Early warnings for RUC changes, electric vehicles pay nothing

Future increases to road user charges (RUC) will be notified in advance with the Road User Charges Amendment Bill passing its third reading today.

The legislation also exempts light electric vehicles from paying RUC until 2013.

"It is reasonable to give notice of road user charges to assist in the operations of commercial transport operators," says Transport Minister Steven Joyce. 

"The government signalled at the time of the cancellation of regional fuel taxes that RUC rates will be increased on 1 October this year, alongside petrol excise tax increases.

"This change to legislation will give transport operators fair warning of these and all future increases to enable them to budget appropriately and set their own charges accordingly."

The Bill also contains a provision to minimise the potential loss of revenue that can occur through large scale pre-purchasing of RUC once notice of an increase is given. RUC licences for heavy vehicles will now expire one month after an increase comes into effect.

The licence expiry does not extend to light vehicles, avoiding the inconvenience it would create for New Zealand's 400,000 light vehicle owners.

Mr Joyce says the government is exempting electric vehicles from paying RUC as a first step towards encouraging their uptake.

The exemption will come into effect on 1 October and will apply until 2013 when the initiative will be reassessed.

"Private vehicles will continue to be the most significant mode of transportation for most New Zealanders - so it is important that we encourage the use of alternative fuel technologies in order to improve the efficiency of the fleet and meet our environmental obligations over time," says Mr Joyce.

"Over time, electric cars can also decrease our reliance on imported fossil fuels and improve our energy security."

At present light electric vehicles (weighing up to 3.5 tonnes) are classed as diesel vehicles for the purpose of RUC. This results in a cost of between 3.6 and 4 cents per kilometre.

"Taken together with the government's incentives on biodiesel and bioethanol, the incentive in this case in relation to electric vehicles encourages their adoption," says Mr Joyce.