The Government has introduced the Land Transport (Revenue) Amendment Bill to Parliament, a package the Transport Minister says will take the "first steps" towards replacing petrol excise with road user charges for light petrol vehicles. The legislation would update both road user charge rules and tolling arrangements, and aims to move the system away from paperwork and manual processes towards modern, electronic collection methods.
What the Bill proposes
The Bill proposes reforms to how road user charges are collected and paid, with several specific changes designed to support digital payment models. It would enable subscription-style or post-payment options for RUC, and open the market so private companies can offer automated billing services. The changes are intended to allow in-vehicle technology to record distance, and to separate the road agency's operational role from retail collection so third-party providers can compete on a level playing field.
Under the current system, drivers who pay RUC must log odometer readings and display physical paper licences. The Bill would remove barriers to more automated systems that could reduce that administrative burden for individual drivers and fleet operators, and permit newer payment models that resemble billing approaches used for utilities and digital subscriptions.
The Government says the reforms are intended to "future-proof" transport funding and make it easier to move light petrol vehicles from the current fuel excise model onto a distance-based charge if a policy decision is made to do so.
Scope and timing
At present, RUC already applies to all diesel vehicles, heavy vehicles over 3.5 tonnes, and light electric vehicles including plug-in hybrids. The Bill is aimed at enabling RUC for light petrol vehicles as an alternative to petrol tax, not immediately replacing fuel excise for every vehicle. The Minister has signalled the Government will implement the changed collection tools first, then assess the system in 2027 before making any decision about shifting the remaining 3.5 million vehicles to RUC.
For drivers and businesses, that means the technical and regulatory groundwork could be put in place while a formal transition decision remains subject to further analysis and consultation. Fleets that already manage odometer-based charging would see fewer operational changes than private owners who currently rely on petrol excise.
