Road User Charges system He pūnaha utu mō ngā kaiwhakamahi rori

The Government announced that owners of light electric vehicles (EVs) and plug-in hybrid vehicles will start paying road user charges (RUC) when the current exemption expires at the close of 31 March 2024.

EV owners have been exempt from paying RUC since 2009. The exemption was put in place until EVs reached around 2 per cent of New Zealand’s light vehicle fleet. This point has now been reached so the government has decided to end the exemption.

The Government decided to create a reduced RUC rate for plug-in hybrid vehicles. A reduced rate reflects that plug-in petrol hybrid owners already pay some fuel excise duty when they buy petrol.

From 1 April 2024 owners of light EVs and plug-in hybrid vehicles under 3.5 tonnes will need to buy a RUC licence and display it on their windscreen.

They will be able to do this either online or in person at an NZTA agent. There will be a 2-month transition period to allow sufficient time for people to get registered in the RUC system without being penalised for unpaid RUC.

Read about what to pay, how and when on New Zealand Transport Agency’s website.(external link)

Read the Minister of Transport’s media release(external link).

FEB 2023 

Extending fuel excise duty and public transport fares reductions, and reintroducing reduced rates of road user charges 

In response to continued high fuel prices placing pressure on household budgets, the Government has announced an extension to the temporary transport support measures: 

• Petrol excise duty remains at its current reduced rate of 45.02 cents per litre until 30 June 2023 

• Reduced road user charges rates have been reintroduced and apply until 30 June 2023. All rates are reduced by 36 percent. You can contact Waka Kotahi with questions about individual rates. 
• Public transport fares remain at half price until 30 June 2023. Community Connect (ongoing half-price public transport for community services cardholders) will commence on 1 July 2023 and half-price fares for Total Mobility users will continue indefinitely. 

We released the discussion document Te Huringa Taraiwa: Te arotake I te pūnaha utu kaiwhakamahi rori | ‘Driving Change: Reviewing the Road User Charges System’.  

The key topics in the discussion document include: 

• how RUC might be used to charge for greenhouse gas emissions and other factors beyond damage to the roads (like noise pollution and congestion); 
• how light electric vehicle (EV) owners can transition into paying RUC when the exemption for EVs ends on 31 March 2024, and; 
• how RUC’s compliance regime can be improved. 

Read more about the consultation, and read the discussion document and related documents, here.(external link)   

Consultation closed in April 2022.  

Road user charges reduced between 21 April 2022 and 21 July 2022(external link)

Between 2013 and 2016, we commissioned Allen & Clarke to conduct evaluations of the Act in 3 stages.

2013 evaluation

The first evaluation investigated early progress towards the objectives of the changes that came about in the Act. They compared the effectiveness of the modernised and previous systems, and investigated whether any further adjustments were necessary.

The evaluation found changes to the RUC system had been relatively successful in creating greater equity, and that based on both industry and government perceptions, the new RUC system had more integrity.

2014 evaluation

The second evaluation included a particular focus on how the RUC system worked for light diesel vehicles.

The evaluation found that light diesel vehicles owners continue to have relatively limited knowledge of the RUC system, and identified that some owners overrun the distance covered by their RUC licences and that checking RUC compliance at the warrant of fitness test helps to ensure the integrity of the system.

2016 evaluation

The third evaluation took a summative approach, aiming to make definitive judgements on the success, or otherwise, of the changes made by the Road User Charges Act 2012.

The evaluation found that, as a whole, the Act was functioning effectively as a legislative basis for the RUC system.

The Act came into force on 1 August 2012, bringing about changes to how the RUC system worked and allowing the making of regulations to support the implementation of the legislation.

We assisted with policy advice on the legislation, including preparing Cabinet papers on key elements of the legislation. We also supported the Transport and Industrial Relations Select Committee in considering the proposed legislation.

Road User Charges Bill(external link)

The overall purpose of the changes was to:

• continue the RUC system by imposing charges on non-petrol vehicles for their use of the roads in proportion to the costs that the vehicles generate
• modernise and simplify the system
• improve compliance with, and the recovery of, RUC
• establish a framework for electronic management of RUC.

The changes reduced compliance costs, simplified administration and allowed Waka Kotahi NZ Transport Agency to take greater advantage of electronic technology for the administration and collection of RUC. They included:

• each vehicle having its own permanent RUC weight
• removing the time licence system
• simplifying the list of vehicles exempt from paying RUC
• improving the system to enable greater compliance
• introducing a framework for the electronic management of RUC
• establishing fairer offences and penalties especially for light diesel vehicles.

Road User Charges Act 2012(external link)

Since the Act came into force, regulations covering exemptions, RUC rates, infringements and other aspects have passed into law.

RUC regulations(external link)

The review also:

• considered the introduction of a diesel tax but determined that RUC continued to be the most appropriate charging system for diesel vehicles
• identified the opportunity to further harness technology, for example, an electronic collection system, and other administrative changes to reduce compliance costs and evasion.

Road user charges review released(external link)

The review led to the enactment of the Road User Charges Act 2012, which was introduced into Parliament on 25 November 2010.