07 Jul 2010

Cabinet has approved changes to the road user charges (RUC) system which are designed to simplify and modernise a key part of New Zealand's transport operation.

Transport Minister Steven Joyce says the changes will reduce compliance costs for transport operators and ultimately reduce transport costs for our businesses and exporters.

The reforms represent the most significant changes to the RUC system since it was introduced in 1978.

The reforms comprise:

• Changing the current system whereby heavy vehicle operators nominate a licence weight for RUC purposes to one where each vehicle will have its own permanent RUC weight.
• Removal of the time licence system and modernisation of the list of vehicles exempted from road user charges.
• Improvements to the system overall to enable greater compliance.
• An improved regulatory framework for electronic management systems.
• A fairer, simpler and less costly structure in relation to offences and penalties, particularly for light vehicles.

Mr Joyce says the changes will make the system easier to understand and fairer for all those who pay RUC.

"Changing the definition of licence weights, removing the confusing time licence system and simplifying the list of exempted vehicles will all reduce compliance costs for businesses and simplify administration processes for industry and government."

The NZ Transport Agency will also be able to take greater advantage of modern internet technology in administering RUC payment channels."

Government concern about RUC evasion - conservatively estimated by officials at $30 million a year - will also be addressed.

"Currently honest payers of RUC are subsidising those who evade payment.  Changes to legislation will remove a number of evasion opportunities and encourage timely payment, making the system fairer for all."

A review of the RUC cost allocation model will precede legislative changes. This review will ensure that RUC is allocated appropriately between users and make the model simpler and more transparent.

Changes to the RUC system already implemented include the requirement to give six weeks' notice of RUC increases and legislation enabling electronic distance recording and electronic display of RUC licences.

A new road user charges Bill will be introduced to Parliament later this year. 

Media contact: Anita Ferguson  021 243 1623 More information available at http://www.transport.govt.nz