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Proposal 2: Changes to driver licence and driver testing fees

Summary of Proposal 2

There are around 3.6 million licensed drivers in New Zealand, and approximately 100,000 new driver licence holders each year.

New Zealand has a driver licensing system to make sure that everyone who drives on our roads has the skills and knowledge necessary to be a safe driver. The safer drivers are, the safer our roads should be.

Driver licences do more than allow people to drive legally. They also provide proof of identity, better access to employment, and are key to enabling a range of other services, like opening a bank account.

Waka Kotahi contracts agents like AA and VTNZ to provide the over-the-counter services like applications for driver licences, scheduling tests, driver theory tests, eyesight tests, identity verification, and driver licence renewals. Waka Kotahi provides online services through its customer service centre in Palmerston North.

Why are we proposing these changes?

Making fees fair

The funding and fees review found that 97% of revenue collected has been coming from fees paid by driver licence holders and vehicle owners, which means the costs of regulation have been unfairly placed on these groups.

The review found the average cost of getting or renewing a licence is currently set higher than the cost of providing the service, and this subsidises the cost of other things that are either undercharged, or not charged for. We want to change fees so they reflect the actual costs of providing the services.

Reducing the average cost for each stage of a driver licence (learner, restricted, full), would make driver licences more affordable, and this should help improve access.

Ending re-sit fees

People who don’t pass their learner, restricted, or full licence test on their first attempt currently have to pay re-sit fees. This can make the cost of learning to drive too expensive, and some drivers stop taking tests but continue to drive.

We’re proposing the driver test fee becomes part of the driver licensing fee, removing re-sit fees that may discourage people from moving through the licensing system. This should lead to fewer people driving without the right licence, with an aim to increasing overall road safety.

Removing automatic entitlement to refunds for driver licence class endorsements

Currently, when you apply for a driver licence class endorsement you pay an application fee. If your application is successful, Waka Kotahi keeps that fee. If your application is unsuccessful, you get a part or whole refund of that application fee.

The cost of administration for applications is the same whether your application is successful or not, so we’re proposing to remove automatic entitlement to specific refunds and part refunds for these.

We will still exercise our discretion to refund or waive any fee, or part of a fee, on a case-by-case basis for special circumstances.

How and when would the changes take place?

Changes would be introduced through new regulations, or amendments to Land Transport (Driver Licensing and Driver Testing Fees) Regulations 1999 with effect on or before October 2023.

Tables – Fees affected by Proposal 2

There are 63 fees in this section. They are summarised in the table below.

What is the proposed change?

How many changes are there?

What fees are subject to this change?

New fee

2

Table 1

Fee goes up

14

Table 2

Fee goes down

39

Table 3

Fee recovered in a different way

8

Table 4

Total number of changes

63

Proposed fees in the following tables assume that additional government funding is secured through the use of section 9(1A) of the Land Transport Management Act 2003 (outlined in Proposal 1). You will notice a column showing the estimated impact if s9(1A) is unsuccessful.

Table 1: Proposed new fees

Table 2: Proposed fees go up

Table 3: Proposed fees go down

Table 4: Fees recovered in a different way

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