With petrol prices on the rise, it is once again raising suggestions that the government should cut fuel taxes to ease the burden on the public. The National Party in particular are pushing this line, although they don’t say how the government could then afford to pay for current transport plans. While I’m sure if asked they’d say the government should cut back on projects like light rail, now is exactly the time we need good quality alternatives, especially those not subjected to the fluctuations in the price of fuel.
It’s worth remembering that our fuel taxes aren’t that high compared to many countries in the OECD.
Higher fuel prices are likely to have a lot of people thinking about how they travel and if alternatives are available, which isn’t a bad thing.
Consumer NZ boss Sue Chetwin said fed-up motorists may simply opt for public transport, biking, or walking if filling the tank up became too expensive.
“Prices going up so strongly is not good from a consumer perspective, but it might encourage people to think differently about their transport.”
However, I’ve been thinking about other ways the government could help with the issue of fuel prices. Perhaps one small thing they could do is to make it easier for employers to consider non-car based perks, such as subsidising public transport for employees.
I suspect many companies would at least be interested in the option of doing this but don’t after realising they’d not only need to pay the perk but also Fringe Benefit Tax on top of it. FBT is something they often don’t need to pay when offering carparks due to a loophole. The previous government did suggest closing the loophole but quickly backed down following opposition from both businesses and unions.
Removing FBT from PT would at least level that playing field and I suspect would have zero impact on the government because no company is currently doing it.
Taking it further, agencies like Auckland Transport could create special products to sell to businesses. This could consist of full travel passes, like monthly passes currently do, or alternatively, use the same functionalty used for child/student concessions. In that situation, the employee might get discounted PT with AT billing the company for the difference. Both options could help to encourage more people to use PT which fits perfectly with goals for both Auckland and the Government.
Of course, this isn’t likely to be something that will benefit everyone. Public transport isn’t practical for a lot of people, especially those in rural areas but it’s one little thing that could help.
If the government were to take it a step further, they could also pick up and tie it in with an idea we posted last year. It would require employers who provide parking for staff to allow employees to have the value of that carpark cashed out.
What other options should the government consider?