The government has introduced new legislation aiming to initiate the transition from petrol taxes to road user charges for light vehicles.
The Land Transport (Revenue) Amendment Bill, presented to parliament, is designed to take the “first steps” toward establishing a “fairer, simpler, and more modern transport funding system.”
Transport Minister Chris Bishop said the focus is on “ensuring New Zealand is ready for the next generation of road building.”
The changes involved the road user charge system, which Bishop called an “outdated” system from the 1970s that still depended on manual paperwork and paper licences.
He said drivers currently paying RUC “have to track their odometer readings and stick paper labels to their windscreen.”
“This bill enables new payment models like subscriptions or post-payment and allows private companies to offer easy, set-and-forget billing options.”
“Similar to how many of us already pay for power or streaming services.”
He added that the changes would “future-proof” the system by enabling in-vehicle technology to track distance and would separate the New Zealand Transport Agency from its retail functions, allowing third-party providers to compete fairly.
“These changes are the first step towards replacing petrol tax with RUC for light petrol vehicles,” Bishop said.
The updated system will be evaluated in 2027 before determining the next steps for transitioning the remaining 3.5 million vehicles.
The legislation would also allow for “corridor tolling,” enabling tolls on sections of an existing road where “users receive clear, demonstrable benefits from a new project in the same corridor.”
“The Bill also introduces new tools to manage diversion from toll roads, including the ability to restrict heavy vehicles from using unsuitable alternative routes and allowing toll revenue to help fund maintenance of alternative roads when councils are unable to do so.”
The bill requires annual CPI increases to enhance collection efficiency instead of occasional adjustments. It also seeks to improve collection processes and transfer toll liability from the driver to the registered owner.
According to Bishop, the said changes will provide a more consistent and flexible tolling framework, enabling faster delivery of major road upgrades and supporting regional economic growth.