Summarised by Centrist
The government has replaced the 12-cent-a-litre fuel excise increase due on 1 January 2027, with a series of smaller rises beginning in 2028.
Finance Minister Nicola Willis says $450 million of the shortfall will come from a Budget 2026 contingency originally set aside for a fuel emergency. The remainder will appear in the Pre-election Economic and Fiscal Update.
To make up the lost fuel-tax revenue, the Crown will top up the National Land Transport Fund by an estimated $1.476 billion over the forecast period.
The next fuel-tax increase will be 5 cents a litre from 1 January 2028, followed by three further 5-cent increases at six-month intervals. Annual 5-cent increases will then resume from 2030. Equivalent changes will apply to road-user charges.
Transport Minister Chris Bishop says construction inputs have risen sharply while fuel excise has been frozen, leaving the tax about 20% lower in real terms than in 2020. He argues that simply absorbing the lost revenue inside the transport budget would mean cuts to maintenance, public transport and new infrastructure.
The decision narrows the political gap with Labour, which has promised to freeze fuel excise and road-user charges for a full three-year term. The government says that would create a roughly $4.6 billion transport-funding hole; Labour says motorists cannot afford the planned increases.
Read more at 1News and the Beehive
Re-published from the Centrist with permission
