Road freight association Transporting New Zealand says that decreasing investment in the road network will lead to transport issues that fuel the cost-of-living crisis.

This week the Government said that, if re-elected, the previously planned increase of 12 cents per litre in January 2027, followed by a further 6 cents per litre increase in January 2028 and annual 4 cent increases from 2029, will not go ahead. Instead, there will be an increase of 5c a litre from January 2028, followed by three 5-cent increases every six months until 2030. This is despite the fact fuel excise duty (FED) and road user charges (RUC) have not increased since 2020. 

"Flatlining revenue from fuel tax and RUC alongside a significant increase in road construction costs means the actual purchasing power of our National Land Transport Fund has plummeted," says the group’s chief executive, Dom Kalasih. 

"New Zealand's road network is a national asset. Keeping it in good shape is essential for moving freight, growing the economy, and keeping communities connected," he continued.

The announcement comes days after the Labour Party announced their promise to not increase FED or RUC for the next three years, as a measure to address the cost-of-living crisis. 

"An inefficient transport network imposes extra costs on everyone," Kalasih said. "Therefore, we welcome Minister Willis and Bishop’s acknowledgement that pausing fuel excise and RUC increases would result in a funding shortfall, and that this gap will be bridged with $1.476 billion in funds from alternative sources."

"Poor roads increase freight times, spike vehicle maintenance costs, and waste fuel. These costs are inevitably passed down to consumers - for example, on supermarket shelves. Chronic underinvestment is a hidden tax on every single good moved in this country."

Kalasih added that the next Government will have some very difficult decisions to make without an increase to FED or RUC.

"There will be trade-offs, and it’s all road users who will pay the price," he said. "We will be seeking clarification from whoever forms the next Government on how it intends to deliver on the commitments in the current National Land Transport Programme."