In 2012, a new road user charges (RUC) system came into force. The biggest change of the system was to the definition of vehicle weight.
Public consultation on specific proposals relating to vehicle types and weight bands changes to the RUC system was undertaken between 28 October and 16 December 2011. Forty-seven submissions on the consultation document were received from a range of transport stakeholder organisations and individual transport operators.
All submissions were considered as part of the development of proposals relating to vehicle types and weight bands. Many of the comments received were taken on board and were reflected in the final schedule of vehicle types and weight bands.
How did the definition of vehicle weight change?
Under the Road User Charges Act 2012, all RUC vehicles are assigned a permanent RUC weight.
The Act defines RUC weight as the lesser of the
- gross vehicle mass for the RUC vehicle; or
- maximum allowable mass for the RUC vehicle under section 4.5(1) of Part 1 of the Vehicle Dimensions and Mass Rule 2002 (VDAM Rule 2002)
No vehicle on New Zealand roads should exceed these weight limits unless issued with an overweight permit.
How do I find out my vehicle type and weight band?
In most cases vehicle types did not change. However, some new types are being created, some old types are being amalgamated, and in some cases vehicle operators now have an option as to which type they wish to use. The changes mainly affected powered vehicles with more than two axles, and heavy trailers.
A list of vehicle types and weight bands is available here. If you are uncertain about which type your vehicle fits into, or wish to change your vehicle’s type, please contact the NZ Transport Agency.
Why did the definition of licence weight change?
Changing the definition of licence weight simplifies administration for both industry and government agencies.
Previously, a vehicle operator had to estimate the maximum laden weight of a vehicle for a journey, and purchase a corresponding RUC licence. It can be difficult for vehicle operators to predict the weight to be carried in advance and weigh scales are not always available at loading sites.
The change also closed the door on weight-based evasion because an operator can no longer underestimate the weight of the vehicle and purchase an incorrect licence.
Which weight limit is likely to determine the RUC weight of my vehicle?
For light RUC vehicles and smaller (typically 2 axle) trucks, the RUC weight will usually be determined by the manufacturer’s rating.
For larger trucks the RUC weight is likely to be determined by the maximum weight allowable under the VDAM Rule 2002.
Why are charges set for weight bands, rather than a graduated scale with one tonne increments?
The use of weight bands greatly simplifies the scale of charges. It also addresses a number of potential issues that would otherwise exist if the previous one tonne incremental scale of charges still existed.
Setting charges in one tonne increments would result in there being arbitrary distinctions between vehicles that have RUC weights falling just under and just over each one tonne increment. As operators would wish to ensure their vehicles are rated at as low a weight as possible, it would also create opportunities for manufacturers to game the system by reducing the gross vehicle mass of vehicles by small amounts.
Charging in weight bands will not completely eliminate these issues but it significantly reduces the number of vehicles affected by falling on the wrong side of a weight class and the incentive for de-rating vehicles to ensure they fall within a lower weight band.
What about vehicles that mainly carry lighter loads in vehicles with greater capacity, was consideration given to offering exemptions for these kinds of operators?
Yes it was considered, but this proposal was not taken further as it would reintroduce the evasion and enforcement issues present in the old system.
During consultation as part of the policy development process for the RUC Bill some operators suggested that there should be an option to nominate a permanent weight that would be lower than the vehicle’s normal capacity.
However, as noted in the previous questions and answer setting charges in one tonne increments would result in there being arbitrary distinctions between vehicles that have RUC weights falling just under and just over each one tonne increment. As operators would wish to ensure their vehicles are rated at as low a weight as possible, it would also create opportunities for manufacturers to game the system by reducing the gross vehicle mass of vehicles by small amounts.
Charging in weight bands does not completely eliminate these issues but it significantly reduces the number of vehicles affected by falling on the wrong side of a weight class and the incentive for de-rating vehicles to ensure they fall within a lower weight band.
While the new system affects operators differently, it is a fair system because similar vehicles pay similar charges and heavy vehicles as a group pay the same amount as previously to cover the cost of the road damage they are responsible for.
Why are vehicles carrying the heaviest loads not getting such a big RUC increase?
The changes encourage the most efficient use of vehicles so those operators at the top end of the weight scale will be able to achieve greater efficiencies from their vehicles.
Both the old system and the new one involve averaging assumptions about road wear and vehicle loads. Actual road damage caused by individual vehicles varies considerably depending on road conditions and loading practices. In general vehicles that carry the heaviest loads are only fully laden for part of their journey.
However the system is fair as similar vehicles pay similar charges and heavy vehicles as a group will keep paying the same amount as present to cover the cost of the road damage they are responsible for.
What benefits are gained from these changes?
The change to RUC weight provides a number of benefits, including:
- reducing compliance costs for transport operators - such as time savings from simpler RUC purchasing processes and less complex roadside checks
- simplifying administration for transport operators and government
- encouraging the efficient utilisation of vehicles
- reducing weight-based evasion by removing the opportunity to purchase road RUC licences for less than the actual weight of the vehicle (including any load being carried)
How will this affect costs passed on to consumers?
On average RUC makes up about 10 percent of total road freight costs, so even quite large increases in RUC will represent a relatively small change in total truck operating costs. It will be up to each transport business as to how they adapt to the new system and pass on any increased costs.
How did these changes affect heavy vehicles?
The changes to the system meant vehicles that are similar now pay similar levels of charges. Heavy vehicles as a group continue to pay the same amount as previously, covering the road damage they are responsible for.
Some operators faced increases in RUC payments as a result of the change, while others had a decrease, depending on the nature of the loads carried and their choice of vehicle.
How did these changes affect light RUC vehicles?
The new definition of weight did not have any significant impact on how light RUC vehicles were classified or charged under the new RUC system.
A light RUC vehicle is defined as a motor vehicle with a gross vehicle mass of 3,500 kilograms or less and with motive power that is not wholly derived from petrol.
All light vehicles fall within a single weight band, and pay the same RUC.
Why should a small passenger car pay the same road user charges as a larger SUV?
Variation in vehicle weight below 3.5 tonnes does not have a significant influence on the wear and tear vehicles cause to the roading network, ie a 3 tonne SUV does not cause noticeably more damage to the road than a 2 tonne car.
Any significant differentiation of charges within this weight limit would be inconsistent with the Act, which requires charges to be set in proportion to the costs vehicles generate.
Why do the charges for light RUC vehicles not take into account fuel efficiency?
RUC rates are set in proportion to the costs vehicles generate to the roading network. The fuel efficiency of a vehicle has no direct relationship with the costs generated to the roading network and therefore is not taken into account in the setting of RUC rates.
How were vehicles with overweight permits affected?
Vehicles operating with an overweight permit are now required to purchase additional RUC for the additional weight carried. There are two options available to operators in this situation.
Vehicles that are used regularly to carry overweight loads have the option of having a special “H vehicle” type licence. This enables them to carry weights up to the maximum under a high productivity vehicle permit at all times.
Vehicles that only operate overweight occasionally, or carry varying overweight loads, have the option of purchasing additional RUC licences as required to cover specific journeys.
How did these changes affect motor caravans?
Like truck operators, some motor caravan owners now pay higher charges under the new system and some pay less.
About 70 percent of motor caravans have a maximum gross vehicle mass of no more than 6 tonnes. For these vehicles the effect of the change to the new RUC system was relatively small. This was because the RUC licence values previously purchased for these vehicles were all within about 10 percent of the new rate.
There was greater variation in charges for motor caravans with a maximum weight of more than 6 tonnes (those requiring a heavy vehicle driver’s licence). The size of the difference depended on how much the licence weight purchased under the old system was above or below the average for similar vehicles.
Motor caravans are often unable to be loaded to the maximum allowable legal weight – why charge the same as trucks that carry payloads?
Many truck operators, because of the nature of their business, are also unable to load to the maximum weight allowable.
This is the fairest way of treating these types of vehicles while being consistent with charging for similar vehicle types.
Also, motor caravans tend to have a significantly higher unladen weight than equivalent trucks. Even trucks that are often loaded to maximum capacity will run empty or lightly loaded for a significant proportion of their road use.
How did the different weight bands affect revenue generated for the National Land Transport Fund?
The changes to the RUC system did not have a significant affect on the amount of revenue collected into the National Land Transport Fund.
If the changes were not intended to raise extra revenue why did I pay more when the new system came into effect?
The transition between systems was made on a revenue neutral basis. That is, charges were initially calculated to recover the same amount of revenue in total, and by vehicle type, as under the previous system.
However, the change in definition of vehicle weight meant that most vehicles had a different new charge than for the RUC licence they carried under the old system. A revenue neutral transition meant that the charges were the same on average, but most people paid either more or less than they did previously.
In addition, to ensure there was sufficient funding available to meet the government’s land transport expenditure requirements, the government increased RUC by 4.1 percent (on average) on 1 August 2012. This was equivalent to the 2 cent per litre increase in petrol excise duty that occurred on the same day.
Application of this increase meant that there were more increases in charges than reductions under the new system. In particular, all light vehicles had increased charges. This mirrorred the increase in petrol excise duty payable by all users of light petrol vehicles.
Did the new type and weight band charges take account of the increase in road user charges?
Yes. The increase was applied on top of the revenue neutral charges that were calculated to transition to the new system.
Will the new system be reviewed at any point?
The Ministry of Transport and the NZ Transport Agency will continue to monitor the new system and has begun a full evaluation of it , including assessment of impacts on the transport industry.