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.  

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Mornings podcast where John McDonald
from News Talk ZB.

Speaker 2 (00:12):
So the Infrastructure Commission has finally put out its draft
thirty year plan, which is the kind of big picture
thinking women saying is needed for a long time ahe
when it comes to infrastructure, instead of the sort of
ad hoc politically driven approach we've had in which we

(00:34):
still have at the moment now. Essentially, the Commission says
we're going to need less schools and more hospitals because
of the aging population. But that's not the bit I
want to focus on. The Commission also says that we're
going to need more roads and better roads, despite what

(00:54):
some political parties think, and it says we're going to
have to do some serious thinking about how we pay
for them. And this is the bit of the report
that I want to talk about this morning, how we
get the money to build them and how we get
the money to maintain them and fix them. Now, the report,
it doesn't go into too much detail other than pretty

(01:18):
much saying that we have to get real and we
have to accept that we're going to have to have
more user pays And already we've got one commentator floating
an idea which I don't necessarily like, but which I
think is inevitable. This is what I want to get

(01:40):
your your views on today, because as the Infrastructure Commission
is hinting at today and it's report the current way
be funds roading in New Zealand, it's got yesteryear, it's
got yesterday written all over it. Old hat. You know,
once upon a time it was probably feasible or sustainable
for the government and councils to pay for the roads,

(02:04):
to pay to build them and maintain them once upon
a time, or for us to pay it all through
our taxes and our rates and they're not have to
worry about paying anything else on top of that. Those
days are gone, which is why I think Matthew Birchall
from the New Zealand Initiative think tank is why I
think he's onto something here. He reckons how about this.

(02:28):
He reckons that we should do away with the current
road user charging model, which as you know, has people
who drive the likes of diesel vehicles paying road user
charges or rucks and everybody else doesn't. And he reckons
the best way to pay for road building and road
repairs in the future is for us to do away
with that model and to replace it with distance based

(02:52):
charging for all vehicles on all roads, meaning the more
you drive, the more you pay. And while I don't
necessarily like the idea of being payed for every kilometer
I drive, I think it's the only solution. I think
it's the only answer that I've seen to the problem

(03:15):
raised by the Infrastructure Commission. How were we going to
pay for roads in the future? And Matthew Virtual from
the New Zealand initiative, He says, for too long, New
Zealand has relied on the fuel the likes of the
fuel excised duty to pay for roads. But with vehicles
becoming more fuel efficient and electric cars growing in popularity,
this way of doing things isn't for purpose anymore. What

(03:37):
about this, he says, In the next decade alone, Nzita
reckons it's going to be short of about four to
five billion dollars. Four to five billion, that's the next decade,
litt alone, the next thirty years, and quite rightly, he says,
we need a fairer system that directly links road user
charges to those of us who use the roads and

(03:58):
how much we use the roads. And the thing is too,
is why should roads be any different to the likes
of electricity we pay for how much electricity we use,
why not do the same for roads. And aside from
being a very practical way of getting the money needed
for the roads, I reckon it would also work in
favor of people who think we should be on public

(04:19):
transport more. These chances are might be cheaper in some
instances to take the bus. Now, Matthew Virtual, he's not
just floating an idea. He's got a name for this
model that he's proposing. He's calling it smart road user
charging or smart rucks, And he says quite under the system,

(04:39):
fuel excise duty would be phased out and replaced with
distance based charging for all vehicles. And I remember we're
talking about the next thirty years here, distance based charging
for all vehicles. He said, road users would choose between
an automated pay as your drive system or you can
have a pre purchase choose to pre purchase like people

(05:01):
do at the moment with their rucks for their diesel vehicles.
And he says charges could be or could vary based
on factors like the type of vehicle someone drives, the
weight of the vehicle, the time they travel. He says,
we need to ensure that costs are allocated efficiently and equitably.
Now I'm not sure about the equitably, but because I

(05:23):
imagine people living in our bigger cities who might not
be on a big income, might live further out of
town and therefore might be staying more than wealthier people
living closer to the city. But broadly, and this is
what I want your take on today. Broadly, I think
this is a great idea. In fact, I think it's
a no brainer. Don't love it, but I think it's inevitable.

(05:45):
But how would you feel about us replacing the current
road user charging model with distance based charging for all
vehicles on all roads, so the more you drive, the
more you pay. How would you feel about that? I
think it's a brilliant idea, But what do you think?

Speaker 1 (06:01):
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