Fuel tax to replace ACC on regos?

[James Deuce]

11.5c per litre is only part of the story. Remember that they want to fully fund their liability, so they don't want to cover the cost of claims they want to cover the cost of future claims. It it's transferred to petrol it will be significantly more than 11.5/litre. The inflationary byproduct of a huge rise will throw NZ's economy down the toilet. 11.5c/litre will make a significant rise in the price of food, especially dairy and bread, a reality too. It wasn't that long ago that a kilo of cheese was $12.

[newbould]

Add 25 c a liter and it's still a lot cheaper than it was 18 months ago - remember $2.20 a litre. Yes NH just before the recession hit I know, but it takes more than the price of fuel to cause a recession. pLus you have $10.00 a week extra in your back pocket -enough to pay the extra on 40 l of petrol - which would take me from here to the beehive. But why would I want to go there - the bastards aren't going to listen to any of us.

[Mikkel]

Hell, put an ACC levy of 50c a liter on the petrol for all I care! The less 4x4s hauling boats over twisty mountain passes I have to get stuck behind the better. Fuel is too bloody cheap in NZ anyway...

As for food prices - either don't apply it to diesel or introduce tax deductions for commercial applications.

And Jim - if you can sell it for $12 a kg and turn a profit it is not cheese!

As for the recession - that has nothing to do with fuel prices. The current global financial crisis is caused by one thing, and one thing only: Greed! The banks lost all common sense and jumped on the "let's invest in real estate" bandwagon. Anyone who's sat an introduction level course in economy knows that real wealth does not arise from speculation-driven investment gains. The banks failing to realise this and stop the madness before it got out of hand is what caused the current state of affairs.

[NighthawkNZ:Me]

Can't put GST on the tax part. Only on the base cost.

I think?

ACC isn't classed as I tax, its a levy... yeah I know

[NighthawkNZ:Me]

Add 25 c a liter and it's still a lot cheaper than it was 18 months ago - remember $2.20 a litre. Yes NH just before the recession hit I know, but it takes more than the price of fuel to cause a recession. pLus you have $10.00 a week extra in your back pocket -enough to pay the extra on 40 l of petrol

Not saying it caused the recession, but it didn't help for those that were starting to feel the pince... so they start spending less... and we are not out the recession yet...

[James Deuce]

Hell, put an ACC levy of 50c a liter on the petrol for all I care! The less 4x4s hauling boats over twisty mountain passes I have to get stuck behind the better. Fuel is too bloody cheap in NZ anyway...

As for food prices - either don't apply it to diesel or introduce tax deductions for commercial applications.

And Jim - if you can sell it for $12 a kg and turn a profit it is not cheese!

As for the recession - that has nothing to do with fuel prices. The current global financial crisis is caused by one thing, and one thing only: Greed! The banks lost all common sense and jumped on the "let's invest in real estate" bandwagon. Anyone who's sat an introduction level course in economy knows that real wealth does not arise from speculation-driven investment gains. The banks failing to realise this and stop the madness before it got out of hand is what caused the current state of affairs.

The price of dairy in the local market had Fonterra, our biggest exporter scrambling for overseas markets because it significantly dented their financial portfolio. The price of cheese and milk was entirely related to the big spike in fuel prices. We have no rail network to speak of and thanks to our truck friendly National brethren rely almost entirely on an industry who would be savaged overnight, to move the basic goods of life from manufacturing to warehouse to point of sale.

NZ simply doesn't have the money or the logistics infrastructure to cope with a sudden increase in the price of fuel of that magnitude. If it goes over $2 a litre we won't exit the current recession for considerably longer than it takes the rest of the world to extricate themselves. Relative standard of living slips, downward spiral continues.

[scracha]

.. problem fuel drives part of the econmony

Fuel does not drive the economy. Fuel is an expense. Avoiding paying fuel is also part of the economy. If fuel goes up then more sensible forms of transport may be employed. Companies also think twice about moving goods from one end of the country unnecessarily and quite often local macro economies are drastically improved and waste levels reduced. Essentially, why should the haulage industry be subsidised? Just because there is a recession should not mean we continue pumping money into unsustainable means of transport. Quite the opposite in fact.

[James Deuce]

Fuel does not drive the economy. Fuel is an expense. Avoiding paying fuel is also part of the economy. If fuel goes up then more sensible forms of transport may be employed. Companies also think twice about moving goods from one end of the country unnecessarily and quite often local macro economies are drastically improved and waste levels reduced. Essentially, why should the haulage industry be subsidised? Just because there is a recession should not mean we continue pumping money into unsustainable means of transport. Quite the opposite in fact.

In Europe, yes. In NZ no. There's no alternative to road transportation for goods, and the distance from logistics head to point of sale would generally exceed that of the average European country.

This is not meant as an insult in any way, but immigrants often forget that NZ has the population of Hampshire spread out over an land area slightly bigger than the UK. The price of fuel in NZ governs the price of a lettuce in a supermarket.

Before you say it, we do not have the available funds to upgrade the rail network to "take over" from trucks. We struggle to get rolling stock because of our odd gauge and we would need to seriously consider changing gauge to make the exercise worthwhile in terms of upgrading the rolling stock to cope with the proposed volume. You're talking 10s of billions of dollars.

[McJim]

We seemed to be going fine when fuel topped $2 a litre.....why would an extra 12c or so break the camels toe...I mean back? (thinking of another thread for a monet there - forgive me)

[Mikkel]

The price of dairy in the local market had Fonterra, our biggest exporter scrambling for overseas markets because it significantly dented their financial portfolio. The price of cheese and milk was entirely related to the big spike in fuel prices. We have no rail network to speak of and thanks to our truck friendly National brethren rely almost entirely on an industry who would be savaged overnight, to move the basic goods of life from manufacturing to warehouse to point of sale.

NZ simply doesn't have the money or the logistics infrastructure to cope with a sudden increase in the price of fuel of that magnitude. If it goes over $2 a litre we won't exit the current recession for considerably longer than it takes the rest of the world to extricate themselves. Relative standard of living slips, downward spiral continues.

Well, last time I checked lorries ran on diesel, which I suggested remain exempt... Anyway, you can keep commercial traffic clear of the ACC component on fuel through a variety of regulations.

As for Fonterra and the global market - when international fuel prices start to increase they will be at a serious disadvantage regardless of what national issues they may be dealing with.

As for the recession in NZ - I'm not saying it isn't here, but compared to most other places we do not seem to be doing too badly in that regard.

In Europe, yes. In NZ no. There's no alternative to road transportation for goods, and the distance from logistics head to point of sale would generally exceed that of the average European country.

Still scracha has a valid point - NZ will eventually have to find a sustainable alternative to transporting goods. NZ can not, in the long run, prosper if it persists in using the argument of "too few people, too much space" to excuse it's shortsightedness. You might find this documentary interesting.

[James Deuce]

We seemed to be going fine when fuel topped $2 a litre.....why would an extra 12c or so break the camels toe...I mean back? (thinking of another thread for a monet there - forgive me)

Because we weren't in a recession then, and it won't be an extra 11.5c. The really important point to remember is they aren't after 63 million, or even 300 million. They're after 22 billion, I think it is, to fully fund future claims.

There's been a substantial reduction in retail spend over the last 12 months and it isn't reversing in step with the intoxicated Treasury officials rambling about economic recovery. You'd need to plot that sort of increase to be in step with an economic upswing or you'll soften or even reverse the desired recovery.

[James Deuce]

Still scracha has a valid point - NZ will eventually have to find a sustainable alternative to transporting goods. NZ can not, in the long run, prosper if it persists in using the argument of "too few people, too much space" to excuse it's shortsightedness. You might find this documentary interesting.

You can say that, but it won't happen in NZ. We don't have the money. Our projected medium term debt is running into the Trillions and our GDP does not inspire the confidence of any financial institution to lend the money to redesign our transport industry. If we had something other than primary produce as our main export earner we "might" be able to do something about it, but we don't. Our exports are subject to the vagaries of culture, religion, and political machinations and don't provide the hard currency to back up our current standard of living.

Another point that is always forgotten about NZ is that it requires intensive soil management to produce nutritious food. Our soil composition is designed to support 150 million year old flora, and trace elements are missing that you need to maintain a healthy populace. The self-supporting village concept will still require intensive transportation of goods and imports of different kinds of fertiliser.

The argument isn't too few people, too much space, more no money, wrong industry supporting the economy.

I don't think you guys realise just how much rail has been ripped up in NZ, nor how stupidly short sighted and self important or politicians are. Our spending cycle is: 1 year of election promises, 1 year of spending money producing excuses for why the election promises aren't going to be fulfilled and 1 year of producing reports about how good it was they didn't spend the money.

[NighthawkNZ:Me]

They're after 22 billion, I think it is, to fully fund future claims.

Something like that (I thought 23 Billion) they have 11 billion in the bank... after banking 1 billion last year...

But you are correct it all about being fully funded by 2014 hopefully now 2019 which should ease it a bit...

I don't think you guys realise just how much rail has been ripped up in NZ.

a good quarter is gone... basically the main trunk line left with a few off shoots

[Mikkel]

You can say that, but it won't happen in NZ. We don't have the money. Our projected medium term debt is running into the Trillions and our GDP does not inspire the confidence of any financial institution to lend the money to redesign our transport industry. If we had something other than primary produce as our main export earner we "might" be able to do something about it, but we don't. Our exports are subject to the vagaries of culture, religion, and political machinations and don't provide the hard currency to back up our current standard of living.

Another point that is always forgotten about NZ is that it requires intensive soil management to produce nutritious food. Our soil composition is designed to support 150 million year old flora, and trace elements are missing that you need to maintain a healthy populace. The self-supporting village concept will still require intensive transportation of goods and imports of different kinds of fertiliser.

The argument isn't too few people, too much space, more no money, wrong industry supporting the economy.

I don't think you guys realise just how much rail has been ripped up in NZ, nor how stupidly short sighted and self important or politicians are. Our spending cycle is: 1 year of election promises, 1 year of spending money producing excuses for why the election promises aren't going to be fulfilled and 1 year of producing reports about how good it was they didn't spend the money.

So, in a way, you are saying that you whole-heartedly agree with my point... but that it is too late and NZ is fucked because it doesn't have the financial strength to pull itself out of the hole it has dug itself into?

That's being a bit too pessimistic. Wouldn't it be better to drop the excuses, face the music and do something about the situation?

[James Deuce]

So, in a way, you are saying that you whole-heartedly agree with my point... but that it is too late and NZ is fucked because it doesn't have the financial strength to pull itself out of the hole it has dug itself into?

That's being a bit too pessimistic. Wouldn't it be better to drop the excuses, face the music and do something about the situation?

It isn't part of NZ culture to face the music, particularly NZ's political culture because an admission of defeat means a defeat in the polls. Hence the "pessimism". The only way forward lies in either mass immigration from the Pacific's low lying islands that are supposedly disappearing under the sea to boost the population over the growth threshold, or reducing the current population's standard of living for a couple of generations while the economy is sorted out, and trade balances are altered.

In both cases, I think you'd see a substantial change in NZ's ethnic makeup fairly rapidly, provided of course that option 2 allows a legal escape.