Have you heard of RUCs?
It's the acronym for Road User Charges and just like nearly everything else at the moment, they are under review. Some people may be blissfully unaware that these charges even exist, but I assure you, owners of vehicles that qualify for these charges certainly do, because it costs them a bomb.
So, what purpose do they serve and how is the money that is derived from the RUCs used?
The purpose statement of the Road User Charges Act 2012, states: "To continue the road user charges system by imposing charges on RUC vehicles for their use of the roads that are in proportion to the costs that the vehicles generate."
It is widely agreed that anyone using New Zealand's roads contributes towards their upkeep. Most road users pay levies when they buy fuel. In fact, over half of the price you pay for petrol at the pump is some form of government levy or tax. Diesel users are caught in a different way, they pay via RUCs.
New Zealand's system of road user charges (RUC) is unique internationally. It was introduced in 1978 and the revenue is used to fund the operation, maintenance and improvement of our land transport system.
It applies to all heavy vehicles and to all diesel-powered light vehicles, and on all public roads. All non-petrol-powered vehicles, excluding vehicles powered by CNG or LPG, are subject to RUC, but there are exemptions.
In practical terms, this means that heavier vehicles will pay higher charges than others, as it is widely accepted that heavier vehicles disproportionally increase the need for greater maintenance and repairs on our roads.
The RUC legislation was updated in 2012 which was the most significant update since it was introduced. The changes made the system easier to understand and fairer for all those who pay RUC. It is the Road User Charges Act 2012 that empowers the making of regulations to support the implementation of the legislation, including exemptions.
Here is my gripe. There is a stand-out exemption in place at present, that I simply don't understand – electric vehicles. It begs the question; don't electric vehicles cause damage to roads in the same way that petrol-powered cars or diesel-powered trucks and utes do?
You might assume they don't, because they are not contributing to the funding of the road maintenance costs via either a petrol levy or a road user charge. Is this fair, particularly considering other road users are required to pick up the cash shortfall created by the exemption? Isn't the purpose of the act to fund road maintenance costs?
The exemption was granted to further incentivise and encourage the uptake of electric vehicles, given our climate change obligations. It is a new use of RUCs by using them as a method of increasing the use of zero emission vehicles.
While this will play an important part in reducing emissions in New Zealand and help the Government achieve its overall drive towards a net-zero emissions economy, it also means electric vehicle users don't contribute to road maintenance as others do. Fair?
Initially the exemption was granted to December 2021 but was recently extended until March 31, 2024, which is around the time expected for electric vehicles to make up 2 per cent of the fleet.
Electric vehicles (EVs) are defined as vehicles that run on electricity and which can be plugged in to recharge. They can be powered solely by electric batteries, known as pure electric vehicles, or a combination of batteries and a conventional engine, called plug-in hybrid electric vehicles.
The Ministry of Transport has commenced a wide-ranging review process on possible changes to Road User Charges (RUC) to improve the system.
Any changes to the road user charge system have the potential to affect many people in a rural community like Stratford and I encourage people to participate in the consultation process and have their views considered by emailing RUCconsultation22@transport.govt.nz. Submissions close April 22.