27 Oct: A regional petrol tax to help fund Auckland city's transport infrastructure comes amid a global change in the air for user-pays funding for major projects, provided the benefits stack up for those footing the bill.
US President Donald Trump is reportedly toying with the idea of hiking fuel taxes as a means to fund his promised US$1 trillion of infrastructure investment, which was a key policy plank in his successful bid for the White House last year. That would end a 24-year freeze on US petrol taxes and marks "a massive shift" for user-pays funding models, says KPMG's Americas and India head of global infrastructure Stephen Beatty.
"It will send a signal to all politicians it is possible to raise charges as long as you're prepared to provide something to the people that you are charging," Beatty told Infrastructure New Zealand's building nations symposium in Wellington today. "Our credibility as public servants is not high because we aren't delivering the value we need to and we are apologising when we raise any charges for it, and so I would urge everybody in the room to turn to the new government and say don't apologise but make sure you deliver benefits at the same time."
Both major political parties made big-spending infrastructure promises in the lead-up to the September election to meet New Zealand's expanding population, which has seen a shortfall of housing drive up property prices and increase traffic congestion, while at the same time local authorities are hamstrung in their ability to pay for upgrades to municipal infrastructure.
Beatty told the conference that the big questions for policymakers to answer is funding projects, which is whether the taxpayer or users foot the bill over an extended period of time, rather than financing, which is simply where the immediate cash comes from. "It's not about financing, it's about funding. Does the base business case actually work?" he said.
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