RUCs to apply to all vehicles (incl EVs), replacing road user tax on petrol

Forums › Transport (cars, bikes and boats) › RUCs to apply to all vehicles (incl EVs), replacing road user tax on petrol

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#3137673 2-Oct-2023 11:39

wellygary:

There is no justification for letting pure EVs have a RUC rate of just over 1/4 the regular diesel rate when the most popular EVs (Model 3/Y) have weights or 1700-2000kg, which is heavier than a RAV4...

Sure there is; as others have pointed out, it's not necessarily meant to be entirely fair. We don't want people driving diesels, we want them driving EVs. At the moment there is no road tax for EVs, as a (small) incentive towards encouraging people to buy them. We could call the lower EV rate a half-way house between no RUCs and full RUCs.

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cddt

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#3137679 2-Oct-2023 11:52

So essentially there needs to be two different taxes for two different purposes, which are both charged independently.

One to pay for road maintenance. Should be charged proportionally to road damage (weight^4?)

One to discourage pollution. Should be charged proportional to fuel consumed.

wellygary

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#3137681 2-Oct-2023 12:00

SaltyNZ:

Sure there is; as others have pointed out, it's not necessarily meant to be entirely fair. We don't want people driving diesels, we want them driving EVs. At the moment there is no road tax for EVs, as a (small) incentive towards encouraging people to buy them. We could call the lower EV rate a half-way house between no RUCs and full RUCs.

There's currently around a 20c/litre ETS Levy on Diesel that EVs Don't pay,

This is likely to rise in the future....

@ 5l/100km this is equivalent to a $10 RUC/1000km, ... more so on less efficient vehicles..

frankv

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#3137869 2-Oct-2023 16:54

SaltyNZ:

Sure there is; as others have pointed out, it's not necessarily meant to be entirely fair. We don't want people driving diesels, we want them driving EVs.

It really shouldn't matter what the government wants. So long as the user pays the whole cost of their activity (including the cost of mitigating/repairing both road damage and climate damage), then the government shouldn't care. If you want to drive an Abrams tank on the roads, you pay all the costs of that and the government shouldn't care if more people choose to do that or not.

smac

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#3137871 2-Oct-2023 16:58

frankv:

SaltyNZ:

Sure there is; as others have pointed out, it's not necessarily meant to be entirely fair. We don't want people driving diesels, we want them driving EVs.

It really shouldn't matter what the government wants. So long as the user pays the whole cost of their activity (including the cost of mitigating/repairing both road damage and climate damage), then the government shouldn't care. If you want to drive an Abrams tank on the roads, you pay all the costs of that and the government shouldn't care if more people choose to do that or not.

The problem with that is it ignores all the obligations the govt has under all the various climate/environment agreements. Emissions need to come down, ICE cars make emissions, so unfortunately the govt DOES care what you drive. One way of influencing what you drive is by hitting you in the pocket.

Handle9

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#3137879 2-Oct-2023 17:18

frankv:

SaltyNZ:

Sure there is; as others have pointed out, it's not necessarily meant to be entirely fair. We don't want people driving diesels, we want them driving EVs.

It really shouldn't matter what the government wants. So long as the user pays the whole cost of their activity (including the cost of mitigating/repairing both road damage and climate damage), then the government shouldn't care. If you want to drive an Abrams tank on the roads, you pay all the costs of that and the government shouldn't care if more people choose to do that or not.

That's not how the climate works.

Qazzy03

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#3137891 2-Oct-2023 18:06

frankv:

It really shouldn't matter what the government wants. So long as the user pays the whole cost of their activity (including the cost of mitigating/repairing both road damage and climate damage), then the government shouldn't care. If you want to drive an Abrams tank on the roads, you pay all the costs of that and the government shouldn't care if more people choose to do that or not.

Apparently Tanks are legally allowed to drive on New Zealand roads, but rubber must be attached to the tracks to stop the tank from chewing up the road and the gun has to be disabled. When the gun is disabled, the vehicle owner still needs to have a firearms licence.

While saying that Goverments do care what people do, even if they are willing to pay for the cost of doing it. Take the smoking change, someone yet to be born in the future may be willing to pay the smoking tax, never use public health care and, only smoke in their own home. Goverment still says nope (I am anti smoking but I don't think any drug should be illegal or criminalized).

Now the fun thing is would a tank pay RUC?

I try to say a tank would be exempt under as a All-terrain vehicle under the clause, A vehicle is exempt from paying road user charges if it belongs to a class of vehicles whose purpose or design means it's unsuitable for regular road use.

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#3137898 2-Oct-2023 18:35

Qazzy03:

A vehicle is exempt from paying road user charges if it belongs to a class of vehicles whose purpose or design means it's unsuitable for regular road use.

A vehicle exempt from RUC for "purpose or design means it's unsuitable for regular road use" shouldn't be allowed on regular roads.

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shk292

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#3137974 2-Oct-2023 20:21

jarledb:
A vehicle exempt from RUC for "purpose or design means it's unsuitable for regular road use" shouldn't be allowed on regular roads.

Now have a think about how farmers are going to get their tractors, headers etc from one end of the farm to the other.

Scott3

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#3137975 2-Oct-2023 20:23

wellygary:

Scott3:

Perhaps the solution is to throw fairness to the wind in favor of simplicity/ease:

Petrol Taxed by liter as per now
Diesel RUC: 7.6c/km
Pure EV RUC: 2.5c/km (calculated and changed every year so that they pay the same tax per km as the most efficient non plug in car on the market)
PHEV RUC: 2.0c/km (80% of the Pure ev rate, to cover an assumed 80% running in electric mode. Don't allow fuel tax redunds for PHEV's).

The purpose of RUCs is to pay for road usage, and this is a function of Weight....

There is no justification for letting pure EVs have a RUC rate of just over 1/4 the regular diesel rate when the most popular EVs (Model 3/Y) have weights or 1700-2000kg, which is heavier than a RAV4...

[ Whether there should be a sub 2T RUC category is another debate, but it should be uniform across bot Diesel and EV vehicles,]

I agree that some form of proxied rate for PHEVs is probably the easiest solution

Absolutely it is completely unfair.

All light vehicles do negligible road damage, and occupy approximately the same space on the road (with following distances included), So it would be fair for light vehicles to pay the same for the same trip regardless of fuel source.

But the problem we have is the system being unfair now. Somebody in a Yaris hybrid using 3.3L/100km gets a crazy good deal. They are paying roughly 1/3rd of the road tax of somebody driving any diesel vehicle, and roughly 1/4 of a of somebody driving V8 Nissan Patrol...

If we are not willing to make the system fair, we need to pick the winners to incentivise the behaviors we want. In this case I am proposing pegging EV RUC's to match that of the cheapest petrol powered car. This should avoid the situation NZ had with small effichent diesels being unecomic here due to RUC's (a blessing in hindsight given what we know know about diesel emmisions, but this was by luck not design).

Of course this would highlight exactly how unfair existing system is...

On PHEV's, the rates I was proposing are so low it hardly matters, but if we were to run say 80% of the diesel rate (7.6c/km), somebody who had a PHEV and ran it mostly on petrol would get hit pritty hard with road tax, perhaps a good thing to encourage people to plug them in, perhaps a bad thing to discourage their purchase.

jarledb

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#3137985 2-Oct-2023 21:04

shk292:
Now have a think about how farmers are going to get their tractors, headers etc from one end of the farm to the other.

You don't think it is fair that they pay for their driving on the roads?

SaltyNZ

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#3137986 2-Oct-2023 21:06

Scott3:

perhaps a bad thing to discourage their purchase.

Unless you're towing a boat 200km every week, you should be discouraged from purchasing a PHEV. And if you are towing a boat constantly, then you'll be running on petrol most of the time anyway.

PHEVs are the worst of both worlds.

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shk292

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#3138038 2-Oct-2023 22:14

jarledb:
shk292:
Now have a think about how farmers are going to get their tractors, headers etc from one end of the farm to the other.

You don't think it is fair that they pay for their driving on the roads?

Sure, if there was a reasonably efficient way of doing that. But the road use would be a tiny fraction of the total KMs travelled by such vehicles, so you'd be imposing costs and bureaucracy in order to extract a few bucks from farmers. In my experience (having grown up on a farm) farmers will typically spend much of the day using these vehicles on farm property, with a few short road transits between non adjacent paddocks. Can't see what you'd achieve by charging RUC

Scott3

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#3138042 2-Oct-2023 22:38

On the discussion about fairness, It is interesting and not widely known that we have incentives baked into our fuel tax system.

The below table is in cents/L excl gst.

Note:

LPG has 73% of the energy content per Liter of Petrol
Ethanol has 61% of the energy content per Liter of Petrol
I think the ethanol rate below only applies to the ethanol component of the blend (i.e. petrol component is taxed at the normal rate).

Note how tiny the tax on LPG is. This is A historic policy to encourage it's use for reasons that many will have forgotten. Ethanol has even less tax, a fairly recent policy to encourage uptake & boost local industry (similar to the current EV RUC exemption).

Moving all vehicles to RUC's will unwind these changes (likely a good thing in the context of LPG).

https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-generation-and-markets/liquid-fuel-market/duties-taxes-and-direct-levies-on-motor-fuels-in-new-zealand/

LittleGreyCat

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#3138065 3-Oct-2023 02:52

At one time LPG was considered less polluting than petrol or diesel.

Low tax encouraged conversions which were cheap to run but had less performance.

Now engines are far more efficient, and I also suspect that they are not suitable for LPG conversion due to the high complexity of the computer control of combustion.

It would, however, be interesting to consider an EV with a generator run off LPG (much like the proposals to run a generator off Hydrogen) compared to other vehicles.

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