Auckland Regional Fuel Tax unfair burden on low income households - Report
7 August 2018
The Independent Māori Statutory Board (the Board) says despite anticipated improvements to transport expected to come from revenue from the regional fuel tax, the Auckland Council and the Government urgently need to come up with ways to offset the fuel tax’s impact on low-income Auckland households, particularly for Māori living in the regions south and west.
The Board today released a report showing vehicle-using low-income Auckland households spend more of their income on fuel compared to higher earners, making the regional fuel tax unfair in terms of its impact on the less well-off. People on lower incomes were also more likely to run older less fuel-efficient vehicles and have fewer available public transport options at the time they needed them for travel to and from work, according to the report.
Board Chairman, David Taipari, said little or no policy consideration had been given to the impact of higher fuel prices on low-income Auckland households and he called on the Government and the Auckland Council to urgently look at ways the combined impacts of the regional fuel tax and the newly introduced national fuel levy could be offset as both were adding to Auckland’s poverty problem.
“Of serious concern to the Board is the impact of higher fuel costs on lower socio-economic groups, especially on lower income Māori families who are forced to spend more of their income on fuel. The implications have not been adequately thought through and the problem needs to be urgently addressed,” Mr Taipari said.
Mr Taipari said the Board would ask Auckland Council and the Government to set up a system to monitor and track the effects both fuel taxes were having on low-income Auckland households using Census data and household expenditure and travel surveys.
Mr Taipari said the Board commissioned report conclusively showed that lower income households pay a larger share of their income in fuel, and consequently fuel taxes, than higher income households.
“The regional fuel tax policy is regressive meaning it disproportionately impacts on lower-income households many of which are Māori and producing even more inequitable impacts when the fuel efficiency of vehicles is taken into account,” Mr Taipari said.
The report showed increases to annual fuel costs could be as much as $366 for lower income households, with an additional $452 a year if the fuel efficiency of vehicles owned by low income households is considered. Regardless of increased fuel costs, low-income families needed to fill their cars to get to and from work as local public transport options were often unsuitable, Mr Taipari said.
“The more it costs to fill the car each week the less money is available for other life essentials like food, clothing, power bills, school fees, and the like, creating further stress on whanau. This continual stress on our most vulnerable also damages self-esteem and hope, creating social and health problems that cost a phenomenal amount of money and time to rectify,” Mr Taipari said.
Mr Taipari said the report listed several options both local and central government could consider to ease the disproportionate burden the fuel cost increases will have on poorer Aucklanders. These included further increases to Working for Families, tax relief, discount cards, rates relief and specific targeted transport services.
Mr Taipari said as part of a concerted advocacy strategy, the Board would also discuss with Council Controlled Organisations like Auckland Transport, how prioritising planned for regional public transport projects, particularly those in South Auckland, could be fast-tracked allowing them to be completed sooner.
“The Board recognises that the regional fuel tax and the government’s national fuel tax increase are done deals, however, we strongly advocate for local and central government to consider the impact of these taxes on those who can least afford them, both in terms of fairness, and ways to lessen their impact,” Mr Taipari said.
Contact: Brett Solvander (027) 223 9296