New Zealand’s road freight associations are backing the Government’s move to modernise the road user charges (RUC) system ahead of a wider transition to universal electronic charging.
Transport Minister Chris Bishop confirmed Cabinet has agreed to a suite of legislative reforms that will pave the way for replacing fuel excise duty with distance- and weight-based RUC for all vehicles.
Transporting New Zealand chief executive Dom Kalasih says the changes, which include enabling greater use of technology and private sector delivery of RUC services for light vehicles, are a step in the right direction.
“Having modern, well maintained transport infrastructure is essential to moving people and freight in a safe, affordable, and reliable way,” Kalasih says.
He says a growing number of electric, hybrid and fuel-efficient vehicles are contributing little or nothing through the current fuel tax model, placing long-term strain on the National Land Transport Fund.
“With an increasing number of electric, hybrid, and efficient ICE (internal combustion engine) vehicles not paying fuel excise duty or contributing at reduced rates, we need reform to avoid a structural funding deficit.
“We simply cannot afford to have a large proportion of the light vehicle fleet not contributing fairly to the maintenance and improvement of our roads. That is a recipe for congested, unsafe, pot-holed roads.”
Kalasih says the freight sector has decades of experience paying weight-based RUC and is confident the light vehicle fleet can be transitioned without significant disruption.
“It’s encouraging to see the Government isn’t rushing to implement the transition, is focused on ensuring the RUC system is user-friendly and accessible to lower income people and is continuing a bipartisan approach to these reforms.
“The Ministry of Transport has been engaging with us on this change for a considerable period and it’s good to see the Minister is addressing this issue. We will continue to provide advice on how to implement the RUC transition smoothly, learning lessons from our trucking members’ experiences with paying and managing RUC.”
National Road Carriers Association (NRC) also welcomed the announcement, describing the move as an opportunity to establish a more sustainable revenue base for the country’s transport infrastructure.
“Our Road User Charges (RUC) system gives New Zealand a unique opportunity to transition the entire vehicle fleet onto a single platform that is proven to allocate cost based on actual impact on the roading infrastructure,” NRC chief executive Justin Tighe-Umbers says.
“And while it is a single system, it allows for digital innovation for payment options.”
Tighe-Umbers says revenue from the current fuel tax model is falling as vehicle technology improves, while demand for road investment continues to grow.
“Revenue generated from the current RUC user pays model is declining, while the need for roading investment and maintenance grows.
“This is an unsustainable situation, and a wholesale fix is needed, including a move away from the fuel excise duty. NRC supports the Government’s recognition of the urgency of this situation and encourages the rapid application of expertise and resource to get it done.
“NRC looks forward to continuing to work with officials on this fundamental transition and evolution of Road User Charges.”
