Driving Change: Reviewing the Road User Charges System

Last updated: April 20, 2022

Economy

Driving Change: Reviewing the Road User Charges System

Published: April 20, 2022

Stage: Ongoing

Priority: Medium

Submitting To: Waka Kotahi NZ Transport Agency

Issue for Business: NZ Transport Agency wants to recover costs of damage to roads while also addressing other issues with little relation to distance travelled or vehicle weight within RUC.

Action: BusinessNZ is seriously concerned about the use of RUCs as a de facto mechanism for achieving other government objectives, such as promoting greater use of EVs to lower greenhouse gas emissions. The net impact is likely to be less money available for spending on roads as different transport modes are cross-subsidised by petrol-and diesel-powered vehicles. Second, many so-called externalities associated with on road transport - greenhouse gas emissions and accidents for example - are respectively already covered by the Emissions Trading Scheme (ETS) and by accident compensation (funded by the Motor Vehicle Account via petrol levies, Motor Vehicle Registration levies and vehicle insurance levies). One of BusinessNZ’s key points in our submission is that if after a thorough review of the RUC system, in government’s opinion there is a sound public policy reason for the continued cross-subsidisation of any new or existing road users e.g., EV owners, the nature of the subsidisation should be made transparent, and funding provided from general taxation. The funding will then show clearly in the government accounts, allowing the quality of the expenditure to be judged alongside all other areas of government expenditure.

Outcome: Awaiting Government decisions

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