New Zealanders Favour Usage-Based Charging for Infrastructure Services, Survey Reveals

New Zealanders believe charging for infrastructure services based on household usage is the most fair, according to a survey by the New Zealand Infrastructure Commission, Te Waihanga.

The survey asked participants to weigh in on whether they believed payment for services such as roads, electricity and water should be based on household usage, income or location.

While 74% of respondents felt usage-based charging was fair for electricity and water, just 34% said the same for roads.

The results also showed a variation in responses according to age, gender, ethnicity and region, as well as the type of infrastructure in question.

"Gaining a better understanding of what people perceive is fair when paying for infrastructure services is an important step toward meeting this challenge. For example, while many people think it’s fairer to pay for the infrastructure services they use, they don’t view it as fair to have to pay for the full cost of supplying those services, especially where the costs are higher, such as in remote locations," says Te Waihanga General Manager - Strategy, Geoff Cooper.

The survey findings highlight a number of key points that may support policy development, including:

Volumetric charging for water: Nearly three-quarters of respondents (72%) think it’s fair that what households pay for water should be based on what a household uses. Decision-makers have the opportunity to harness this broad support for use-based charging as a fair means of paying for water and adopt volumetric charging where it is not already in place. This could be done by incorporating a low fixed charge for basic needs and the discretion to have lower charges for some households.

Congestion charging in Auckland: Despite most respondents (65%) not viewing congestion charging as a fair way of charging for road use at peak times, Aucklanders were more likely to think it was fair (31%) than those from elsewhere (22%). This is comparable to the levels of public acceptance of time-of-use charging in cities overseas before congestion charging was introduced.

Cost of supplying infrastructure: Over half of (55% to 60%) survey respondents did not think it was fair for households to pay for services based on the cost to supply. New Zealand has a long-standing approach that everyone should have access to infrastructure services regardless of where they live. This includes rural and remote areas where the cost of supply is higher or where the population is too small to meet the costs. But there are some tough decisions for the future about who should bear the cost of, for example, of rebuilding infrastructure in remote communities after damage from extreme weather events or in adapting infrastructure to be resilient in the face of climate change. 

Report: What's fair? Providing and paying for infrastructure