Are Road User Charges for every vehicle actually fair?

Written By: - Date published: 8:01 am, January 22nd, 2024 - 99 comments
Categories: climate change, Environment, science, simeon brown, transport - Tags:

New Zealand is one of the most car-reliant and petroleum-reliant countries on earth. So how we are taxed to travel on land has huge equity implications.

Minister of Transport Simeon Brown has stated multiple times that we will in time shift to a totally Road USer Charge system for all vehicles, rather than fuel tax. That needs to be tested.

Road User Charges are paid for every 1,000kms travelled. Fuel Excise Tax is paid by the litre of petrol used.

We should outline some basic principles about what “fair” means in tax. Let’s get to some principles.

Both the 2009 and 2018 Tax Working Groups included the following principles in assessing the design of the tax system:

Efficiency: The principle of efficiency seeks to raise tax at the least cost to domestic residents.

Fairness/Equity: The principle of equity is typically divided into its horizontal and vertical components.

Revenue integrity: The Revenue system should be sustainable over time and minimise opportunities for tax avoidance.

Compliance and administration cost: The tax system should be as simple and low cost as possible for taxpayers to comply with, and for Inland Revenue to administer.

So to deal with each in turn briefly, comparing Road User Charges and Fuel Excise Tax


Road User Charges Fuel Excise Tax
Ordinary citizens pay Road User Charges by going into a Post Shop, figuring out what you can afford, and what class your vehicle is, and paying over the counter.

The tax is paid automatically in the over-counter payment at a petrol station

 Fairness and Equity

Vertical equity is the principle that those with a higher income or higher ability to pay, should pay a greater amount of tax

Horizontal equity is that people in the same position should pay the same amount of tax

Road User Charges Fuel Excise Tax
Road User Charges are precisely based on the amount you use the road, not upon your ability to pay.Users are paying the same amount per kilometre.

Owners of light EVs will pay $76 per 1000 kilometres, to match equivalent diesel-powered vehicles. Meanwhile, plug-in hybrid owners will pay a reduced rate of $53 per 1000km, recognising that they also pay excise duty on their petrol.

Fuel Excise Tax favours those with the most efficient vehicles which are usually newer.New Zealand has one of the oldest car fleets in the developed world. Arguably there is less vertical equity in this tax.

 Revenue Integrity

Road User Charges Fuel Excise Tax
With all vehicles paying through the same system (while still differentiating for weight classes), the ability to forecast future income will be easier. Fuel Excise Tax currently captures 81% of New Zealand’s vehicle fleet. About 2% of the full fleet are electric or electric-variant.The National Land Transport Fund has required greater subsidy from other government income over time.

Owners of light EVs will pay $76 per 1000 kilometres, to match equivalent diesel-powered vehicles. Meanwhile, plug-in hybrid owners will pay a reduced rate of $53 per 1000km, recognising that they also pay excise duty on their petrol.

Fuel Use Disproportionality

We need a note on where this government income goes. With all petrol taxes now going into the National Land Transport Fund (NLTF), the amount paid into the fund by petrol users has doubled, while the amount paid by diesel users has remained the same. This means there is a further inequality in the system – users of petrol vehicles pay a disproportionately high amount of tax compared to Road User Charges paid by diesel vehicles.

Income  Inequalities

Low income people with multiple jobs across town, or requiring lots of travel and using their own vehicles, pay more in a Road User Charges system. There’s no more hunting out the fuel price specials across town. AA has just stopped its fuel points system. Wealthier people can work from home on Teams, or they get their cleaners and carers to do the menial trips for them.


As most large fleet operators do already, there will be a strong drive for all companies to attach speed-and-location devices to vehicles.There will be a strong drive to attach it to all vehicles in a family – something akin to tracking the daughters’ cellphone location. It is very easy to give away privacy and impossible to get it back.

Also, NZTA is preparing to take over all cameras in all cities, from public transport to Police enforcement. If you have not paid your RUC you may be able to be pulled over by the cops simply through number plate recognition. That’s a lot of aggregated state surveillance and enforcement power bearing down on you and your car.

Lower Incomes and the Force of the State

For many taxes and charges including water rates, council rates, public transport and many other fees and charges in society, poorer and very old people get discounts and flat fees for a first level of usage. This is more possible with RUC than with fuel taxes. Do we want a Gold Card and Community Card option for RUC?

On the other hand, RUC is a more penetrating and more accurate system of user pays than fuel taxes. Like rates, the rich will be able to pay a year in advance and everyone else won’t be able to.

Will NZTA or the Police be impounding your car if you don’t pay RUC? Will they make payment of RUC a condition of getting a Warrant?

Will failure to pay affect your Driver License points?

Will the Police or NZTA be able to make you forfeit ownership of your car like Councils do to houses for failure to pay rates? Forfeiture might be bearable for those with multiple vehicles, but not for those who can only afford one car and like the rest of us totally rely on it for most of our lives.

More on Fairness

Even if we go to a full Road User Charges system, and it’s efficient to collect, and it takes into account the most vulnerable, does RUC make heavy trucks really pay their way?  Two tonne car does about 10,000 less damage than a 20-tonne truck.

And Road User Charges for vehicles under 3 tonnes make no distinction between a wee Nissan feather and a three tonne Range Rover steel brick. There need to be a whole lot more staggered levels of the tax level you pay based on the road impact you make.

And since it’s all about user-pays for the amount of damage you cause, maybe it’s time to strip out anything to do with funding cycling. That’s where this logic of user-pays takes us.

We need an actual debate on this, not just an untested assumption from central government that because NLTF is running out, we need to switch to a fully user-pays system with no thought for accuracy in attribution or fairness in the system for all.

99 comments on “Are Road User Charges for every vehicle actually fair? ”

  1. Johnr 1

    I would like to hear slimy browns rationale and end game.

    I've paid RUC for trucks, another pain in the arse chore. But I can't see another way for EVs or hybrids.

    Tax on petrol works fine. The further you travel the more you pay. The larger gas guzzler you own the more you pay. So this becomes, a simple cheap self regulating tiered system. Don't think it's broken and needs fixing

    • Cricklewood 1.1

      Wee bit of setup cost but can get a digital label setup that works off gps and a wifi connection that auto buys the rucs as needed.

      • Johnr 1.1.1

        Then your going to need every vehicle to be fitted with a tracking device. Big ask with our fleet, and who pays, what about trailers and caravans. As I say ain't broke, don't fix

    • Kiltannen 1.2

      Sadly, I think tax on petrol does not work fine

      There are MANY petrol consumers who do not use the roads at all, look at most recreational boats for example

      ALL the small ice gardening tools & ride on mowers for another.

      Small generators. Small ice pumps (mostly water)

      While big gas guzzling utes do use more petrol, the variance between what they use, and the "damage" to the road infrastructure is highly variable between models

      I don't agree that government depts are incapable of working out complex charging formulas. For all it's faults, ACC has been able to right size the annual levy on vehicles for the level of risk the particular model has.

      I propose we should have RUCs for ALL vehicle. This gives the chance to use this as a policy tool at a fine level of detail to influence behaviour, while also giving a very good ability to provide fair & equitable charges for all users of the roading network

      Definitely need to remove the cross subsidy of the rail network – this needs to stand on its merits

      Also, by shoving this at all consumers, put in place post use charging at time of warrant or registration. This makes it easier for end consumers to swallow the change. Make getting registration contingent on paying your RUC, this gives a compliance tool. Make it so the consumer can pay their charges through AP/internet banking in advance to manage their costs over time, and when they can afford it

      • Johnr 1.2.1

        Back in the day when most farm machinery was run on petrol you applied for a road tax exemption for fuel supplied by farm delivery, the exception rather than the rule.

        As for charging RUC. I can show you, in suburban east auckland, a van that is used most days that hasn't had a warrant or rego since April 2020, and a heavy truck the same for the last two years also way out of RUC miles. I would predict a proliferation of this type of behaviour. Keep them separate and aim for safety, I say.

        • Pat

          Chancing their arms there…the penalty for unpaid RUC is the back RUC and 3 times for non payment…nevermind the fines for no WOF or Reg.

          Of course there is a cohort that worry not about fines no matter the system.

      • Excellent point of view 1.2.2

        Excellent point of view

      • "Definitely need to remove the cross subsidy of the rail network – this needs to stand on its merits"

        Do that and rail will fail, all traffic will go on the roads which will then fail because of the number and weight on trucks.

        Rail cannot pay for it's own right of way, it needs to be treated the same as trucks. What we need is open access rail where the tracks, signals and overhead is owned by the Government and trains are owned by private companies light Mainfreight, who then pay the Government an access charge

  2. Kay 2

    Any user pay tax will inevitably penalise the lowest income citizens the most (read: GST), directly or indirectly. I'll never have to pay a RUC, but sure as hell, it will be incorporated into business costs somehow, everything always is. Discount for Gold and CSC card holders? The former of course, definitely not the latter. They're about the scrap the 1/2 price public transport- that's how little they care about low income people being able to get from A to B.

    From my interpretation of the post, a fuel tax is definitely fairer and more equitable, but if the government wants (needs) revenue to fix/keeps the road intact, then RUC on those massive trucks destroying the highways have to increase. And if the trucking lobby don't like it- and the public don't like the increased prices, well tough. We're the ones that keep voting for this situation, ie killing off rail transportation and refusing to do anything about restoring it.

    NZers in general still have this aversion to paying tax, but they want nice things like roads that aren't falling apart, and can't make the connection why this isn't happening. Then get angry and punish whichever stripe does something to raise revenue, however fair or unfair.

    So long as this RUC introduction isn't to obtain funds for tax cuts.

    • Ghostwhowalks 2.1

      Massive trucks already pay miles ahead of what light vehicles pay and they travel longer distances per year

      Its 76c per unit for cars , while the heaviest semi trailers class pay 435c per unit distance

      • GregN 2.1.1

        Except its 7.6 cents per unit (km) for light vehicles – not 76.

        But the point is not if heavy semi-truck and semi trailers pay a lot more. Clearly they do. Some 57 time more in fact by that ratio.

        The evidence is however that the bulk of the damage to the roading network is in fact caused by all those heavy semi trucks and semi trailers. and the huge distances they cover each year.

        So the question is really not should light vehicles pay their way, but it actually is is the 435c per km (for a semi-trailer) actually enough to cover the damage it causes.

        Or to put it another way, is the damage 1 semi trailer causes to the roading network (per km) the same as the damage 57 light vehicles do per km?

        The research and scientific evidence (here and overseas) clearly shows that in fact these semi trucks and semi trailers cause way,, way more damage than the 57 (or whatever number it actually is), of light vehicles do.

        So, in fact far from the heavy trucks paying [more than[ their fair share as you allude to – the light vehicle fleet (RUC payers and petrol tax payers) are collectively subsidising the heavy trucks/trucking industry.

        Its not as bad as 1 truck is causing the same damage as 10,000 light vehicles figure that is sometimes bandied about, but its a number that is far, far larger than 57 times worse figure that the 435 cents per km/7.6 cents per km ratio suggests.

        • Pat

          The transport industry will always be subsidised one way or another….if the RUC for heavy transport increases then those costs will be passed on into higher consumer prices.

          RUC and scale may go a long way to explaining why transport costs are so high in NZ….rail and coastal shipping may have the ability to reduce the overall cost of freight movements in NZ.

          • Res Publica

            That's always bugged me Pat.

            We have an entire, completely hidden, entirely opaque system of implicit subsidies across a bunch of sectors – including trucking and agriculture, that's woven into the very fabric of our taxation and regulatory system.

            Yet we never acknowledge its existence or the effects it has on our economy and environment.

            • gsays

              About those subsidies, don't forget the Accommodation Supplement.

              Administered by folk with a high percentage of landlords, so don't expect change there

            • Pat

              Bugs me too….it costs less to get a container from Shanghai to Auckland than it does for the same container from Auckland to Christchurch…go figure.

        • Jack

          the RUC and excise tax includes (many) things that aren't related to road wear and dont scale with size or weight.

          Road policing, the roughly 50% of roadworks that comes from weathering / age (ie of the pavement), rusting of infra, signage, capex, etc

          It makes no sense to put those costs on larger vehicles and so instead it is intended they are spread per vehicle. Like electricity lines charges are spread per connection. Road surface wear from weight is included in RUC calculations and is an extensive per axle / combination system.

          There is almost zero difference in road wear and costs imposed on the system between a 1 ton vehicle and a 6 ton vehicle, and so there is almost no difference in the RUC rate, and no difference for anything under 3.5 ton.

      • lprent 2.1.2

        Massive trucks already pay miles ahead of what light vehicles pay and they travel longer distances per year

        Wrong orders of magnitude. The semi-scientific / empirical test is the Fourth Power Law which looks at laden axle weight as the basis of looking at roading damage.

        When evaluating the series of tests, it was found that there is a connection between the thickness of the pavement, the number of load transfers and the axle load, and that these have a direct effect on the service life and condition of a road. The service life of the road is thereby reduced with approximately the fourth power of the axle load.[1]

        The accuracy of the law of the fourth power is disputed among experts, since the test results depend on many other factors, such as climatic conditions, in addition to the factors mentioned above.[2]

        This is the basis of our RUC charges. Except that trucks and all heavy vehicles are vastly under-charged. Taking the simple case

        Calculation examples[edit]

        This example illustrates how a car, a truck and a bicycle affect the surface of a road differently according to the fourth power law.

        • Car (total weight 2 tonnes, 2 axles): load per axle: 1 tonnes
        • Truck (total weight 30 tonnes, 3 axles): load per axle: 10 tonnes

        104=10⋅10⋅10⋅10=10,000{\displaystyle 10^{4}=10\cdot 10\cdot 10\cdot 10=10,000} times as large

        The load on the road from one axle (2 wheels) is 10 times greater for a truck than for a car. However, the fourth power law says that the stress on (damage to) the road is this ratio raised to the fourth power.

        It does point to the orders of magnitude that trucks should be paying for road maintenance compared to a my Honda Fit hybrid (max loaded weight about 1.7 tonnes) and 17m truck with 8 axles with a mass of 46 tonnes. I figure that it should have for fully loaded road maintenance purposes a cost of more than 20 thousand times than my car.

        • Ghostwhowalks

          Thanks for that .

          NZTA does consider the 4th power effect but road maintenance/repair isnt how every dollar is spent
          Also the heaviest trucks distance RUC costs could be around $95,000 pa while your Honda Fit ( yeah) could be around $1000 pa ?

          They use a broader economic model on each category of spending and 'car equivalents'

          Space costs 12%

          Gross vehicle Mass 10%

          pavement Wear 30%

          Common Costs 48%

          heavy vehicle policing 0.3%

          The detail on the largest share – Common Costs

          'd. Common costs are costs that are not related to road wear, vehicle weight, or vehicle size. They include public transport subsidies, general road policing (not the specific heavy vehicle enforcement (HV costs) noted above), road signs and marking, emergency works, and most routine road maintenance. They also include 45 percent of the costs of building new State highways and 68 percent of the costs of new local roads

          • lprent

            Yeah, but what we are looking at is the transference of the existing RUC system to cover all vehicles. Which is a good idea bearing in mind that fuel taxes are going to become even more inequitable than they are over the next couple of decades as the types of energy shift. That is the whole basis for shifting EVs and hybrids on to RUC. Doesn't matter if you're looking at electric, hydrogen fuel cell engines, or even the vast improvements in petrol or diesel fuel efficiencies into the future, they're all going to shift the balance points.

            I think that they may as well go the whole hog and push it much closer to a full user-pays and concentrate on the user-pays aspects of the major economics of common roads – the equitable recovery of the cost of construction and maintenance. Most of which is related to (in order of effect)

            • loaded weights
            • km travelled
            • space on roads

            Effectively people who don't travel a lot are currently subsidising those who do.

            The problem is that "pavement Wear 30%" isn't the primary cost of the 4th power or even the major cost of the roads. Pavement wear is effectively just pothole and resurfacing issues. The biggest costs are related to building and rebuilding roading foundations from either heavy traffic or due to erosion from things like washouts or landslips.

            The 4th power effect has an impact on many of the most expensive of the Waka Kotahi and crown transport activities. The 4th power effect is about the cost of building and then maintaining the structure of the road. In other words the primary portion of the common costs at 40%.

            With the design of making new roads, the engineering is directly related to the heaviest traffic that is expected on that road. The 4th power effect wasn't about which pavement should used. It was about teh structural engineering of the road foundations.

            Because the 4th power effect says that it isn't the frequency of much lighter vehicles travelling a road that you have to build for. It is the frequency of heaviest 10-15% of the loaded vehicles.

            The reason is obvious. To handle heavy vehicles you have to build much heaver foundational and compression support of the surface of the road. This is particularly the case in NZ where the types of young clays and recent soils that we have are very compressible. Not to mention the vast regions of ex-peat. Or the erosive hillscapes that torture out roading engineers.

            If you took the heavy trucks off new roads and restricted them to vehicles with a max load of (say) 6 tonnes, the new build engineering costs* would be somewhere in the order of a twentieth to a hundredth of the cost of a road that had 40 tonne trucks or 80 tonne truck and trailer units. Probably closer to the hundredth than the twentieth.

            * ie excluding the land purchase costs which would largely be the same either way.

            The cost of building and maintaining a road is also directly related to the largest loads being moved over them. So when you're looking at your quoted statement, then the 4th power effect is dominant in the 88% of the costs

            • Gross vehicle Mass 10%
            • Pavement Wear 30%
            • Common Costs 48%

            So when I'm looking at the finances of WK (Operating and capital funding and expense) for the WK, I see a pickure of teh actual aggrgate costs.

            From the NLTF expenses , what I see is a total expense of 5,076m of which at least 3,333m is directly related to roads maintenance and improvement. That is ~65% of NLTF.

            • State highway improvements 923m
            • Local road maintenance 1047m
            • State highway maintenance 1229m
            • Local road improvements 134m

            The remainder is mostly targeted at things that reduce loading and congestion on roads for a further 1244m – about 25% – in effect things that reduce the need to have more roads.

            • Public transport services 498m
            • Public transport infrastructure 547m
            • Walking and cycling improvements 176m
            • Coastal shipping 23m

            Plus there is safety like the 'Road to zero' programme. ~8% which most is used for death spots on the roading network. Including a lot (if not most) of the more useful signage and road markings.

            • Road to zero 367m

            But basically direct roading improvement and maintenance funding is at least 65% of expenditure.

            In the Crown funding, there is a total of 1226m of expenses which nearly half is directly related to building roads or improving them

            • NZ Upgrade Programme 478m
            • Local road improvements (Provincial Growth Fund) 11m

            So what a RUC on all vehicles should ultimately be covering would be something like 3333 + 489 = 3822. New roads + improvements

          • lprent

            …while your Honda Fit ( yeah) could be around $1000 pa ?

            Haven't looked taxes at the Fit hybrid and its potential RUC (because that is yet to be determined).

            However based on my max recent annual usage of about 6000km, and assuming it was a PHEV that would be $53/1000km, plus 45.02c/litre. So that would be at worst (5 litres/100km – I do very little around town driving, no commuting, and mostly open road) and assuming no Auckland regional fuel tax.

            ($536) + (605*$0.4502) = 318 + 135.06 = $453.06 road taxes. Filling up 34 litres roughly 9-10 times per year

            Mostly when not working remote to Hamilton I have used a e-bike for commuting and most around town traffic. When I had to commute I used public transport so I could work on the tedious ride to and from Takapuna.

            But the car typically got used more as a shopping basket and less open road. Roughly doing about 3000km per year. About 6 litres /100km with a hybrid fit.

            ($533) + (306*$0.4502) = 159 + 81.04 = 240.04. Filling up roughly 5-6 times per year

            So the change to RUC and if my fit taxed was a PHEV, would roughly increase my double to triple my current costs by 2-3 times.

            Now that doesn't worry me. My other costs for the Fit are

            • Fuel excluding tax = 30*6*$2 = $360 /year
            • Insurance $60.22 * 12 = $722.64 / year.
            • Depreciation ? probably about $1000/yr
            • Maintenance ~$500 / year
            • WOF $70
            • Registration $106.

            But if I didn't spend my work life working remotely and drove to work instead … Then the ratio changes markedly.

            As it is, I’m starting to look at a car as not being a required expense when I eventually retire.

    • No-Skates 2.2

      I find it funny how in community Facebook groups, the people who complain loudest about potholes also complain loudest about rates increases and roadworks getting in the way.

    • Michael P 2.3

      "NZers in general still have this aversion to paying tax"

      I disagree. In my opinion and experience it is mainly the wealthy or high income and some self employed people who have an aversion to paying tax. As well as maybe some of the more extreme libertarians (Not all of the members of these groups obviously and I am generalizing with no actual evidence)

      The rest of the people (the majority) especially those on PAYE don't really do much in the way of looking closely at their income taxes because income tax for them is taken from them before they get paid and they can't claim expenses, make use of loopholes, exemptions etc (Mostly). But most of them IMO know that income tax is necessary for hospitals, schools, infrastructure, etc. I'd guess they have an aversion to unfairness in the tax system rather than the concept of income tax itself.

      Why are you fine with a discount for gold card holders (many of whom are comfortable in economic terms and many of whom are well off); also, the elderly in general tend to drive far less km's per year than others? By contrast you are "definitely…" against discounts for CSC holders who are mostly those on the lowest incomes who are least able to pay for extra things such as RUC's?

      As far as the article in general:

      As we move to phase out fossil fuels, there is obviously going to be less and less tax revenue from petrol. So we do have to shift to RUC's for everybody at some stage, unless someone comes up with another way to fund roads. (like a levy on businesses with vehicle fleets maybe, or tolls… ich!

      RUC's as the system currently works are pretty easy to get around for non-business use road users. They can simply disconnect the odometer for a few months or for long trips if they want. So it will have to be relatively cheap otherwise if people think it is too much or they simply can't afford it then potential abuse is more likely.

      As with all consumption taxes it is quite difficult to try and ensure those least able to pay are still able to feel part of society and participate as much as anyone else. CSC is an option for discounts . The other option is to make RUC's for small vehicle use so low that those on low incomes aren't adversely affected. (of course then the total revenue might be too low) Weight can be used as it is now to ensure more fairness and large trucks should be paying much higher proportional rates in my opinion.

      Regardless of anything, I'm certain as with most things introduced by governments which involve population wide payments or taxes, that those on low incomes and those who are least able to afford extra outgoings on their income will no doubt have an unfair proportion of negative impacts dumped upon them from up on high.

  3. Ghostwhowalks 3

    ". With all petrol taxes now going into the National Land Transport Fund (NLTF), the amount paid into the fund by petrol users has doubled, while the amount paid by diesel users has remained the same. "

    RUC charges regularly increase like the excise levy on petrol

    The RUC on the lowest diesel vehicle weight increased last year from 4.9c per km to 7.6c/km

    The penaltys for not having the correct distance are much much higher than pre paying.

    And yes , its not uncommon to see people in a petrol/diesel station buy fuel in $10 amounts as thats all they afford.

  4. bwaghorn 4

    ""And Road User Charges for vehicles under 3 tonnes make no distinction between a wee Nissan feather and a three tonne Range Rover steel brick

    The cynic in me says this is more what's driving it, nationals wealth backers hate paying tax so paying more tax unfurl exise than a leaf owner for the rangy (what what) would have them fuzziness.

    • Ad 4.1

      The AA support a lot more vehicle weight steps in a future unified RUC. They are our most powerful driver lobby. Similar to a greater number of steps in income tax.

      • GregN 4.1.1

        The issue is not so much as the AA says that we need more "weight bands" [below 3.5 Tonne].

        But we do a more fine-grained system than the current "one RUC class below 3.5 Tonnes fits all" – which is what we more or less are getting.

        The argument for why all alternative fuelled vehicles (which included Diesel, biofuels etc, and now soon to include EVs – full EVs or plug in Hybrids) should all be lumped in the same band of 7.6 cents a km was stated by officials over many years to be necessary for "administrative efficiency" – makes admin/enforcement a lot simpler etc.

        Of course, they now say they want to carve out plug in Hybrids via a special band, which makes a mockery of the "simpler admin with a single band" argument.

        So the fact they can create a new band for one class, does indicate that implementing several RUC bands would indeed be fairer way to implement this. And no really more complicated than running the annual Registration system which NZTA also do for some 4 million vehicles in the NZ fleet.

        The key thing is that even if every EV not paying road tax thats on the road today (plug in hybrid or full EV) went to full RUCs tomorrow – the actual income earned would be about $82m a year. Assuming they continue to drive the similar distances they did in the past before RUCs came along. And not assuming the plug in hybrids get a lower RUC rate than the rest of the EV fleet. So its a very much optimistic figure, and will be lower in practise.

        $82m is not chicken feed. But its not going to fund (many) road repairs or tax cuts.

        The other thing is that the deal National came up when Key was PM and Simon Bridges was Transport Minister, was no RUCs on EVs until either specific dates [all long since extended], or the EV [light] vehicle fleet hit 2%.

        So the Governments since then [National, Labour/NZ First/Greens, Labour etc] were all prepared to take this hit in road taxes to get to that 2%. They showed this by extending the RUC exemption regime several times. The last being Labour in 2021 out to 2024.

        As of right now, the EV fleet is at about 1.83%. of all vehicles And may be by the time this RUC regime gets into law we may have passed that 2% figure but its unlikely given they kicked the Clean Car Discount stool out from under the car industry. And so full EV sales will take a hit during 2024, and plug in hybrid EV sales an even bigger hit now the true extent of their double taxation is coming to the fore.

        So it may take until much later than 1 April 2024, closer to 1 April 2025 to get that 2% figure.

        But all of this ignore the cost of this in the wider costs – as the recently released Impact Statement showed on the ending of the Clean Car Discount – the costs to NZ Inc over the next 25 years for ending that are more than double the expected savings.

        I am sure the same "it will cost $2 for every $1 saved" will be the case here with this too, as the evidence for it being otherwise is just not there or Brown would have released it.

        Its little better than some Ministers knee jerk policy, made up on the hoof – to really allow raiding of the national piggy bank.

        If thats fairness then petrol car drivers should tremble now with the thoughts as to what Brown will do with his plans to force all drivers to pay RUCs.

        • lprent

          …was stated by officials over many years to be necessary for "administrative efficiency" – makes admin/enforcement a lot simpler etc.

          Pre-computer network thinking.

          What they need to do is to dump any paper entry and make it completely computer and network usage, ideally by removing intermediaries. Run through RealMe login, plug in your registration, have them attached to the database.

          Have the system only look at km travelled against a percentage of the max loaded weight for type of vehicle only. Something like 65% of max loaded weight to discourage single passenger / unloaded journeys with all of the economic wast involved in that. Cost is a powerful tool for changing economic behaviour

          Provide a backup system for people who aren't literate. Somewhere they have to turn up in person to get someone else to enter it for them to encourage them to pre-buy RUCs.

          This is one case where I do approve of surveillance or extreme measures because cheating the system is an abuse of the commons and implicitly throwing extra costs on to low users of roads.

          Check the odometers in WOF. Spot check odometers on checkpoints. Confiscate vehicles where owners don't have RUCs or WOFs. Run computerised scans on much travelled routes scanning for vehicle number plates that may be scamming the systems.

          Above all – RUCs are a user pay system – that means that the users need to pay in rough accordance to the damage that they actually do. That means that strict accordance to the 4th power law is required without other 'economic' considerations applied. We currently have a distorted system where trucks aren't paying anything like the right orders of magnitude for the level of damage they cause on roads.

          This is obvious on every new multi-lane highway that National has built recently because they build them on the cheap. In particular the Waikato Expressway and its massive left lane damage (or anywhere logging trucks operate) from wall-to-wall trucks that run up and down it.

          Sure increasing the RUC costs for high-load capacity trucks to a realistic level (ie 2-4 orders of magnitude higher) will cause economic issues for road freight. But getting light vehicles to subsidise heavy trucks is just daft. Let the costs flow through to those who currently profit from those subsidies.

          Overall I prefer to have a full RUC system across all vehicles – provided that it is run on a full user-pays basis.

          It'd make the rail system look way better for heavy transport, and remove the daily subsidy to dairy farming.

    • Jack 4.2

      That's because there is no difference in costs imposed on the road system between those two vehicles. Vehicle weights up to 6 tons do functionally zero pavement damage, the costs are for things like weathering / corrosion related maintenance (about 50% of maintenance costs), emergency works, policing, capex, admin overheads etc which are spread out per vehicle.

      • lprent 4.2.1

        Tor a certain degree, I'd agree.

        Of course the fully loaded weight of a Ford Ranger is in fact at exactly at 6 tonnes – which is why I suspect that you picked that level.

        But there are other factors about providing roads than simple pavement damage.

        Like all of the larger vehicles (including most SUVs), they are also a safety menace for other motorists and cyclists for visibility. That means that they cause greater gaps on the roads, need for wider roads and larger intersections.

        You cannot see around them unless you are more than twice the distance behind them. They also take up road space and parking space. All of which increases roading costs and just the sheer nuisance of those vehicles..

        But a RUC even on the current basis would take care of a lot of that if it was based on say 50% of fully loaded weight.

        The max permissible weight of a Honda Jazz HEV sport (roughly equivalent to my Honda Fix hybrid RS is about 1750kg. That of a Ford Ranger of any model is about 6000kg without a trailer (which should require a separate RUC).

        A RUC that was about 3x what my parsimonious vehicle is would assuage much of my current urge to blow up the next Ford Ranger driven by a single driver that blocks my half of my vision by sitting next to me on intersection.

    • Michael P 4.3

      You have to draw the line somewhere and governments will draw it at the place where they get the most revenue with the least amount of cost. Making all vehicles under 3.5t $76 per 1,000km is easier to implement and as the 3.5t limit is already in use then bringing all small vehicles up to that same price per km maximises revenue for them. Plus people will start arguing about their 2t ute compared to someone's 2.5t ute and so on.

      Bringing the price of petrol closer to the RUC charges for small vehicles would be politically not possible IMO. For example at the lowest use end a small modern fuel efficient car might use 5 liters per 100km. So for 1000km they are being taxed $0.86 (per liter tax in Auckland) x 50 = $43 as opposed to the new $76 road user charges. They also have to pay a total of around $130 (including tax) for 50 liters so yes $43 is less than $76 but $76 is less than $130.

      In the past, the difference in price between diesel and petrol probably made things fairer. (50 liters of diesel used to be much cheaper than 50 liters of petrol. Diesel also goes further by about 30% I think and is less refined so cheaper to produce.)

      However the difference in price between diesel and petrol is now much smaller. due mostly I think to diesel demand being very high currently and getting higher all the time. Obviously you would expect diesel to be 86cents per liter cheaper than petrol (in Auckland) all other things being equal.

      Not sure what an electric vehicle owner would have to complain about with $76, keeping in mind that they have no fuel costs on top of that which owners of 3.5t and under petrol and diesel powered vehicles do have.

  5. Mike the Lefty 5

    If Whaka Kotahi (aka NZTA) run the RUC as well as they run other aspects of transport such as road repairs, the result will be a total ballsup.

    Actually it isn't a question of fairness in any case, that is just National's convenient excuse to do what it has wanted to do for the last six years and make its Ford Ranger driving supporters happy. Now they have a petrolhead for a minister its all go.

    • Ad 5.1

      Yes it should be IRD.

      Fee collection isn't the core NZTA skillset, though they do a lot of it already.

    • Ghostwhowalks 5.2

      RUC has been running for over 40 years now.

      And no the licensing system isnt the same people who do road repairs – thats outsourced to consultants and contractors

      the Police enforce the RUC licensing system and theres a big chunk of their budget comes directly from NZTA for all road policing

    • Res Publica 5.3

      I worked as a RUC assessor at Waka Kotahi about 10 years ago. The system is actually fairly efficient, easy to collect from, and reasonably difficult to evade.

      And this was at a time where the agency was almost entirely captured by the trucking, roading, and vehicle inspection industries. Eventually most non-compliant people are caught by the police, or their arrears are picked up at a WOF inspection or change of hubo. This includes truck owners deliberately purchasing a lower weight and trying to flaunt the system.

      Even as far back as then there were debates over the relative merits and fairness of the fuel tax vs universal RUC.

      The argument was always that the FED was basically an implicit subsidy for rich people who could afford more fuel-efficient cars (on top of paying proportionally less of their income on fuel taxes), and that RUC has the bonus of at least approximating your use of the roads, and therefore the wear a vehicle causes to it.

      I mean, both are still incredibly regressive (like any consumption based tax). But at least if I'm a rich prick driving in my Cayenne or Tesla to my holiday home every second weekend, I won't be subsidised by people that can only afford an old Corolla.

      • gsays 5.3.1

        I heard a whisper that police a going to start targeting campers, RVs and small buses.

        They can quite often be over their axle allowance and/or driver's licence endorsement.

      • Ad 5.3.2

        Very pleased to have an expert commenter on the field Res.

        What do you think of Ed's comment below of RUC "tills at petrol stations"?

        Would like to hear more from you on how to make a future RUC-only payment system work.

        I suspect even 10 years ago there was policy debate on it.

        • Res Publica

          There were absolutely massive policy debates about it.

          From a regulatory perspective, there's a bunch of dynamics at play.

          1) We expect users to pay RUC in advance but can only take regulatory action retrospectively (e.g. at a WOF or Hubometer change).

          2) There's a tradeoff between having a more efficient and real-time RUC system, and the level of surveillance and data gathering that the state would require, and the administrative overhead.

          3) It comes down to what you think the fairest and best way to collect revenue. We could, for example get rid of RUC and the FED and just charge an annual car tax. But that would come with a whole new set of inequities and problems.

          Pushing RUC collection onto petrol stations would likely be illegal under current legislation (think Privacy Act), would require a huge amount of system development and change at both WK and by retailers, and would require the state to basically monitor vehicles in real time.

          There was a school of thought that suggested the cheapest, easiest, and most revenue efficient option was to remove the prebuying of RUC entirely and just invoice vehicle owners after a WOF or COF.

          • lprent

            The RUC system was developed before cheaper processors and software.

            It could do with an update based on processing technology to make it simpler and much more fine-grained for all except for evaders.

            • Res Publica

              Absolutely! the motor vehicle registry system is incredibly old and flaky. Pretty sure it's still COBOL running on a mainframe.

              As a software engineer myself, I shudder at the thought of opening up that particular can of worms.

              It's doable but would be an incredibly expensive and complex project. And to be frank, WK's track record on managing IT transformations isn't all that great.

              • lprent

                Probably don't employ the good architects or programmers.

                As soon as I read your comment, I figured out how I'd want to build the project. I'm heavy into distributed systems albeit mostly c++ server and embedded as a programmer.

                Wouldn't do a on-line system. I can imagine places where that simply wouldn't work all the time in all places. Think of the electoral roll on election day and the fun that they had with that.

                But a hybrid batched/online system with secure keys (effectively the RUCs are currency) would be resilient.

                Then I thought about the committee stages – ie the politics of getting agreement on the regulatory framework …. there are easier ways of dying than of bored frustration….

                • Res Publica

                  It's not so much the engineering per se. It's the layers upon layers of undocumented (or half documented) business rules and workarounds.

                  The whole thing is basically built out of cruft and good intentions. And I seriously doubt the good intentions.

              • Michael P

                "…incredibly expensive and complex project…"

                As a software development project manager (in a previous life), instinctively I have to fight you on this. I get the expensive bit, you guys have been charging heart stopping like rates since at least the time I had my first PC. (a zx81).

                But complex?? Surely it's just a big database along with the associated functionality for adding to, maintaining, updating and reporting on that database, along with associated retail functionality, etc etc so how complex can it be? laugh

                I say this with a wink and a large grain of salt of course. It must be some sort of automatic reflexive push back action brought on by years of misery and torment thrown at me (How long's it going to take again?? GASP!!) by software engineers, coders, developers, etc.

  6. bwaghorn 6

    Don't know if it's still a thing but I've known more than one person with a switch to turn off the odometer for reducing ruc usage

    • Res Publica 6.1

      It's much less common now.

      And even if people are doing so, no tax system is 100% efficient or airtight and the costs of pursuing and investigating the few cases that do crop up probably massively outweigh the lost revenue.

      • Jack 6.1.1

        Yep, I know a guy that had it set up and just never used it in the end. Most people are happy to pay if they can, and aren't keen on defrauding the state for something they use every day.

        It's also considerably harder in modern vehicles which have multiple different computers keeping track of it.

        • Michael P

          As per another comment. Not considerably harder. Older car = disconnect odometer for a period of time or roll it back. Modern car = if the car has an OBD port as they all do then there's bound to be a gadget online that can be used. Whether people choose to do it is more likely to be about affordability and fairness rather than greed IMO.

          Which all probably means that some sort of GPS tracking will end up being used to track km's travelled which would have all sorts of privacy implications but no doubt we'll sleepwalk into it.

      • Michael P 6.1.2

        This is why getting the amount charged correct is so important. Too high and you risk massive non-compliance. (watch how quickly 20 buck plug in odometer changing devices will start flooding online).

  7. tsmithfield 7

    If most EV's are purchased by realatively wealthy people, then wouldn't it be easiest just to call the RUC charge on those a "rich pricks'' tax? I imagine those who are less leaning would rejoice in the charge if it were framed that way, lol.

    • Drowsy M. Kram 7.1

      On National’s Tax Cuts [31 August 2023]
      Here's how Willis reacted when asked about how much she stood to personally receive from her party’s tax cut proposals:
      In our family of two incomes we’d get $80 a fortnight. And kids, that means instead of movie night meaning DVDs and Tip Top at home, we might go out to the movies.”

      …wouldn't it be easiest just to call the RUC charge on those a "rich pricks'' tax?

      Do we have a "rich prick" PM, a "rich prick" Minister of Finance (enjoying going out to the movies, at last), and a National-led government working for "rich pricks"?

      Don't like the "rich pricks" narrative myself – they may all be "realatively [sic] wealthy", but they can'r all be "pricks" – whaddaya reckon?

      BTW, won't be for everyone, but I enjoyed 'Poor Things' smiley

      Three great forces rule the world: stupidity, fear and greed. – Einstein

      • Ghostwhowalks 7.1.1

        DVDs at home with the kids ? Which decade is Ms Willis referring to ?

        Im pretty sure all those DVD rental shops are closed now.

      • tsmithfield 7.1.2

        I guess the point I was making tongue in cheek is that those who can afford EVs etc can likely also afford to pay the RUC charges.

        • GregN

          Perhaps, but not every EV driver in NZ is "a rich prick" who drives a Tesla or Polestar, or expensive BMW [EV]. And so can afford the RUCs.

          In fact the most common EV added to the NZ fleet until very recently has been 2nd hand Jap Import Nissan Leafs. These cost under $30K – sometimes even less depending on the age and the kms on the clock when it arrives from Japan.

          They don't have a lot of range, they have a unique charger setup that makes them harder to charge in public but they are popular.

          And many of those drivers still struggle with living costs now, and they usually get a Leaf 'cos they have a long daily commute and/or live further out of town to save money on housing costs – and the petrol costs were killing them. And the fuel costs for such a EV make them almost a no-brainer in such cases.

          So if you think someone who can afford the most popular EV on our roads (with is a $30K or less car) is a rich prick then you must have a different perspective to many others in NZ I suggest.

          • Johnr

            Get real man. Which of we peasants can afford a $30k vehicle. No matter what it's fueled by

            • GregN

              "peasants" as you call them, are buying $30K cars now – whether you or they realise it or not. Because you're paying towards that sort of figure, each time you fill it up with fuel, do oil changes, pay for any repairs, such as less fucked tyres or better brakes to get a WOF/Rego, or paying someone to give it whatever it needs to make it go another 100 kms so you can get to work before you need to spend the same amount again next week/month/year.

              You might not like paying that [I never did], but over the lifetime of the cheap dungers being bought and sold, the cost to the driver ends up being the thick end of $30K.

              Denying its true Is like a smoker denying they spend thousands of dollars a year on smokes, 'cos they only buy a pack every 2nd or 3rd day. Do the maths and say it ain't so.

              Not rubbishing your or anyones situation, just ensuring you compare like for like when you say "the peasants can't afford a $30K" car – they are already "affording a $30K" car, they just don't realise it, and the main difference with whatever they have now sure won't cost the $30K upfront to buy, but it will cost them that and more over its useful [to them] lifetime.

          • James Simpson

            I earn a pretty good salary.

            Paying 30k for a car is an eye watering expense. If you think that is a cheap car you live in lala land.

            • GregN

              As I said to JohnR's similar comment above yours.

              $30K is an eye watering expense alright – but many buying cheap cars end up paying that and more – 1 expense at a time – and over 10, 15 or more years thats a lot of money.

              Don't think that "cheap cars" means "cheap to run [and keep running] cars".

          • lprent

            I'd agree. I'm pretty affluent but I don't need much of a car.

            The 15k I spent on a second hand Honda Fit hybrid is the most that I have ever spent on a vehicle. The previous record was 9k for a similar earlier model that got drowned in Jan floods last year in downtown Auckland.

            The car prior to that was less than $3k and was a 1997 Caldina. I only brought the Fit(s) for that day in the office once a fortnight. I needed something a bit more reliable than a a gas guzzler and maintenance hog of the Caldina. I’d have used the train to Hamilton and a taxi if the train had usable times departing and returning to Auckland (the times were designed to go the other way).

            Of course I seldom drive much. Last year was my largest ever and I drove less than 6000km. That was mostly because I was doing a fortnightly drive to the offices in Hamilton, and then went from there once a month to see my elderly father further down-country. Because the hybrids are so efficient (at present I fill 34 litres about every 3-4 weeks even with that driving), the major costs of a car for me is insurance and depreciation.

            BTW: My usual driving per year is less than 2000km. I mostly work remote, e-bike or use public transport and mostly have done so since the early 90s.

            Driving is mostly a waste of my valuable time. My cars reflect my needs.

      • Michael P 7.1.3

        All MP's (based upon their salary alone) would be rich in many people's eyes.

    • Robert Guyton 7.2

      Our not-for-profit food co-op crowd-funded for an EV (electric delivery van) chosen in part because it would cost far less to "fill er up". We are NOT a "well to do" organisation. These proposed charges will cause us significant issue and disadvantage 6 or 7 rural townships around the "loop".

      Not good news for us.

  8. Ed1 8

    We can readily obtain data from WOF work about weight, wheel/ axle configuration, exhaust emissions; and from manufacturer specs estimate fuel use and electricity use for a standard travel distance.

    Petrol and diesel have characteristics for emissions measurements, but from all that data it should be possible to work out a suitable mix of charges to be included in appropriate rates for each registration number for 1. Annual Registration, 2. Road user charge, and 3. additional fuel charge margin for petrol or diesel

    As is currently done for heavy vehicles (which can vary for each load) scientists could work out standard parameters for each vehicle, taking into account all the data

    Tills at fuel stations could be programmed to have the registration number inserted, and automatically add standard adjustments to fuel costs, the registration fee could vary, and road user charges may be able to be avoided for some vehicles, but reflect factors for other vehicles. Sure there are guesses involved and assumptions to be made, but caravans and trailers would have variable registration fees based on weight / wheels only. Electric vehicles would have road user charges that allowed for weight.

    In broad terms, we would have financial incentives that pay for road repairs (and that may increase with higher temperatures) and incentives to minimise use of and pollution from fossil fuels, and minimise emissions.

    If fuel stations can adjust for loyalty programmes, their tills should be able to cope with Road user charge payments (which may apply to fully electric vehicles); there could be a transaction charge to be shared between the retail outlet and the government.There should be fairly heavy fines for not paying road user charges in advance, but that would normally only be discovered at the annual fitness check – just don't get caught speeding!

    Complex – yes in working out the parameters, but for an individual owner, not really.

    Leaves room for political tinkering, yes – don't expect for example farm tractors to pay very much at all – but enough needs to be raised to pay for road development and repairs.

    Have I missed anything?

    • satty 8.1

      It sounds similar what I had in mind: Environmental Impact Charge.

      The charge (per driven distance, like 1,000 km) depends on:

      • Emissions, like CO2, NOX, particles (pollution and climate change)
      • Weight (road damage) and size (required parking space)
      • Noise (pollution)
      • Jack 8.1.1

        Weight is included already, but according to the MOT "Vehicles weighing less than around 6 tonnes do almost no damage to roads and so they impose very similar costs on the road network. For this reason, all light RUC vehicles pay the same RUC rate – $76 per 1,000 km (from 1 July 2020)"

        C02 tax (ETS costs) is included in all fuels already

        I agree there needs to be a toxic emissions charge added to RUC rates, it would be relatively easy, that information is already associated with your plate which you enter to pay your RUC online. Noise would be more difficult would have to be adjusted by tyre choice.

    • Michael P 8.2

      Privacy and data concerns – Compulsory collection of the public's personal data by private corporations is never a good thing.

      Cost – Will be passed on to consumers.

      Avoidance – Fairly easy to avoid if people really want to avoid it.

      Fines – You mentioned fines but in your scenario who would administer those fines? (It seems to me it would require government access to private systems unless your local mechanic is allowed to start fining everyone)

      "2. Road user charge, and 3. additional fuel charge margin for petrol or diesel" – By the fuel charge margin to you mean some sort of mechanism to adjust the price of petrol someone pays to make their total charge the same as RUC only vehicles? In which case you would have to lower the price of fuel considerably which would mean taxpayers subsidizing oil companies. Then again I guess the margin you're suggesting could be positive or negative and could be applied to the RUC rather than the fuel.

  9. Will 9

    You're woefully missing the point on cycle funding. Every person on a cycle is a car not on the road. Of course you should spend relative peanuts to encourage people to not drive cars on roads, requiring more roads to be built.

  10. How about progressive targeted RUCs based on the number of vehicles per household?

    Increase rego/RUC costs incrementally with each vehicle someone (or household) owns

    There's no perfectly fair way but at least it would make people think twice before getting a second vehicle.

    (similar idea applies to rates – should go up exponentially with every extra property, and especially if they are rentals)

    Per this comment on bluesky

    • Paul W 10.1

      That sounds like an envy tax

    • Res Publica 10.2

      Great idea in theory, but it would be incredibly difficult, expensive to manage and not compatible with current legislation. So therefore, probably not worth the effort.

      You have to remember that WK only captures and manages the registered person for a vehicle, which can be entirely arbitrary and is completely separate from ownership.

      Compared to immovable property, vehicles change hands dizzyingly fast, can disappear overnight, and come with substantially less paperwork that can be used to track ownership.

      To the point where maintaining an ownership register for vehicles would be next to impossible.

    • Michael P 10.3

      What about people renting a property together as flatmates? They would only be treated as individuals rather than as a household wouldn't they?

      If it's just a boyfriend and girlfriend is that classed as a household? What about if they only stay in the same house at weekends? How would the government know if they did or didn't?

      Taking these things into account it could almost start to look like people would be being punished for being married or being a family???

      Why would you want to restrict the number of vehicles a person or household may want to own? Isn't that a bit authoritarian? It's a slippery slope once the government starts telling people they can't have more than one of something. Look at China's impending demographic catastrophe for an extreme example.

      • roblogic 10.3.1

        Authoritarian measures will become more common in the face of climate crises and infrastructure failure. We cannot carry on with Ford Rangers leading new 'car' sales…

  11. Foreign waka 11

    RUC = Road user charge – its in the name. Hence, all road users should be paying to maintain the road. Full stop. Its fair and equitable. However, the breakdown as to how much should be pegged against type of fuel used, tonnage and distance travelled.

    I am sure people with a good mathematical brain can figure out the logistic and how to implement. I agree with the notion that there need to be a wider band of tonnage. I would also like to add that those proliferation of SUV's are putting equally high pressures on roads that are clearly only having some "cheap" seal.

    Also, prohibit driving on beaches. Besides of being dangerous to people, it compresses the sand and makes living for those very small creatures impossible. (Where are the greens on this issues?)

  12. Pj 12

    Contractors are using tractors and trailers to replace trucks to cart metal and silage on the road as it is cheaper with no RUC. They are heavier than a 4 axle truck and do more damage. So why are they not charged road users.

    • Foreign waka 12.1

      And how often I find these work vehicles used to go to and from homes on little side streets that, as in the area I live in, need patch ups every 6 months due to the weight of those vehicles and the roads certainly not designed to hold. It was that bad for a while that a whole section of residents were facing to not be able to go home due to the rain making all the damage worse and the road increasingly dangerous.

      The building/road works industry is peppered with ruse operators and dare I say sly people who know how to fleece the taxpayer. This creates expenses beyond the means of NZ to pay. A morass as far as I can see but tank god for the upgrade of Waka Kotahi's office to the tune of 28 million. Imagine how many houses could be build, or hospital personal recruited…..

      • Michael P 12.1.1

        Blame the system rather than the contractors. They're just charging as much as they can get away with which may be morally corrupt but isn't illegal. It's the politicians that make the rules and public servants / councils that approve jobs and sign off on estimates that need to be held accountable. The reason anything to do with the public (council or government contracts) is so expensive is because those paying aren't paying with their own money so don't care about how much things cost. (Yes I know I'm generalizing again but I've seen some mind blowing examples of tax/rate payers getting ripped off.)

    • Robert Guyton 12.2

      The problem with huge farm machines on the roads is escalating here in Southland.

  13. most evs can only do 150 km a charge i don't think they will be getting that much out of them yes there are some that can do 350km in real world driving but not that many most a the 30 kw nissan leaf

    [Please use a more unique user name here for your next comment, so that it’ll be easier to see that it comes from you and not a troll bot, for example, thanks – Incognito]

  14. unhappy one 14

    Regarding PHEV's. The RUC charge of $53.00 per 1000km is based on an assumption. They said it not me. I own 2 PHEV's. My more efficient PHEV (a prius) will attract a 48% increase in fuel running costs when the RUC is applied. My less efficient (an outlander) will attract a 29.65% increase in fuel running costs when the RUC is applied. It feels like lambs to the slaughter, incentivize people to reduce fossil fuel use, and reduce imports, then tax them to the point that there is no advantage in buying an EV or PHEV. Talk about wealth destruction. The value of EV's and PHEV's is falling rapidly.

  15. That_guy 15

    I appreciate the quality of the OP's analysis and the practice of avoiding knee-jerk rightwing=bad responses before proper analysis. Now that this has been done, it's clearly a bad rightwing policy.

    My 2c: Having no RUC on BEVs isn't fair. Neither is the world we're leaving our children.

    I'll tolerate minor unfairness if it's dealing with existential unfairness.

    I'm not sure "fairness" is even the right way of looking at it. I'd prefer to ask the question "where do we want our light vehicle fleet to be heading, and are the incentives in place to do that".

    And the answer is "Norway" and "we used to have the right incentives but now we don't". Norway had 60% of new sales as BEVs and now has more BEVs that ICEs.

    • Foreign waka 15.1

      For those who do not know and try to find out about all these initialisms:

      EV and BEV: electric vehicles and battery electric vehicles

      HEV: hybrid electric vehicles

      PHEV: plug-in hybrids

      We still have a problem with disposal of batteries, lithium, cobalt and its associated slave labor.

      On the consumer side: limitations on charging stations, high cost of vehicle, very high cost of parts etc., battery change after 5-10 years etc…

      • Fran 15.1.1

        Just 1 thing.

        Batteries don't have to be replaced every 5-10years.

        There are many leafs driving around with batteries 12+years and they have the worst drop in health.

        Hyundai ioniqs, the original 28khw model, are now pushing 6-8 years and aren't showing any noticeable drop. And some have gone over 100,000km.

        So let's finally drop the miss-truths about battery life.

  16. Mike the Lefty 16

    It's funny but the Beatles' song Taxman popped into my head with this topic.

    The lyrics: If you take a walk I'll tax your feet.

    Perhaps that is National's next step – taxing us for walking on the footpaths (because footpaths are technically part of the road) and/or cycling on the roads on the premise that why should those ingrate greenies get to use the roads for free?
    Maybe National will further extend RUCs to E-bikes?
    I wouldn’t put it past them to take another opportunity to display their hatred of electric-powered transport.

    • Foreign waka 16.1

      Why would you say that? Taxing the user could be necessary by any party in government to fund roading. Someone has to pay. I hope you are not suggesting those without vehicles should subsidize the drivers of any vehicle.

      • Mike the Lefty 16.1.1

        So you support taxing walking and EVs then?

        • Foreign waka

          ??? I have never heard of any governments plan taxing walking.

          EV's are road users as all others, methodology could be adjusted to type of "fuel" but yes, RUC = Road user charge.

  17. Dan 17

    I think this writer has some hidden agenda on keeping taxes on petrol as many points made against a switch make no sense. He/she makes out it's a balanced article giving pros and cons but really if you read it properly without bias it's very one sided. Arguing rucs favour rich because they can buy in advance? It doesn't favour anyone, it's not cheaper to buy 8n advance. Rich people working from home don't pay, well petrol or ruc, this is the same for both. Rucs are a fair collection method for all, only issue would be being able to save to buy rucs when you are used to buying an inclusive price model. Having money aside for rucs will be a tricky budgeting exercise to accept/remember for many as the poorer often struggle here. Rucs are fairer for all, why pay petrol tax for a boat or lawn mower?

    • Michael P 17.1

      The majority of recreational boats are towed to the water on roads so am assuming you'd have no problems with additional RUC's for boat trailers? Then of course we should probably add some extra taxes in order that only people who own boats pay for boat safety and rescue activities? We should probably start charging at all boat ramps so that only boaties are paying for the build and upkeep required for the ramps too. Coastguard services tax should be added too, and so on and so on. After all, it's about fairness right?

  18. Jack 18

    OP please do some reading about the system and methodology of the RUC system, all is available online. Start with this

    Only 30% of the RUC assigned NLTP expenditure is associated with weight related pavement wear.

    45% of costs are common vehicle costs, weather related wear, public transport subsidies, policing, capex , road signs and marking, emergency works, and most routine road maintenance. They also include 45 percent of the costs of building new State highways and 68 percent of the costs of new local roads. These costs are shared equally by all RUC users.

    Also vehicles weighing less than around 6 tonnes do almost no damage to roads and so they impose very similar costs on the road network. For this reason, all light RUC vehicles pay the same RUC rate – $76 per 1,000 km (from 1 July 2020)

    As far as MOT / NZTA / the roading system is concerned there is no cost difference to serve between a nissan leaf and ford ranger.

    The biggest legit complaints about RUC is that it doesn't account for toxic emissions and other acc costs (old light diesels, and probably most new light ones should be charged off the road due to health costs they impose), and the fact that the RUC rate is set to be equivelenet to the excise collected from a petrol car that gets 9.5l/100km which is very high.

    • Ad 18.1

      This is where MoT are at on reviewing the RUC system including the review on attribution and collection through 2022:

      The review asked mostly operational issues, not equity questions.

      MoT tilts their summaries to classes of vehicle, not to the percentage of the total national fleet that is diesel and pays RUC (9%). The 3,11,000 petrol vehicles are lighter as a vehicle on average, but do they in total make as much wear and tear as the total fleet with more then 2 axles? Would have been great if they’d set that out as an equation.

    • Michael P 18.2

      Wouldn't the health costs for diesels that you've suggested be offset by the diesel's lower co2 emissions?

  19. Frank 19

    I wish they would introduce ruc for every car fuel user.that way I wouldn't pay road tax for using my boat and lawnmower,chainsaw etc

  20. JPS 20

    The real inequity is the rate to be charged for plug-in hybrids (phev). They only do between 20 and 50km on electric only. That is 100%ev on a 20km round trip or 20%ev on a 100km round trip or 4%ev if you do a journey using a full tank. There is no practical reason to differentiate between EV and PHEV in the RUC calls. Under the proposed regime PHEV owners will be paying both excise and Ruc for the vast majority of their travel.

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    5 days ago
  • Govt will deliver on expanded breast screening
    The coalition Government has made the first steps in delivering on its promise to  extend free breast screening to women aged 70-74, Health Minister Shane Reti says. “As part of the 100 day plan, the Government has now met with officials and discussed what is needed in order for the ...
    5 days ago
  • Government announces woolshed roadshows in support of sheep farmers
    The Government celebrates National Lamb Day (15 February 24) and congratulates sheep farmers on the high-quality products they continue to produce. Agriculture Minister McClay hosted bipartisan celebrations of National Lamb Day with industry representatives at Parliament this week to mark the anniversary of the first frozen lamb exports that left ...
    5 days ago
  • Speech: Address to the NZ Economics Forum
    It’s great to be back at the New Zealand Economics Forum. I would like to acknowledge everyone here today for your expertise and contribution, especially the Pro Vice-Chancellor, Head of the Waikato Management School, economists, students and experts alike. A year has passed since I was last before you, and ...
    5 days ago
  • Government tackling high construction costs
    The Government is focused on reducing sky-high construction costs to make it more affordable to build a home, Building and Construction Minister Chris Penk says.  Stats NZ data shows the cost of building a house has increased by 41 per cent since 2019, making housing even more unaffordable for Kiwi ...
    5 days ago
  • Labour’s Three Waters legislation repealed
    The Coalition Government’s legislative plan to address longstanding issues with local water infrastructure and service delivery took an important step today, with the repeal of Labour’s divisive and unpopular Three Waters legislation, Local Government Minister Simeon Brown says. “Repealing this legislation is a necessary first step in implementing our Local ...
    6 days ago
  • Cost of living support for beneficiary households
    The Coalition Government is delivering on its commitment to ease the cost-of-living by increasing main benefit rates in line with inflation and ensuring the Minimum Family Tax Credit threshold remains aligned with this change, Social Development and Employment Minister Louise Upston says. The Social Security (Benefits Adjustment) and Income Tax ...
    6 days ago
  • Government announces agriculture delegations to better support Primary sector
    The coalition Government has announced ministerial delegations to support key areas across the Primary sector to deliver for New Zealand’s food and fibre sector, Agriculture Minister Todd McClay announced today. “I will be supported in my roles as Minister of Agriculture, Trade, Forestry and Hunting and Fishing, by three Associate ...
    7 days ago
  • Waikato MoU reinforces Govt’s commitment to increase NZ doctors
    The Government has taken an important step forward in addressing a critical shortage of New Zealand-trained doctors, with today’s signing of a Memorandum of Understanding for a third medical school, Minister of Health Dr Shane Reti has announced.  “Today’s signing by the Ministry of Health and the University of Waikato ...
    1 week ago
  • Speech – Lunar New Year 2024
    Annyeonghaseyo, greetings and welcome all. It is my pleasure as the Minister for Ethnic Communities to welcome you to the first Lunar New Year Event in Parliament. Thank you to our emcees for greeting us in the different languages that represent the many cultures that celebrate the Lunar New Year. ...
    1 week ago
  • More funding to Hawke’s Bay and Tairāwhiti
    Urgent work to clean-up cyclone-affected regions will continue, thanks to a $63 million boost from the Government for sediment and debris removal in Hawke’s Bay and Tairāwhiti.                                                                                                   The funding will help local councils continue urgent work removing and disposing of sediment and debris left from Cyclone Gabrielle.   “This additional ...
    1 week ago
  • Budget will be delivered on 30 May
    Plans to deliver tax relief to hard-working New Zealanders, rebuild business confidence and restore the Crown’s finances to order will be unveiled on 30 May, Finance Minister Nicola Willis says. The plans will be announced in the Budget which is currently being developed by Ministers.  “The last government’s mismanagement of ...
    1 week ago
  • Government advances Local Water Done Well
    The Coalition Government is continuing work to restore council ownership and control of water assets by repealing Three Waters and appointing a Technical Advisory Group to provide expert advice on the implementation of Local Water Done Well, Local Government Minister Simeon Brown says. “The Government will pass a bill to ...
    1 week ago
  • New diplomatic appointments
    Foreign Minister Winston Peters has today announced five new diplomatic appointments.  "Strong and effective diplomacy to protect and advance our interests in the world is needed now more than ever," Mr Peters says.  “We are delighted to appoint senior diplomats from the Ministry of Foreign Affairs and Trade to these ...
    2 weeks ago
  • Speech to the Committee for Auckland
    It is great to be here today at this event as Minister for Auckland and Minister ofTransport. Let me start by acknowledging each one of you and thanking the Committee forAuckland for hosting this event and inviting me to speak here today. The Committee for Auckland has been a symbol ...
    2 weeks ago
  • Getting Transport Back on Track in Auckland
    Transport Minister Simeon Brown has today confirmed his high-level transport priorities for Auckland, in the lead up to releasing the draft Government Policy Statement on Land Transport. “Our economic growth and productivity are underpinned by a transport network that enables people and freight to move around safely and efficiently. At ...
    2 weeks ago
  • Government to axe Auckland Regional Fuel Tax
    Transport Minister Simeon Brown has confirmed that the Auckland Regional Fuel Tax will end on 30 June 2024. “Today, I can confirm that the Government has agreed to remove the Auckland Regional Fuel Tax in line with our coalition commitments, and legislation will be introduced to parliament to repeal the ...
    2 weeks ago
  • Minister Calls for Work to Tackle Kina Barrens
    Changes to fishing rules and a significant science programme are being undertaken to address kina barrens, says Minister for Oceans and Fisheries Shane Jones. “There has been tremendous interest from iwi, communities and recreational fishers who had raised concerns about such kina infestations being a major threat to Northland’s marine ...
    2 weeks ago
  • Government law and order crackdown begins
    The coalition Government is making good on its promise to restore law and order by removing government funding for Section 27 reports and abolishing the previous Labour Government’s prison reduction target, Justice Minister Paul Goldsmith and Corrections Minister Mark Mitchell say.  “In recent years, the development of Section 27 reports ...
    2 weeks ago
  • Greater focus on getting people into work
    The coalition government will refocus employment efforts and the welfare system so that supporting people who can work into jobs is the number one priority, Social Development and Employment Minister Louise Upston says. “Of concern in the labour market statistics released by Stats NZ today was the number of youth not ...
    2 weeks ago
  • One year on, NZ appeals for release of Phillip Mehrtens
    Foreign Minister Winston Peters has appealed to those holding New Zealand pilot Phillip Mehrtens in remote Papua, Indonesia, to release him immediately.  Phillip Mehrtens was taken hostage a year ago on 7 February in Paro, Papua, while providing vital air links and supplies to remote communities. “We strongly urge those holding ...
    2 weeks ago
  • Ministers reaffirm Pacific connections this week
    Foreign Minister Winston Peters and Health Minister and Minister for Pacific Peoples Dr Shane Reti are reaffirming the importance of New Zealand’s connections to the Pacific by visiting Tonga, Cook Islands and Samoa this week.  “New Zealand enjoys strong and long-standing relationships with our Pacific partners - especially in Polynesia, where we ...
    2 weeks ago
  • Rt Hon Christopher Luxon – Waitangi speech
    E ngā mana, e ngā reo, e ngā iwi, rau rangatira ma. Tēnā koutou katoa. He tino mihi ki te mana whenua o tēnei rohe.  Mihi mai, mihi mai, mihi mai. Te whare e tū nei, tēnā koe.                               He-wāhi whakahirahira tēnei mō Aotearoa. Ka huri nga whakaaro, ki nga mate. ...
    2 weeks ago
  • Government awards primary sector scholarships to students
    Six university students studying agriculture and science have been awarded scholarships as part of the coalition Government’s efforts to boost on-the-ground support for farmers and growers. “The coalition Government is committed to improving support and operating conditions for farmers and growers,” Agriculture Minister Todd McClay says. “We’re backing a range ...
    2 weeks ago
  • High Court Judge appointed
    Attorney-General Judith Collins today announced the appointment of Wellington Barrister Jason Scott McHerron as a High Court Judge. Justice McHerron graduated from the University of Otago with a BA in English literature in 1994 and an LLB in 1996. From 1996 to 1999 he worked as a solicitor in the ...
    3 weeks ago
  • New Zealand provides further humanitarian support to Gaza and the West Bank
    Foreign Minister Winston Peters has announced that New Zealand is providing a further $5 million to respond to the extreme humanitarian need in Gaza and the West Bank.  “The impact of the Israel-Hamas conflict on civilians is absolutely appalling,” Mr Peters says.  “That is why New Zealand has contributed $15 ...
    3 weeks ago
  • Government consults on expanding COVID-19 Inquiry terms of reference
    The Government is delivering on its commitment to enable public input into expanding the scope of the Royal Commission of Inquiry into COVID-19 Lessons, says Internal Affairs Minister Brooke van Velden. “As committed to in both the ACT-National and NZ First-National coalition agreements, the public will be given the opportunity ...
    3 weeks ago
  • Tai Tokerau Water Boost
    A further $5 million loan has been advanced to the Tai Tokerau Water Trust for Te Waihekeora Reservoir, Regional Development Minister Shane Jones says.  “Water is a precious resource, Kānoa – Regional Development and Investment Unit at the Ministry of Business, Innovation, and Employment have done amazing work in the ...
    3 weeks ago
  • Fast track consenting in the fast lane
    The Government is progressing changes to resource management laws as part of its 100 Day Action Plan, with the first steps taken to establish a new fast-track consenting one-stop shop regime. “This new regime, which forms part of National’s coalition agreement with New Zealand First, will improve the speed and ...
    3 weeks ago
    Deputy Prime Minister and Minister for Defence the Hon Richard Marles MP and Minister for Foreign Affairs Senator the Hon Penny Wong hosted New Zealand Deputy Prime Minister and Minister of Foreign Affairs Rt Hon Winston Peters MP and Minister of Defence Hon Judith Collins KC MP on 1 February ...
    3 weeks ago
  • Minimum wage set for cautious increase
    The adult minimum wage rate will increase by 2 per cent to $23.15 an hour from 1 April 2024, Workplace Relations and Safety Minister Brooke van Velden announced today. “This Government is committed to striking the right balance between protecting the incomes of our lowest paid workers and maintaining labour ...
    3 weeks ago
  • Increased security improves ED safety over summer
    Increasing the number of security staff in emergency departments (EDs) over the busy Christmas and New Year period improved the safety of both staff and patients, Health Minister Dr Shane Reti says. 200 additional security staff (93 FTEs) were provided to 32 EDs in response to concerns raised by ED ...
    3 weeks ago
  • Step Closer for European Union Free Trade Agreement
    New Zealand has moved closer to ratifying the New Zealand – European Union Free Trade Agreement (FTA), with the First Reading of legislation to bring the Agreement into force being held in Parliament today.   “Almost a decade after preparatory talks first began on an FTA with the European Union, I’m pleased to ...
    3 weeks ago
  • Continuing support to community flood resilience
    The Government is contributing more than $15 million to support councils and communities to build flood resilience in three regions, following the 2023 severe weather events. “Last week I announced funding of just under $12 million for Wairarapa and Northland flood resilience projects, these further projects bring the Government’s contribution ...
    3 weeks ago

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