INTRODUCTION

1.1 The New Zealand Initiative welcomes the opportunity to submit on the Land Transport (Revenue) Amendment Bill.

1.2 The Initiative is a Wellington-based think tank supported primarily by major New Zealand businesses. In combination, our members employ more than 150,000 people. We undertake research that contributes to the development of sound public policies in New Zealand, and we advocate for the creation of a competitive, open, and dynamic economy, as well as a free, prosperous, fair, and cohesive society.

1.3 The Initiative’s members span the breadth of the New Zealand economy; a well-functioning transport system is important to them. The views expressed in this submission are those of the authors rather than the New Zealand Initiative’s members.

1.4 The Initiative has consistently supported economically efficient transport pricing, including road pricing and congestion charging. Efficient pricing is the most effective way to manage demand, allocate scarce road space, and fund infrastructure investment. Our 2024 report Driving Change: How Road Pricing Can Improve Our Roads set out a comprehensive vision for Smart Road User Charges that would modernise New Zealand’s transport funding system.

1.5 We broadly support the Bill. It represents a pragmatic and incremental reform package that moves New Zealand's land transport revenue framework in a more economically coherent direction. In particular, the Bill strengthens user-pays principles, improves investment incentives, and modernises the road user charges system in preparation for a future transition away from fuel excise duty.

1.6 Importantly, this Bill should be read alongside the Land Transport Management (Time of Use Charging) Amendment Act 2025, which passed in November. Together, these two pieces of legislation form the core of New Zealand’s emerging road pricing architecture. Our recommendations focus on ensuring they work together coherently.

1.7 That said, the Bill also reflects a cautious approach, especially on tolling. In several areas, it falls short of what the Tolling Regulatory Impact Statement (RIS) identifies as the preferred policy direction. We therefore support the Bill, subject to the recommendations outlined below.