Bill Enacted Latest version Introduction 4 April 2022 | 2022 No 116—1

Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill

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New sections 42A to 42G and cross-headings inserted

Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill

Government Bill

116—1

Explanatory note

General policy statement

Fuel prices in New Zealand and across the globe have increased following Russia’s invasion of Ukraine. The rapid increase in fuel prices has impacted on households and businesses across the country. The overall policy goal is to offset some of the price increases through reducing road taxes.

As a response, the Government has reduced petrol excise duty levied on every litre of petrol imported or produced. There is no equivalent excise duty on diesel and therefore vehicles powered by a fuel other than petrol (or a fuel not subject to excise duty) are subject to road user charges (unless exempt). Road user charges (RUC) are distance charges and are unrelated to fuel consumption.

The Bill is intended to reduce RUC to provide equivalent relief to motorists with a diesel vehicle that the reduction in fuel excise duty has provided to petrol vehicle owners. It does so by requiring the RUC collector (Waka Kotahi NZ Transport Agency) to apply a 36% discount to all legislated rates of RUC. A 36% discount is equivalent to a 25 cents per litre reduction to petrol excise duty. The discount is time-limited to 3 months to ensure owners of diesel vehicles are treated similarly to the owners of petrol vehicles. RUC vehicle owners should only purchase RUC licences at the reduced rate for the distance that they would expect to use in 3 months.

The Bill provides the RUC collector with the power to issue assessments if RUC licences are purchased for distances that are excessive or unreasonable, or otherwise abuse the intended 3-month reduction.

Post-implementation assessment

The Ministry of Transport will produce a post-implementation assessment of the temporary reduction scheme set up by this Bill.

A copy of the post-implementation assessment will be made available on the Ministry of Transport Internet site.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 provides that the Bill is to come into force on the day after it receives the Royal assent.

Clause 3 states that the Bill amends the Road User Charges Act 2012.

Clause 4 inserts new clauses 42A to 42G and cross-headings.

Temporary reduction in rates of road user charges

New clause 42A provides a definition of temporary reduction period. This period begins on 21 April 2022 and ends on the date specified by Order in Council or, if no order is made, on 21 July 2022. An order made under this section is secondary legislation so must be published in the Gazette and presented to the House of Representatives.

New clause 42B provides that the RUC collector, Waka Kotahi New Zealand Transport Agency, must apply the discounted rate to the purchase of RUC licences for which applications are made during the temporary reduction period. This clause defines 2 terms as follows:

discounted rate is defined to mean a 36% discount applied to the normal rate, but a lower discount may be set by Order in Council if the temporary reduction period is extended under new clause 42A(2)
normal rate is defined to mean the Goods and Services Tax-inclusive rate as specified in regulations or by notice under the Road User Charges Act 2012.

The clause also sets out the requirement as to how the amounts calculated are to be rounded up or down.

An order made under new clause 42B(6) is secondary legislation.

New clause 42C provides for a return to the normal rate at the end of the temporary reduction period.

Assessments for unpaid road user charges

New clause 42D provides for the RUC collector to issue an assessment to an owner or operator of a RUC vehicle for unpaid road user charges. This power applies if the collector forms the opinion that excessive or unreasonable amounts of RUC have been purchased during the temporary reduction period or that the purchases have been an abuse of the temporary reduction scheme. In coming to that opinion, the collector may consider any matters that the collector considers relevant in the circumstances, including the purpose of the temporary reduction scheme and whether the owner or operator has acted consistently with the guidance of the RUC collector as to what is considered reasonable.

The provisions of Part 3 (other than sections 53(4) and 55(6)) apply to the issuing of assessments.

New clause 42E sets out the formula that applies for calculating unpaid road user during the temporary reduction period.

New clause 42F provides that, in the case of a RUC licence purchased at the discounted rate for a heavy RUC vehicle, section 86(2) applies to the increase from the discounted rate to the normal rate, meaning that the licence purchased at the discounted rate becomes invalid 1 month after the end of the temporary reduction period.

New clause 42G repeals new sections 42A to 42G 12 months after the end of the temporary reduction period.

Hon Michael Wood

Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill

Government Bill

116—1

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Road User Charges (Temporary RUC Reduction Scheme) Amendment Act 2022.

2 Commencement

This Act comes into force on the day after the date of Royal assent.

3 Principal Act

This Act amends the Road User Charges Act 2012.

4 New sections 42A to 42G and cross-headings inserted

After section 42, insert:

Temporary reduction in rates of road user charges

42A Meaning of temporary reduction period

(1)

In sections 42B to 42G, unless the context otherwise requires, temporary reduction period, means the period—

(a)

beginning on 21 April 2022; and

(b)

ending on—

(i)

the date specified by an Order in Council made not later than 21 July 2022; or

(ii)

if no order is made under subsection (2), 21 July 2022.

(2)

The Governor-General may, by Order in Council, shorten or extend the temporary reduction period to a date specified in the order.

(3)

An order under subsection (2) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

42B Temporary reduction in rate of road user charges

(1)

Subsection (2) applies to the purchase of a RUC licence in relation to applications received by the RUC collector during the temporary reduction period.

(2)

The RUC collector must apply the discounted rate.

(3)

In this section and sections 42C to 42F,—

discounted rate means—

(a)

a 36% discount applied to the normal rate; or

(b)

a lower discount, as set by Order in Council under subsection (6), applied to the normal rate.

normal rate means the GST-inclusive rate—

(a)

applying immediately before the commencement of the temporary reduction period; and

(b)

specified for the RUC licence—

(i)

in the Road User Charges (Rates) Regulations 2015; or

(ii)

by notice given under section 90A(2)

(4)

For the purpose of applying the discount to the normal rate, the amount calculated must be rounded up or down to the nearest dollar or cent as follows:

(a)

for distance licences,—

(i)

an amount of less than 50 cents must be rounded down to the nearest dollar:

(ii)

an amount of 50 cents or more must be rounded up to the nearest dollar:

(b)

for additional licences,—

(i)

an amount of less than 0.5 cents must be rounded down to the nearest cent:

(ii)

an amount of 0.5 cents or more must be round up to the nearest cent.

(5)

The discounted rate must be treated as being calculated in accordance with regulations made under section 85.

(6)

If the temporary reduction period is extended by an Order in Council under section 42A(2), the Governor-General may, by Order in Council, reduce the discount specified in paragraph (a) of the definition of discounted rate set out in subsection (3).

(7)

An order under subsection (6) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

42C Road user charges that apply after end of temporary reduction period

The normal rate of road user charges applies to the purchase of a RUC licence in relation to applications received after the last day of the temporary reduction period.

Assessments for unpaid road user charges

42D When assessments may be issued

(1)

The RUC collector may issue an assessment for unpaid road user charges to the owner or operator of a RUC vehicle.

(2)

Subsection (1) applies if the collector forms the opinion that the owner or operator has, during the temporary reduction period, purchased RUC for that vehicle for distances that are excessive or unreasonable or are an abuse of the temporary reduction scheme.

(3)

In forming an opinion under subsection (2), the RUC collector may consider matters such as the following:

(a)

the objective of the temporary reduction scheme, which is to provide a discount to the owner or operator of a RUC vehicle that is approximately equivalent to the discount on the excise and excise-equivalent duty on motor spirits provided for the owners and operators of vehicles that are not RUC vehicles under the Excise and Excise-equivalent Duties Table (Temporary Reduction of Motor Spirits Duty) Amendment Order 2022:

(b)

whether, during the temporary reduction period, the owner or operator of a RUC vehicle has purchased RUC licences consistent with the guidance issued by the RUC collector as to what is considered to be reasonable, having regard to the type and use of the RUC vehicle and any other relevant circumstances:

(c)

any other matter that the RUC collector considers relevant in the circumstances.

(4)

Part 3 (other than sections 53(4) and 55(6)) applies, as far as it is relevant, to the assessment and collection of unpaid road user charges by the RUC collector under this section.

(5)

In this section, temporary reduction scheme means the scheme for discounting road user charges—

(a)

for the period specified in section 42A(1); and

(b)

in accordance with the discounted rate prescribed in accordance with section 42B.

42E How assessments are to be calculated

For the purpose of section 42D(1), unpaid user charges must be calculated in accordance with the following formula:

(a − b) × (c − d) = e

where—

a: is the distance covered by RUC licences purchased at the discounted rate
b: is the distance covered by RUC licences that the RUC collector considers would have been reasonable to purchase for the RUC vehicle during the temporary reduction period
c: is the normal rate
d: is the discounted rate that applied at the date of purchase
e: is the amount of the assessment of unpaid road user charges.

42F When certain RUC licences are no longer valid

In the case of a RUC licence issued at the discounted rate for a heavy RUC vehicle, section 86(2) applies as if that provision applied to the increase from the discounted rate to the normal rate.

42G Repeal

(1)

Sections 42A to 42F, the cross-headings above sections 42A and 42D, and this section are repealed on the date that is 12 months after the end of the temporary reduction period.

(2)

Those repeals do not affect the completion of anything done or yet to be done under sections 42A to 42E.

(3)

Subsection (2) does not limit section 33 of the Legislation Act 2019.

Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill