Auckland Fuel Levy an Attack on the Poor

Solutions to traffic should never have to include depriving low income families of their ability to move around or put food on the table. more

Bernard Spragg - New Zealand TR class locomotive
28 June 2018

Auckland’s chronically underfunded public transport infrastructure has been on the political agenda for years now. For the past nine years, under the previous National Government, both the Labour and Green parties consistently spoke against expensive motorway projects and advocated for these funds to go towards improving busways, cycleways and building light rail alongside major suburbs. Not only would these transport projects be cheaper, they would go further in reducing traffic, sustaining our growing population and reducing carbon emissions. Alongside these arguments we were often presented idyllic rendered pictures of young professionals riding on protected bike lanes, alongside medium density modern houses and abundant greenery.

With a change of Government, the debate on whether we need better public transport seemed to have finally settled. Since then a flurry of transport projects have been announced by the Labour-led Government. The much needed public transport projects will cost billions of dollars, and the Government has announced an increase in the fuel tax of around 10 cents a litre in order to fund it, on top of the 11.5 cents per litre regional fuel levy that Aucklanders will pay from July 1 2018.

It was no surprise that immediately following the fuel tax announcement right wing commentators slammed the Government for, in their words, introducing a new tax. The debate then became around whether the fuel tax was a new tax or not, since the Government had promised not to introduce any new tax for the remainder of their term. It is worth noting that the previous National Government raised the fuel tax several times over the nine years they were in power. Prime Minister Jacinda Ardern defended the decision by claiming that the fuel tax was not a new tax, and that the only way to improve public transport is to accept the need for an increase in fuel prices.

A false dichotomy started appearing around the debate of the fuel tax. Your level of support for the fuel tax was immediately linked to your support for public transport. If you were critical of the fuel tax, you were immediately assumed to have no regard for the environment and to prefer the inefficient motorway projects of the last Government over better public transport.

What was missing from the public transport debate was the consideration of the geographical inequities that exist within Auckland and the cost a fuel tax, new or not, would have on low-income families. Fuel taxes by their nature hit low-income families hardest. A fuel tax is considered a “regressive tax” because it imposes a greater burden relative to resources on the poor than on the rich. A low income family, living in a public transport deprived area and dependent on an old vehicle to get around will be paying a higher proportion of their income towards fuel compared to a family living in an area that already enjoys a greater degree of public transport infrastructure and proximity to schools and workplaces.

Auckland is a sprawling city with clear geographical inequities in terms of infrastructure and income. The further you get from the city centre, median incomes drastically drop, and the presence of cycleways and busways become an even rarer sight. Economist Sam Warburton pointed out that in Auckland, families with older or fuel inefficient vehicles would be spending almost twice a year more as a result of the fuel tax than those people with hybrids or fuel efficient vehicles. These geographical inequities are the product of decades of aggressive gentrification that have pushed Māori, Pasifika and other migrant communities from the central suburbs into the South. The beautifully rendered pictures of young professionals cycling that accompanied the Government’s medium density housing projects often exclusively portray higher income neighbourhoods such as Grey Lynn and Mount Eden. Meanwhile, communities in South Auckland happen to be the ones that would benefit the most from increased access to public transport and investment. While these communities wait for the public transport projects to finish, some which could take several years, they are faced with increased costs of living. In the face of our worst inequality crisis since World War II, for families already struggling to feed their kids, a fuel tax is literally taking food off their tables.

The insistence by the Government to tie in public transport infrastructure projects to a fuel tax was a deliberate move. It came about because of their self-imposed inability to introduce new taxes during their first Government term, and their commitment to the budget responsibility rules. In their pursuit to be branded fiscally responsible by commentators from the right, the government left themselves little leeway to implement imaginative and progressive ways of funding infrastructure projects. Instead of looking at new and well-researched taxes which would not only help fund infrastructure but redistribute wealth in society, the Government had to look at existing taxes it could tweak. The Government could have looked at implementing a wealth tax or a tax on speculative transactions. Some of these taxes are becoming mainstream political demands in countries such as the UK. These taxes would have had little to no effect on the vast majority of citizens, while collecting billions from those who already have more than enough.

While the argument for needing to move away from a fossil fuel and vehicle dependent society remains, the path towards achieving this should not include measures that are punitive towards our poorest. Government must provide alternatives to cars and fossil fuels by building the necessary infrastructure and ensuring that access to public transport is financially accessible and equitable.

Public transport is ultimately about connectedness, and how we plan this infrastructure must bring all of our communities on board. People in South Auckland and other public transport deprived neighbourhoods deserve a Government that is brave enough to explore all available options to fund public transport, instead of recycling the failed strategies of past Governments.

The fuel tax is an unfortunate vestige of previous Governments that is neither creative nor fair. We can and should aspire for both better public transport and equitable ways of funding it. Solutions to traffic should never have to include depriving low income families of their ability to move around or put food on the table.

A fuel tax is not the only way for people to have access to better public transport infrastructure. Progressive council members such as Efeso Collins have already laid out a grassroots viewpoint on this. The Labour led government has an opportunity to bring communities on board to ensure we all benefit from these projects. In order to do so, though, the Labour Party and its Government partners will have to re-evaluate the Budget Responsibility Rules, as well as tax established wealth, in order to meet the costs of these important projects without burdening the poor.


Ricardo Menendez March is a Coordinator of Auckland Action Against Poverty.