Why we have changed our fees and charges

New fees and changes now in effect

Waka Kotahi consulted on changes to regulatory funding, fees and charges between March-May, 2022. Changes to regulations came into effect on 1 October 2023.

Why we have changed our fees and charges

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 came into effect on 1 October 2023. These changes ensure Waka Kotahi is properly resourced to regulate the land transport system.

Why regulation is important

Better regulation means better safety on our roads.

Waka Kotahi has many different responsibilities, including:

  • driver testing services (making sure drivers are safe to be on the roads)
  • issuing driver licences and transport service licences (TSL – to carry goods, passengers, and other things)
  • vehicle certification (warrant of fitness (WoF) and certificate of fitness (CoF)) making sure vehicles are safe to be on the road
  • vehicle registration and licensing (new licence plates and annual rego)
  • collecting road user charges (RUC) and other money for roads.

How regulation is paid for

The money that pays for our work currently comes from:

  • fees (like the amount you pay when you apply for a driver licence)
  • charges paid by groups in the transport industry to contribute to the cost of regulating them
  • government funding for things that benefit all New Zealanders, eg a subsidy to make licence renewals more affordable for older drivers
  • land transport revenue, for things that are in the public good.

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 documents

Updated Proposed changes to land transport regulatory fees, charges and funding consultation document – April 2022 [PDF, 4.4 MB]

Supplement to Proposed changes to land transport regulatory fees, charges and funding – April 2022 [PDF, 4.4 MB]

FAQs about consultation

Consultation activities

Consultation ran between 21 March and 13 May 2022.

During consultation we held:

  • 10 industry workshops with 77 attendees
  • meetings with Key Service Delivery Partners
  • engagement with 30 local authorities at 7 workshops
  • 7 focus groups.

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]

Consultation feedback themes

  • Many people recognised the importance of Waka Kotahi as a strong regulator that needs more funding.
  • Some acknowledged strengthening of Waka Kotahi leadership and regulatory function over time.
  • There was general agreement with the need to rebalance fees and charges across the system.
  • Increased cost of living a key theme and concern for individuals and businesses.
  • Many/most submitters opposed increased fees and charges and supported decreases.
  • Many industry-related submitters said they couldn’t absorb extra costs, and would need to pass them on.

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, government agreed to new fees, charges and proposals, as specified in the Cost Recovery Impact Statement.

Cost recovery impact statement [PDF, 3.9 MB]


Allocation of land transport revenue

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.

Changes to fees and charges

The package of changes to fees and charges was considered by government in late March, and was approved on 3 April 2023.

Changes to regulations

Changes to the regulations were approved by government on 28 August 2023 and came into effect on 1 October 2023.

What this means for Waka Kotahi funding

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).

Updated Proposed changes to land transport regulatory fees, charges and funding consultation document – April 2022 [PDF, 4.4 MB]

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:

  • additional $10m from NLTF (Section 9(2) of the LTMA)
  • $34m from Land Transport Revenue Section 9(1A) of the LTMA)
  • $66m in additional fees and charges.

Proposed total funding of $273.2m million per year is required for regulatory function (average over 2023/24 to 2025/26).

Waka Kotahi funding breakdown per annum prior to receiving capital loans and under the changes

Funding source Pre-capital loan
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