The New Zealand Government has signed off on the first steps towards scrapping petrol tax and shifting all vehicles onto electronic road user charges, calling it the “biggest change to how we fund our roading network in 50 years”.

Transport Minister Chris Bishop said Cabinet had agreed to legislative reforms that would enable the country’s 3.5 million light vehicles to eventually pay for roads based on distance travelled and vehicle weight, regardless of fuel type, says Stuff.co.nz.

“The abolition of petrol tax, and the move towards all vehicles (whether they be petrol, diesel, electric or hybrid) paying for roads based on distance and weight, is the biggest change to how we fund our roading network in 50 years,” Bishop said.

Bishop said the changes would mean the roading network could be maintained in the coming years, and would result in a fairer system where those who have less fuel-efficient cars would no longer be effectively “subsidising” roading costs for people driving hybrids or other more efficient cars.

“[It] will not result in poorer folk who drive fuel inefficient cars, cross subsidising wealthier folk,” he said. “The current system is less regressive”.

At the moment, drivers of petrol vehicles pay around 70 cents per litre in fuel excise duty (FED), which is funnelled into the National Land Transport Fund to build and maintain roads. Diesel, electric and heavy vehicles already pay road user charges (RUC) based on how far they drive.

“The current RUC system is outdated. It’s largely paper based, means people have to constantly monitor their odometers, and requires people to buy RUC in 1000km chunks,” said Bishop. “We’re not going to shift millions of drivers from a simple system at the pump to queues at retailers.

“A handful of E-RUC companies already do this for about half of our heavy vehicle fleet and there are several companies, both domestic and international, with innovative technology that could make complying with RUC cheaper and easier.”

No date has yet been set for the full switch to electronic RUC for all light vehicles.

“That’s a deliberate choice, as we’re focused on getting the system right rather than rushing its rollout,” Bishop said.

“This is a once-in-a-generation change. It’s the right thing to do, it’s the fair thing to do, and it will future proof how we fund our roads for decades to come.”

(Pic: Yay Images)