Transport Minister Chris Bishop has poured cold water on the prospect of all New Zealand motorists moving onto road user charges (RUCs) in the near future, saying the Government doesn’t yet have a set date for the proposed switchover.

The Government has previously outlined plans to eventually replace petrol excise with a universal RUC system, meaning all light vehicles would pay to use the roads based on distance travelled rather than fuel consumption.

While announcing planned fuel excise and RUC increases would be delayed until 2026, Bishop says several steps still need to be completed before the change to universal RUCs for all light vehicles can happen.

“We don't have a set date in mind,” Bishop said.

“There’s a few things that have to happen before that.”

The first is passing the Land Transport Revenue Bill, which is currently awaiting its committee stage.

Bishop said he had been advised by the Leader of the House that the legislation is unlikely to complete its passage through Parliament before the upcoming election.

“That’s something we can deal with after the election,” he said, describing the issue as not an immediate priority.

There is also significant work still required to design how a universal RUC system would operate, including privacy considerations around how distance travelled would be measured.

“There’s a bunch of work around design. There’s privacy considerations we’ve got to carefully work our way through,” Bishop said.

The Minister said the proposal is therefore on a “medium term track”, with his hope being that work could begin in earnest during a second term of the current Government.

“My hope would be that in the next, if we’re privileged enough to get a second term, then we could start to look at that around ’28, ’29,” he said.

The comments mark a significant shift from earlier expectations that a universal electronic RUC system could be introduced relatively soon.

Previous Government briefings indicated fuel excise could eventually be phased out as petrol vehicles moved onto RUCs, potentially lowering the tax component of petrol prices while replacing it with a distance-based charge.

The proposed system is intended to address differences between the amount motorists contribute to the National Land Transport Fund under the current system.

Petrol vehicles currently contribute through fuel excise, while diesel vehicles, electric vehicles (EVs), and plug-in hybrid electric vehicles (PHEVs) pay RUCs.

Under the current RUC system, light diesel and battery-electric vehicles pay $76 per 1000km, while PHEVs pay $38 per 1000km.

Officials previously told the Government the average petrol vehicle uses 8.1L/100km, with the break-even point against the existing RUC rate sitting at around 9.4L/100km.

That means more fuel-efficient petrol vehicles can currently contribute less towards the National Land Transport Fund than equivalent vehicles paying RUCs.

Moving all light vehicles onto RUCs would remove that distinction, with motorists instead paying based on how far they drive.

The change would also mean fuel excise could eventually disappear, potentially reducing petrol prices at the pump. However, motorists would still pay for road use through the RUC system, meaning it wouldn’t necessarily result in lower overall motoring costs.

For now, however, motorists shouldn’t expect the fuel-tax-to-RUC switchover any time soon.

With legislation still to pass, the system yet to be fully designed and privacy issues to be resolved, the Government’s current target is looking more like the 2028-29 period – and only if it wins another term.

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Universal RUCs could be years away, says Transport Minister

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