Vehicle Licensing Reform - decision questions and answers
Last updated on
31/01/2013 3:11 p.m.
Warrant of fitness
What are the planned changes to New Zealand’s warrant of fitness system?
Currently, warrant of fitness inspections are annual for vehicles up to six years-old and six-monthly thereafter.
The new warrant of fitness package includes:
- after initial inspection, no further inspection until vehicles are three years-old
- annual inspections for light vehicles three years and older, that were first registered anywhere, on or after 1 January 2000
- six-monthly inspections for vehicles first registered before 1 January 2000
- extra education and communication measures will be developed to encourage New Zealanders to keep their vehicle roadworthy
- extra Police enforcement activities
- Ministry of Transport and the NZ Transport Agency monitoring to assess any effects on safety the changes may have (additional measures will be considered, if needed).
Why is change needed?
New Zealand has one of the most frequent vehicle inspection systems in the OECD. Analysis indicates checking vehicles so often places unnecessary costs on motorists. Each year, New Zealanders spend around $245 million on inspection fees and around $100 million in time getting warrants of fitness. Vehicle technology has dramatically improved since six-monthly inspections were first introduced in the 1930s.
By using measures, such as education and enforcement, to promote vehicle safety and roadworthiness, the frequency of inspections can be reduced. An annual inspection maintains regular checks on vehicle roadworthiness while providing savings to motorists.
International research and analysis of New Zealand crash data shows vehicle defects play a very small role in road crashes and overall, their contribution to vehicle crashes has been decreasing.
Percentage of crashed cars and vans with a warrant of fitness defect, by vehicle age, over time
Because circumstances are different in other countries, up-to-date New Zealand data has been analysed. This data shows approximately 0.5 percent of all fatal and injury crashes have vehicle factors cited as the sole cause of the crash. Of fatal and injury crashes involving light vehicles, around 2.5 percent involve a contributing vehicle defect, which could have been identified by a warrant of fitness inspection. The most recorded causes of serious crashes are alcohol, loss of control and speed.
The package of supporting safety measures is designed to promote and enforce responsible vehicle maintenance by New Zealanders, as happens in other countries.
The package of changes could benefit New Zealanders by around $159 million each year, while still keeping our vehicles and roads safe (the value of the benefits is $1.8 billion over 30 years).
Will 1 January 2000 be a fixed cut-off date, over time, for annual inspections?
Yes, vehicle registration on or after 1 January 2000 will remain the cut off point for annual inspections. Any vehicle registered before 1 January 2000 anywhere will remain on six-monthly inspections until it leaves the vehicle fleet.
The 2000 date was chosen to acknowledge there is public concern about older vehicles. Over 12 years old, research shows that the percentage of vehicles involved in crashes with warrant of fitness defects starts to increase. The age at which the increase starts to occur is getting older as better quality vehicles come into the fleet.
Our projections indicate that by 2020, about 370,000 light vehicles will be left on six-monthly inspections. This is about 13 percent of light vehicle fleet of that time.
Why were these particular changes selected?
The reform package recommended for the warrant of fitness system was chosen because it keeps vehicles safe while, at the same time, offering large benefits overall to motorists. It recognises the quality of vehicles and their safety features are improving over time.
The package makes sure vehicles registered before 1 January 2000 remain on six-monthly inspections. This recognises concern about older vehicles while allowing a progressive shift to annual inspections.
The public discussion document canvassed four options. Following Cabinet feedback three options were put forward, including an option which acknowledged concerns about older vehicles but allowed for a progressive shift to annual inspections as newer vehicles enter the fleet.
The options considered but not selected either delivered smaller benefits for motorists, would have been difficult to comply with and enforce, or carried more risk than the recommended package.
When will the changes happen?
The change to WoF inspection frequency will need amendments to Land Transport Rule: Vehicle Standards Compliance 2002.
Changes to the transport rules will be made in 2013, with the new inspection requirements targeted to begin on 1 July 2014. This could be brought forward provided rule-making and other implementation work allows for a reasonable lead-in time before the new inspection system starts.
Will there be any safety risks and if so, how will these be countered?
The package will avoid adverse impacts on safety. The recommended reform package takes a precautionary approach to older vehicles by keeping pre-2000 vehicles on six-monthly inspections and includes well-proven road safety measures, such as education and advice programmes and Police enforcement, to encourage New Zealanders to keep their vehicles safe.
Information will be provided during the move from the old to the new system, and as part of an ongoing strategy to encourage vehicle owners to take greater responsibility for the safety of their vehicles. Initiatives will likely include print and web advertising, brochures for agents, raised awareness of enforcement activities and roadside message boards.
Evidence shows effectiveness of education and advice measures increases greatly when backed up by enforcement. For this reason, there will be increased enforcement of vehicle safety requirements to enhance awareness and support change.
The overall cost of the additional education and enforcement activities will be approximately $3-6 million during the transition period and less than $1 million ongoing.
Why are an improved warrant of fitness test, demerit points for not having a warrant of fitness, or other safety measures, not included in the package?
The combination of targeted education and advice programmes for motorists and increased enforcement activities has been chosen as the best way to maintain road safety.
A key part of the reform package is ongoing monitoring of the package to ensure the best mix of measures continues to be employed.
There is also ongoing work aimed at improving vehicle safety and roadworthiness. The NZ Transport Agency, for example, conducts reviews each year to update and clarify inspection requirements or in response to feedback from vehicle inspectors and others, and will continue to do so.
Will the reforms affect businesses that provide warrant of fitness inspections?
A reduction in the frequency of inspections will affect inspecting organisations because the amount motorists pay these businesses for inspections will fall.
Inspecting businesses include testing stations and a large number of other outlets, such as garages, that deliver both inspections and repairs. The vehicle inspection and repair industry will have a long lead-in time to adjust to the changed environment.
New Zealanders will continue to have good access to inspection services and inspection prices and it is likely there will be a good level of competition between providers.
How much will the changes cost?
The implementation costs, and costs of the education and enforcement measures are estimated at between $4.3 - $7.2 million to deliver the package, with $0.1 – 0.4 million of annual ongoing costs (excluding depreciation). Officials are developing a final funding package and will report back to Cabinet at the end of April.
Are there other opportunities to have my say?
There will be a period of consultation before any amendments to Land Transport Rule: Vehicle Standards Compliance 2002 are made. A draft of the proposed Rule will be notified, and made available to interested groups and individuals for comment. It will be advertised on the NZTA and Ministry of Transport websites and in the public notice columns of the major metropolitan newspapers, in addition to the New Zealand Gazette.
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Certificate of fitness
What are the planned reforms to New Zealand’s certificate of fitness system?
Currently, heavy vehicles, and light vehicles operated as a transport service (such as taxis and rental cars) are inspected for a certificate of fitness. Vehicles are usually inspected every six months to make sure their condition and equipment meet safety standards. The frequency of inspections can be varied by the NZ Transport Agency (NZTA) to between three and nine months although this discretion has not been used much to date.
There are only three organisations approved to provide certificate of fitness inspection services. These organisations do not provide repair services and there are a limited number of approved sites where inspection can be done.
The changes to the certificate of fitness system will:
- allow vehicle owners and operators to have greater choice about where and from whom they get their vehicles inspected, and greater flexibility to combine inspection and repairs, and possible accreditation for operators to manage the safety of their vehicles
- keep six-monthly inspections but allow increased flexibility for good performing operators to have an extension up to 12 months, while poor operators can be placed on an increased frequency of between three and six months.
This change is subject to a report to government on funding due by 30 April 2013.
The Ministry of Transport and NZTA will monitor road safety and sector productivity to assess the results of the change. Changes will be proposed if required.
How will high-quality inspections be maintained with more inspection choice and the ability to combine inspections and repairs?
The certificate of fitness inspection market is regulated by the NZTA.
The NZTA will be reviewing its policies to enable greater choice. The NZTA will make sure there continues to be robust approval criteria and processes for appointing inspectors, and effective audit and monitoring systems. The goal is to make sure that inspection organisations manage conflicts of interest well, and that high quality inspections continue.
The NZTA will provide regular updates to the Associate Minister of Transport about progress in revising its policies.
Why are these reforms recommended?
The current certificate of fitness system places a burden on transport operators including travel costs, waiting times and associated business disruption costs. About $20 million in time is spent in getting certificates of fitness. Facilities are also duplicated between operators, repairers and inspectors.
To reduce the burden the system imposes, transport operators will have more choice over where inspections take place, and by whom. For example, more inspections will be able to done at the places where vehicles are serviced. Strong regulatory controls to preserve high quality and robust inspections will continue.
The proposed changes are designed to decrease the time vehicles are out of service, leading to productivity improvements for transport operators. Benefits resulting from these changes are estimated to be in the range of $14 - $41 million per year (net present value of $160 – $460 million over 30 years).
The small adjustment in variable inspection frequency, from nine to 12 months as the upper limit, will see operators with good safety records rewarded with less frequent inspections and operators with poor records more closely managed. That way the inspection system will be more closely targeted to safety risk, while maintaining the current good safety record.
Will the changes create safety risks for the commercial fleet or motorists?
Only operators with the best safety records would likely be approved to have fewer inspections, while poor operators could be required to have inspections as often as every three months.
When will the changes happen?
The changes to certificate of fitness variable inspection frequencies will need amendment to Land Transport Rule: Vehicle Standards Compliance 2002. The Rule changes will be made in 2013 to allow for a reasonable lead-in time before implementation of the revised variable inspection frequency from 1 July 2014 or possibly sooner.
Changes to NZTA policies to enable greater choice in the inspection market are also expected to be completed in time for implementation from 1 July 2014 or possibly sooner. The NZTA will continue to consult current inspection providers, potential new providers and the road transport industry as it develops these new policies.
How much will the changes cost?
The cost of implementing the changes will be in the range of $2.2 million, with ongoing costs of $0.6 million (excluding depreciation).
Will the reforms affect the businesses that provide certificate of fitness inspections?
Over time, the recommended changes are likely to have an impact on the current businesses that issue certificates of fitness because new businesses will be able to issue certificates of fitness. Because the default inspection frequency is remaining at every six months, the overall size of the inspection market will stay around the same. As a result, the total number of inspections will stay roughly the same.
Are there other opportunities to have my say?
Before any amendments to Land Transport Rule: Vehicle Standards Compliance 2002 are made there will be a period of consultation. A draft of the proposed Rule will be notified, and made available to interested groups and individuals for comment. It will be advertised on the NZTA and Ministry of Transport websites and in the public notice columns of the major metropolitan newspapers, in addition to the New Zealand Gazette.
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Annual vehicle licensing (commonly known as registration)
What are the recommended changes?
The annual vehicle licensing fee collects revenue for two government accounts: ACC and the National Land Transport Fund. The ACC account provides injury cover for all people injured on New Zealand roads, while the National Land Transport Fund pays for the land transport system.
The recommended approach will make it easier for people to understand what they are paying for, and will use targeted tools to encourage people to pay on time and comply. This approach is significantly different from the current system, which relies heavily on issuing infringements to deal with vehicle owners who do not renew their licence on time.
The improved system would make it easier for vehicle owners who do their best to pay on time, while still using penalties for those who choose not to pay on time. Officials will report to Cabinet by 30 September 2013 with a detailed improvement package on ways to:
- make it easier for motorists to pay on time by improving communication
- encourage on-time payment through the use of payment incentives such as late payment penalties
- use different infringements to better distinguish between those are who late to pay and those who are evading payment.
Why can’t the fee be collected on petrol tax or through insurance?
Some public and stakeholder submissions suggested that the ACC levy and land transport charges should be collected by other means, such as a petrol tax or through road user charges. Options for this type of fundamental reform were not considered as part of this review because the ACC and the Ministry of Business, Innovation and Employment are currently investigating options for the future collection of the ACC motor vehicle levy. This includes investigating the alignment between safety risk and cost factors posed by a particular driver or vehicle.
The ACC investigation might affect how the motor vehicle levy is collected in the future, which could have a significant impact on the annual vehicle licensing system. For this reason, current reforms are focussed on how the current annual vehicle licensing system can be improved.
Why are improvements to the annual vehicle licensing system needed?
Complying with annual vehicle licensing should be as easy as possible for people. The current system relies heavily on issuing infringements to ensure motorists keep their vehicle licence up to date. By potentially using business processes and late payment penalties, people should be encouraged to pay on time and fewer infringements will be issued to simply forgetful motorists. Enforcement and infringements can be focused on those who attempt to avoid paying their fair share, rather than those who are simply a little overdue.
There will always be a small number of people who choose not to pay their fair share, but these few should not penalise and punish the majority of people who do. It is about achieving the right balance.
Will the Police and local authorities still issue infringement notices for non payment of annual vehicle licensing?
Yes. Officials will be reporting back to Cabinet in September 2013 on a detailed improvement package for annual vehicle licensing. This will include possible changes to the enforcement system but those people who deliberately evade payment can still expect sanctions.
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Transport services licensing
What is transport services licensing?
The transport services licensing system is used to identify and regulate commercial transport operators. The system covers the range of services provided by commercial transport including passenger services - such as taxis and buses - freight services, towing services and rental vehicles.
Its main purpose is to contribute to road safety. It sits alongside other controls such as fatigue management, vehicle safety and driver licensing, all of which work to manage the problems that can result from commercial transport.
What changes to transport services licensing are proposed?
The current system has been retained, but the NZ Transport Agency (NZTA) has been asked to review some aspects of the system to see if it can be streamlined and refocused towards operators who are more likely to present a risk to road users.
The NZTA will report back to the Associate Minister of Transport by 30 September 2013 on:
- the implications of removing farmers and trades people who only use one goods vehicle of less than 15,000kg gross vehicle mass, from having a transport services licence
- opportunities to better manage and exit unsafe and poor performing operators from transport services licensing
- the NZTA’s fees and charges for its regulatory activities directed at operators who hold a transport services licence.
Why is transport services licensing being retained?
The transport service licensing system plays an important role in identifying operators and linking vehicles and drivers to the operators who are responsible for them. This is critical for the Operator Safety Rating System that has been established to encourage greater safety by rating operator performance.
Transport services licensing can also be used to remove unsafe and poor performing operators from providing transport services. These provisions are being reviewed to see if they can be improved.
When would any changes come into effect?
If changes were recommended, amendments to existing legislation could be introduced later in 2013 or 2014. Any changes to the current system, will, however, only occur after further consultation with the licensed transport industry.
Will there be another opportunity to have my say?
The reviews to be undertaken by the NZTA will involve interested stakeholders. Stakeholder and public input would also be expected if any proposals resulted in the need to change legislation.
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Submissions from the public and transport sector organisations
What were the main trends in the summary of submissions from the public and organisations?
4593 submissions were received on Vehicle Licensing Reform. 4489 submissions were from individuals and 104 submissions from organisations. The majority of submissions focussed on the options to reform the warrant of fitness system. Of the total number of submissions, 4524 submitted on warrant of fitness reform. Submitters in favour of some sort of reform (2263) were evenly split with those in favour of keeping the current system (2265). Submitters were able to choose one or more of the proposed options or submit their own alternative option.
Read the full Summary and Analysis of Submissions (PDF, 346kb)
What role did submissions and other information play in the recommendations for change?
The information from public consultation was considered alongside research, information from stakeholders, cost-benefit modelling and safety modelling in developing recommendations for Ministers.
Read phone survey and focus group report
Read the full Summary and Analysis of Submissions (PDF, 346kb)