National's answer to crowded roads: Axe fuel tax, adopt congestion charging

National's transport spokesperson Chris Bishop.
National's transport spokesperson Chris Bishop. Photo credit: Newshub / Zane Small

Petrol taxes would be phased out over time and charges for driving during peak hour traffic would be introduced, if the National Party takes office in 2020. 

"We need new thinking about the way we fund our future transport requirements," National's transport spokesperson Chris Bishop said, in the Opposition's transport policy discussion document. 

The revenue for transport infrastructure in New Zealand is currently raised through petrol taxes - or fuel excise - as well as road user charges and vehicle licensing fees. 

National essentially wants to expand road user charges by making motorists pay for how much they're using the roads, rather than funding transport projects through taxing motorists at the pump. 

The Government raises around $4 billion each year for transport projects through the current model, which is ring-fenced in the National Land Transport Fund and managed/distributed by the New Zealand Transport Agency (NZTA). 

Bishop argues the model is unsustainable, because the introduction of hybrid vehicles by taxi and ride-sharing services reduces the contribution they make to road investment, while electric vehicle users currently pay no road user charges at all.

As the need for transport project funding grows in New Zealand, the current model requires the Government to increase fuel taxes each year by 4 cents per litre. This year was no exception, with an increase implemented in July, followed by another in 2020. 

On top of that, Aucklanders are paying an extra 11.5 cents a litre through the Auckland Regional Fuel Tax introduced in July 2018.  

Prime Minister Jacinda Ardern has ruled out regional fuel taxes around the country. 

Instead of fuel usage being a proxy for road usage, "actual kilometres travelled would be measured and paid for through road user charges and congestion charging", National is proposing. 

Bishop says the revenue-neutral congestion charging model would encourage more public transport use. 

"By charging for travelling at a certain time and/or on certain routes, it encourages commuters to find alternatives, such as travelling earlier or later, taking a different route or getting out of the car and taking public transport."

National is also considering an increase in direct Government funding for transport investments rather than taxing fuel, as well as wider use of road tolling, to pay for transport projects. 

Bishop says congestion charging would "fundamentally change the game". 

"We are already familiar with the concept of paying more for services when there is higher demand. For example, flights cost more at 5pm than they do at midday.

"It currently costs you the same amount to drive on a motorway at midnight, when nobody is around, as it does at 7am when everyone wants to be on the road. Congestion is the result."

If National is elected in 2020, it says the concept would need to be "phased in over the medium-to-long term", so there's no timeline provided as for when it would come into play. 

But the Opposition says modern technology "makes it eminently possible".

ACT leader David Seymour says National "must go further and commit to rolling it out in its first term of government". 

Before the 2017 election, Ardern said Labour had considered traffic congestion charging and new road tolls, but found it would not have the "immediate effect required for us to be able to invest" in big infrastructure projects. 

The Government announced last week plans to inject $12 billion into investments in transport, schools, regional development, district health boards (DHBs), and public estate decarbonisation.

National also rejects a proposal by the Government in July that would see discounts on electric vehicles as well as low-emission petrol cars, and fees slapped onto gas-guzzling machines.  

The Government says the discounts and fees will only apply to vehicles the first time they are sold in New Zealand, and won't affect sales of vehicles already registered in New Zealand.

The Opposition says it will "end up becoming just another tax on consumers". 

However, National "proposes to investigate the concept of a fuel efficiency standard that is practical, achievable, and developed in conjunction with industry, similar to overseas schemes". 

What else does National want to do?

  • Prioritise building roads and introduce new road projects 
  • Introduce a new funding priority for regional roads 
  • Introduce legislation for roadside drug testing
  • Decrease the use of random speed cameras and use sign-posted ones in high-risk areas
  • Greater accountability of Auckland Transport
  • Require cyclists to use cycle lanes where they exist

National's discussion documents can be found here