As this is the first Collins Comments of 2017, I want to start by wishing you all a happy new year. I hope you had an enjoyable break over Christmas and New Year, I also hope the sun was shining wherever you were for Waitangi weekend.
After a busy end to 2016 that saw me appointed Minister of Energy and Resources, Minister of Revenue and Minister for Ethnic Communities, a lot of my summer was spent reading up on my new portfolios.
I am thrilled with the new portfolios and the challenges they will present to me over this year.
In the Ethnic Communities portfolio, I have attended some wonderful Chinese New Year celebrations. I wish all of our Chinese New Zealanders a Happy New Year in the Year of the Fire Rooster. Last week I was honoured to host the Chinese New Year celebrations in the Banquet Hall in Parliament which saw 18 ethnicities and 13 cities represented and the largest attendance ever, at more than 220 guests.
The Energy and Resources portfolio is incredibly interesting. For example, electric vehicle (EV) options for public and private transport will help reduce the effect of vehicle emissions on the environment, as part of the Government’s focus on Climate Change issues.
You may have caught up with the fact that I announced a fuel price study.
The Fuel Market Financial Performance Study, which is expected to be completed by the end of June, is designed to determine how fair petrol and diesel prices are at the pump.
MBIE data shows fuel margins have more than doubled over the past five years. The market study will report on fuel company returns and will include in-depth analysis of oil companies’ finances.
The study will focus on the returns on average capital employed against cost of capital, across different parts of each business. It aims to determine if companies are making super-normal profits or not. I have spoken with the oil companies and I’m pleased that they have agreed to fully cooperate with MBIE.
Fuel excise is a significant contribution to the Government accounts. Most of the money goes into the National Land Transport Fund. The scope of the land transport expenditure includes road policing and road safety promotion, road improvements and maintenance, public transport, as well as walking and cycling improvements.
That being said, I am concerned that New Zealanders are paying a fair price at the pump which is why we are undertaking this study.
The Revenue portfolio is also very interesting (especially for a former tax lawyer like me). I was pleased to see Inland Revenue recently announce tax measures for Northland farmers affected by drought. The measures will allow farmers to make late income equalisation deposits from the 2016 income tax year and apply early for refunds.
These steps will allow farmers to better plan their financial response to the drought conditions. A drought is an extraordinary event that normal tax laws do not cater for and the added flexibility of the tax measures reflects the reality of the situation in Northland.
Southern Motorway Expansion
The Southern Motorway upgrade is progressing, with work underway to widen the motorway between the bridges at Orams Road and Alfriston Road.
The southbound lanes have been narrowed and the speed limit reduced to 80 kph prior to work starting to lower the road levels to allow large vehicles to pass under the bridges. Meanwhile, work on retaining walls and sound wall construction continues on the southbound lanes from Alfriston Road to Takanini. It is great that completion of this south-bound section is still on schedule for this year.
This year has got off to a fantastic start and I am sure that positive momentum will continue. I do wish you a very prosperous and rewarding 2017.