The gap in the user-pays model
Tolling makes intuitive sense to any business owner. Those who use new infrastructure pay for it. But New Zealand’s tolling model has a hole in it, and Tauranga councils have just put their finger on exactly where.
Tauranga and Western Bay of Plenty councils have publicly backed the Land Transport (Revenue) Amendment Bill, which passed its second reading in June 2026 and would allow toll revenue to be used to maintain free alternative routes. Their argument is not anti-tolling. As Western Bay of Plenty infrastructure general manager Brad Singh put it, “the council is not opposed to tolling. We see this as a discussion about fairness rather than opposition to tolling.”
The fairness problem is this. When a driver avoids a toll by using a council-owned local road, the wear and the maintenance cost fall on that road. But under current law, toll revenue is ring-fenced to repay construction debt and cover the operating costs of the tolling system. None of it flows to councils.
Why Tauranga is the test case
The Bay of Plenty hosts two of New Zealand’s three toll roads, the Tauranga Eastern Link and Takitimu Drive, making Tauranga the most-tolled city in the country. A third, the Takitimu North Link, is due for completion in 2028 and will be tolled from day one.
The money is real but modest. In 2024/25, Takitimu Drive brought in $11.4 million from 5 million vehicles and the Tauranga Eastern Link $9.3 million from 4.1 million vehicles. Since the $455 million TEL opened in 2015, about $79 million has been collected, with $53 million going to debt and interest and the rest to running costs. Councils see none of it.
The diversion effect is not theoretical
Cabinet has already quantified the problem. A March 2026 Economic Policy Committee decision on a second toll point at Pāpāmoa East found that without the new toll, 37% of TEL users, roughly 13,500 vehicles a day by 2035, would go untolled. The same document found 50% of Pāpāmoa East Interchange users were expected to divert once the new toll came in.
That traffic goes somewhere. Singh named the roads at risk: Te Puke Highway and Pacific Coast Highway near the TEL, and Minden Rd in Te Puna for the Takitimu North Link. He acknowledged the council cannot yet separate toll avoidance from general traffic growth, and NZTA confirmed it does not hold data showing maintenance costs caused specifically by toll avoidance. The absence of data is not evidence of no cost. It is evidence nobody is measuring it.
Double-charging brings it home
The Pāpāmoa East situation has turned the abstract concrete. The new Waiariki Interchange toll of $1.10 for light vehicles and $2.80 for heavy vehicles means motorists who exit and rejoin the TEL pay both tolls, $3.40, rather than the $2.30 full-length rate. At an August 2026 public meeting, 86% of Pāpāmoa residents opposed the new toll.
Worse, residents already pay a targeted rate of $105.78 per property for the interchange through their council rates, then get charged again to drive on it. And the numbers barely stack up: an OIA response showed NZTA estimated the new tolling infrastructure would cost $3.8 million to $4.3 million to install against just $816,000 in additional net revenue in 2035.
The bill trying to please nobody
The amendment bill attracts fire from opposite directions, and the objections do not reconcile. The Taxpayers’ Union argues toll revenue should stay on the tolled road, warning that funding alternative routes creates a perverse incentive. Freight operators, through National Road Carriers and Transporting New Zealand, warn against tolling becoming a revenue extraction tool and reject any move to force trucks onto tolled routes. The Automobile Association has found only 25% of respondents think tolling an existing road is fair even where a new road benefits users.
Threading between all three is hard, and the system’s own inefficiency narrows the room to move. A Ministry of Transport analysis has put New Zealand’s collection costs at roughly 32% of toll revenue against a global average of 14.6%. If a third of the pool is eaten by the cost of collecting it, there is less left for debt, maintenance and council compensation combined.
What happens next
Bay of Plenty MP Tom Rutherford has signalled the direction plainly: “the starting point for new roads will be to look at whether tolling is appropriate.” As more Roads of National Significance are tolled, and as the Takitimu North Link hands a stretch of State Highway 2 to councils as a local road in 2028, the pressure on free alternatives, and the ratepayers who fund them, only grows. The bill is a genuine attempt to close a real gap. Whether it does so without opening new ones is the question Parliament has not yet answered.
Sources
- ‘About fairness’: Councils in NZ’s most-tolled region back revenue sharing (2026-09-13)
- NZ’s most road-tolled region faces more tolls under 10-year deal (2026-05-14)
- Stop off, pay extra: New SH2 toll labelled ‘unfair’ to locals, businesses (2026-04-01)
- Pāpāmoa residents rally against second Tauranga toll on new interchange (2026-08-29)
- Pāpāmoa residents rev up fight against new tolls (2026-08-29)
- Tauranga Eastern Link – Updating the Tolling Scheme (Cabinet EPC decision) (2026-03-04)
- Regulatory Impact Statement – Tolling Legislative Reform
- Summer road trips are about to cost more (Taxpayers’ Union)
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