Hort Talk with Mike Chapman HorticultureNZ CEO

On July 1, 2018, the first Regional Fuel Tax allowed under law came into force in Auckland – and confusion reigned. The law was passed only a matter of days before, on June 26, 2018, and how it would work in practice for growers and farmers in the area – and beyond once other regions adopt the tax – was unknown. Today it remains very much a mystery.  

Growers who have attempted to make monthly rebate claims on fuel used “off road” and therefore, not subject to the fuel tax, have been denied and told they can only make quarterly claims.

The New Zealand Transport Agency’s electronic rebate system only went live on October 9, past the end of the first quarter during which growers incurred considerable costs for tax paid on fuel for vehicles used on their farms only.

The complexities and consequent costs of making claims is seeing a number of growers deciding not to apply for a rebate as that just adds even more cost.

This is despite Horticulture New Zealand hearing Ministers, and Members of Parliament, who had been on the Select Committee considering the law, publicly say that it was never intended to capture off-road, or “behind the farm gate”, fuel use.

HortNZ is trying to get the gap between what Ministers said they intended and the reality of the law closed. Why? Because unlike a lot of farms, for horticulture we are talking about considerable numbers of vehicles and machinery used to produce healthy food for New Zealanders, both in Auckland and beyond.

In the Auckland region there are more than 400 growers – feeding the Auckland population of 1.5 million people. For one grower alone, the stock of mainly diesel-powered vehicles and machinery used off-road includes around 100 tractors, as well as self-propelled harvesters, self-propelled sprayers, two and four-wheel motorbikes, generators, irrigation pumps, and flood pumps, using about 1 million litres of diesel off-road per year.

HortNZ contends the law-making process was so rushed, the full democratic process was unnecessarily truncated and the end-users are the losers. This tax is designed to improve Auckland’s transport system, and therefore must exclude vehicles not used on those roads.

Growers have had to pay the RFT plus GST for three months before being able to claim a rebate, and that money has been sitting in a Government bank account earning interest.

This affects growers’ businesses and costs considerably, to the point of hundreds of thousands of dollars a year. Those costs will have to be passed on to consumers, making healthy food more expensive at a time when many households are already struggling.