Government’s transport changes explained: Higher fines, fuel tax, hiked rego costs

Road users of all stripes can expect proposed changes to transport policy to hit their pockets, although the Government is saying they’ll see the benefits too.

Prime Minister Christopher Luxon and Transport Minister Simeon Brown yesterday announced the draft Government Policy Statement (GPS) on Land Transport, explaining ways it plans to raise funding for improvements to New Zealand’s roading network and systems.

The Herald explains the key points of the draft policy, which will go out for consultation before taking effect on July 1.

Prime Minister Christopher Luxon (left) and Transport Minister Simeon Brown after the delivery of the draft Government Policy Statement on Land Transport. Photo / Mark Mitchell

Registration fees going up

Prepare to fork out more to update your rego. The proposed changes include increasing motor vehicle licensing fees by $25 in January next year, and a further $25 in January 2026, meaning it would ultimately cost an extra $50 for most vehicles once the changes are complete.

For motorcycles, trailers and ATVs, registration costs will increase by $28 and mopeds will increase by $16.50.

The change is expected to bring in an extra $530 million over the 2024/2025 and 2026/2027 years.

“The annual licensing fee component of Motor Vehicle Registration (MVR) hasn’t been increased since 1994,” the policy document said.

Inflation since then has reduced the real value of the charges by half, it said. The increase in registration fees would return MVR to the 1994 level “in real terms”.

Fuel taxes and road user charges to increase

While still planning to axe Labour’s proposed 12c fuel tax hike this term as promised, Transport Minister Simeon Brown’s proposal is to push it back until January 2027.

After that, fuel taxes will go up by another 6c per litre the following year, and 4c per litre for each year after that, meaning the Government will have but the fuel tax hike up by 22c per litre by the end of the next parliamentary term.

Labour's 12c fuel tax hike has been pushed back and will become a 22c hike by the end of the next term. Photo / Duncan Brown

Luxon said yesterday he didn’t believe a staggered increase this term - like Labour had proposed - was the right approach, saying interest rates would be lower after 2026 and the cost of living will have eased, meaning low-income families had a better ability to absorb an increase in fuel prices.

Meanwhile Road User Charges (RUC) would also be going up by an equivalent amount.

All vehicles would eventually be moved to some kind of RUC based on the type of vehicle they drove, Brown said.

Crackdown on safety: speed limits to increase, fines to be reviewed

There will be a stronger focus on road policing and enforcement, including raising fines for traffic offences and introducing legislation to enable roadside drug testing.

The Government will set a target for police to achieve 50,000 of these tests per year once provisions were in place. Police should also be aiming to conduct at least three million roadside alcohol tests per year too, the policy said.

Many traffic fines have not been reviewed since 1999 and needed to be increased. For example, bringing New Zealand’s fine for not wearing a seatbelt in line with Australia’s would require nearly tripling the fee, while adding demerits, the draft policy said.

Meanwhile, speed limits will be increased where safe to do so, including in areas where there had recently been speed reductions.

Roading governing body NZTA (NZ Transport Agency Waka Kotahi) is expected to lean on ACC to contribute to road safety investments too.

Roads being constructed

The coalition Government is resurrecting its Roads of National Significance programme, started under the previous National Government in 2009.

“These investments will ensure that key connections are provided so that Kiwis can get to where they need to go, quickly and safely,” the draft policy said.

“These investments will also reduce congestion on our roads, provide low-emission transport options in our main cities and create a more productive and resilient transport network, driving economic growth and unlocking land for thousands of new houses.”

The idea was that new roads would “unlock access” to land for housing development and would support greater intensification so Kiwis would have more housing stock available.

Roads of National Significance will work on essential corridors around the country.

A report last year found big returns on two proposed Roads of National Significance (Rons): Warkworth to Wellsford and Cambridge to Piarere.

The report found that, once operational, each of these Rons would contribute up to $500m a year to New Zealand’s GDP.

“All Roads of National Significance will be four-laned, grade-separated highways.”

Areas identified for Rons include Whangārei to Auckland, Tauranga to Auckland and Auckland’s Mill Rd and East-West Link.

Roads to unlock housing growth include Hamilton Southern Links, the Petone to Grenada Link Rd and the Cross-Valley Link, and Northwest Alternative State Highway (SH16).

Other major routes are the Takitimu Northern Link Stage 2, Hawkes Bay Expressway, the second Mt Victoria Tunnel and Basin Reserve upgrade in Wellington, the Hope bypass, and the Belfast to Pegasus motorway and Woodend bypass in Christchurch.

Road maintenance to improve

The draft GPS plans to increase road maintenance funding by $640m compared to what the previous Government had proposed in August last year.

Potholes would be under the spotlight, with a set of new State Highway and Local Road Pothole Prevention Activity Classes in the works to target potholes.

Potholes will be under the spotlight. Someone mounted a protest on the Te Puna slip road next to SH2, north of Tauranga, by planting pot plants in potholes - which elicited a quick response by the local council. Photo / Alex Cairns

“Contract review will also include increased requirements to fix potholes on our state highway network within 24 hours to increase safety on our roads,” the policy said.

“Funding from these activity classes will only be available for the following activities: road resealing, road rehabilitation and drainage maintenance.”

Investment in public transport

The draft GPS commits up to $2.3 billion for public transport services and $2.1b for public transport infrastructure over the next three years, with a special focus on Auckland.

The major public transport projects include the completion of the City Rail Link, Eastern Busway, Northwest Rapid Transit corridor and Airport to Botany Busway in Auckland.

Public transport will receive more funding. Photo / Michael Craig

The Lower North Island Rail Integrated Mobility project was also a priority.

“Completing Auckland’s Rail Network Rebuild and upgrading Wellington’s rail network substations are priorities for the Government.”

Melissa Nightingale is a Wellington-based reporter who covers crime, justice and news in the capital. She joined the Herald in 2016 and has worked as a journalist for 10 years.