Moving Forward - Land Transport Changes 6/11

Mark Gosche Transport

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

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
Current charge per 1000
New charge per 1000
Increases per 1000
1 tonne
Diahatsu Charade)
2,138 $14.38 $22.58 $8.20 57
2 tonne
Mazda Familia, Holden Rodeo)
255,767 $18.46 $24.74 $6.28 34
3 tonne
Toyota Landcruiser, Ford Courier)
92,741 $21.81 $26.83 $5.02 23
4 tonne
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.