Minister eyes modern RUC system
The government has taken the next step towards applying road user charges (RUC) across the country’s entire fleet after introducing the Land Transport (Revenue) Amendment Bill to parliament.
Chris Bishop, Minister of Transport, says the bill will make changes across RUC and tolling frameworks to provide a fairer, simpler and more modern transport funding system.
“A core principle of our transport funding system is fairness, that all road users should contribute in proportion to their use of the roads,” he adds.
A key area of change proposed in the bill, which was introduced to parliament on November 13, is to modernise the RUC system.
Bishop, pictured, describes the current set-up as “outdated” and notes it was designed in the 1970s and still relies on manual paperwork and paper licences.
“Right now, drivers paying RUC have to track their odometer readings and stick paper labels to their windscreen,” he continues.
“This bill enables new payment models like subscriptions or post-payment, and allows private companies to offer easy, set-and-forget billing options – similar to how many of us already pay for power or streaming services.
“It also future-proofs the system by allowing accurate in-vehicle technology to record distance and separates NZTA’s regulatory role from its retail role so third-party providers compete on a level playing field.”
He notes these changes are the first step towards replacing petrol tax with RUC for light petrol vehicles. The RUC system currently applies to all diesel vehicles, heavy vehicles over 3.5 tonnes and light electric vehicles, including plug-in hybrids.
“We’ll assess the improved system in 2027 before deciding on next steps for transitioning the remaining 3.5 million vehicles.”
The bill will also make changes to tolling, which is considered a key tool for delivering the government’s roads of national significance programme.
Bishop says tolling can help bring forward investment and build the roads New Zealand needs sooner.
“Key changes include enabling ‘corridor tolling’, which allows tolling on parts of an existing road where users receive clear, demonstrable benefits from a new project in the same corridor,” he adds.
“The bill also introduces new tools to manage diversion from toll roads, including the ability to restrict heavy vehicles from using unsuitable alternative routes, and allowing toll revenue to help fund maintenance of alternative roads when councils are unable to do so.
“To make tolling fairer and more predictable for users, the bill mandates annual CPI adjustments instead of ad-hoc increases. And to improve collection efficiency, liability for paying a toll will shift from the driver to the registered person.”
After having its first reading, the bill will be considered by the Transport and Infrastructure Select Committee and the minister expects the legislation to pass in 2026.
