jordan Williams – I wonder if he is a smoker. They also list a Campaigns Coordinator (Ben Craven) and a Research Fellow (Jim Rose).

I presume it costs a significant amount to run.

We are New Zealanders who have formed a union to stand up for hardworking New Zealand taxpayers. We represent the common interests of all taxpayers. We want to become New Zealand’s largest union.

No, they don’t represent the common interests of all taxpayers. I can’t see any claim about how many members they have, nor how many smoking members who feel like cash cows.

We are not a political party, and we don’t represent big business or special interests. When we launched all of our donations were from individuals. Joining the New Zealand Taxpayers’ Union only takes a few minutes and costs $5.

“When we launched all of our donations were from individuals” is meaningless. When they launched (after they launched) they sought members and donations.

But they also say in their Q & A:


The Taxpayers’ Union is independent and funded by individual members and supporters who are New Zealand taxpayers.  The vast majority of funding has been from private individuals.

We are of course happy to accept donations from businesses, organisations and members of the public who support our objectives and activities.

Forgive me for being a bit suspicious of what appears to look a lot like a lobbying campaign for tobacco related products.

As an incorporated society, the Taxpayers’ Union must file annual accounts with the Registrar of Incorporated Societies. 

That means we will be more transparent about our income and spending than most political parties.

They have filed annual accounts once, in September 2014.


This shows that as at 31 December 2013 they had received ‘Donations and annual subscriptions’ of $66,329.095 (the Financial Statement shows the amount exactly like that). They also show the median donation as $25 and an average donation of $520.

Their income transparency seems to be lagging. I’ve checked a number of other registered associations and unions and they have filed annual accounts this year.

The Taxpayers’ Union tobacco campaign looks quite odd to me. I think there should be more transparency, more specifics and less general waffle that sounds like product lobbying.

UPDATE: As kiwidave pointed out the safety of e-cigarettes has been questioned.

Taxpayers Union: “the Government has prevented the sale of new generation smoking alternatives such as e-cigarettes which are 95% less harmful”:

NZ Herald today: E-cigarettes safety questioned

Using e-cigarettes is no safer than smoking tobacco with nicotine, scientists warned after finding the vapour damages DNA and could cause cancer.

Researchers at the University of California created an extract from the “smoke” of e-cigarettes and used it to treat human cells in a laboratory.

The exposed cells developed DNA damage and died far sooner than untreated ones.

Nicotine-free e-cigarettes caused 50 per cent more DNA strand breaks; for those with nicotine, the damage rose three-fold in eight weeks.

Dr Jessica Wang-Rodriguez, professor of pathology at the university in San Diego, said: “Our study strongly suggests that electronic cigarettes are not as safe as their marketing makes them appear. E-cigarettes on the whole have something to do with increased cell death. Based on the evidence to date I believe they are no better than smoking.”