Friday, 13 June 2008

On fuel prices

There's a great letter in the Herald this morning from Libz member Shaun Holt:

On Fuel Prices
Why don't petrol stations advertise the cost of petrol as $1.25 plus taxes? That way everyone would see who is to blame for high prices - not the oil companies who find, collect, process and distribute the petrol, but the Government who takes nearly half of the cost, just because they can.

Shaun Holt


  1. sorry... too keen on the keyboard and not keen enough on the previewing... I should have written 'Shaun'. ('Sahaun' sounds a bit like a Saudi name doesn't it? Maybe its the Sahaun family who own all those oil wells! :-))

  2. Cheers!! Now that's the sort of brilliance we need in an election year.

  3. Another sign could show the level of annual NZ oil production. Another sign could indicate both NZ's known and estimated reserves.

    And next to the cash register they need a big map of the world showing all the areas ruled off-limits for exploration.

    And how about listing the countries that receive oil revenue, showing them ranked 1 to 50, with the name of the head of state. These could be colour-coded to indicate the level of oppression exercised in that country.

    C'mon, lets shame our leaders into allowing us to explore for oil.

  4. It's something so obvious you wonder why no-one thought of it sooner.

  5. It was tried in Australia. The govt prosecuted the petrol station that did it. "Misleading pricing" or some such euphemism. Basically they made telling it like it is a crime.


  6. Ah, LGM, similar to cheap flight prices in the UK a few years back. So the pricing was all inclusive until after you paid, then you got a receipt that said something like:

    $ 4.99 Flight
    $10.00 Barclays Fat Cat Tax*
    $14.99 Ticket Total

    * I kid you not: it was the departure tax at Luton airport, from memory.

  7. You guys sound remind me of the collective sound of a bunch of whining diffs.

    If you don't like the price - choose an alternative. That's why we have a "market".

  8. Steve - the point we are making is that when the Govt nearly doubles the price of something with taxes, it's not a FREE market. As the letter says, I'm perfectly happy with the price of petrol, but not the taxes. You're getting confused with collectivists who want the oil company prices to be forced down.

  9. Shaun, I disagree slightly. I don't mind the taxes, as long they are used to build/maintain the roads.

    It the fact that my gummint (and other western gummints, too) cause such a massive distortion in the market.
    This means that fuel is more expensive:
    - hurting the domestic consumer
    - impacting on balance of payments
    - enriching despots

    So Steve, you are right, we DO have a market. It is rigged, it is distorted, it is corrupt, honest participants are often excluded, but indeed it is a market.

  10. richard mcgrath13 Jun 2008, 20:28:00

    Shaun - if you're reading this - well done, my sentiments exactly! The tax on petrol is obscene.

    Fist - I like your suggestion about publicising the oppressive tendencies of the gummints of the oil-producing countries. But why can't the roads be tolled so that the users actually pay for the upkeep? If you don't mind the taxes, you surely wouldn't mind tolls.

    Steve - I'd love the alternative - untaxed petrol.

  11. Hey Richard - hope you're doing well.

    Fist - your take on the "market" is spot on. I too would be very happy to pay for roads ....but on a voluntary basis. At the end of the day, taxation is the threat of violence, and you don't sound like the sort of person who thinks that violence is the way to solve problems. If other people don't want to use roads or pay for them, I don't want to force them to pay. Private roads funded by tolls, adverts or however the owners want to do it as Richard says, are the way to go. Cheers

  12. Having said that, petrol taxes aren't paid unless you DO use roads (you can claim petrol tax refunds for offroad use of petrol). Given all petrol excise tax now goes to Land Transport NZ, it really is largely an argument about how roads are charged.

  13. That's defintely right - and they can be funded without the threat of violence, which is what taxation is

  14. I spent $11 on petrol yeasterday. It's the most I've spent since I sold my car and used that money to buy a Suzuki 125cc scotter. The tax doesn't worry me at all - and all my parking is free!

    Everyone is talking about roading taxes - what about the other parts of the tax? Seems to me, from having to deal with all he arsehole drivers on my pushbike or motorbike, that the ACC one should be raised.

    Does anyone know why the petroleum excise tax was added in the 70's? I suspect it was a poor attempt to lower dependency on petroleum... I'm predicting $3 per litre by the end of the year and $4/litre within 18 months. The tax will be a lot less significant by then. The fact that you'll be spending $150 per week on petrol will be crippling your ability to party like it was 1999.

    My vote goes to campaigning to lowering company tax significantly. We're going to need that in the next few years. Everyone should focus their energy on that (pun wasn't intended).

  15. Shaun said...
    "That's defintely right - and they can be funded without the threat of violence, which is what taxation is."

    But Tolls aren't violence? At least the tax is simple to administer, unlike tolls. SOme of the "solutions", like satellite trackingare expensive abd haven't really been invented yet.

    At least with a tax, no one keeps track of where I'm driving or even how far (I can pay for petrol with cash and no one need know anything about me). I would have thought that tracking wasn't something Libz would be keen on.
    Also I ASSUME that Libz get rid of annual licencing? Perhaps even registration?

  16. ACC won't be built in to petrol tax by Libz: ACC will be abolished by libz...I assume.

  17. CF - tolls are voluntary (no threat of violence involved) as would everything be in a libertarian society. No licensing, rego or compulsory ACC either (although you may decide to take accident insurance from a private provider - your choice).

    As for personal data - the road owners would declare their policies with respect to the data they collect and what they do with it and they'll have to make sure consumers are happy with it or they won't last long.

    Tax may be easier to administer, but that does not override the moral issue that if you don't pay taxes you go to jail and if you resisted going to jail you'd be shot. A toll road is a voluntary interaction.

    Happy to be corrected if I'm missing why tolls involve violence.


  18. I'm against toll roads because those proposing them blithly assume that the only benefit of having a road is to the motorist.

    A comprehensive roading network serves the whole population; everybody benefits from having the ability to travel to and from places. If we didn't have roads, then nothing would be able to be delivered anywhere, for example, so its certainly not just the 'drivers' who gain from them. Therefore general taxation is the best way to pay for their construction and upkeep - ie the people paying for them and owning them in trust for everybody's benefit.

    Having said this, it is obviouslsy an act of blatant corruption by government to levy huge taxes on petrol and then refuse to use the money to improve or maintain the roads, but to put it into some consolidated fund or other or give it to beneficiaries, maoris and ecofucks under some PC theft scheme.

    I think the 'toll roads' argument is similar to the old 'mental hospitals are poorly run so we'll do away with them completely instead of simply improving them' policies which have failed us in the past.

    What we desperately need is rationality and above all honesty and a higher degree morality in our government. I would be quite happy to pay a government to do (some basic) things for me if I could have confidence that the bastards would actually get on and do them instead of stealing my hard-earned money and giving it so some other lazy fuckers.

  19. Dave - by definition Govt is a monopoly of force, so I'm not sure how you can ask for a higher degre of morality in Govt. Its like saying that the Mafia should spend some of the money they steal on roads and that you want a higher degree of morality, rationality and honesty from them from them.

    Do you not think that people can organize things such as roads without taxation, which is the threat of violence?

    You may be happy to pay Govt to do basic things for you if they totally changed from being corrupt and dishonest. But I'm not, so why should I be forced to pay them?

    You're saying that you are happy for the GOvt to steal your money as long as they spend it a bit better?


  20. Toll roads, toll roads, toll roads! Does no-one have any imagination? Can no-one imagine life without government holding your hand?

    Have you not noticed that there are already many examples of private roads around the place that aren't toll roads?

    The roads and car parks around large shopping malls are private, but they aren't toll roads -- they're free to use (or at 277 in Newmarket, free if you buy something) because the retailers at the malls want your business.

    The roads and car parks around holiday resorts and marinas are free -- they're free because the resorts and marinas get their revene from attracting people in, not keeping them out.

    There's no reason this same model can't be applied elsewhere -- imagine for example two alternative roads between two points A & B, one a privately-owned toll road, the other a road in which the residents and retailers of the town between A & B own shares. Don't you think the retailers of those towns would want to encourage patronage from passing motorists?

    Toll roads, toll roads, toll roads! Look around you. The only alternative to government theft is not a network of toll roads.

  21. There's a serious failure of imagination and observation at work here. Some of you have been creating straw men instead of applying your intelligence to understanding what's been suggested.

    Why for instance would there be a problem with private roads in the suburbs?

    Do you know who builds the roads in your average new suburb? The developer does, and once he's built them he's forced to hand them over. But why need that happen at all?

    When a developer builds an apartment block, for example, he doesn't hand over the hallways and car parks to the government: they're vested in a body corporate in which all apartment owners are members. There's no reason at all in a more rational world that your developer who's just built a network of suburban roads couldn't or wouldn't put the same legal structure in place for his subdivision.

    Why would you want to stop him doing that?

  22. PC

    Quite right. I mentioned the same thing a while back.

    Seems that most people do not read what is written and/or don't have the wit to actually think outside a collectivist mindset. And so, the same old objections are warmed over and raised from the dead time and time again, even though they've long since been invalidated. Contemptible.


  23. PC, your illustration with the marinas and shopping centres etc doesn't hold water because these facilities are at the present time simply overlaid on top of an existing infrastructure which is publicly owned.

    Your model would have us heading into third world status at an even more accelerating rate than we are now. We would simply end up like Bombay with filthy ghettos where 'ordinary' people live and die slowly in their own waste interspersed with gleaming 21st century shopping malls and whizzbang facilities for the favoured few.

    This country was created (literally) by honest governments which did the job that they were paid to do by the citizenry. The huge network of paved roads we built here was at one time the envy of the world, as were the hydro dams, the (genuine) universities and research institutes etc, the forestry and everything else which made us a leader among those in the civilised world.

    Just because government has fallen into the hands of corrupt venal grasping thieves does not mean that we should do away with the state. It means that we should FORCE the bastards to clean up their act and DO what we fucking well PAY them to do.

  24. How's that again, Dave? You say, "your illustration with the marinas and shopping centres etc doesn't hold water because these facilities are at the present time simply overlaid on top of an existing infrastructure which is publicly owned." You'll have to explain the connection here, since its obviously eluded me.

    And perhaps you could explain exactly how private property in roads "would have us heading into third world status at an even more accelerating rate than we are now"? I'm very keen to see your arguments on this, since there's no case anywhere in history where private property has led to Third World status -- quite the reverse, in fact.

    As Andrew Galambos points out, the fact is traffic jams is a collision between socialism and capitalism: Capitalism produces cars faster than socialism produces new road capacity. Why wouldn't you want more capitalism in your roads?

    Frankly, as the Libz Transport policy outlines, the mediaevalism of NZ's present roading network can be ended quite painlessly, and with excellent results.

    After explaining how it can be effected, it concludes:

    "With the removal of state control comes the end of petrol taxes, ACC levies, transport-related rates, regos, WoFs and police-operated speed cameras. All these will swiftly become bureaucratic vestiges of the past, as will resource consents and having to wait 20 years for a transport system upgrade.

    "No longer will the rights of private property owners be trampled upon by officials in the name of their social agenda; projects forcing private land owners to give others access to their land, or to sell it, simply would not exist.

    "The current system of cronyism, government-private partnerships and currying of favours to win projects will be replaced by developers and contractors having to compete fairly for a project and attract private rather than public (stolen) capital to win contracts.

    "Owners and operators will become the ones determining which drivers and vehicles are allowed to use their property (within the framework of the relevant sale covenants in the case of existing roads). In order to prohibit or suspend a particular driver or vehicle from using their road(s), for instance, an owner or operator would need to apply to the courts for a ruling against the offender on the grounds that they or their vehicles are causing a danger or are a nuisance to other motorists; that toll fees haven't been paid; or that a crime has been committed (i.e., an actual victim exists).

    "Courts will only be able to impose fines or jail time on motorists for committing real crimes (to life or property).

    "In short we will all be free to get on with our lives unencumbered by bureaucratic nonsense.

  25. Clunking fist: The alternatives to fuel tax have been invented, why do you think there is virtually no diesel tax? Switzerland and Germany both apply versions of technology that could be applied in NZ, given a bit of commercial nouse and the right incentives.

    The "tracking" argument is sheer nonsense, spread by people who don't even understand how GPS operates.

    As PC pointed out there will be different solutions in different locations. Today there are numerous privately owned bridges, motorways and the like around the world, happily providing service to road users. In fact the entire original road network of the UK was privately built by landowners getting together in parishes and sometimes imposing tolls (if there was through traffic),sometimes not. The system broke down when government tried to regulate the tolls and imposed the "common law right of passage" which hindered the ability to charge road users.

    Dave Mann - Everyone benefits from food shops, yet not everyone pays for every shop or everything in each shop. There may be a case for a road owner to require adjoining property owners to charge a fee for access to the network from a driveway or garage - in fact it may well be the same entity with the same shareholders. However, the Southern Motorway doesn't necessarily benefit everyone, anymore than Invercargill Airport does. The result of government operation of roads is chronic congestion, people complaining their road isn't good enough and some roads being too good.

    There is no good reason why my parents living in Hawke's Bay where it is cheap to maintain roads and where congestion is defined as not getting through the lights the first go at 5pm, should pay the same to use the roads as Aucklanders who need more road capacity (or the current capacity rationed by price not queues), or those in East Cape who have lightly used, expensive to maintain roads being chewed up by logging trucks.

    However, the biggest difficulty with getting the point over to those with collectivist thinking is that I DON'T have all the answers, entrepreneurs have more answers and given the chance can be far more innovative and adventurous than any bureaucrat.

    This was a point even noted by the Nats when they were previously in government, regarding the roads. This is why they proposed commercialising them because, quite simply, bureaucrats can't make these decisions as effectively as operators of a business. Now there were flaws with the approach proposed, but it said no to centralised road pricing, but yes to allowing road operators to contract directly with road users (whilst giving the road user a full refund of road related taxes).

    That would be a suitable model for transition purposes - privatise the roads and while the road owners get their act together, you choose to pay road taxes or pay the road owner directly.

  26. "Switzerland and Germany both apply versions of technology that could be applied in NZ, given a bit of commercial nouse and the right incentives"
    Expensive proprietary technology that every car owner would have to pay for. No thanks; the current system is cheaper.
    “who don't even understand how GPS operates” So GPS tells the car where it is, but databases will be used to track whose road you drive on, in order to pass the charge (prepay system, monthly in arrears, debt collection agencies involved?) to the owners of the roads you use. Shit, it’ll even keep track of the TIME you used the road, and the direction, so that any “congestion” component of the charge can be calculated. The owners WILL be smart enough to charge more at peak times, right?
    I was living in the UK at the time the London congestion charge was introduced. The technology is expensive and intrusive. You’ll correct me if I’m talking about the “wrong technology” of course! The hassle and the cost and the evasion and the freeloading is unbelievable.

    “As PC pointed out there will be different solutions in different locations.”
    So I’d need different technology at different points along my journey?

    “Today there are numerous privately owned bridges, motorways and the like around the world, happily providing service to road users.”
    Yep, but they’re doing it at the margins, not the core of the system. And they are using blunt technology, like a dollar per car, when the mini doesn’t wear the road as much as the SUV. Petrol tax /petrol use increases with weight, all other things being equal. So petrol tax is simple, “progressive” and doesn’t require new technology. Perhaps some work needs to be done to better share the money with regions?

    “In fact the entire original road network of the UK was privately built by landowners getting together in parishes [kinda like local councils and rates you mean? Jeez, man, that is collectivism in a pure form] and sometimes imposing tolls (if there was through traffic), sometimes not. The system broke down when government tried to regulate the tolls and imposed the "common law right of passage" which hindered the ability to charge road users.”
    Yep, hark back to the good old days. It probably worked well when 16 families owned the country.
    It does kinda sound like you want to go back to those days where the allegedly highly intelligent elite held all the cards and life was pretty miserable for those without land. Those WERE the days before democracy if you’ll remember, when the king represented God and hence the powers were reserved to the king and those he favoured. Me, I prefer a meritocracy, where we have equal rights.

    SO you good ahead and believe that a range of expensive technology solutions are better, where the occasional local yokel will want no one on his land and thus make a simple trip between two towns a pain in the arse*. Sacrifice the simplicity, transparency and anonymity of petrol tax for tracking systems and billing systems. Me and 98% of New Zealanders will vote elsewhere.**

    *This is shorthand for “place compliance costs and delays on business”.
    **You guys are expending a lot of energy and maybe money for zero impact on the world. You’d be better off working as a thinktank/lobby group to influence the gummint of the day toward better solutions.

  27. Clunking Fist - You're wrong, the on board unit can include a map, can calculate the charge and spit out the charge through the cellphone network to an account issuer. However, you're not too fussed with cellphone companies knowing roughly where you are from day to day, and who calls you and who you call,and where they all are. A road operator wont care what road you're on, just you're on a road with a set charge (with a schedule), and if it's private who cares? Why would any road owner want to track you? All I'd care about is that you are using a vehicle on type A road at this time and you're good to pay for it - after all, you use airlines and tell them who you are and where you are going and don't think twice about it.

    London's congestion charge uses technology two generations behind this (declaration of number plates) - the operating costs of the German and Swiss systems are less than 15% of revenue, and ever decreasing. Yes petrol tax costs little to collect, but then you may as well argue EVERYTHING should be paid for by that, because billing is expensive. Anyway technology is not the issue at all, there is nothing special about making roads intelligent, what is special is making the current owners intelligent!

    I doubt you would need different technologies, a GPS based solution could be universal, but some road users may prepay a licence for unlimited use at a very high fee, others may choose a different way. The key is to move away from taxation to paying for use.

    No petrol tax is a nonsense, which is why NZ doesn't use fuel tax for heavy vehicles as the effect higher vehicle weights have on road maintenance is logarithmically higher than fuel consumption. Fuel consumption bears next to no correlation to the marginal costs of road use, which does vary by time and location. After all some people use petrol on farms, in lawnmowers, in boats, and they all have to claim refunds of the tax.

    If you charged according to marginal costs, Canterbury would get a significant discount over what it currently pays, Northland, East Cape and Westland would pay more, and so on.

    You can keep going on with roads run with socialism and you'll have congestion, which you wouldn't tolerate with electricity (power cuts) or telecommunications (network outages or internet running extra slow), so why should people put up with it for roads?

    Let's be clear, for most car users most of the time it would make a small difference, the rate they pay would be flat, probably vary by region and may vary by general types of road (sealed/unsealed). However in major cities peak driving would cost more on busy roads, off peak driving would cost less. Road funding would come from road users that use particular roads, so upgrades would be reliant on a central pool of funding everyone pays into, but many get little from. The average Southland motorist hasn't seen a road upgrade in a very long time, but Aucklanders are experiencing a major road building boom.

    I don't want compliance costs, I want roads to just be run like any other utility, and for them to be run on a more rational basis. At the moment they are run bureaucratically and politically, albeit better than most countries, but it can be better - and remember fuel tax can always be thieved for non road purposes.


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