The government has introduced the Land Transport (Revenue) Amendment Bill to Parliament, taking a formal step towards a nationwide modernisation of road user charges, and making several changes to tolling arrangements. The package aims to update a RUC framework that Ministers describe as outdated, while also expanding tools for funding and managing national road projects.
What the bill would change in RUC
The bill proposes to overhaul how road user charges are collected and administered, opening the system to new payment models and private-sector participation. The Minister of Transport said in Parliament, "A core principle of our transport funding system is fairness, that all road users should contribute in proportion to their use of the roads." He also described the current system as designed in the 1970s and still dependent on manual paperwork and paper licences.
Under the proposed changes, the RUC regime would allow subscription-style payments and post-payment options, and permit private companies to offer automated, continuing billing services. The ministry argues these options would make compliance easier for vehicle owners by reducing manual tasks such as tracking odometer readings and applying paper labels to windscreens. The bill would also enable in-vehicle technologies to record distance more accurately, while clarifying the separation between the regulator’s role and the retail/collection functions so third-party providers can compete on an equal footing.
Importantly, the minister framed these reforms as the first step towards replacing petrol excise with RUC for light petrol vehicles. Currently, RUC applies to diesel vehicles, heavy vehicles over 3.5 tonnes, and light electric vehicles including plug-in hybrids. The government plans to trial and evaluate the updated system, with a formal assessment scheduled for 2027 before any decision is taken on transitioning the remaining 3.5 million light petrol vehicles.
Tolling changes and intended effects
The amendment bill also introduces several changes to tolling powers, which the government sees as instrumental for accelerating major road investments. One notable change is permission for "corridor tolling," where tolls can be applied on parts of an existing route when users derive clear benefits from new projects within the same corridor.
