The government’s proposal to switch all vehicles to road user charges is likely to become an expensive lemon, says the car review website dogandlemon.com.
Motoring expert Clive Matthew-Wilson says:
“Let’s be clear: this scheme isn’t really about collecting road tolls; this scheme is all about privatising the most profitable parts of our roading system.”
As Fleur Fitzsimons of the NZ Public Service Association put it:
“The only people who will see any benefit from this scheme are the corporates who take their cut”.
Matthew-Wilson adds:
“Whether the corporation controls the entire road or just the revenue collection, the outcome is much the same.”
Experience from Australia and elsewhere suggests this toll road model often creates as many problems as it solves.
A 2024 report to the New South Wales government stated bluntly: “Sydney’s toll road network is a poorly-functioning patchwork of numerous different price structures that will cost motorists $195 billion … in tolls over the next three and a half decades on top of the billions they have already paid.”
Matthew-Wilson says there is no urgent need for the proposed switch to road user charges for all vehicles.
“For the foreseeable future, we’re going to have gas stations and petrol-powered cars. Taxing fuel at gas stations is an incredibly efficient way of collecting taxes. The Customs department collects direct payments from the fuel companies. This system is extremely difficult to cheat, because there are clear records every time a vehicle fills up at a gas station.”
The current system brings in around $2billion a year, with very low collection costs.
“By comparison, road user charges require that every vehicle has some reliable way of recording the distance it travels. This is not nearly as easy as it sounds.”
“It’s easy enough to toll vehicles driving down a section of highway or vehicles entering and leaving a city. But to keep track of millions of vehicles over thousands of roads over millions of kilometres, is a major logistical task that is likely to cost a large percentage of the revenue it collects.”
“Corporations want a quick return and high profits. This is the very opposite of the public interest. The experience in Australia is that privatised toll roads are really costly to use, but don’t increase efficiency.”
As Dr Scott Elaurant, chair of the Engineers Australia Transport Society put it:
“In reality, we’ve created private monopolies over essential infrastructure. These companies are motivated to maximise revenue, not deliver public value. With rising toll prices and persistent urban congestion, the inefficiency of this model becomes evident.”
Dr Elaurant adds: “According to the Australian Automobile Association’s Affordability Index (June 2023), the average toll-paying household in capital cities spent $66.19 weekly on tolls, while the national average was just $13.24. [These road] users are [not paying based on the quality of the roads], but on where they live or work….public roads [are meant to be] accessible to all [but this basic right is eroded] when tolls become unavoidable...”
Matthew-Wilson adds that the people planning the government’s toll system appear to assume that all vehicles are easily traceable.
“According to various credible estimates, approximately 9% of cars lack registration, while an estimated 400,000 cars are driving around without a current WoF. My guess is that these figures are conservative.”
“[1]You can prosecute these 400,000 drivers, but many of these drivers can’t afford to pay the fines they already have. It’s common for poor people’s vehicles to be seized by bailiffs over unpaid fines for WoF and registration. After one car goes, the same poor families scratch together enough money to buy another car and the process repeats. Remember, you’re talking about hundreds of thousands of vehicles here. There’s no prison large enough to hold even the worst offenders.”
Matthew-Wilson adds that, even if you solve the problem of illegal vehicles, the infrastructure required to collect revenue is likely to be very expensive, with poor returns on investment.
“The transport minister, Chris Bishop, is talking nonsense when he implies that road user charges can be collected solely using a transponder in your car that triggers a charge when you drive down a main road. [2] These sort of transponders, such as the ones used for Sydney’s motorway toll collections, have an extremely short range. Such a system would be useless over an entire country. The same applies to number plate recognition. It works on a single stretch of road, but once you've passed the number plate recognition camera, there has to be another camera, or the system will lose track of you. Number plate recognition is also not particularly accurate, which can be a nightmare if a person is being charged incorrectly for the distance they travel."
“Smartphones are equally useless for recording vehicle usage, because about 40% of the country doesn’t have cellphone cover. And people lose smartphones. And they break and go flat and get stolen.”[3]
Matthew-Wilson believes the only feasible system for recording road user charges over the entire country would require some kind of satellite monitoring system, permanently connected to each vehicle.
“This system would also require very sophisticated systems to gather and sort the data from the millions of vehicles moving around our roads every day.“
“Such a data collection system is also wide open to abuse, regardless of what the politicians tell us".
“Once you have 24/7 electronic surveillance of the national vehicle fleet, it’s also inevitable that this technology will be given additional uses. For example, many cars are already fitted with devices that can shut them down without warning."
“There are solid law-enforcement reasons for fitting every car with shut-down technology. But there are frightening implications in such a move. For example, the government could decide it didn’t want protestors in a particular time and place. Using remote technology, the government could simply track the protesters then shut down their cars at the side of the road.”
“Governments almost never give up their power but they often find new ways of staying in control. That’s a simple reality.”
Matthew-Wilson adds that charging vehicles for the distance they travel rather then the fuel they use, could easily mean a huge rise in costs for vehicles such as taxis.
“Most taxis in New Zealand are Toyota petrol hybrids. While the government taxes petrol at the gas station, these petrol hybrids get rewarded for their efficiency. If the government switches to taxing the distance these hybrids travel, these vehicles will be penalised, along with the passengers who ride in them. But, under the government’s proposed system, rich people in gas-guzzlers could be rewarded, because they tend to travel shorter distances. Therefore they will pay less. So the owners of taxis will be charged unfairly while the owners of gas-guzzlers will get an easy ride.”
[1] In most rural areas there’s little or no public transport; having a vehicle is not a luxury but a necessity. Most drivers would rather drive legally, but driving legally requires that you can afford to pay the cost of obtaining a WoF and then the cost of registration.
New Zealand’s vehicle registration system won’t let you register a car if it doesn’t have a WoF and it won’t let you get a WoF if you don’t have a registration. This makes it very easily for a car to simply drop out of the system. It’s also getting harder and harder to pass the WoF test, so many poor families simply choose to drive illegally.
[2] Transponder-based systems typically use a a tiny transmitter about the size of a deck of cards. This device is placed on the inside of the car. Antennas, or electronic readers, are positioned above each toll lane. These antennas send out radio frequencies that communicate with the transponder. When a vehicle passes, the vehicle’s details are therefore recorded and passed to a central computer. However, this kind of system requires a permanent antenna at every major intersection. When there’s no antenna to communicate with the transponder, the vehicle becomes invisible to the system once it exceeds the range of the antenna. This makes this system impracticable for use on a nationwide basis.
[3] While mobile networks cover 99% of the population, they only cover about 60% of the country's landmass. For example, there’s little or no cellphone reception on a 200-kilometre stretch between Fox Glacier and Makaroa through the Haast Pass on the West Coast.
