Matthew Birchall: NZ Initiative Report Author on the recommendation to replace the fuel excise duty with a Smart Road User Charges system

A new report says our fuel tax system is outdated and unfair. 

A new report from the NZ Initiative proposes replacing the fuel excise duty with a new Smart Road User Charges system. 

Under the system all vehicles would be charged based on actual road usage, time of day, and vehicle type. 

Lead author Matthew Birchall says it would reduce congestion and ensure a fairer distribution of costs. 

He says it's a revenue-neutral system where you wouldn't pay more, but just change the source. 

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Episode Transcript

Speaker 1 (00:00):
So the New Zealand Initiative is proposing we replace fuel
xise duty with a smart road user chargers system. Now,
they say the current fuel tax system is outdated and unfair.
Under the smart Road User charges, vehicles would actually be
charged for actual road usage, time of day, and vehicle type.

(00:20):
So it's a little bit more advanced than our current system.
It will reduce congestion, they believe, and ensure fair and
distribution of costs. And the reports author Dr Matthew Birtchell
from the New Zealand Initiative joins me.

Speaker 2 (00:31):
Now, hello Richard, Oh, Matthew, good morning Andrews.

Speaker 1 (00:35):
Don't know where the Richard came from, but there we
have it. Is this, if we're even considering this, is
this an admission that our roads are going to have
to become a more expensive place to do business, to
drive upon.

Speaker 2 (00:48):
No, so under smart op road users wouldn't pay more.
The system is designed to be revenue neutral, so it's
just about shifting how we pay, not about increasing costs.

Speaker 1 (00:59):
Okay, so, but some people might pay a bit more
because they might be not paying as much as they
should now, and some will be paying a bit less.
So overall cost neutral yep.

Speaker 2 (01:09):
Correct. So around the margins, if you're traveling and you
say to the city centers at peak times, you may
be paying slightly more. But across the board, it's a
revenue neutral system.

Speaker 1 (01:20):
But if you don't like it, you cannot doubt by
just not driving on the roads.

Speaker 2 (01:25):
Yeah, exactly. I mean that's one of the benefits of
having a pricing system for our transport network. You have
choices that it gives you flexibility, so you can make
those decisions about whether you want to take public transport,
shift the time of travel, those sorts of things, So
it gives that flexibility.

Speaker 1 (01:45):
Okay, So when I was talking about this half an
hour ago, I was saying, you know, look forward to Sundlizer,
where you've got a whole lot of devices that are
picking away doing your road user charges, doing your congestion charges,
doing everything. Can you explain how your model would actually
work It would look like on our cars.

Speaker 2 (02:02):
Yeah. Sure. So road users would have two payment options,
an automated pay as you drive system using an in
vehicle device, or pre purchase distance licenses like we already
use for our ruck So it gives you flexibility for
those who want the technology option that's there, but also

(02:23):
feel more comfortable with a pre purchase distance license like
we already used for ruck you can go for that
as well.

Speaker 1 (02:29):
Okay, so there won't be an electronic thing picking us.

Speaker 2 (02:33):
Then no, no, So you have the option to have
an electronic recorder in your car, but you also have
the option to go for the more manual choice.

Speaker 1 (02:44):
But you need the electronic one if you're going to
do the congestion charges at the same time, wouldn't you.

Speaker 2 (02:49):
Well, you can actually go also for number plate technology,
so there are choices there.

Speaker 1 (02:56):
Fascinating is this being done overseas.

Speaker 2 (02:59):
So congestion charging, yes, and also tolling. And in the
report I canvas a vast array of international examples. So
I look at Stockholm, I look at Singapore, I look
at the United States, I look at Japan. This would
be a world first though, in terms of scaling that
up to a universal road pricing system, and I think

(03:20):
New Zealand is really well positioned to do this. We
already have a road user charge system. It's just about
taking the next step because you know, let's be honest,
the current setup isn't doing us any good.

Speaker 1 (03:33):
How long will it take to roll this own.

Speaker 2 (03:36):
So I've outlined a five year implementation phase. I think
it's really important not to go for just a big bang,
sudden switch overnight, so you progressively phase out fuel tax
with road user charges.

Speaker 1 (03:50):
Getting text all over the place, mate, he says, how
many millions will it cost you change from fuel excise
to RUS?

Speaker 2 (03:57):
Look, that's something for the Ministry of Transport to work out.
What I would say in response to that is, our
current system is incredibly inefficient.

Speaker 1 (04:06):
Okay, here's another one. Is there a trade discount?

Speaker 2 (04:09):
Mate, I haven't factored that into the smartruck proposal as
of yet. I think as an important principle you don't
really want to be carving out too many exemptions. So
if we look at London, then it's congestion charge. One
of the main problems that it's had is about fifty
percent of road users have an exemption. The point that

(04:32):
I just want to reiterate is this is not about
putting huge costs on drivers. You know, even just a
dollar to say a congestion charge can change travel patterns
around the margins and it allows people to get from
A to B more efficiently.

Speaker 1 (04:47):
And I got one more from the audience. What have
magnificent audience. They are too. How will this work? How
will this work for farmers? For instance, they're driving down
the back of the farm and then the next day
they're on the road to the shops. But will they
end up being charged for the back of the farm
driving in that by the rucks?

Speaker 2 (05:02):
No, the farmers excluded from smart road user charges.

Speaker 1 (05:06):
Well, hold on, one moment you're saying exemptions are bad,
next moment you're exempting.

Speaker 2 (05:10):
Well, yeah, if they're driving around the pandock, you know,
no problem without it for using public roads, and that's
a different matter.

Speaker 1 (05:19):
Doctor Matthew Burchell, thank you so much for doing some
thinking on us. And what do you think about this?

Speaker 3 (05:24):
He's saying that it's less his system's less complicated. It
sounds do you know what doesn't sound that complicated is
the text that we used to play pay here in
Auckland that they took off us.

Speaker 1 (05:35):
You fill up the gas and then you pay for
the roads.

Speaker 3 (05:38):
Yeah, and I'm wondering if we went the wrong way,
if this kick ass fast track government just was a
little bit hasty with that, and perhaps they should have
just extended that to the rest of the country. Maybe
I don't know, some.

Speaker 1 (05:47):
Texts asked me before, it isn't New Zealand Initiative right wing?
And now of course the texts are saying this is
communism at its best. What a croc. And of course
somebody said, I've got to read this text, I've got
to find it again. Well, tell them I'm dreaming. And
then somebody says, oh does he work for the wea
for the devil.

Speaker 3 (06:02):
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