How to RUC

This still doesn't sound like a plan for applying the government's petrol excise discount to Road User Charges:

Minister of Transport Michael Wood said he and officials were aware of the financial risk for transport coffers, if too much “stocking up” occurred.

“I don’t think many people will look to do that, but we do want to make sure there is some integrity built into the system,” Wood said.

Wood would not disclose exactly how RUC purchases would be controlled when the discount kicked in.

“Primarily, it would be about Waka Kotahi having the ability to audit and check after purchases have been made,” he said.

“We’d be looking at what is potentially excessive and unreasonable purchasing.

“If you have someone who purchased 5000 kilometres every three months, and suddenly they were wanting to purchase 25,000, that would obviously be an alarm bell, and we’d be wanting to empower Waka Kotahi to be able to deal with that situation.”

Audit and check what - that kilometres purchased were driven during the allotted time? They'll then need a mechanism for running odometer checks at either end of the discount period. 

Why both sides of the allotted time? Because people will be using expensive previously-purchased RUC during the discount period, and you'll need to weigh that up. If I purchase 50,000 km at the start of the period and wind up with 40,000 km unused at the end of the period, I could claim that I actually put on 50,000 km during the period - I'd just had a lot of km that had been sitting there unused at the start of the period. 

That sounds extreme, but I right now have about 5,000 km of RUC pre-purchased. I've 7,000 km on the odometer and RUC purchased to get me to 12,000 km. If I buy 5,000 km during the period and, at the end of the period, my odometer's at 12,000 km with RUC purchased up to the 17,000 km mark, that isn't me gouging the system, that's me buying a quantity exactly equal to my RUC consumption during the period. But there's no way of telling whether I actually had 5,000 in the bag ex ante without an odometer check at the start of the period.

Or maybe "to be able to deal with" just means "yeah, they can phone the purchaser up and verify that there's a plausible-sounding story around any higher-than-normal purchase, because enforcing anything in this will be a nightmare unless it's just impossible that the purchase was legit." 

It won't be an easy one to get right.

UPDATE: From Newsroom:

Transport Minister Michael Wood told Newsroom those purchasing discounted RUCs would need to “complete an online declaration form stating that they are only purchasing charges that they require for that period’’.

“Waka Kotahi will undertake spot checks of large or suspicious purchases and, where appropriate, take enforcement action.

“Enforcement action could include the charging of unused road user charges at the non-reduced rate,’’ Wood said.

Those diesel users who have charges remaining on their vehicles will also be able to apply for a credit.

“They will be able to purchase what is referred to as an overlap licence. Typically when purchasing a RUC licence, the start distance of that licence will continue from the end of the previous RUC licence.

“However, with an overlap licence, the RUC licence begins from the odometer reading on the date of purchase, with the unused distance automatically credited towards the new licence,’’ Wood said.

Most people who choose this method will have to purchase a top-up for the new licence due to RUCs only being able to be purchased in 1000km units.

“This top-up will be at the discounted rate," Wood told Newsroom.

Legislation will be introduced into the House on Tuesday, and passed under urgency, to allow and enforce these changes ahead of the discount period starting.

So when this comes in, an honest person in my position would apply for the overlap licence, truthfully report the current odometer reading, purchase the amount of RUC they expect to use over the next 3 months, and get a RUC label that combines the amount just purchased with the prior stockpile for a new "paid up until XXXXX km" notice.

A dishonest person would understate their odometer's current position and overstate the amount they were likely to use over the next 3 months, so that their new licence could cover a lot of driving after the three months, or not bother applying for the overlap at all and just hold the new licence.

One fairly simple thing they could do would be to print the discount-period RUC licences on different coloured paper, so there could be some worry that a traffic stop could involve an odometer check if you were still running that permit after the period had lapsed. If your discount-odometer licence had you good through 100,000 km and your odometer only had 20,000 km on it two months after the discount window, it would be pretty obvious that you owed the difference on 80,000 km. 

But if the only penalty is that you wind up paying full price for kilometres that you'd have wound up purchasing and using anyway, sometime, it seems a bit of a one-way bet. Heads you get cheaper RUC for a longer period. Tails you get some cheaper RUC, and you've purchased RUC earlier than you might otherwise have for the rest of it. If you win, 1/3 off the cost of a pile of km. If you lose, you've brought forward a bit of spend - and that could matter a bit if RUC doesn't move up with inflation as quickly as it should.