The deeper issue in the road tax aggro

Bill English, a Southlander, is fomenting aggro between the provinces and Auckland. This is an interesting tactic.

Of course, more people live outside Auckland than in it. And the JAFA syndrome is alive and well. But an aspiring Prime Minister usually seeks to unite, not divide.

And an aspiring Prime Minister seeks especially not to make Auckland a target. When tax-scourge John Banks is on the side of higher taxes, one ought to register that something is up.

Yet English promised last week to campaign in the provinces on how much they will be paying in extra petrol tax to pay for Auckland’s roads.

That might chip away votes in Palmerston North and Ashburton — if, that is, come November the punters can remember the 4.7 cents imposed in March amidst all the ups and downs at the pump because of OPEC and our yo-yo peso.

There is, of course, a background point. It is that this is a tax-and-spend government, though modestly so compared with English’s own political forebear, Sir Robert Muldoon (a divide-and-rule leader at considerable cost to the nation and his party). Ministers have largely suppressed their 1960s-70s social democratic beliefs that taxes are good for you but every now and then there is a small eruption.

English wants his party to be known at election time as a (modest) cutting-taxes party. But he is extraordinarily wary of specifying amounts and times. A couple of weeks ago some MPs thought the caucus had decided on a 25 per cent corporate tax rate but he denies that.

On the Auckland roads petrol tax, though, he hesitated not a whit. He will repeal it if he gets the chance and forgo the $200 million a year it should bring in.

This looks awfully like bumper-sticker politics.

English is much better known for subtle and complex high-level thinking — witness his thoughtful speech at the Queen’s banquet last week.

His recent descents into hand-to-hand combat have looked gauche — witness his bumper-sticker recitation of the business mantra not to ratify the Kyoto protocol just yet. There is usually subtle thinking behind the bumper-stickers but it is not easy to see the connection.

Joining up the two Englishes is going to take some time.

The Auckland road tax affair illustrates this nicely.

His bumper sticker implies taxes are payment for services. They are not. Often your payments and what you get for them are wildly different and also the balance changes a great deal over time.

You collect heavily on education while your children are growing up and then you pay for others’ kids. You pay for huge numbers of police to protect the person of Tiger Woods even if you have not the slightest interest in golf.

And even if you pay no tax you get a state pension. Moreover, the average past pay-in while working by today’s oldies, plus earnings, would not cover what they are getting.

So on regions and roads. Auckland has not had its fair share for roads and is now getting more than its share (though, as English points out, will also pay some tolls on top of the tax). Is Southland to be left to fund the big roading upgrade necessitated by its dairy boom?

In any case, just as Southland’s dairy boom is good for all of us, so is an efficient Auckland, especially as most imports come through its port.

In other words, there is a national issue here which requires a national response. And on that English has thought deeply.

Half a century ago roads used to be the stuff of pork-barrel politics. The National Roads Board was introduced to depoliticise road-building. Under the Transfund/Transit system of arm’s-length Crown entity management, roads have been funded according to a cost-benefit formula.

The government now wants this done partly according to a national strategy, which it sets. A sensible notion, surely, when costs are being added to imports by Auckland’s roads and logs might not be got out to market for lack of roads in the East Coast, Northland and Nelson.

But English reckons this risks the return of pork-barrel politics, with Wellington politicians meddling in who gets what, when. This is the deep objection to the Auckland roads tax that lies several levels beneath his “repeal” bumper-sticker.

It makes better sense of his aggro on Auckland. But will voters get it?