The Government this week unveiled its plans for transport over the next 10 years, but those plans have been overshadowed by the rising costs drivers will face to pay for them.
Prime Minister Christopher Luxon and Transport Minister Simeon Brown announced the draft Government Policy Statement on Land Transport on Monday. The plan lays out plans for 15 Roads of National Significance and money towards road maintenance to deal with issues like potholes, while less funding will be going towards public transport and cycle and walkways.
As part of the announcement, the Government confirmed it would not increase fuel taxes this term - but drivers will pay 12c more a litre from 2027, with more increases in the following years. And Motor Vehicle Registration fees will go up by $25 in 2025 and another $25 in 2026.
NZ Herald senior political writer Derek Cheng told The Front Page, the Herald’s daily news podcast, that particular fee was a surprise, and seemingly goes against what Luxon said on the campaign trail about no new taxes.
“It’s a tough call really because during the election campaign, the Prime Minister talked a lot about lower taxes and tax relief. He was opposed to new taxes like the proposed bed tax in Queenstown.
“When he became PM, though, he was asked if he could promise there’d be no new taxes, and he did the political do-si-do and sidestepped the question. So it’s effectively a tax increase and people who voted for National might be a bit upset about all the rhetoric around tax relief during the campaign.”
Cheng said that will depend on how much tax relief people get from the Government, but for some lower-income workers, these increased fees could outweigh any benefit from a tax cut.
The news comes as the Government continues to signal that getting back to surplus by 2027 will be more difficult than first thought.
News that the Government also plans to crack down more on drunk and drug drivers, with higher fines on the cards, has raised some suggestions of revenue raising.
Cheng said that the Prime Minister said that is all about safety, but the country’s finances can’t be ignored.
“Let’s get real here. The coffers of bare, the forecasts for deficits and deficits, the public services say is being told to find money everywhere and the government needs cash because we have massive infrastructure deficits.
“So there’s a real financial benefit to increasing fines, many of which haven’t moved since 1991.”
As for how voters will respond to this, Cheng said that some will be miffed by the extra costs, but they also may not care if they start to see more pothole-free roads and state highways during their travels.
“Those projects are going to take years though, so the government is probably hoping that voters will be patient and give them a reasonable grace period, and also that there will be less congestion and more efficient and resilient transport across the country. That’s also a pretty big wait-and-see on whether that even happens.”
Listen to the full episode to hear more from Derek Cheng on what these transport changes mean for you.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. This episode was presented by Georgina Campbell, a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.