After significant discussion, the New Zealand Cabinet has passed new laws to begin the transition towards paying for the country’s roading network through electronic road user charges.
The changes passed include:
- Removing the requirement to carry or display RUC licences, allowing for digital records instead.
- Enabling the use of a broader range of electronic RUC devices, including those already built into many modern vehicles.
- Supporting flexible payment models such as post-pay and monthly billing.
- Separating NZTA’s roles as both RUC regulator and retailer to foster fairer competition.
- Allowing bundling of other road charges like tolls and time of used based pricing into a single, easy payment.
“The abolition of petrol tax, and the move towards all vehicles (whether they be petrol, diesel, electric or hybrid) paying for roads based on distance and weight, is the biggest change to how we fund our roading network in 50 years,” says NZ Transport Minister Chris Bishop.
“Right now, New Zealanders pay Fuel Excise Duty (FED, or petrol tax) of about 70c per litre of petrol every time they fill up at the pump with a petrol car. Diesel, electric, and heavy vehicles pay Road User Charges (RUC) based on distance travelled.
“This revenue is funnelled into the National Land Transport Fund which funds the building of new roads and maintaining our existing ones.”
Bishop says this system will allow for the road user charge to better reflect how New Zealanders use their roads.
“As our vehicle fleet changes, so too must the way we fund our roads. It isn’t fair to have Kiwis who drive less and who can’t afford a fuel-efficient car paying more than people who can afford one and drive more often,” he says.
“This is a change that simply has to happen. The government has recognised reality and is getting on with the transition.
“The government’s plan will eventually see all vehicles pay based on actual road use (including weight) regardless of fuel type.
“The transition will happen in stages, beginning with legislative and regulatory reform to modernise the current RUC system and enable private sector innovation.”
Heavy vehicles have led the way for this system, with half of the nation’s heavy vehicle fleet already using technology in line with the E-RUC.
“The current RUC system is outdated. It’s largely paper based, means people have to constantly monitor their odometers, and requires people to buy RUC in 1000 km chunks,” Bishop says.
“We’re not going to shift millions of drivers from a simple system at the pump to queues at retailers. So instead of expanding a clunky government system, we will reform the rules to allow the market to deliver innovative, user-friendly services for drivers.
“A handful of E-RUC companies already do this for about half of our heavy vehicle fleet and there are several companies, both domestic and international, with innovative technology that could make complying with RUC cheaper and easier.”
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