Hon Mark Gosche - Moving Forward - Land Transport Changes

Office of Hon Mark Gosche
Minister of Transport

28 February, 2002

Funding Changes

Fact Sheet Two

Our land transport system is funded from the National Roads Fund. This is a dedicated portion of the Crown Account that receives revenue from fuel taxes, Road User Charges, motor vehicle registration and licensing fees. This money is invested in roads, road safety and passenger transport.

Over the next 16 months, to 30 June 2003, the government will invest a further $227 million (including GST) as a first step in fulfilling its long-term goals for land transport. These funds will come from increased excise duty on petrol and higher Road User Charges.

Petrol Tax

Excise duty on petrol will increase by 4.2 cents a litre which, when GST is added, will mean an increase of 4.7 cents per litre for motorists, if passed on in full by retailers.

The increase in petrol tax could add approximately $1.34 per week (including GST) to the average household's weekly expenditure on petrol. This translates to approximately $70 a year (including GST).

Road User Charges

Changes in Road User Charges (RUC) affect only diesel vehicles of four tonnes or less. Charges for these vehicles will increase by about 30 per cent overall. The exact size of the increase depends on the size of the vehicle.

For the biggest group of vehicle owners affected - those with two tonne vehicles - the increase will mean an extra $6.28 (including GST) per 1,000 kilometres - the equivalent of a return trip Wellington to Hamilton.

Weight Vehicle numbers Current charge per 1000 kms New charge per 1000 kms Increases per 1000 kms Percentage increase

1 tonne
(eg Diahatsu Charade) 2,138 $14.38 $22.58 $8.20 57

2 tonne
(eg Mazda Familia, Holden Rodeo) 255,767 $18.46 $24.74 $6.28 34

3 tonne
(eg Toyota Landcruiser, Ford Courier) 92,741 $21.81 $26.83 $5.02 23

4 tonne
(eg Ford Transit – 15 seater or camper van version) 26,493 $24.88 $28.36 $3.48 14

Total 377,139

When will the changes take effect?

Increases in petrol excise tax will take effect immediately after the Governor-General signs the legislation, expected to be Friday 1 March 2002.

The new Road User Charges will come into force on 1 April 2002. Previously RUC vehicle owners have been required to purchase new RUC licences within one month of a rate change but, because of the frustration this has caused in the past, the government intends repealing this provision.

Impacts on government revenue

The National Roads Fund currently receives net $462 million (including GST) from petrol tax excise each year, along with net $652 million (including GST) from Road User Charges.

The increases will provide around $142 million (including GST) per year in petrol tax, and $33 million (including GST) per year from Road User Charges.

All of this additional revenue will be dedicated to the National Roads Fund. None of the additional revenue will go to the Crown Account.

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