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Fuel tax hike proposed to fund roading shortfall

Published: 8:25PM Thursday November 15, 2012 Source: ONE News

The New Zealand Transport Association (NZTA) is facing a $1.7 billion shortfall for roading projects over the next ten years.

The NZTA has told the Government it needs to raise fuel tax by 3 cents a litre for the next three years to fix the problem.

"It's the first time we've heard the number, but we're not surprised, in fact we've been telling the Government that was likely anyway," said Andy Forster from the New Zealand Traffic Institute.

"They've been predicting a significant amount of traffic growth and therefore significant revenue growth, [but] the traffic growth hasn't been happening."

In an October briefing obtained by ONE News, the NZTA says it already has a deficit of more than $200 million, while revenue over the next 10 years will be almost a billion dollars less than projected and Christchurch road repairs alone will cost over half a billion dollars.

The NZTA says it is left with some options - for instance, it could borrow the money, or raise fuel taxes by three cents a year for the next three years.

Mike Noon from the Automobile Association says small price increases would probably be manageable.

"As long as they're done in a sensible way, so it's not like, ten cents a litre, it's two or three cents a litre and it's staggered, that's probably going to be all right for average motorists," he says.

Alternatively, the agency could put off some of its plans for so-called roads of national significance - by as much as five years in the case of Wellington's much anticipated and delayed alternative motorway route - while the controversial highway north of Auckland could be held back by two years.

Transport Minister Gerry Brownlee says the construction of roads of national significance was an election promise and will be delivered.

"The first of the roads of national significance - the Victoria Park tunnel up in Auckland - came in under budget and on time so as you get those sort of results, that financing will change," he said.