Waka Kotahi consulted on changes to regulatory funding, fees and charges between March-May, 2022. Changes to regulations now been approved and will come into effect from 1 October 2023.
In the wake of investigations after regulatory failure, Waka Kotahi undertook a review of all regulatory funding, fees and charges – the first full review since the agency was established in 2008 - to see if the money we receive for doing our work covers the costs of doing the work.
The review included a stocktake of all regulatory services to understand our true costs. We established how much it costs us to do our work as regulators, and to monitor the agents, individuals and companies we use to do some of this work (like AA, VTNZ, and your local mechanic).
It found the money we receive for our regulatory work doesn’t cover the costs of doing it, and that some people and companies are paying more for services than they should, some less, and others are not paying at all.
After public consultation on changes to funding, fees and charges in 2022, recommended changes were approved by government in April 2023. Changes to regulations have now been approved and will come into effect from 1 October 2023. These changes will make sure Waka Kotahi is properly resourced to regulate the land transport system.
Better regulation means better safety on our roads.
Waka Kotahi has many different responsibilities, including:
The money that pays for our work currently comes from:
With few changes to our fees and charges for many years, some people and companies are currently paying more than they should for products and services, some are paying less, and others are not paying at all. This means some groups are subsidising others.
In 2022, we consulted on a new funding model based on cost recovery. Cost recovery means breaking even on providing a product or service – not making a profit and not making a loss. In a cost recovery funding model, the costs of providing a service are wholly covered by the amount of money charged for it (eg if it costs $25 to deliver a service, the user should pay $25 for it).
We proposed to introduce new fees for products and services we’ve previously provided for free because there was no way to recover the costs of providing these services when they were set up.
We proposed to increase fees where the cost of providing the product or service is greater than the fee paid for it.
We proposed to reduce fees where the cost of providing the product or service is less than the fee paid for it.
Each of the proposed changes reflects our need to accurately recover our costs from the right people for providing regulatory services.
Consultation ran between 21 March and 13 May 2022.
During consultation we held:
We received 144 written submissions.
A Summary of Submissions document analyses and provides a summary of the submissions and feedback from Waka Kotahi.
Submission analysis funding and fees – August 2022 [PDF, 834 KB]
Feedback received during consultation on all proposals was considered, including the feasibility of alternative or amended ways to recover costs. Final proposals were presented to Ministers and Cabinet in March 2023.
Cabinet paper – Land transport regulatory charges and fees proposed changes [PDF, 1.2 MB]
On 29 March 2023, Cabinet agreed to new fees, charges and proposals, as specified in the Cost Recovery Impact Statement.
Cost recovery impact statement [PDF, 3.9 MB]
Proposal 1 recommended an allocation of land transport revenue to fund some regulatory functions and repay loans. Over 80% of submitters supported this proposal.
The Minister of Finance and Minister of Transport agreed to this allocation, which minimises financial impacts on consumers and industry.
The package of changes to fees and charges was considered by government in late March, and was approved on 3 April 2023.
Changes to the regulations were approved by government on 28 August 2023.
At the time of consultation, Waka Kotahi needed an additional $100 million in fees, charges, and government funding to be an effective regulator from the level of funding we had pre-government loans (see page 128 of the consultation document for more detail).
Since then, numbers have needed to be adjusted due to factors like inflation, and the agency now needs an uplift of approximately $108 million per year from the pre-capital loan annual budget, funded from:
Proposed total funding of $273.2m million per year is required for regulatory function (average over 2023/24 to 2025/26).
| Funding source | Pre-capital loan (2018/19) |
After changes (Avg. 2023/24 to 2025/26) |
|---|---|---|
| Fees (based on volume forecasts) | 126.3 | 159.9 |
| Charges (based on volume forecasts) | 30.0 | 62.1 |
| National Land Transport Fund (NLTF) S9(2) | 4.9 | 14.7 |
| Land Transport Revenue (LTR) S9(1A) | - | 34.4 |
| Regional fuel tax | - | 0.7 |
| Crown | 1.4 | 1.4 |
| Other | 2.7 | - |
| Capital loans | - | - |
| Total | 165.3 | 273.2 |
