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

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

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

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

Its draft plan doesn’t go into too much detail, other than we’re going to have to have more user-pays.  

Already, we’ve got one commentator floating an idea that I don’t 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 “yesterday” 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 —which has people driving the likes of diesel vehicles paying road user charges— 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’t fit for purpose.  In the next decade alone, NZTA reckons it will be short of about $4 billion to $5 billion. That’s 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 “smart road user charging” – or smart RUCs. He says: “Under 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 “pay-as-you-drive” 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’m 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’s a great idea. In fact, I think it’s a no-brainer. I don't love it. But I think it is inevitable.  

See omnystudio.com/listener for privacy information.