Media Release: 21 February 2012

Road User Charges Bill will mean higher costs for motorists

The Road User Charges Bill just passed by Parliament will mean higher costs for the majority of diesel vehicle owners, says the New Zealand Automobile Association.

“While the new Bill simplifies the Road User Charges (RUC) system and reduces compliance costs and fraud, most diesel users will have to pay more,” says AA spokesperson Mark Stockdale.

“A vehicle will now be charged for the maximum weight it can carry, which assumes that cars are always carrying a full load, which is rarely the case. This is expected to result in an increase of $1.56 per 1,000 kilometres for a diesel car, or about an extra $23 per year for the average motorist.

“While not a large increase, this amounts to an extra $5 million a year across the entire fleet of 217,000 diesel cars and utes. On top of that, RUC fees are expected to increase again later this year along with the petrol tax.

“The new Bill sends the wrong message to diesel car owners. The Bill is a missed opportunity to encourage people into buying more fuel-efficient, environmentally-friendly diesels.”

The AA says a minority of very heavy diesel vehicle owners will benefit from the changes, at the expense of the majority of owners who will end up paying more. Ninety percent of RUC users are not heavy freight.

“In addition to higher RUC fees for cars, owners of large motorhomes will pay over double what they do now. This is despite motorhomes not causing any more damage to the road, and will be hard for owners who are often on fixed incomes. Other vehicles that do not carry heavy loads, like courier and furniture trucks, tow trucks and fire engines will also pay more. This will have a negative impact on many businesses who will pass on higher costs to their customers,” says Mr Stockdale.

“The Bill has moved away from the principle of users pays, whereby those who carried more weight paid more road tax Under the new regulations, vehicle owners who carry light loads will be subsidising the heaviest vehicles, and that’s plain wrong.

“The AA is disappointed the concerns of the majority of diesel vehicle owners have been ignored in the drafting of this Bill. However, some of these unfair and unintended consequences can still be addressed by changing the consequential regulations.”

The AA made strong submissions on the draft Bill, proposing including a lower RUC weight class for cars, creating a new class for motorhomes, and permitting commercial vehicle owners to nominate a lower weight for certain vehicle sub-classes that better reflects their operating weight.

• Diesel vehicle owners contribute about $1 billion a year in Road User Charges, compared to about $1.45b from petrol vehicle owners in fuel tax. These funds are used to maintain the land transport network.

Ends

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