Government proposes RUC for all cars to pay for transport projects

The New Zealand Government recently revealed a plan to invest $20 billion into the land transport sector as part of its draft Government Policy Statement (GPS), with Kiwi drivers likely having to front the cost in several ways, including the possible introduction of road user charges (RUC) for all vehicles.

It plans to invest around $7 billion per year over the next three years into various new roading projects and filling in potholes, as well as public transport and road safety.

The first port of call for the GPS is the construction of 15 new roads of national significance, each of which will be four-lane highways dotted around the country.

“Investments in these essential corridors will make it easier for New Zealanders to get where they need to go, create a more productive and resilient transport network, drive economic growth, and unlock land for thousands of new houses,” says Transport Minister Simeon Brown.

Next comes the $4.8 billion ‘Pothole Prevention Fund’, which seeks to fill over 62,000 potholes on State Highways around New Zealand.

“We have created this new Pothole Prevention Fund, through two new activity classes, to ensure that maintenance funding is ringfenced to resealing, rehabilitation, and drainage maintenance works,” says Brown.

An investment of more than $2 billion will be made for public transport services and $2.1 billion for public transport infrastructure over the next three years, with the key focus being the completion of the City Rail Link and the Eastern Busway in Auckland.

Road safety is another area that falls under the draft GPS, with Brown confirming plans to cancel the previous government’s “blanked approach to speed limits”. New Zealand could even see limits rise to 110km/h on roads designed to accommodate those speeds.

“We will take a balanced and targeted approach to speed limit settings, ensuring economic impacts – including travel times – and the views of road users and local communities are taken into account, alongside safety,” added Brown.

So how is all of this going to be paid for? The Government is proposing several new costs for Kiwi road users including RUC for all vehicles, an increase to vehicle license costs by $25 in January 2025 and a further $25 hike in January 2026, as well as multiple increases to fuel excise duty starting next term.

“I invite local government, the transport sector, community groups, and the wider public to have their say on the draft GPS. Projects and funding commitments will be confirmed through the National Land Transport Programme (NLTP) later this year.”