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Transport Minister Chris Bishop this year announced “the biggest change to how we fund our roading network in 50 years”. Herald data editor Chris Knox explains the change and what it could mean for you.
The Government has announced it’s preparing to stop funding roads from fuel taxes – and switch to road user charges in 2027. What could this mean for you?
Currently, for every litre of petrol you put in your car. you pay 70.024 cents into the National Land Transport Fund – used to build and maintain our roads.
Or, if you own a diesel or electric car you pay into the fund via road user charges, because electric cars don’t fill at the pump and the price of diesel doesn’t include a 70c per litre charge.
The 70c per litre fuel tax is also subject to GST so switching to road user charges will remove 80.53 cents per litre from the current cost of petrol. Your petrol will be cheaper.
Road user charges are a fundamentally different charging model: a per-kilometre charge. This is the system the Government plans to replace a fuel tax with.
With a fuel tax, more efficient vehicles pay less towards roading than vehicles that use more petrol to travel the same distance.
Transport Minister Chris Bishop said one goal of the switch is to ensure those who can’t afford a more fuel-efficient car aren’t paying more towards roading than those who can.
Currently, drivers of diesel or electric vehicles that weigh less than 3500 kilos – which is almost all light passenger vehicles – all pay a flat fee of $76 including GST per 1000 kilometres.
The Government hasn’t announced yet if that figure will change, or stay the same, when the system replaces the fuel tax for petrol-using cars.
The new road user charge system is expected in 2027 and the exact structure and costs haven’t been revealed.
The law changes also enable the bundling of other road charges like tolls and congestion charging – there is much still to be revealed.
The current road user charge to drive 15,000km – a year’s driving for some – is fixed at $1140 plus transaction costs.
The cost when paid via fuel tax depends on the efficiency of the car. A vehicle that averages 10 litres per 100 km would pay $1208 to drive 15,000km.
Use the interactive below to see how the costs change depending on a vehicle’s fuel efficiency.
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