Transport Minister Chris Bishop says rising fuel taxes still possible

Transport Minister Chris Bishop - who previously cast doubt on fuel taxes rising next year - says after the Iran peace deal they are still possible.

Speaking at the Transport scrutiny hearing on Thursday morning, Bishop told his Labour counterpart Tangi Utikere his stance was unchanged.

"The status quo is just what I said, which is it's unlikely ... but still possible," Bishop said.

"Just in the last few days the world has changed again, we hope. Obviously, there's been a deal done in the Middle East, we've got to wait and see how that plays out but fuel price is down compared to a month ago, for example.

"It may lead to more sustainable, a lower oil price over time. It also may not, we just don't know."

Labour has ruled out increases to fuel tax. In a statement to RNZ, Utikere said it was disappointing Bishop had not done the same.

"We acknowledge that households are doing it tough. National are incredibly out of touch to think what they're doing is going to work for household budgets."

Bishop said it would still be a "hard ask" for New Zealanders to "stump up with a 12-cent rise in petrol tax and the equivalent in RUC (road user charges). On the other hand I'm acutely conscious... the land transport funding system is not sustainable the way it is at the moment".

Bishop had been working on scrapping fuel taxes in favour of digitally monitored road user charges.

He pointed to fuel taxes not rising since 2020, Labour having kept them steady during the Covid pandemic being followed by National's promises not to increase them this Parliamentary term - delaying Labour's previously planned increases to next year.

He had earlier said it was important to get the switch to all vehicles paying road user charges right and "build social licence" - helping the public understand what it would mean and support it - saying the government was "not rushing it".

In the meantime, fuel excise charges and the equivalent increase in RUC - currently scheduled for 1 January next year - would need to go through Parliament.

"I don't have a fixed date," Bishop said on that.

Transport funding plan for next year may be delayed

The minister was unable to say when the next government Policy Statement for Land Transport, which sets out government plans for transport investment from 1 July 2027, would be completed - saying it was "possible" that would not be complete by the end of the year.

"We don't have a fixed date for it ... it is challenging because obviously we've been dealing with the fuel situation in the last few weeks and months, and that has discombobulated things somewhat."

He said the Transport, Infrastructure and local government sectors had often told him the "three-year wild oscillations in GPSs are unhelpful", noting he had previously talking about changing them to a 10-year timeframe.

"There's a difficulty there with the way the Budget process works, and just the Crown forecasting and fiscals - so that's a subsidiary issue, but related.

"I would envisage some change to the next draft GPS that we consult on but it's not going to be a wild change."

Bishop pushed back on the suggestion legal changes would be used to bring maintenance funding up to 60 percent of the transport total, as recommended by the Infrastructure Commission.

"We haven't talked about legislating for the 60 percent figure, because that's just a rough guide, like, don't get fixated on 60 percent," he said.

"What we've talked about legislating is long-term asset management plans that will be a requirement of government agencies."

While it would not apply to the entire sector, the 60 percent figure would apply to the New Zealand Transport Agency after legislation passed in 2027, he said.

Roads of National Significance

Bishop confirmed there was no newer cost estimate for the various Roads of National Significance (RONS) since the $56 billion figure he confirmed in November.

"We tend to focus on it more at an individual road level," he said. "There's a spectrum of readiness."

"Hawke's Bay's in construction now; Ōtaki about to go subject to commercial procurement decisions; about to hit go on Northland; obviously Cambridge to Piarere ... we'll have a final cost on by the end of the year, give or take.

"Those are projects further up the food chain, but then there's projects like the North West Alternative State Highway, for example, which ... how much is that road going to cost, who knows, really. I mean, we've got a forecast, we've got an estimate, but we don't know ... it could be 20 years away."

When that earlier estimate was arrived at, Bishop had indicated the government would not be able to afford the cost of funding all those roads as promised at the 2023 election, and they would need to be rescoped, resequenced.

Asked how soon that would be done and made public, he could give no more specific answer than "soon".

"I don't know. I mean, people have different definitions, I'll just say soon. It's a challenging piece of work, the fuel crisis has not helped matters ... I think people perhaps are discovering a bit more than they knew before: you can't just build a road tomorrow.

"There's an enormous amount of work that goes into all the pre-implementation work, and the roads are at different stages of that as well."

He said the rescoping of the projects would likely curb the costs, noting the $56b figure was "like a finger in the air".

RONS projects considered "high risk, high value" would also be put through the new investment assurance process that was part of the National Infrastructure Plan supported by National, Labour and the Greens, he said.

He also confirmed road tolling would also be considered as part of future cost-benefit assessments, once the system was in place.