Road User Charges increase

Transport Minister Annette King says Road User Charges (RUC), affecting diesel vehicles and all other vehicles weighing more than 3.5 tonnes, will increase from 1 July.

Ms King says the increase is needed to ensure all road users pay their fair share of the costs of roading.

“The Government is currently funding New Zealand’s largest National Land Transport Programme, allocating a total of $2.7 billion for transport activities in 2008/09, including approximately $791 million for State highway construction, $325 million for passenger transport services and infrastructure and $273 million for road policing,” Ms King said. “Without all road users paying their fair share, this level of investment cannot continue to be sustained.”

For a small diesel car, it will cost $3.28 more to drive 1000 kilometres, or $32.80 more for an average year’s motoring of 10,000 km, she said. A larger vehicle, such as a three tonne SUV, will cost an extra $49.20 per 10,000km.

A typical five tonne truck will pay an additional $53.80 per 10,000 kilometres, while a 23 tonne four-axle truck can expect to pay an additional $198.

“RUC represents approximately 10 percent of total truck operating costs; therefore the impact of this increase on cartage rates will be relatively insignificant. I would not expect these increases to have any noticeable impact on consumer prices,” Ms King said.

”RUC for diesel vehicles weighing more than six tonnes has only been increased once (last year) since 1989.”

The Government will now channel all fuel excise duty, RUC and motor vehicle registration fees into the National Land Transport Fund. This change, termed “full hypothecation”, will also come into effect from 1 July.

“Changes to the way revenue is channelled means that $600 million a year that petrol users previously paid into the general Crown revenue pool will now be dedicated to transport purposes,” Ms King said.

“As diesel is not subject to any taxation apart from the 0.33 cent a litre Local Authority Petroleum tax, and the 0.025 cent a litre petroleum fuels monitoring levy, these increases to RUC will help restore the balance between charges paid by diesel and petrol users so diesel users make a fairer contribution to the National Land Transport Fund.”

Ms King said no notice of the increases was given to avoid mass pre-purchasing of RUC at the old rates.

“When notice was given of RUC increases in 2007 there was more than $17.5 million of RUC licences pre-purchased at the old rate. This gave an unfair advantage to those who could afford to pre-purchase a large amount, and resulted in lower levels of RUC being collected by the Government.

“Under current legislation RUC licences can be pre-purchased and used over an unlimited period of time.

“In the future the Government intends to amend the RUC Act for vehicles weighing more than 3.5 tonnes to restrict the period of time in which pre-purchased licences can continue to be used after a RUC increase. This will allow the Government to give a reasonable notice period of increases.”

The updated RUC book is available on the Land Transport New Zealand website at: http://www.landtransport.govt.nz/publications/docs/road-user-charges.pdf

 

A fact sheet with information on RUC charges for 1-6 tonne vehicles is also available at: http://www.landtransport.govt.nz/factsheets/38.html