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Government considers scrapping vehicle rego fees

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    A user pays fuel tax may benfit motorcyclists due to their better fuel economy than most vehicles, however it may punish those who are not fortunate enough to be able to afford newer economic vehicles.

    The Government has looked at ditching vehicle regos, and one option to replace it is another hike to the fuel tax.

    While in opposition, MP Phil Twyford called the annual vehicle licensing system and its 235,000 fines each year a “giant revenue gathering device”.

    Now the Minister of Transport, Twyford took official advice on other ways to raise the money, but doesn’t plan to pursue changes at the moment.

    Twyford said he was concerned the current vehicle licensing system, which raised $469 million last year, cost taxpayers $50m to administer.

    “I’m also concerned about the 235,000 people a year who don’t pay their rego fees on time and then end up getting dragged through the courts, clogging up our justice system and costing people a disproportionate amount of time and money for a minor offence.”

    There won’t be changes anytime soon, however, as there were more “urgent commitments” for the Government, he said.

    The annual vehicle licensing system, commonly referred to as “the rego”, keeps the motor vehicle register up to date.

    Most of the money raised went to the Accident Compensation Corporation (ACC), $235m, with the National Land Transport Fund (NLTF) taking the next biggest chunk of $185m.

    Phil Twyford called the rego system a “giant revenue gathering device” when he was in opposition.
    In advice to Twyford, Ministry of Transport manager Marian Willberg said an increase in fuel tax would be the simplest and most cost-effective way to cover the money for the NLTF.

    The fuel tax would need to increase 5 cents a litre this year, and another 2 cents for each of the following two years, if the system was replaced now.

    A similar increase would be needed in road user charges, which was paid by owners of diesel vehicles.

    Another option for recovering the money was network pricing, where motorists were charged when they used high-demand roads.

    Otherwise the motor vehicle register could be updated and licensing fees collected when vehicles had their safety inspection, she said.

    This would likely be a cheaper system to administer, focus enforcement of vehicle safety and would stop people trying to pay a cheaper rego by lying about what their vehicle was used for – for example registering a van as an ambulance.

    However, it would have “significant and ongoing implementation costs” for the 4000-odd inspection sites across the country.

    Some motorists would avoid safety inspections because of the increased cost, she said.

    The vehicle licensing system was reviewed in 2012 and changes to infringement fees “to better reflect the severity of the offence” were proposed, Willberg said.

    There are about 235,000 fines given to motorists around the country each year for not showing an up-to-date rego.
    However, the then transport minister did not adopt the changes because the benefits did not justify the implementation costs, she said.

    Twyford said there was merit in changing the whole system but the options needed to be explored further.

    “Our focus right now is delivering on a number of urgent commitments, so I have decided not to proceed with this work at this time, but may come back to it in the future.”

    An Official Information Act request revealed police handed out 92,651 fines across the country last year, mostly $100 in face value, and totalling $9.3m to people with an expired car registration.

    Councils also issue $200 fines – and get to keep half the money collected.

    Auckland dished out 54,644 warnings and 56,112 infringements for the 2017 financial year, with 20,188 of them going to court.

    Christchurch issued 995 infringement notices in 2017. Wellington issued no infringements but gave out 353 warnings.

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