The New Zealand Government has introduced the Land Transport (Revenue) Amendment Bill to Parliament, outlining what it calls a fairer and more modern approach to fund the country’s transport network. Transport Minister Chris Bishop said the package of reforms aims to ensure the system keeps pace with the demands of new infrastructure and the expectations of road users.
“A core principle of our transport funding system is fairness: that all road users should contribute in proportion to their use of the roads,” Mr Bishop said.
Tolling framework set for major overhaul
A major focus of the Bill is strengthening tolling settings so the Government can deliver large projects more quickly. Mr Bishop said tolling will remain a “key tool” in the delivery of Roads of National Significance.
“Tolling helps us bring forward investment and build the roads New Zealand needs sooner,” he said. “The Bill provides the flexibility required to support major projects, including our new Roads of National Significance.”
The legislation introduces “corridor tolling”, which would allow tolls on sections of an existing road where users receive “clear, demonstrable benefits” from a new project in the same corridor. It also creates new ways to manage diversion, including the option to restrict heavy vehicles from using unsuitable alternative routes, and the ability to allow toll revenue to support maintenance when councils are unable to fund those roads.
Mr Bishop said the aim is to make tolling more predictable and consistent. “To make tolling fairer and more predictable for users, the Bill mandates annual CPI adjustments instead of ad hoc increases. And to improve collection efficiency, liability for paying a toll will shift from the driver to the registered person.”
Bringing the road user charges system into the modern era
The Bill also targets long-standing issues in the road user charges (RUC) system, which Mr Bishop said has not kept pace with modern transport needs.
“It was designed in the 1970s and still relies on manual paperwork and paper licences,” he said. “Right now, drivers paying RUC have to track their odometer readings and stick paper labels to their windscreen.”
The reforms would enable new payment models including subscriptions and post-payment options and allow private companies to offer streamlined billing services.
The Bill also allows for accurate in-vehicle technology to record distance and formally separates NZTA’s regulatory and retail roles to ensure third-party providers can operate on equal terms.
“These changes are the first step towards replacing petrol tax with RUC for light petrol vehicles,” Mr Bishop said. “We’ll assess the improved system in 2027 before deciding on next steps for transitioning the remaining 3.5 million vehicles.”
The Bill will now be examined by the Transport and Infrastructure Select Committee following its first reading. The Government expects the legislation to pass in 2026.
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