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28 February, 2002
Electronic Road User ChargesFact Sheet FiveThe government wants to ensure the system used for recovering roading costs from heavy and diesel vehicles is fair and does not impose unnecessary compliance cost on vehicle operators. An electronic system of road user charges will enhance the efficiency and fairness of these charges.The current paper-based system for Road User Charges (RUC), introduced in 1977, is a weight-distance tax that uses vehicle distance measuring devices (odometers and hubodometers). Charges are based on the average cost of the roading system. Charges are also based on vehicles' average rather than actual weights. This system is inefficient and imposes high compliance costs on users. It also requires substantial ongoing enforcement and a national network of agencies issuing licences. Non-compliance is currently estimated to cost the country about $28 million (including GST) per year, representing some four per cent of the total net RUC revenue. An electronic system, called e-RUC, will offer a fairer and more accurate means of charging heavy and diesel vehicles. It should also mean savings for many businesses. E-RUC will be introduced on a voluntary basis and, initially, RUC vehicle operators will have the choice of moving to e-RUC or continuing to operate under the existing system. Over time it is expected that the majority of heavy and diesel vehicles will switch to e-RUC. Legislation is needed to implement e-RUC and to ensure privacy is protected.
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