Changes to administration fees for motor vehicle registration and licensing, and road user charges - Questions and Answers (2012)

Find out more about the changes to the administration fees for motor vehicle registration and licensing, and road user charges.

View Minister Brownlee's media release on the beehive website.

View the Regulatory Impact Statement on the Review of Motor Vehicle Registration and Licensing and Road User Charges Administration Fees.

What is changing?

An independent review of the administration fee portion of charges associated with road user charges and the registration and annual licensing of motor vehicles was carried out. Cabinet subsequently approved the review’s recommendation to develop a new framework for setting and managing the fees.

The review found that under the current system, administration fees do not align well with the costs they are intended to recover. The new framework sets administration fees that are fairer, transparent and more closely aligned to the actual costs of providing the service they relate to. It ensures wherever possible, users who primarily benefit from specific activities pay the cost of the service provided and users are encouraged to utilise the most efficient and cost effective payment option. 

Also, the cost of activities that maintain the integrity of the land transport system have been removed from administration fees and instead will be covered by the National Land Transport Fund, as it is more appropriate that these costs are met proportionately by all road users.

Why was the review carried out?

The administrative fees have not been comprehensively reviewed since the early 1990s. Since this time there has been considerable change in the external environment, including advances in technology and changes to the regulatory environment. Opportunities now exist to better target and align administration costs to the services they are intended to recover.

What is included in the new fee framework?

• Adjustments (reductions in most cases) to existing administration fees to better target and align the fees with the actual cost of providing the service.
• Introduction of specific fees for some transactions that did not previously have an administration fee applied to them.
• Introduction of variable fees to reflect the different costs associated with each payment option
• The annual $5.67 million cost associated with activities that protect the land transport tax base and maintain the integrity of the land transport system will now be funded from the National Land Transport Fund. This removes these costs from the general licensing administration fees.

What are the new fees?

This table shows the existing administration fees and the new fees resulting from the review (PDF, 66kb). The highlighted columns indicate which transactions will now have an administration fee applied.

When will the changes be introduced?

Changes to administration fees for road user charges will be introduced on 1 August to align with the implementation of the Road Users Charges Act 2012.

The changes to administration fees for motor vehicle registration and annual licensing will be introduced on 1 October 2012.

Why is payment by the internet channel cheaper?

The administration fees for registering a motor vehicle, and for purchasing a motor vehicle licence or road user charges using the internet, will be set at 70 percent of the forecast transaction cost in order to encourage people to use the lower-cost online payment channels. This will allow the NZ Transport Agency to achieve additional cost savings which can be passed on to users in the future.

When will the NZ Transport Agency next review fees?

The NZ Transport Agency will review motor vehicle registration and licensing and road user charge administration fees in mid 2013. The NZ Transport Agency will report to government on its findings of this review by December 2013.

What services will no longer be covered by administration fees?

The cost of activities that maintain the integrity of the land transport system have been removed from administration fees and instead will be covered by the National Land Transport Fund. It is considered more appropriate that these costs are met proportionately by all road users.

• The cost of administering fuel excise duty refunds. It is not appropriate that costs associated with the fuel excise duty system be met, in part, by users of unrelated administrative services.
• The cost of administering road user charges refunds, investigations and reviews.
  It is not appropriate to recover the cost of administering refunds from users who, by definition, are entitled to a refund.
• The Ministry of Transport’s forecasting and strategy work.
  It is appropriate that all road users contribute to meeting the cost of this service.