New biofuel taxes law in discussion

[Windsock]

See below (sourced http://www.stuff.co.nz/4795038a6160.html). It'll be interesting to see whether the law being drafted will evolve into allowing homebrewed biofuels tax exemption status. I doubt it'll happen in the immediate future but it may happen to some extent. Once they let this exemption rule out about tax exemption for commercial it'll be the thin edge of the wedge to major changes to RUC I think. Time will tell.

Brownlee signals tax break for biofuels
NZPA | Tuesday, 16 December 2008

The Government is working on a tax incentive regime to encourage the production of sustainable biofuels in New Zealand, Energy and Resources Minister Gerry Brownlee told Parliament today.

Mr Brownlee was speaking on the first reading of a bill that repeals the obligations placed on oil companies requiring them to put biofuels into petrol and diesel, reaching a level of 2.5 per cent in 2012.

The obligation was introduced by the previous government and Mr Brownlee said the new government had a different approach.

"We think biofuels should be introduced through companies responding to commercial, environmental and marketing considerations, not because the Government tells them what to do," he said.

Mr Brownlee said there were problems with the previous government's regime because oil companies would have to import biofuels without any guarantee that they were produced sustainably.

He said forests were being cleared to grow biofuel and some sources, like soy and corn, were having the effect of forcing up the price of food.

The obligation would also increase the cost of fuel, estimated by oil companies at between 2c and 8c a litre, and the Government did not want that to happen during tough economic times.

Mr Brownlee said the Government supported the use of biofuels and knew it had a big role in the future.

But there was not enough of it being produced in New Zealand to help the oil companies meet the obligation.

Mr Brownlee said sustainability standards for biofuels were being developed, and that work would continue.

He said the Government was looking at applying a consistent tax incentive for sustainable biofuels, exempting ethanol and biodiesel from excise and road user charges in proportion to the blend.

Under the plan, a 10 per cent blend would get a 10 per cent exemption.

The bill has been introduced under urgency and will go through all its stages before Parliament adjourns on Thursday for the summer recess.

[tallsam66]

I think in the not too distant future youll see ALL vehicles will have to pay RUC.

As vehicles become more fuel efficent & more electric/hybrid vehicles & more use of "home made" fuels the tax take from fuel is actually decreasing.

To make up this shortfall they will bring this in for sure as this way they will be able to capture lots of lost revenue.
In lots of ways this will be good as all road users will pay a share of the costs as at present many arent paying there share.

[Windsock]

I think in the not too distant future youll see ALL vehicles will have to pay RUC.

As vehicles become more fuel efficent & more electric/hybrid vehicles & more use of "home made" fuels the tax take from fuel is actually decreasing.

To make up this shortfall they will bring this in for sure as this way they will be able to capture lots of lost revenue.
In lots of ways this will be good as all road users will pay a share of the costs as at present many arent paying there share.

Yep, I was thinking similar. What worries me is if they do this, then when the large infrastructure projects and roading projects are all implemented and hypothetically by say 2013 the price of fuel hits the same high levels as seen recently and car numbers drop proportionally, those left holding the car keys will be paying a much higher proportion to maintain otherwise emptier roads that we previously have been... RUC works well when there are lots paying it... Was shocked to see my recent RUC was $197 when the previous 5000km was only $173 WTF!

Answer: Get everyone driving 4WD and it won't matter what the state of the roads are in and no RUCs