Driving Change: How road pricing can improve our roads

Dr Matthew Birchall
Research Report
9 July, 2024

The New Zealand Initiative’s report proposes a comprehensive reform of the country's transport funding model. The report, Driving Change: How Road Pricing Can Improve Our Roads, authored by Senior Fellow Dr Matthew Birchall, argues that the current fuel tax based system is outdated and unfair.
Key points:

  1. The report proposes a new "Smart Road User Charges" (Smart RUC) system to replace the current fuel excise duty.
  2. Under Smart RUC, all vehicles would be charged based on actual road usage, time of day, and vehicle type.
  3. The proposed system aims to reduce congestion, improve road maintenance, and ensure a fairer distribution of costs.
  4. A five-year implementation plan is outlined, allowing for a gradual transition.

"Transporting New Zealand, the national road freight association, welcomes the New Zealand Initiative’s report on comprehensive road pricing," says Billy Clemens, Policy & Advocacy Lead at Transporting New Zealand. "Increasing levels of congestion and the declining state of our roading network are disrupting the supply chain and restricting economic growth. It also makes achieving safety and emissions improvements difficult. We need innovative policy solutions that make our roading network function better for everyone."
The report addresses common concerns about road pricing, including privacy and equity issues, and draws on successful international examples from cities like Singapore and Stockholm.
"This is not just about raising revenue," Dr Birchall adds. "It's about creating a more efficient, sustainable, and fair transport system for all New Zealanders."
The New Zealand Initiative calls on policymakers to seriously consider this proposal as a solution to the country's growing transport funding crisis.

Click here to download the two-page summary of Driving Change: How Road Pricing Can Improve Our Roads


Dr Matthew Birchall discussed his report with Dr Oliver Hartwich on our webinar launch of the report. Watch below:


They also discussed the report on our podcast. Listen below:

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