19 March 2024

Draft Government Policy Statement on land transport 2024

The Minister of Transport has released the draft Government Policy Statement on land transport (GPS) 2024 for feedback. The draft GPS outlines the Government’s plan for investing in land transport over the next 10 years by directing $7 billion per year in expenditure from the National Land Transport Fund.

This draft GPS replaces the GPS that the former Government consulted on in August 2023. Consultation closes on 2 April, and the final GPS will come into effect by July 2024.  

In the GPS, the government has committed to not raising petrol tax (Fuel Excise Duty or FED) or RUC in the current term. Instead, it will raise the motor vehicle licence fee by $25 in January 2025, and another $25 in January 2026 (this works out to be equivalent to what a 3 cent per litre annual FED increase would amount to for the average motorist per annum). This will increase the annual cost of registration in 2026 by $50 for most vehicles ($28 for motorcycles and $16.50 for mopeds). In addition, it has signaled raising FED (and equivalent RUC) by 12cpl in January 2027, 6cpl in January 2028, and an ongoing 4cpl thereafter.

The GPS notes that “fuel usage as a proxy for road usage is rapidly diminishing, due to growing fuel efficiency of vehicles and the shift to electric vehicles”. In response, the GPS will advance reforms to the National Land Transport Fund’s revenue system, including requiring all road vehicles to move from FED to RUC as “a fairer way of charging for road use based on weight and distance.” Another reform will be to allow for time-of-use charging on the most congested parts of New Zealand’s road network. Technology will be a critical enabler of these reforms, which will be advanced over the course of the GPS (2024-34). The GPS says it expects the MoT and NZTA to jointly report on the future of land transport revenue within 3 months of the release of the draft GPS, so by July.

The Government will also introduce a new set of objectives and actions for road safety that will focus on safer roads, safer drivers and safer vehicles, including reviewing the vehicle regulatory system to enable better management of the safety performance of the vehicle fleet. The GPS says that the government expects that NZTA will facilitate contributions from ACC to investments which improve road safety, citing motorcycle safety as a good example of this practice (e.g. Ride Forever).

Finally, to fix the increasing number of potholes on our roads that has occurred in recent years, GPS 2024 increases road maintenance funding by $640 million which goes into a new State Highway Pothole Prevention and Local Road Pothole Prevention activity class.

Other points in the draft GPS include:

  • The GPS reintroduces a focus on increasing economic growth and productivity as a priority for land transport expenditure
  • The GPS re-introduces the Roads of National Significance (RoNS) programme, with 15 projects to support economic growth and regional development across New Zealand
  • The GPS expects greater farebox recovery and third-party revenue from local councils to fund public transport
  • While rail freight network investments will remain within the GPS, rail infrastructure will no longer be cross-subsidised from revenue generated from road users
  • Read the draft GPS here

Theme picker