Road user charges
Last updated on
12/01/2012 4:35 p.m.
Road user charges (RUC) are paid on all diesel vehicles and on all vehicles over 3.5 tonnes. This page contains information about RUC in New Zealand.
On this page:
What is RUC and what is it used for?
The road user charges (RUC) system in New Zealand was established in 1978.
All the revenue from RUC goes into the National Land Transport Fund (NLTF). The fund is used mainly for road construction and maintenance, along with other activities benefiting road users.
RUC rates are set according to vehicle types and weights and vary in proportion to the roading costs to the network related to different vehicles. This is intended to encourage transport operators to make efficient choices when transporting freight, ie to use vehicles that balance direct operating costs and damage to roads.
National Land Transport Programme expenditure 2009-2012
- State highways: 53 percent
- Local roads: 22 percent
- Road policing: 10 percent
- Public transport: 10 percent
- Other: 5 percent
Why isn’t diesel taxed at the pump like petrol?
An estimated 36 percent of diesel is used off-road, such as on farms, by manufacturing, industrial and commercial ventures, and boats. Taxing this would impose an unfair burden onto these sectors. Operating a refund system would be costly and cumbersome to administer and involve compliance costs without any related benefit.
How is RUC collected?
RUC is collected by NZ Transport Agency agents, such as NZ Post shops and the Automobile Association, and via the NZ Transport Agency’s website. It’s a bit like car registration except that you do not get a reminder, and you have to pay it according to the distance on your odometer (or hubodometer for vehicles over 3.5 tonnes). It is enforced through NZ Transport Agency and Police checks.
What is revenue collected from RUC used for?
All revenue gathered from RUC goes into the NLTF which funds central government expenditure on transport.
Increases in RUC will ensure that diesel users continue to pay their fair share of land transport costs.
Why do different vehicle weights and types have different RUC licence costs?
All other things being equal, the heavier a vehicle is the more damage it does to the road surface. Other factors, however, also make a difference. In particular, the number of axles and tyres that a vehicle has affects road wear.
For example, a four-axle truck with two double sets of wheels at the rear spreads its weight across the ground more evenly than a truck with fewer axles and wheels, and thus causes less wear and tear on the road.
Where can I find more information about RUC?
You can look at the NZ Transport Agency website, or ring the help-desk at the RUC Contact Centre on 0800 655 644, Monday to Friday 8am to 6pm.
Diesel car users
Am I still better off driving a diesel car?
The average petrol car uses about 10 litres of petrol to cover 100 kilometres. Since the 1 October 2010 increases in petrol excise and GST, this results in total tax of $5.58, including GST.
The cost of RUC to cover the same 100 kilometres, under the current rates, is $4.43 for a two tonne vehicle (a small car) and $4.65 for a three tonne vehicle (a large car).
The benefits of running a diesel vehicle increase further once their superior fuel economy is taken into account. Fuel consumption tests generally give results between 20 and 30 percent better for a diesel engine car compared to the same model with a petrol engine.
Why not take diesel cars out of the RUC scheme?
An independent review of the RUC system considered this option carefully, but decided that, on balance the existing RUC scheme should be retained.
Taking diesel cars out of the RUC scheme would mean placing a tax on diesel.
An estimated up to 36 percent of diesel is used off-road, such as on farms, by manufacturing, industrial and commercial ventures and boats. Taxing this would impose an unfair burden onto these sectors. Operating a refund system would be costly and cumbersome to administer and involve compliance costs without any related benefit. A refund system would also potentially be susceptible to fraudulent claims.
Introduced to Parliament in 2010, the RUC Bill contains a package of proposed reforms to simplify and modernise the RUC system.
The reforms comprise of:
- changing the current system whereby operators nominate a licence weight for RUC purposes to one where each vehicle will have its own permanent RUC weight
- removal of the time licence system and modernisation of the list of vehicles exempted from road user charges
- improvements to the system to enable greater compliance
- an improved regulatory framework for electronic management systems
- a fairer offence and penalty regime, especially for light diesel vehicles
The changes to the system mean vehicles that are similar will pay similar levels of charges. Heavy vehicles as a group will continue to pay the same amount as at present, covering the road damage they are responsible for. The changes will also encourage the most efficient use of these vehicles.
There will be time savings for all transport business operators through the simplification of RUC licence purchases and less complex roadside enforcement checks.
Some operators will find that their RUC payments increase as a result of the change, while others will see a decrease, depending on the nature of the loads they carry and their choice of vehicle. The marginal changes are however likely to be relatively small compared to total truck operating costs and the change should affect all operators who carry similar loads equally.
Learn more about the proposed changes and follow the progress of the Bill.
The Road User Charges Review Group was established in August 2008 to conduct an independent review of the New Zealand road user charges system.
Read more about the Review, including the Review Group's report.
Results of the Review
Some recommendations of the Review have already been implemented, including:
- legislation to require a period of six weeks notice of RUC rate increases
- regulations to allow for the use of electronic distance recorders and electronic display of RUC licences (1 January 2010)
- implementation of some of the recommendations concerning the cost allocation model
Many of the recommendations of the Review that the government accepted are covered in the Road User Charges Bill 2010 (RUC Bill).
The following sets of questions and answers were published at the time that various announcements were made in the last few years.
RUC increases and the expiry of RUC licences for heavy vehicles (2009)
Read questions and answers that were published in 2009 when the notice of RUC increases and the expiry of RUC licences for heavy vehicles were announced.
Exemption for light electric vehicles from RUC (2009)
Read questions and answers that were published in 2009 when the Exemption for light electric vehicles from RUC was announced.
Fee increases for trailers (October 2010)
Read questions and answers that were published in 2010 when the 15 October 2010 fee increases for trailers were announced.
Fee increases for RUC and fuel excise duty on petrol (October 2010)
Read questions and answers that were published in 2010 when the 1 October 2010 fee increases for RUC and fuel excise duty on petrol were confirmed.
Further information on RUC
For further information on RUC look at the NZ Transport Agency website, or ring the help-desk at the RUC Contact Centre on 0800 655 644, Monday to Friday 8am to 6pm.
Other useful pages (Ministry website)
Road user charges review
Road user charges legislation changes