Motorists face new charges

New hybrid cars, like this Toyota Prius, can use nearly 40 per cent less petrol than conventional cars. File Picture

The Ministry of Transport wants motorists and trucking firms to pay more towards building and maintaining the country's roads.

A potential trial in Auckland to charge direct fees for the use of some existing roads - and not just tolls for new highways - could also raise more money for public transport.

The ministry has highlighted to new Transport Minister David Parker a need to charge more for actual road use, rather than relying on blunter forms of raising revenue such as petrol tax and ratepayer contributions.

It warns in a briefing paper for the new minister that better fuel efficiency from technological improvements to New Zealand's vehicle fleet is starting to outstrip the growth in kilometres travelled.

"This will lead to a reduction in the level of fuel excise duty collected and is therefore likely to threaten the long-term viability of petrol excise as a primary method of paying for land transport activities," the briefing paper says.

It also warns of cases of "strong community resistance" to attempts to boost property rates to pay for transport infrastructure.

Petrol tax is expected to raise $1.362 billion this year, of which $748 million is bound for the National Land Transport Fund and $614 million to the Government's general account.

Road-user charges from diesel vehicles levied according to how many kilometres are travelled will contribute $792 million to the transport fund, and vehicle registration fees will add $230 million.

But Transit New Zealand will spend more than $1 billion on state highways this year in the face of annual cost rises of up to 15 per cent, and Government funding agency Land Transport New Zealand expects to dish out $22.15 billion in the next decade.

Despite that spending commitment, the Auckland Regional Council is fretting over a $1.5 billion shortfall in an $11 billion transport wish-list to tackle potentially ruinous congestion over the next decade and has given its own briefing to the minister.

Mr Parker, who was in Auckland at the weekend opening new "park and ride" bus stations in Albany and Constellation Drive, could not be reached for comment last night.

The Government is frequently criticised by groups such as the Automobile Association for siphoning too much petrol tax away from roads but says it spends more than $1 billion a year from the general account to treat crash victims and those made ill by transport air pollution.

Motorists pay 62.9c in tax for each litre sold - 47.665c in petrol tax and 15.3c in goods and services tax - accounting for 46 per cent of the 136.9c price of 91-octane. Although petrol tax will rise with inflation in annual adjustments starting in April, the ministry's briefing paper says this will only delay an erosion in revenue.

"A significant challenge ahead for the Ministry of Transport is to identify and develop alternative revenue sources which apportion the cost of land transport activities in a transparent, equitable and sustainable manner," it says.

It also warns the minister that the amount local and regional councils are having to contribute to match Government transport funding is becoming increasingly contentious.

An early challenge is likely to be posed by recommendations the ministry expects to make to Mr Parker by the end of this month after a year-long study into charging motorists to use existing roads in Auckland.

Regional council transport policy committee chairman Joel Cayford said last night that he had yet to see the study but understood it was likely to generate considerable controversy.

Dr Cayford was unwilling to give his verdict on the idea of road pricing but said channelling some of the money raised towards public transport would be "absolutely" justified, given the benefits to all road users from reducing congestion.

He noted that the regional council was conducting its own study into potential alternatives to increasing rates. This was because the council's proposal to increase rates over the next 10 years by "slightly" more than the level of inflation threatened to exceed the public's ability to pay.

The problem

New hybrid cars can use nearly 40 per cent less petrol than conventional cars - and their owners pay much less fuel tax as a result. This is expected to cut into the Government's coffers

The solution

Officials say motorists could pay for actual road use. Tolls are increasingly seen as a revenue earner.