There are some dramatic shifts in the tax collected from motorists that are likely to have a significant impact on the Crown Accounts.
The Crown Accounts have only been published through to April 2022. (The May Crown Accounts are not due to be released until July 5, 2022.)
But what has been released reveals huge movements recently, as petrol taxes and Road User Charges have collapsed to levels not seen for more than ten years.
The chance that the exemption EV's (electric vehicles) get from Road User Charges will be extended seem low - unless the Government is willing to take an increasing hit to this funding.
Petroleum Excise Tax ran at almost $1.7 bln in the fiscal year to June 2019. It plateaued in the 2020 year, and rose to $2.1 bln in 2021 after excise tax rates were hiked. But this year it might struggle to reach $1.6 bln, miles below what was budgeted ($2.4 bln).
In fact, the amounts collected in April were the lowest we have seen since we started analysing this data in 2008.
Road User Charges collected reveal a very similar story of sharply falling revenues for the Crown.
And all this is happening while new car sales have risen to record high levels.
Some of this is happening because modern ICE (internal combustion engine) vehicles are significantly more fuel efficient. But vehicle manufacturers have also almost universally decided they will transition to EVs relatively quickly from here on and end ICE motive power options.
Any material shift from petrol car use to EVs hurts the Petroleum Excise Tax collected, not made up in the RUC collections because of the exemption that currently runs until 2024. And the irony is that EV users need roads, and choose personal transport over public transport.
Electric vehicle use is relatively small still, but as the recent monthly new car data shows, it is growing quickly. By 2024 when the RUC exemption runs out it will have grown to be a significant portion of our car fleet. These owners will be unhappy if the tax benefit isn't renewed, and it will make the Government look cynical if on one hand it says it wants car owners to transition while on the other hand slugs them with 'new taxes'.
And as Auckland Transport passenger data shows (to May 2022), public transport use isn't really recovering, and isn't an alternative option for most. WFH and the general inconvenience caused because scheduled services don't go where you need, hurts public transport use. We don't have point-to-point data from the competitive Uber services, but that is likely growing - revealing that passengers actually value the time-not-wasted in point-to-point travel when they need it.
Billions are being spent in engineering marvels to encourage passenger use just when riders lives have been upended and the traditional routine journey to a 9-5 drudge job in the City center no longer seems appealing. Employers have decamped to the suburbs and fringe centers, where all this "investment" isn't focused.
Those billions currently being spent on pointless 'think big' public transport non-solutions should be refocused on the necessary capacity increases that will be required for the juice that electric vehicles will need. We are woefully unprepared for that additional demand. Yes, we are looking at it, but the investment is yet to be committed.
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... or , we could ramp up our importation of Indonesian coal , to burn at Huntly , to produce the electricity needed to power up the EVs , which we're subsidising , to remove internal combustion engine vehicles from our roads , because they burn fossil fuels , which leads to global warming and dead polar bears , and a very angry Greta ...
most of the capacity at 3am is not wasted. The majority of our hyrdro has storage lakes rather than run of river. At 3am the oil and coal turns off and dispatchable hyrdro ramps down. https://app.em6.co.nz/
If everyone switched to EVs overnight we'd be burning gas and coal to meet demand.
actually, can't see the intra-day generation mix on em6 anymore. The transpower data has it. https://www.transpower.co.nz/sites/default/files/bulk-upload/documents/…
That transpower data is interesting. Many days the cook street cable reverses direction overnight Presumably that's the run-of-river waikato hyrdo and geothermal generation that runs 24/7 while the big south island hydro lakes turn off.
Recharging is easily available, assuming your house is on mains electricity. For the cost of a couple of services on your ICE car you can install a charger at home in most cases. And for trips out of town, the charging network is pretty good in the north island at least, so long as you get an EV that isn't really only practical for city only use (ie, old Nissan Leaf or similar).
Small flaw there: no suburban electricity distribution networks are ready for the impact of multiple home chargers. Even a little top-up could run to 20-40kWH, which roughly doubles typical daily household consumption. Lines, transformers, all the way back to substations, and on already maxed out segments, further back from Those, need to be beefed up. Which means planning, time and lotsa capex. Best to let engineers, not hand-waving pollies, figure this out and estimate the associated costs and time frames.
Rubbish, if they can keep the ovens, oil heaters, and the heat pumps running at 6pm in winter, they can charge an EV at 16A from 1am to 6am.
A little top up is not 40kWh, thats 2/3rds of a full charge on most EVs. The average car in NZ does under 40kms a day, about 6kWh from the battery. Even allowing rediculous levels for charging inefficiency thats 10kWh max.
The nonsense about EVs being spouted by people is staggering.
I'd be more worried about generation assets. Yes charging overnight can help avoid the peak load, but water that flows out of a dam overnight is no longer available for the next days peak.
I think we need way more storage lakes, but can't see that happening now the hydro generators are part-privatised. Who wants our wilderness ruined just to benefit wealthy foreign shareholders the argument will be.
Maybe once petrol is at $12/litre and electricity at $1/kWh people will think differently. We certainly wont be needing to build new roads once were at that point.
And as for transmission networks, what % of EV users (think joe bloggs once EVs are mainstream and not the preserve of the enthusiast) are going to come home and just plug it in without using a timer to charge overnight? I know timers are easy to use everyone will do it, but i set my dishwasher and e-bike charger to come on at 2am when the electricity is the cleanest, what % of NZers do that?
I know timers are easy to use everyone will do it, but i set my dishwasher and e-bike charger to come on at 2am when the electricity is the cleanest, what % of NZers do that?
They are built into the car, you set it once and never need to touch it again. And most EV targeted power plans are time of use plans, there is a significant financial incentive to do it.
I think we need way more storage lakes, but can't see that happening now the hydro generators are part-privatised. Who wants our wilderness ruined just to benefit wealthy foreign shareholders the argument will be.
Hydro storage isnt the answer, more generation, wind, and during daylight hours solar, which means more water can stay behind the dams during the day, and be used at night charge EVs if needed. Or better still, more ev charging infrastructure so cars can be plugged in during the day and solar used directly to charge them, or homes with batteries. Future EVs with V2G will also change the way the grid is run. Charge during the day and run your home at peak hours off the car to avoid peak electricity prices.
Once again, the poor will be screwed, while those with capital will enjoy the benefits.
but how many people are going to switch to a targeted EV power plan? The financial incentives are certainly larger than running the dishwasher overnight, but I fear there will be a significant proportion who will just come home after work and charge it up. Even if 90% of EV users do the smart thing, 10% would be a signification addition to our evening peak. Remember last winter we actually had blackouts during an evening peak.
I'm not talking about the tech savy early adoptors, but when EVs become more mainstream. Based on the number of family members i help with tech... i don't think 90% of the population would be able to programme a charge timer on an EV.
An LDV T60 EV ute has an 88kWh battery. Half charging it takes 44 kWh. In my little suburb, around half the vehicles are utes or SUV's, lotsa fishos, contractors and tradies. From our own discussions with our power supplier, to acquire a 3 phase supply (3 x 32A) they are gonna replace the low tension overhead lines, substitute a larger transformer, and they have already beefed up high tension feeder lines. Glib assumptions and generalizations about the state of power network capacity need to be challenged. The sales pitch of 'yeah, it'll do that' won't cut it.
I was going to challange that with 'but how many people are going to half empty a 88kWh battery daily' but then i saw the range is only 325km.
A Telsa model 3 with a similar sized battery gets 614km range.
Still, 160Km/day in your LDV is far far far above the average daily commute.
Yes, some cars have even bigger batteries, but that doesnt change the fact that the average driver does ~40kms a day. They do not need to charge 40kwh a night, and even if one person on your street does, not everybody will.
You don't need three phase, its a complete red herring. Piss off with your FUD.
But what else do them Busses run on top of? Or Uber, taxis, ride-share and other point to point to solutions ? Or, come to that, horses and wagons or ponies and traps? Roads and streets are since antiquity the ultimate last-mile solution, even if the bulk of the travel is via air, sea or rail....
Ooh, 'via' is Italian/Latin for 'paved way'.....
... if memory serves , Ardern shut down as many of the Gnats big roading projects as fast as she could in 2017 ... Transmission Gully wouldnt have happened if Labour could have stopped it ...
Occassionally a huge bus lumbers past our place ... usually empty , except for the driver ... on the newly asphalted road ...
Not only that, but I have noticed that many roads around where I live have been hammered by buses, trucks going to building sites, rubbish trucks etc. And for me, this makes riding my bike a bit like an obstacle course around the bumps in the road which some day might hasten my demise: sending me in front of a car. Or at the very least, makes riding at speed an unpleasant experience.
busses don't need new roads, the roads we have already have plenty of capacity for busses. Like when people compain that the bus lane is a waste of space cause it's empty most of the time, only carrying a bus every 2 mins. But actually that bus lane is moving as many people as the general traffic lane.
I am not sure you can actually say we are using our cars less. See Fig 3, here in the June report. Perhaps we are just driving more efficiently in a way that uses less petrol that can be taxed.
But the light blue line in figure 3 shows a huge drop in light vehicle travel at the start of 2022 when omicron hit, the period you are talking about here, so yes, we were driving allot less. ( I assume the numbers on the x axis is years, i.e. 22 = 2022, and not weeks, i.e. 22 = 22nd week of 2022)
Traffic levels have recovered at the end there, i would say it's May that's close and June finally fully recovered, but that's after the period that your fuel tax data covers, so expect fuel tax to similarly recover (though still down due to the fuel tax cut).
My experience is as follows:
- The early Tesla buyers (late 2019) were doing big km to make the economics work.
- The later Tesla buyers are doing it as a mix of petrol cost impact and the rebate. They are not necessarily doing big distances. We bought our first Tesla then.
- I used to work in the Auckland CBD. I only go now when forced to. I take a car using early bird parking. Maybe 2 or 3 times per month. I will strongly resist more days in the CBD and/or using public transport, no matter the cost.
- We have ordered our second Tesla, to get the rebate as we expect it to go in late 2023
- We rarely use public chargers and RUC in 2024 don’t worry us. I don’t think we are typical as such but the CRL and Light Rail are of no interest.
We don't have point-to-point data from the competitive Uber services,[...] revealing that passengers actually value the time-not-wasted in point-to-point travel when they need it.
How can a complete lack of data reveal a preference? All it reveals is your bias.
You seem to suggest the shift to EVs is the cause of the tax drop, yet you admit the EV numbers are tiny, so the drop is 1) people driving less 2) the governments fuel tax cut.
How can you not mention the fuel tax cut in this analysis?
In fact, the amounts collected in April were the lowest we have seen since we started analysing this data in 2008.
This is not a surprise when April is right after fuel taxes were cut.
Of course people value time, but for some, public transport is time competive, saves circling around looking for a park and then walking to your destination. They also value cash, the cost of operating a second car compared to public transport is huge. These factors haven't changed, what has changed is the amount of working from home that office workers are still doing. What makes you think people working from home were public transport users but not taxi users or drivers?
The data does not at all support your conculsions, but an excellent topic to bring to peoples attention thank you.
Of course people value time, but for some, public transport is time competive, saves circling around looking for a park and then walking to your destination.
That pretty much only applies to CBD workers, and a very small proportion of non-cbd workers who live and work rather close to a train station, or directly along a bus route that has a bus lane (ie those that go to/from the city along a major arterial mainly).
For the vast bulk of the rest of us, PT is a huge time waste. Buses are not time-effective, even if they were reliable (and during covid times everything i've read suggests that daily bus cancellations due to lack of drivers is far more common)
100% correct, I often get passed by what would be my bus as I get the bike ready to ride to work. Because of its frequent stops and traffic it is far slower then riding - I overtake it pretty quickly. In any case driving is only marginally quicker, but far more convenient when picking up kids, or inclement weather.
On a side note, when I see the politicians using public transport or riding a bike I may take more interest in the green revolution.
Which is why its easier just to do RUCs on all cars, regardless of fuel use. Drop the petrol fuel excise, add RUCs instead. Or do away with any concept of it being fair or related to road use, and just increase one of the the other general taxes to cover it. GST, company tax, or income tax.
But then PHEVs get double taxed, taxed on distance via RUC and taxed on the petrol.
And so what if regular hybrid energy comes from the petrol, that means they need less road space that other cars?
RUC for all is the only clean way to do it, but the government has ruled that out not so long ago.
https://www.beehive.govt.nz/release/road-user-charges-review-released
Worth a look at the traffic data and petrol consumption if you want to know why duty is down. Petrol spending is way down - despite higher prices. Traffic is only just returning to something like normal (Covid dataportal has weekly data).
The comment on wasting money on showpiece public transport schemes that could be spent on ev infrastructure ignores the reality that we cannot simply electrify traffic jams. We need smart networks of public transport hubs and mass transit, and personal transport lanes (bikes, scooters) through neighbourhoods. Cities built around cars will be ghost towns in ten years.
Actually its the petrolheads that are the loud obnoxious ones. The majority of the general public would like more focus on active modes and public transport.
couple of quick examples:
https://ibb.co/NFG153r
https://www.scoop.co.nz/stories/PO1111/S00376/poll-shows-most-kiwis-dis…
Those examples don't show at all that people want existing roads blocked off and to forced to take the bus. Typical of the pedal-head mentality, you can't see the difference.
Edit: LOL, just noticed the date on that, the only examples you could pull out were back in 2011? You really are a a joke.
Going forward I don't think petrol consumption will be down. New cars are more fuel efficient for sure with their lightweight turbocharged engines (or heavy hybrids), but in NZ we are moving to offroad Utes and SUVs which are less fuel efficient.
If you look at the MBIE data on fuel imports to March 1, it tracks the ANZ truck-o-meter, so expect fuel consumption in May/June to be back to normal
http://energydashboard.mbie.govt.nz/?
Might see some reduction at the margin as people drive less with $3/petrol, but petrol demand is one of the more inelastic ones, certainly in the short term. Takes time to trade in that shinny new ute for a prius.
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