On Monday, the Government released proposals in the form of a cost-of-living relief package. This package included a reduction in fuel excise duty of 25 cents/litre and an equivalency for road user charges (RUC).
The first component was relatively easily introduced, but the latter (the RUC relief) is more challenging given the administrative structures required to make the relief mechanism viable for both industry (vehicle owners) and the regulatory authorities. In addition, there are prescribed legal frameworks which inhibit a simplified approach to changing RUC rates.
In recognition of the inherent difficulties of creating a viable and truly cost-effective RUC relief framework, Transporting New Zealand has been working directly with government officials. The discussions highlighted a menu of options including looking at proxy approaches that would provide a similar reduction in costs. Unfortunately, no real details around how RUC relief will occur have been forthcoming. Our recommendations to the Minister and Government have been to ensure the relief is implemented swiftly, is equitable for all users of diesel, and is easy to administer. Our view is that an at-pump price reduction, such as that introduced for petrol, would be the best way to achieve the above principles.
Once the details of the reduction scheme have been determined, we will inform Transporting New Zealand members immediately.
