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The nationwide restrictions under COVID-19 Alert Levels 2, 3 and 4 between April and July meant that many New Zealanders did not travel as much and so spent less on fuel or road user charges. Consequently, this had an impact on land transport revenue from petrol excise duty and road user charges.
Between April and June 2020, we provided advice to the Minister of Transport on the potential impact of the COVID-19 lockdown on the National Land Transport Fund (NLTF). We also provided advice on new funding requirements across the transport sector generally (rail, maritime, aviation) relating to COVID-19.
Our advice on National Land Transport Fund revenue used scenarios based primarily on the number of months at each alert level and the length of the lockdown. Due to the rapidly changing circumstances at the time, the estimates were quite uncertain. Most of the estimates were made before the move to Alert Level 1. Because of the earlier and faster than expected nationwide move down alert levels, the likely actual impact of COVID-19 on land transport revenue is expected to be less than those indicated in the papers.
To address the ongoing revenue shortfall associated with COVID-19, the Government agreed to several measures:
You may note some of the options canvassed in the papers to address reduced revenue include adjustments to the rates of petrol excise duty and road user charges. The Minister of Transport has ruled out any increases to petrol excise duty and road user charges for the next three years (until 2023).
We continue to monitor land transport revenue, including the potential impact on revenue from the re-emergence of the virus, and a further update to revenue forecasts will be included as part of the Half-Year Economic and Fiscal Update 2020. We also continue to work with Waka Kotahi NZ Transport Agency to understand the potential implications of COVID-19 for investment in the land transport system, and the impact it may have on future expenditure commitments.