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NZ: HortNZ not giving up on complete fuel tax exemption for off-road vehicles

HortNZ is not going to give up fighting for the complete exemption of off-road vehicles from the regional fuel tax, which it says could mean a large and unnecessary cost and inconvenience for growers in the Auckland area.

It came into effect on Sunday July 1, and is paid by anyone purchasing petrol and diesel in the Auckland region. This has already led to higher fuel prices.

The peak body made two submissions to the government prior to its introduction; first that the tax become a road toll specifically to be paid by road users, and secondly that off road farm vehicles and machinery be exempt from the tax - both have so far been rejected. It added that the law allowing regional fuel tax is designed to collect money to fund various solutions to Auckland’s road congestion and was never intended to capture the use of vehicles used off-road and ‘behind the farm gate’, but it has. Farmers and growers will be able to claim a rebate on fuel used off-road, but Chief Executive Mike Chapman points out the policy was rushed and there is some confusion as to how this system will actually work.


Photo: Courtesy HortNZ

"They haven't dealt with how you set up off-road use adequately, and how you claim your rebate," he said. "So the growers have to start a system, not knowing really how it works. They'll be paying the tax plus GST for three months before they can claim the rebate, but we don't know how they are going to claim the rebate. It's very rushed and hasn't really been thought through, in that you normally establish the full system, test it, and you roll it out to people and explain how to use it. None of that has happened."

In the region there are more than 400 growers – feeding the Auckland population of 1.5 million people - with some growers having more than 100 vehicles as well as diesel-fuelled machinery on their farm. Mr Chapman says for these growers there would be a lot of additional work and paperwork to claim the rebate on tax they should be exempt from in the first place. He added that the government have already exempted New Zealand Rail, with the possibility for large industrial sites to get exemptions.

"Our submission is that if you take the collective commercial gardens and orchards and farms, that is the equivalent of a very large industrial site and should be exempt too," Mr Chapman said. "They shouldn't have to ask for a rebate, because they should just be exempt for things like tractors and pumps."

Photo: Courtesy HortNZ

Mr Chapman is also concerned about the potential rise in fruit and vegetable prices as a result of the tax, which will attract a higher cost for growers and could be passed on down the supply chain to consumers.

"Someone's got to pay for it, and there are generally only two people who end up paying for increases like this - that's the grower or the consumer," he said. "If you are talking about a reasonable sized operation, in terms of the complexity of the rebate system, which we think is going to be applied, you might need to employ another person to administer this. They want to track all the vehicles’ fuel use when this has never been done before for off-road vehicles. So our large growers have said this is going to cost up to $100,000 just to get rebates - someone will have to pay for that."

Photo: Courtesy HortNZ

HortNZ will continue to work with government officials who are designing the rebate system - but has made it clear that it is still pushing hard for exemption for off-road vehicles. In the meantime, it has called on the government to put the policy on hold until all of the details are sorted, and everyone is clear on how it will work.

"Even the Minister himself has said the system that is being used is archaic, that's his exact words," Mr Chapman said. "They are doing a review that will take one year to go to a better system. So we say, why don't you put in the proper system, and then put the fuel tax in? We are all bewildered by it, and wondering why it hasn't been done with due consideration."


For more information:
Mike Chapman
Horticulture New Zealand
Phone: +64 4 472 3795
info@hortnz.co.nz
www.hortnz.co.nz

Publication date: 7/5/2018
Author: Matthew Russell
Copyright: www.freshplaza.com


 


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