Is New Zealand ready to embrace user-pays?
Wednesday, 25 February 2026
Henry Cooke is deputy political editor of The Post, and writes a column every Wednesday.
OPINION: Ruth Richardson did not always get what she wanted.
Despite her continued presence in the New Zealand political imagination, she left politics frustrated about the parts of her programme that never came to fruition.
Her reign is now remembered largely for cuts to state housing and welfare, but that is because those are the changes that survived.
The front pages the day after the Mother of All Budgets were instead focused on something that never happened: $50 a night charges for hospital stays for anyone earning over a certain threshold. This was part of an array of user-pays Richardson was looking at as part of a wider promise that it would not just be the poor paying for her austerity programme, but richer Kiwis too. The Press headline ran: “Middle NZ socked by user-pays”.
But the government couldn’t quite hold that line. Too many were too angry about the prospect of a fee to stay in hospital. The user-pays project had touched a third rail.
Read more:
Chris Bishop opens door to delaying Wellington tunnels - but says he won’t cancel them
Government weighs toll for Auckland Harbour Bridge - one proposal is $9 per trip
User-pays is back in the news following the Infrastructure Commission’s National Infrastructure Plan release last week. The Commission was created by the last government and commissioned by the current lot to study how on earth we will afford all the infrastructure we require over the next 30 years, and keep what we already have.
Of their many answers, the one that naturally drew immediate attention was a far greater focus on user-pays.
It suggested tolling not just the new Auckland Harbour crossing but also the old harbour bridge, to avoid forcing all the traffic there. It suggested using “demand management” tools like congestion charges as much as possible on existing roads before committing to building new ones - a proposal would lead to charging people to drive through Mount Vic tunnel at peak before deciding if we needed a new one.
The principles behind such a push make sense to most people in isolation. It has been a long while since our current user-pays system in transport - petrol taxes and road user charges - paid for the upkeep and expansion of the transport network. So should a cleaner in Dunedin really see their income tax dollars spent on a fancy new bridge in Auckland?
But taken to their logical conclusion, this argument defeats the entire operation of the state. All of us pay taxes for things we don’t use. Those of “working age” today pay taxes for their elders’ superannuation, and the young’s education too.
The political trick is finding where user-pays gives real revenue or behaviour change without voter revolt. Unfortunately it is hard to run experiments.
Kiwis of late have become used to to almost entirely toll-free roads. Things have not always been this way - we’ve been tolling roads since long before cars arrived, with an 1845 law explicitly allowing local councils to do so. But it’s fair to say it has also been consistently controversial: A group of Wellingtonians burnt down a toll gate on Hutt Rd in 1890. In 1922 the Main Highways Act got rid of most of them and now just a smattering remain.
There are signs this is changing. The Government has passed a law that will allow some local councils to introduce “time of use” charging on busier parts of the network. The obvious benefit here is “demand management” - all the people convinced to drive at a less busy time or take the bus instead.
But it is unclear how much this will really be used, given central government will always be highly susceptible to organised pressure to keep one discrete cost from being introduced.
You could see the kneejerk comfort of rejecting such charges in the last week. Labour’s Chris Hipkins, tricky to nail down on any policy these days, confirmed Labour would never toll the existing harbour bridge and didn’t back any tolls on existing roads - a serious set of handcuffs to place himself in. Chris Bishop practised some studied ambiguity on whether demand management should be put in place before the Government commits to building lots of new tunnels in Wellington, but soon walked that back and committed the Government to them wholesale. The simple political logic of “why charge us for a bridge we’ve already paid for” is hard to beat.
Real life experiments through the introduction of charges on existing roads would provide great data to transport planners about what roads we actually value, but feel politically impossible.
Indeed, introducing any new charge is hard work. Just look at the mess the Government got itself into with its levy for a new LNG terminal. But that doesn’t need to end the debate forever - New York introduced a congestion charge in the face of fierce opposition last year and support has gone up as the benefits become more obvious.
Which brings us to the real problem politicians in New Zealand will have with new charges - they will have to actually show the public some benefit. Kiwis will not happily pay more money just to keep existing services, even if that makes some economic sense. But we might be convinced to pay for something new - just not a hospital stay.