Waka Kotahi continues to work on the details to support the Government’s announcement to reduce fuel excise duties (FED) by 25 cents a litre and road user charges (RUC) for three months.
Revenue collected from FED, RUC, vehicle and driver registration and licensing, state highway property disposal and leasing and road tolling is used to pay for investment in land transport activities under the National Land Transport Programme.
This cut in FED and RUC will result in a reduction in revenue for the National Land Transport Fund. The Government has signalled the shortfall will be met through the COVID Response and Recovery Fund. This top-up should ensure all currently funded transport projects will not be affected.
The estimated cost of this cut for three-months of revenue is $350 million for the fuel tax changes alone.
The reduction in FED happened shortly after the announcement. Officials are still working through a number of options around the RUC rate reduction. Because of the nature of RUC with refunds and prepayments and multiple rates applying, it is far more complex to implement.
Public transport fares have also been halved for this period to provide cheaper transport options. It is also intended that this will be covered by Crown funding. Like RUC, this has some complex implementation issues involving Waka Kotahi and our partners.
