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John MacDonald: Attention motorists, more user-pays is on the way

Author
John MacDonald,
Publish Date
Thu, 26 Jun 2025, 12:50pm
(Photo / NZ Herald)
(Photo / NZ Herald)

John MacDonald: Attention motorists, more user-pays is on the way

Author
John MacDonald,
Publish Date
Thu, 26 Jun 2025, 12:50pm

The Infrastructure Commission's draft 30-year plan is the kind of big picture thinking we鈥檝e been saying is needed, instead of the ad-hoc, politically driven approach we have at the moment.  

Essentially, the Commission says we鈥檙e going to need less schools and more hospitals because of the ageing population.  

It also says we鈥檙e going to need more roads and better roads, and we鈥檙e going to have to do some serious thinking about how we pay for them.  

Its draft plan doesn鈥檛 go into too much detail, other than we鈥檙e going to have to have more user-pays.  

Already, we鈥檝e got one commentator floating an idea that I don鈥檛 necessarily like, but which I think is inevitable. Because, as the Infrastructure Commission is hinting at, the current way we fund roading in New Zealand has 鈥測esterday鈥 written all over it.  

Once upon a time, it was probably feasible or sustainable for the government and councils to pay for it all. Or us to pay for it all through our taxes and our rates and not have to pay anything else on top of that.  

But those days are gone. Which is why I think Matthew Birchall from the New Zealand Initiative think-tank is onto something.  

He reckons that we should do away with the current road-user charging model 鈥攚hich has people driving the likes of diesel vehicles paying road user charges鈥 and replace it with distance-based charging for all vehicles, on all roads. So the more you drive, the more you pay.   

He says with vehicles becoming more fuel-efficient and electric cars growing in popularity, the current model isn鈥檛 fit for purpose.  In the next decade alone, NZTA reckons it will be short of about $4 billion to $5 billion. That鈥檚 the next decade, let alone the next 30 years.  

He says we need a fairer system that directly links road user charges to those of us who use the roads and how much we use them.  

And, aside from being a very practical way of getting the money needed for roads, I reckon it would also work in favour of people who think we should all be on public transport.  

Because, chances are, it might be cheaper in some instances to take the bus.  

Matthew Birchall calls his idea 鈥渟mart road user charging鈥 鈥 or smart RUCs. He says: 鈥淯nder this system, fuel excise duty would be gradually phased out and replaced with distance-based charging for all vehicles."   

He says road users would choose between an automated 鈥減ay-as-you-drive鈥 system or a pre-purchased RUC licence, similar to the existing diesel RUC system. And he says charges would vary based on factors like vehicle type, weight, and time of travel, ensuring that costs are allocated efficiently and equitably.  

I鈥檓 not sure about the equitably bit because I imagine people living in our bigger cities who might not be big income earners might live further out of town and, therefore, might be stung more than wealthier people living closer to the city.  

But, broadly, I think it鈥檚 a great idea. In fact, I think it鈥檚 a no-brainer. I don't love it. But I think it is inevitable.  

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