A proposal by Auckland Mayor Phil Goff to introduce a regional fuel tax for new roads has been declined by government.
Finance Minister Steven Joyce says Cabinet have decided to disagree. Instead, they are considering congestion charges.
The extra charges would be offset with reductions in other levies like petrol taxes and road user charges.
Mr Joyce said fuel taxes are "administratively difficult, prone to leakage and cost-spreading, and blur the accountabilities between central and local government."
Phil Goff says this option won't ease Auckland's traffic woes for another ten years and will leave a big financial hole in the short-term.
"We have a $400 million deficit in spending on traffic and transport infrastructure," he says. "If not a regional fuel tax what are we going to put in place? Because I am not going to do the alternative which is to put a 16 per cent increase in rate rises on Aucklanders."
Generation Zero are disappointed with the governments decision to decline the tax. According to their organisation, work undertaken in 2009 by the government showed that a one percent tax rise across the Auckland region would raise $12 million per annum. By raising petrol seven cents per litre, a petrol tax could conservatively raise $84 million per year.