The minimum legal driving age could yet rise to 17, after the Government moved yesterday to have it raised from from 15 to 16 by the middle of next year.
The Cabinet yesterday approved the rise to 16, which is part of the Government's 2010-20 Safer Journeys project.
The project also includes encouraging 120 hours of supervised driving for a restricted licence; learner drivers now do about 50 hours.
Young drivers could also face restrictions on how powerful their cars can be, and tougher penalties for breaching restricted licence conditions.
Federated Farmers criticised lifting the driving age as a move that would have no effect on lowering the road toll, and vowed to fight it through the select committee process.
But Transport Minister Steven Joyce said lifting the age, combined with other measures, would make "a real difference".
He did not rule out pushing the age higher, as advocated by many submissions on the Safer Journeys paper.
"There is ongoing debate about whether it should be 17," Mr Joyce said. "Cabinet's view and my view is that moving it one year is enough of a challenge.
"Obviously these things aren't set in stone. Later on it could go that high."
In January, a survey of 2300 people found 74 per cent would like the minimum driving age raised to at least 18.
Mr Joyce said a report on power restrictions on cars for youths in Australia was due at the end of the year.
"I'm getting some advice currently on that, but if it's feasible, if we could successfully introduce it, then we're very keen to.
"Young Kiwis have a 60 per cent higher fatality rate on the roads than young Australians. We have looked to what has worked in Australia in choosing to progress these measures."
Other approved measures include raising awareness of crash risk, improving road safety education and allowing defensive driving courses to be done earlier.
Legislation will be introduced by the end of the year, and the age increase is expected to come into force midway through next year.
Another Cabinet paper looking at drink-driving issues will be considered shortly.
Mr Joyce said the Government wanted to have a total ban on drinking for young drivers in force by the end of the year.
The Automobile Association supported the tougher tests to gain a restricted licence, but said it made more sense to make it 12 months rather than six months before learner drivers could graduate to a restricted licence.
"Novice drivers under adult supervision on their learner licence are the safest drivers on our roads," said general manager motoring affairs Mike Noon. "Unfortunately, when they start to drive solo on their restricted licence, their risk of crashing soars."
Labour transport spokesman Darren Hughes said the party would support the bill in its select committee stages.
But its continued support after that would depend on details of the required training.
He sympathised with farmers, saying lack of public transport meant raising the driving age would create difficulties for families.
Federated Farmers' acting transport spokesman, Lachlan McKenzie, said the decision would not have any effect on the road toll.
"The decision ignores expert opinion. The way we learn to drive, particularly getting supervised experience, is the key.
"What we wanted was to keep the age at 15 but vastly improve the way young people learn to drive. You cannot beat time behind the wheel.
"So arbitrarily pushing the age up won't work. You just push the problem out one more year."
* Driving age to go from 15 to 16.
* More education and training.
* Defensive driving course can be done sooner.
* Tougher penalties for breaching licence conditions.
* Power restrictions on young drivers' cars.