Media Release

7 May 2009

Road User Charges recommendation further penalises diesel cars

The new vehicle industry has reacted with surprise to some of the recommendations of the independent review into Road User Charges.

In the report, commissioned by the outgoing Government in August 2008, the Committee has recommended that Road User charges for diesel vehicles under five tonnes be increased, but those for heavy vehicles be substantially reduced.

“We accept that there is a need for diesel vehicles to pay a certain amount to reflect the fact that their fuel is not taxed at the pump, but we have a serious issue with the review’s recommendation that the vehicles which cause the most damage to the roads will have their costs reduced, and light diesel vehicles, which cause no more road wear than petrol powered cars, have their Road Used Charges (RUC) increased,” said Perry Kerr, CEO of the Motor Industry Association

According to Mr. Kerr, this is totally unfair on the suppliers and buyers of small diesel-powered vehicles, which are already being penalised through having to pay virtually the same per kilometre Road User Charge as a three-tonne truck, and under the recommendations would see a substantial further increase in their running costs.“This penalty completely destroys the operating cost and environmental benefit that small and medium sized diesel vehicle represent”, said Mr. Kerr.”

Another key recommendation from the review committee is that the current RUC system is retained for diesel vehicles, rather than moving to a diesel tax, because of costs that a diesel tax would impose on non-transport users. We still maintain that by and far the easiest method of collecting tax from the majority of motorist is at the pump.

“We welcome the fact that these recommendations are not yet set in concrete and we remain optimistic that good sense will prevail and consistent with the National Government’s enlightened and rapid response to other lingering anomalies, we do expect a positive modification of the RUC charging scale to reflect the benefits that light diesel vehicles are contributing to the environment” Mr Kerr concluded.

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