Tuesday, 12 June 2012

Lonely Stretch

Vehicle registration costs are going down, petrol excise and Road User Charges are increasing.  What could be exciting about that?  Ken Shirley, the CEO of the Road Transport Forum has the expected whinge.

"The road user charges are a significant amount - about 10 per cent - of that road freight cost."It will have an impact on everything from flatscreen TVs through to packets of Weet-Bix.''
Yeah yeah yeah, whatever.  Bulk transport of goods by road is only possible because we have access to cheap, compact, safe, high energy density fuels at the moment.  Once they are no longer cheap...
Anyway, let's say that petrol excise is paid by private vehicles for personal transport, and RUCs are for transportation of goods etc.  The government expects:
the petrol excise increase will raise an additional $55 million in the 2012/13 year and a total of $235m over the first four years.The increased Road User Charges will raise $38m extra in year one and $186m over four years.


With a quick calculation we can convert these into increase rates for total annual distance travelled by the NZ vehicle fleet.  Skipping the detail, the government expects an average annual increase for private vehicles of 2.6%.

Considering that traffic volumes have remained reasonably static for the last five or so years, and considering that there are no good economic reasons to expect a sudden and significant increase.  So, 2.6% is plausible, but probably on the high side.

So, on to heavy vehicles.  The expected average annual increase is a little over 7%.  And that's well beyond the bounds of plausibility.

My calculations have a number of assumptions, but they are conservative.  For example, private vehicles might become more fuel efficient, thereby reducing the amount of petrol excise collected, and requiring higher traffic growth rates to meet the revenue projections.  Another example, some of the RUCs will be for privately own diesel vehicles.  The increase rate for petrol vehicles is likely to be about the same as private diesel vehicles (unless people are suddenly about to start driving their diesel 4WDs a whole lot more), and are a lot lower than the goods transportation vehicle increase rate, so they would be masking the true rate, which would be even higher than 7%.

Meanwhile the RoNS are being pushed further out on the national land transportation plan.

The Triffids - Born Sandy Devotional, 1986

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