Drivers’ Licence Fee Changes After $22m Shortfall


Cabinet plans increases in fees for driver licensing and testing but has decided to throw it open for public consultation before a decision is taken.

A paper to Cabinet this week by transport minister Steven Joyce reveals a $21.78 million shortfall in this area and blames Labour’s “poor financial oversight.”

In the paper, he says he has turned down two proposals from his officials to deal with it.

One involved fees to provide a full cost recovery and the other a 20% increase in all fees.

“I rejected both and asked that further scrutiny be placed on costs of providing the services.”

The fees have not been reviewed since 2001 but costs have increased, for reasons given, as being:

  • Inflation of about 21% between December 2001 and December 2008
  • Legislative and policy changes have resulted in additional costs that have not been recovered
 Back in 2001 some fees were set below cost
  • Some transactions have not historically been charged for – including driver license suspensions.

The minister said that to deal with the shortfall, his transport agency was looking at ways to improve its systems and reduce costs.

“The agency will have to absorb much of the current deficit but we can’t allow it to keep growing. It’s currently increasing at a rate of about $650,000 per month.

NZTA is therefore now consulting on fee changes that will better match the actual costs of providing each service.”

Proposed changes would mean that:

  • For 18 services, the fees are reduced
  • For 23 services, fees are increased
  • Fees would reduce and standardise for commercial drivers (those using a P passenger, V vehicle recovery, I driving instructor and O testing officer endorsement).  Currently, there is considerable variation in fees for commercial drivers
  • Four fees, including those for drivers aged 75 years and older would remain unchanged.
  • The schedule proposes three new fees, one for license reinstatement after disqualification (which has been agreed to by Parliament) and two admin fees for withdrawing from and / or rescheduling a driving test.

Mr Joyce says the license reinstatement fee is important.

“It’s simply not acceptable that responsible, law-abiding drivers have for so long carried the costs of people whose licenses have been suspended and then reinstated.”

Public submissions close February 26 and the minister returns to Cabinet with proposals in June.

The proposed changes to the most common licensing and testing fees are:

Licence renewal fee  Now $44.30 Real Cost: $42.31   Proposed: $43.00   Change $ and %: -$1.30 (-3%)

Learner licence*  Now $79.00 Real Cost: $93.10  Proposed: $91.90   Change $ and %: +$12.90( 16%)

Restricted licence Now $88.20 Real Cost: $107.05  Proposed:  $105.80 Change $ and %: +$17.60(  20%)

Full licence* Now $115.10 Real Cost: $133.17 Proposed: $133.20 Change $ and %: +$18.10 (16%)

*(application and test fees)


Cabinet paper

NZTA backgrounder

Make public submissions by Feb 26




  1. Ingolfson says:

    So how is this all Labour’s fault?

    Also, why the heck do they have to CONSULT on this? If Labour was doing that, they would be heckling them both for the consulting AND for “forcing the taxpayer to pay for the exorbitant bureaucracy that has been allowed to develop… lalala…”.


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