New Zealand Transport Funding, Road User Charges & Road Safety Updates 2024

Introduction Good afternoon. Thank you, Brett, for the introduction and everyone for the warm welcome.

I am excited to be here to talk with you today about transport funding, the transition to Road User Charges, and improvements to road safety, including our road toll and oral fluid testing.

I’d like to acknowledge Deputy Mayor Desley Simpson for her opening address today. We’ve seen a lot of each other lately, but it’s always good to see you!

I’d also like to acknowledge AA Chief Executive Nadine Tereroa and President Brett Flintoff.

Finally, I’d like to also acknowledge the many AA district councillors and AA staff who are here today. Thank you for the work you do to serve your members and be an advocate for the things that matter to New Zealand motorists.

Fuel Supply Shock To begin, I would like to acknowledge the challenges the transport system, and all New Zealanders, are currently navigating due to the current fuel supply shock as a result of the conflict in the Middle East.

Right now, we know the conflict in the Middle East is causing concerns across the country and across the world about supply of fuel.

We have sufficient stocks in New Zealand and we are working hard across diplomatic, commercial, and industry channels to ensure that remains the case.

But this situation is also a reminder of something we already knew: New Zealand is exposed to international fuel markets in ways that carry real risk.

Around half our fuel comes from South Korea and nearly a third from Singapore.

When global supply chains are disrupted, as they are now, that exposure becomes very tangible for families and businesses who feel the pain at the pump.

We are already seeing significant shifts in behaviour across the country, and as a government we are closely monitoring these changes so we can respond to their impacts if needed.

Using data from a sample of vehicles across the country, we can start to get a rough idea of how people are responding to this conflict.

Comparing the two weeks pre-conflict in mid-February against 7-day rolling averages for subsequent weeks, we have seen a reduction of approximately 20% in the vehicle kilometres travelled by cars. Not necessarily surprising when petrol prices have gone up 30%.

Also not surprising is that people are responding in a predictable way so far: they are using public transport more, with boardings up by more than 10% in Auckland and Wellington. MOT will be publishing updated data regularly, starting later today.

Interestingly, last week saw more than 1,000 electric vehicles registered, close to double the week prior. This makes it the biggest week in EV registrations since the end of 2023. Year-to-date registrations are nearly 2,000 higher than this time last year.

Heavy vehicles are also down around 5% over the last few days, despite an increase of 70% in diesel prices. This is expected – those who rely on heavy vehicles for freight or commercial use have far less ability to respond to these kinds of price shocks with immediate alternatives.

We know higher fuel prices are hitting families and businesses hard. That's why we announced targeted cost-of-living relief for low- and middle-income families earlier this week.

From 7 April, about 143,000 working families with children will get an extra $50 a week through a boost to the in-work tax credit.

The increase will be temporary, lasting for one year or until the price of 91 octane petrol drops below $3 a litre for four consecutive weeks.

This boost will deliver support to working families who are under significant cost-of-living pressure, without driving inflation up higher or further driving up Government debt as this $373m initiative is being paid for out of Budget 2026 operating allowances.

The COVID-19 Inquiry stressed that spending in response to crises should be timely, targeted, and temporary. That is also what Treasury says.

That’s what we’re doing.

The previous Government responded to COVID-19 through profligate, irresponsible spending – racking up debt. Some people have not learned from this and have called for this Government to make the same mistakes. But we won’t.

Throwing the kitchen sink at every event that happens is a recipe for fiscal disaster.

I understand the calls for broad, across the board, fuel tax cuts.

The government won’t be doing that, for a few reasons.

One, as people here know, every dollar from petrol tax and RUC goes into the National Land Transport Fund, which funds our transport system.

Across the board fuel tax cuts are also extremely expensive, and they are untargeted.

We’d rather focus support on those who need it most.

The reality is that maintaining fuel supply is the most important thing we can do to protect Kiwis from the worst case scenarios.

Later today Nicola Willis – who is in charge of our response as a Government – will provide an update on the National Fuel Plan along with further detail around how we see some of the steps playing out in practice.

We all hope things improve quickly - but as the Prime Minister has said, hope is not a plan.

So, we’re doing the hard yards now to ensure New Zealand has a solid fuel plan that gets us through whatever the international situation throws at us in the coming months.

Our Transport Funding Challenge We have significant transport funding challenges.

I am determined to be upfront with the public about this.

Our transport system is supposed to be user pays. In other words, road users pay petrol tax and road user charges and the money goes out the other end on maintenance, upgrades and new projects.

But in recent years, Crown funding has been tipped in more and more, which comes from general taxation – in other words, all taxpayers.

The 2018-21 National Land Transport Programme outlined expenditure of $17 billion over 3 years, and was largely funded by road users, who contributed $13 billion.

Fast forward to the 2024-27 NLTP, and the total investment has nearly doubled at $32.9 billion, but road users are still contributing roughly the same amount, $14.3 billion.

The increased investment has come primarily from Crown funding, with around $12.8 billion of direct Crown funding provided over 2024-27.

Capital contributions from general taxation have to compete with every other important priority the government has to fund.

Every dollar of extra Crown capital we put into roading is a dollar that can’t go into health, or education, or defence, or any of the other calls on capital the Crown has.

Of course, all of these areas have significant deficits and similar funding challenges.

So that’s a real problem.

Then you add in all of the calls for transport investment.

We have real resilience challenges on our state highway network. The recent weather events on the East Coast have shone a spotlight on that.

We have significant deferred maintenance and renewal work required on the Wellington and Auckland metro rail network.

The country needs a second harbour crossing in Auckland.

City Rail Link will open later this year, and soon the conversation will turn to what the next big public transport project is in Auckland.

We have pipeline of Roads of National Significance, important growth-enhancing projects around the country.

So how do we make all of this add up?

One option is to lift petrol tax and RUC.

Petrol tax has not risen since 2020 and has not kept up with inflation. In 2023, we campaigned on not increasing petrol tax in our first term. This was the right thing to do when there was a cost of living crisis, but we have to be honest about those consequences. It has deferred the issue until later.

Petrol tax is currently due to go up by 12c per litre in 2027, by six cents on 1 January 2028, and 4 cents in each year after that.

I have to be honest with you, the idea that we would put up fuel tax during a fuel crisis seems like a non-starter to me.

I’m thinking hard about the funding challenge we’ve just laid out and I’ll have more to say soon.

Later this year we’ll publish a draft Government Policy Statement for Transport funding from 2027 onwards, which lays out how we intend to confront some of these challenges.

And we’re also intending to publish what I’ve been calling a Major Transport Projects Pipeline.

This is about building a credible, long-term pipeline of transport projects with a variety of funding options and in a logical sequence, so that when funding becomes available, the sector and the public knows what project is coming next, and can plan and prepare for it.

New funding tools We are pushing forward with our reforms to increase the number of funding tools we have in the toolkit to deliver transport projects.

Last year, we introduced the Land Transport (Revenue) Amendment Bill to move towards a fairer, simpler, and more modern transport funding system.

The Bill introduces a more flexible tolling framework and enables simpler, technology-enabled ways to pay road user charges, so everyone pays their fair share for the roads they use.

At the heart of these reforms is fairness. Every road user should contribute in proportion to their use of the network.

Transition to RUC Our road user charges system is outdated. It was designed in the 1970s and still relies on manual paperwork and paper licences.

Right now, drivers paying RUC have to track their odometer readings and stick paper labels to their windscreen.

The Bill opens the door for new payment models like subscriptions or post-payment, and allows private companies to offer easy, set-and-forget billing options – similar to how many of us already pay for power or streaming services.

The changes, to modernise the system, will also help us prepare for abolishing the fuel excise duty and transition everyone over to RUC.

The abolition of petrol tax, and the move towards all vehicles (whether they be petrol, diesel, electric or hybrid) paying for roads based on distance and weight, is the biggest change to how we fund our roading network in 50 years.

As our vehicle fleet changes, so too must the way we fund our roads. It isn’t fair to have Kiwis who drive less and who can’t afford a fuel-efficient car paying more than people who can afford one and drive more often.

The Government’s plan will eventually see all vehicles pay based on actual road use (including weight) regardless of fuel type.

Tolling On tolling, we are giving ourselves the flexibility to deliver the big projects New Zealand needs, sooner.

Tolling is a key tool for bringing forward investment, and the Bill introduces a number of changes.

Enabling corridor tolling will allow tolling on parts of an existing road where users clearly benefit from a new project in the same corridor.

The Bill gives us new tools to manage diversion from toll roads, including restricting heavy vehicles from unsuitable alternative routes like they do overseas, and allowing toll revenue to help maintain those alternative routes when councils can’t.

We are also introducing annual CPI adjustments to make tolling fairer and more predictable, as well as shifting liability from the driver to the registered person to improve collection efficiency.

Time of Use Charging Other legislation passed last year gives local authorities the tools to tackle the problem of congestion.

Sitting in traffic wastes time, costs money, and drags down productivity.

Our three largest cities are significantly more congested than comparable Australian cities with similar population sizes and densities, with Auckland congestion alone estimated to cost up to $2.6 billion by 2026.

Time-of-use charging is a commonsense tool to encourage people to travel at off-peak times or by other modes. It’s about keeping our cities moving.

The legislation allows local authorities to partner with NZTA on targeted time-of-use schemes to ease gridlock, improve travel time reliability, and support economic growth.

Auckland Council is well advanced in shortlisting scheme design options and the Ministry of Transport and NZTA officials are supporting them with implementation planning.

Road safety Finally, I want to spend a moment on what we’re seeing in road safety outcomes, and what’s sitting behind them.

Road deaths have trended down since 2022. In 2024, there were 292 deaths and 2,461 serious injuries on our roads. That’s good progress, and it matters.

But we need to be careful not to draw simple conclusions from complex data. No single factor explains year‑to‑year changes in deaths and serious injuries, and it’s still too early to say whether this represents a long‑term downward trend.

What we do know is that the biggest gains come when we focus on the highest‑risk behaviours and invest in proven, cost‑effective interventions.

That’s exactly what the Road Safety Objectives are designed to do — with a clear focus on the main contributors to fatal crashes, including alcohol and drugs.

Enforcement is a critical part of that picture. The Government has invested a record $1.335 billion over three years, from 2024 to 2027, into the Road Policing Investment Programme. That funding supports frontline policing and enforcement activity, particularly during high‑risk times.

Each year, the programme targets 3.3 million passive breath tests and breath screening tests, with more than two million of those carried out when risk is highest.

Importantly, funding is also ring‑fenced for 50,000 roadside oral fluid drug tests each year from the first year of implementation.

I also want to share what we’re hearing directly from Police as roadside drug testing beds in.

Since testing was introduced across the Wellington region in December, Police have been gaining valuable operational insight into how this new road safety tool works in practice.

Testing has been carried out right across the district — from Wellington central through to the Wairarapa and Kapiti — and that experience is already shaping how the national rollout will be delivered.

As of 18 March, Police have conducted more than 650 roadside drug screening tests, resulting in 24 positive tests. The positivity rate at the roadside is broadly in line with what Police see for alcohol.

While it’s still too early to draw conclusions about national trends, Police have seen an increase in positive results as testing activity has expanded across Wellington.

Importantly, officers report favourable feedback from the public during testing. Police are continuing to collect data, but at this early stage the focus is on learning, refining processes, and getting ready.

Feedback from frontline staff has been positive, with Police telling us they are geared up and ready to support the nationwide rollout, with testing across New Zealand by mid‑2026.

But enforcement alone isn’t enough. The Road Safety Objectives also focus on improving the safety of the roads themselves. As the recent AA research report points out, where we have made significant investment in improving the roads we see the benefits of reduced deaths and serious injuries.

Vehicles are another important piece of the puzzle. The overall safety of New Zealand’s has continued to improve over time. In 2025 alone, there were nearly 40,000 fewer one‑ and two‑star vehicles on the road.

Alcohol interlocks Finally, we’re looking closely at what works for repeat high‑risk offenders. One key, underutilised, tool here is alcohol interlocks.

A recent Ministry of Transport study using the Integrated Data Infrastructure database affirms that alcohol interlocks reduce the risk of alcohol-impaired driving.

Here’s some very interesting data.

Drink-driving offenders given alcohol interlock orders are: 9% less likely to reoffend within four years, 45% more likely to remain in employment, and 22% less likely to depend on welfare than comparable drink-drivers given driving disqualification orders.

It’s clear that alcohol interlocks are effective when they’re installed and used properly.

Despite their effectiveness, the uptake of alcohol interlocks is lower than it could – and frankly should – be. Many eligible offenders are not given alcohol interlock sentences, and many offenders who are ordered to get alcohol interlock devices do not do so.

I am actively investigating how to increase the uptake of interlocks with Paul Goldsmith, the Minister of Justice.

Tackling New Zealand’s toughest road safety challenges means focusing on what works and making sure it’s used as effectively as possible.

Conclusion Thank you for listening and I welcome any questions you have.