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Road user charges will definitely go up from October 1, alongside the previously announced increased in fuel excise duty of 3 cents per litre.
Transport minister Steven Joyce says the additional revenue from these increases “will contribute to the billion dollars annually that we now invest in developing our state highway infrastructure.”
For an average two tonne diesel car, the 1 October RUC increases will result in an additional cost of $4.63 per 1,000 kilometres driven. A larger vehicle such as a 3 tonne SUV will cost an extra $5.03 to drive 1,000 kilometres. These are expected to increase total running costs by between 0.5 and 1 percent.
For heavy vehicles the exact RUC increase will depend on vehicle size and axle configuration. Typical large truck and trailer combinations will pay between 4 and 6 percent more in RUC depending on configurations. The maximum increase for any diesel vehicle is 10 percent, and the average is 7 percent.
Mr Joyce says the increases will flow into the hypothecated National Land Transport Fund and assist investment in transport projects throughout the country.
“The additional revenue from these increases will contribute to the billion dollars annually that we now invest in developing our state highway infrastructure.
“That ongoing investment is crucial in assisting economic growth and will enable greater productivity to be gained from the transport network.”
While the FED increase is 3 cents per litre for all vehicles, the RUC increase will vary depending on the size of the vehicle.
“We are continuing to move towards reflecting the conclusions of the recent RUC review in these adjustments,” says Mr Joyce.
The Road User Charges Amendment Act, which was passed last year, requires 42 days notice to be given for road user charges increases, allowing transport operators time to budget for increased costs. RUC licences for vehicles over 3.5 tonnes bought at the old rate will expire a month after the new rate takes effect.
Refunds of road user charges for unused kilometres will be automatically provided at the time a new licence is purchased.
5 Comments
While other countries evolve with the environment & technology and invest more in other transport modes NZ doesn’t. More $’s for electric rail, less for carbon emitting cars. That smog in the morning is gross.
@DanC, Increasing petrol tax and RUC will (although the change is tiny) make competing technologies slightly more attractive. Increasing tax (if only by a tiny bit) on heavy trucks will make rail and coastal shipping more attractive.
This is a move in the right direction, and now when fuel prices are low is a good time politically to put more tax on.
Well, what a surprise, should rename Joyce Minister for Roads.
Scott, still doesn’t capture the costs for damage to roads by heavy trucks, though. The increases need to be a lot larger to remove the subsidy that trucking enjoys.
I do like the expiration of heavy vehicle RUC miles, though. Neatly takes care of the problem that Labour encountered of trucking operators buying millions of kms of RUC mileage between the announcement of an increase and the increase taking effect; the very behaviour that lead to the stealth increase in RUC in 2008.
Matt, this is still a shift in the right direction. The government will want to avoid trucking protest’s so they are unlikely to ever do a giant increase in RUC.