24 New boss for Synlait Vol 17 No 26, July 2, 2018
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Fuel tax hits Neal Wallace neal.wallace@nzx.com
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NEW Auckland regional fuel tax costing some individual vegetable growers up to $100,000 a year has the industry fuming, labelling its introduction chaotic and rushed. Horticulture NZ chief executive Mike Chapman is also bemused why KiwiRail is exempt from the tax but offroad vehicles used by growers, horticulturists and farmers who will have to seek a tax rebate are not. Auckland fuel consumers started paying an extra 11.5c a litre plus GST fuel tax yesterday to fund new city roads and to upgrade public transport but its blanket application and lack of a simple rebate system for offroad use affecting 441 growers has them angry and frustrated. Dacey Balle, a director of Balle Bros, one of the country’s largest produce growers, said half the two million litres of fuel they use a year in Auckland is off road and a further 500,000 litres is used by company vehicles travelling outside the city. In the haste to introduce the new tax the council and Government had failed to develop a simple system for claiming rebates for the offroad use of vehicles or fuel-using machinery. A Transport Agency spokesman said growers should keep accurate
records of fuel used and where it was used to help them claim a rebate. Balle believes growers will get diesel from outside Auckland where appropriate but some smaller operators might just wear the cost. Balle Bros business straddles Auckland Council and Waikato Regional Council territories, with farms in Pukekohe, Waikato, central North Island and Canterbury. Auckland road users face a double blow. From October 1 the Government excise tax for all fuel users increases 3.5c a litre or just over 4c a litre including GST. Chapman said growers, having traversed a convoluted paper-trail application system he described as archaic, might have to wait three months to receive rebates – the result of the Government not consulting those who have to use it. Transport Minister Phil Twyford has also described it as an archaic system and promised to review it in 12 months but Chapman said that work should have been done before the tax was introduced. Such was the rush to make it law he could not get a copy of the legislation on Wednesday – the day after it was passed by Parliament and four days before it came into force. He described the whole process as bad law making, saying the Government has commissions looking at various topics including the country’s taxation system yet has imposed a new tax.
WHAMMY: Dacey Balle faces extra fuel tax bills on the 2.5 million litres a year his firm uses. Photo: Peter Payne
Chapman said the primary sector should have been treated the same as KiwiRail because tractors and machinery spend little time on roads.
“What the Government does not understand is that the rural community, farms, vegetable gardens and orchards are large industrial sites that deserve to
be exempt like KiwiRail.” Chapman warned the remaining 11 regional councils and five unitary councils are all interested in fuel taxes. He has requested a meeting with Twyford to continue to lobby for an exemption or some other relief for his members. Potatoes NZ vice-chairman and Pukekohe grower Bharat Bhana said two-thirds of the nearly million litres of fuel he uses a year is for machinery behind the farmgate. The rush to get the regional fuel tax in place means Bhana has not been able developed a system so he can claim fuel rebates but expects to have to employ extra staff to process it. Bhana believes growers will initially absorb the higher production costs but eventually they will be passed to consumers, reflecting the reality of Auckland’s higher fuel prices. He fully expects that emboldened by its adoption in Auckland, other councils will seek to impose their own regional fuel taxes. “I guarantee that if it works the whole country will jump on the bandwagon.” Bhana also has reservations the extra income will alleviate Auckland’s transport problems, saying congested roads will not be fixed by more public transport. His company delivers produce to a depot 40km away in the city but congestion restricts the driver to two deliveries a day.
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