Max Salmon: Fuel tax is a dying revenue source

New Zealand is a long, narrow country with a very low population density. Air transport is expensive and passenger rail almost non-existent. As a result, our cities, towns, and rural communities rely heavily on our local and national road network.

To pay for this network, New Zealand relies materially on a tax on the petrol we put in our cars, known as the Fuel Excise Duty (FED). Traditionally, this has been a low-cost funding tool. Nearly every vehicle in New Zealand uses petrol. The tax is simple to collect, the revenue generated scaled with road use, and it increased with the consumer’s road use.