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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Ultimate Geek

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#3127108 13-Sep-2023 13:56

Hmmmm... just an idea -and favourite bugbear of mine- why not combine it with mandatory car insurance? Just get the taxes when insurance is paid like fire levy or EQC for houses? And before you write a response, if you cannot afford insurance for your car you shouldn't be driving a car because if something does happen in traffic it means you will either ruin the rest of your life or start down the criminal part of life. Both scenarios are the absolute worst outcome we want as a society. To counter that you could again find other ways to subsidise low income earners (e.g. zero tax to 1st $20K earned or something)

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frankv

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#3127110 13-Sep-2023 13:59

MikeB4:

Folks that don't own cars still use roads be it by walking, biking, mobility scooters. Also when using taxis, buses.

Taxis and buses pay RUC.

But a more compelling argument IMHO is the trucks that deliver the goods for all those not-car-owning people. A not-car-owning person benefits when a car-owner drives to work and provides a service or produces a good. Roads are an infrastructure good that everyone benefits from, like ports (air or sea), Police, Customs, etc.

MikeB4

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#3127112 13-Sep-2023 14:01

I can agree with compulsory 3rd party insurance

mattwnz

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#3127114 13-Sep-2023 14:02

I think this will just be a way to extract more tax. The governemnt gets highly criticised when they increase taxes in petrol and many people don't realise that the petrol price also covers roading costs. But separating petrol price from road tax allows the government to increase taxes easier

olivernz

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#3127116 13-Sep-2023 14:04

mattwnz: I think this will just be a way to extract more tax. The governemnt gets highly criticised when they increase taxes in petrol and many people don't realise that the petrol price also covers roading costs. But separating petrol price from road tax allows the government to increase taxes easier

You do have a point there. Every time you drive by a petrol station you see Taxes/Litre.

MikeB4

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#3127117 13-Sep-2023 14:04

frankv:
MikeB4:

Folks that don't own cars still use roads be it by walking, biking, mobility scooters. Also when using taxis, buses.

Taxis and buses pay RUC.

But a more compelling argument IMHO is the trucks that deliver the goods for all those not-car-owning people. A not-car-owning person benefits when a car-owner drives to work and provides a service or produces a good. Roads are an infrastructure good that everyone benefits from, like ports (air or sea), Police, Customs, etc.

I feel all RUCs should be abolished and road maintenance funded from general taxation. Compliance will be improved and the collection costs/ administration costs greatly reduced.

Qazzy03

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#3127120 13-Sep-2023 14:11

BlargHonk:

For the people that complain about this, I like to remind them that they themselves received a taxpayer funded education, they are just paying for it now through taxes.

Please do not miss quote another user, their quote in full was:

Senecio:

I don't have any kids but my taxes go towards education, and I'm not complaining about. Its a standard expectation that my taxes go towards funding public infrastructure, whether I use that infrastructure or not is irrelevant.

wellygary

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#3127124 13-Sep-2023 14:15

MikeB4:

I feel all RUCs should be abolished and road maintenance funded from general taxation. Compliance will be improved and the collection costs/ administration costs greatly reduced.

And put it all at the feet of politicians, the transport sector would go nuts,

The current system hypothecates all fuel taxes ( and now also speeding tickets) to the transport Fund, this gives a reasonably clear idea of how much money they have to play with for each 3 year planning cycle, ( sometimes the right flavour government comes along and funds extra things (NZ upgrade/RONS etc)

Putting all road funding back to general taxation would mean that road taxes would just go into the "big pot" and the most political popular policies would get funded...

Its best to keep politicians away from infrastructure funding and projects otherwise you end up with pork everywhere,

frankv

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#3127125 13-Sep-2023 14:16

Mehrts:

Ok, I'm going to be "that guy" and say that there is an absolute minimum cost associated with owning & operating a private vehicle, and if you're struggling to meet those minimum costs, then you honestly really can't afford that mode of transport.

I'll be "that other guy" and say that you cannot effectively benefit from NZ's society and economy if you don't have transport, and all citizens are entitled to some minimal amount of benefit of NZ's society and economy. Accessibility to transport is implicit in much of NZ's society and economy. For example, the free dental care for under-30s announced by Labour. If you live more than a few km away from a dentist, this would of no value to you without transport, and (because you're being taxed for this and not getting it) you're effectively subsidizing those who can get to the dentist... the rural poor subsidizing the urban and (relatively) wealthy. So, to make the dentistry policy fair, either the government has to make private transport affordable to the rural poor or make public transport available to them. In rural NZ public transport isn't viable, which leaves...

mattwnz

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#3127130 13-Sep-2023 14:23

MikeB4:

I feel all RUCs should be abolished and road maintenance funded from general taxation. Compliance will be improved and the collection costs/ administration costs greatly reduced.

But noone wants to pay taxes, and the next government (very likely) is giving higher income earners bigger tax cuts. Lower income people are paying a greater % of their incomes in taxes as it is, and taxes like GST would likely have to increase, which makes this worse. You can't just create money out of thin air, as that is what they tried doing with the money printing and NZ is now 100billion in debt. IMO RUC are more fair than the current system as it captures everyone, including EV owners. But t also does give less incentive to own a cleaner car such as a hybrid or EV. But many of those owners will be higher incme people, and it is often the lower income peopel that have older and less efficient and more petrol hungry cars who are often paying more in tax when they purchase fuel.

MikeB4

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#3127131 13-Sep-2023 14:24

wellygary:

And put it all at the feet of politicians, the transport sector would go nuts,

The current system hypothecates all fuel taxes ( and now also speeding tickets) to the transport Fund, this gives a reasonably clear idea of how much money they have to play with for each 3 year planning cycle, ( sometimes the right flavour government comes along and funds extra things (NZ upgrade/RONS etc)

Putting all road funding back to general taxation would mean that road taxes would just go into the "big pot" and the most political popular policies would get funded...

Its best to keep politicians away from infrastructure funding and projects otherwise you end up with pork everywhere,

Politicians control road and public infrastructure funding now, the only difference is how the funding is collected.

frankv

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#3127137 13-Sep-2023 14:38

cruxis:

[Odometer tampering] was a problem way back in 2011. I bet it is worse now with cost of living.

I'll bet it's a lot less now, because it's a *lot* harder to do.

Gone are the days when the odometer drive was a spinning thing off the gearbox that could be disconnected or connected in under a minute (don't ask how I know that). Nowadays it's all electronic, and embedded in the dashboard. There might still be some electrical pulses that go from the gearbox to the dash, which you could tamper with if you knew which wire it was. But maybe it's CANbus messages, so an order of magnitude more difficult to fiddle? If you have stability control, there's a speed measurement on each wheel, and you would be foolish to tamper with any of them. And also, what else is that speed/distance measurement used for? Automatic door locking? ABS? Adaptive cruise control and lane assist? Automatic braking? Gearbox? Engine management? Emissions?

frankv

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#3127142 13-Sep-2023 14:58

mattwnz: I think this will just be a way to extract more tax. The governemnt gets highly criticised when they increase taxes in petrol and many people don't realise that the petrol price also covers roading costs. But separating petrol price from road tax allows the government to increase taxes easier

Maybe.

But I think it's come out of the embarrassing (but useful) amount of money the government collected when the fuel price went from $2 to $3. Because fuel tax is a percentage of the sale price, a 50% increase in the sale price means a 50% increase in the amount of tax collected. Hence the government could easily give us a 30c reduction in tax per litre, because that much was added on by a 50c/litre price increase. With the $1 increase in price, they were still getting an extra 30c/litre even after that reduction. Of course, if/when the oil price dips the tax take will also dip.

So changing to separate RUC taxes makes budgeting much less dependent on the price of oil.

HarmLessSolutions

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#3127143 13-Sep-2023 15:00

smac:

....

However in the longer term they will move to electronic monitoring, which the heavy vehicle industry have been utilising for years (eg e-road). The advantage of this is they can cover RUC, congestion charges, and tolling all with one solution.

This is the way I see the system going and agree with those advantages together with the ability to remove off-road vehicle use RUCs. The civil liberties/anti 'big brother' brigade will oppose monitoring of individual vehicles but in an age where mass information is so valuable in solving issues some sort of monitoring just seems like the logical solution here. Most modern vehicles have ODB connectivity, and a dash top unit for the rest. Checking via online data becomes part of the info gathered by roadside traffic enforcement with significant penalties to ensure compliance.

The alternative would be an RFID tag for each vehicle but the huge amount of monitoring transponders required would seem prohibitive.

Simeon Brown's comment of "There were electronic ways and means that that can be done, and the Government would have to invest in technology to do that." in Stuff's reporting of this would suggest something along the lines of an automated monitoring system is likely.

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smac

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#3127144 13-Sep-2023 15:00

frankv:

mattwnz: I think this will just be a way to extract more tax. The governemnt gets highly criticised when they increase taxes in petrol and many people don't realise that the petrol price also covers roading costs. But separating petrol price from road tax allows the government to increase taxes easier

Maybe.

But I think it's come out of the embarrassing (but useful) amount of money the government collected when the fuel price went from $2 to $3. Because fuel tax is a percentage of the sale price, a 50% increase in the sale price means a 50% increase in the amount of tax collected. Hence the government could easily give us a 30c reduction in tax per litre, because that much was added on by a 50c/litre price increase. With the $1 increase in price, they were still getting an extra 30c/litre even after that reduction. Of course, if/when the oil price dips the tax take will also dip.

So changing to separate RUC taxes makes budgeting much less dependent on the price of oil.

This is completely false. FED is a fixed amount independent of the fuel price.

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