RUC system to be simplified, modernised

Transport Minister Steven Joyce has today announced decisions on the full list of recommendations made by an independent review of road user charges (RUC).

An independent review group was appointed in August 2008 to review New Zealand's RUC system in response to concerns raised by the road transport industry following RUC increases on 1 July 2008.

The review considered the way in which the Ministry of Transport's cost allocation model allocates costs between road users and whether the RUC system should be replaced by alternative revenue collection methods.

"The review made 33 recommendations covering all aspects of the RUC system," says Mr Joyce.

"The government has accepted recommendations that the RUC system be retained, simplified and modernised, rather than replaced with a diesel tax which would impose costs on non-transport users.

"Over time, this will result in a move to an internet-based RUC purchase system which will reduce compliance costs and the risk of evasion.

"A first step towards reducing compliance costs is the new requirement that six weeks notice be given of RUC increases, so that transport operators can plan and budget accordingly. This was passed into law last week.

"As previously signalled, the government has rejected a recommendation for a higher annual flat rate licence fee for all vehicles as it is considered unfair to road users who cover relatively small annual distances."

The review found that light diesel users contribute the least to the roading system compared to their usage of it. Mr Joyce says this relativity issue will be steadily addressed over time.

The Ministry of Transport has established an interagency steering committee with the New Zealand Police and the NZ Transport Agency to drive improvements to the RUC system and road user representatives will be consulted on proposals for change.

Changes to Road User Charges legislation are expected to be introduced to Parliament by early 2010 and work on the cost allocation model will be completed in time for any changes to be taken into account in re-setting road user charges and fuel excise duty in October 2010.