Wednesday, March 27, 2024

David Farrar: Unaffordable and Undeliverable

The Herald reports:

Of the currently estimated $280 billion required to deliver these investments, only $80 billion has been appropriated.”

Officials warned that the $280b cost of that investment “far exceeds the funding available”.

They sought new Transport Minister Simeon Brown to note that Labour's planned investment was “unaffordable and undeliverable”.

This is Labour's transport package. They announced projects which had no capacity to be delivered or funded, yet they continued to try and pull off what was effectively a con job.

The officials estimated that in order to pay for the plan, revenue into the National Land Transport Fund (NLTF), which mainly comes from fuel taxes and road user charges, would need to increase by 17 per cent a year for the next five years until revenue into the fund doubled from $7.3b in 2021/22 to $15.6b in 2026/27. Fuel excise duty is currently charged at 70 cents a litre. If all of that increase came from fuel taxes, it would mean increasing that to $1.40 per litre. GST and ets would add another 40 cents to that price.

So Labour's plan would have seen petrol tax doubling and the cost of petrol exceeding $3.50 a litre so a 50 litre car would cost $175 to fill up.

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders.

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