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Questions & answers
Fees and charges changes affecting the transport service industry
Contents
- What fees are affected?
- What are the fees?
- Who will be affected by the annual licensing fee increase?
- Who will be affected by the TSL application fee increase?
- Who will be affected by the ATO application fee increase?
- Why does the ATO application fee cost so much?
- Who will be affected by the introduction of fees for non standard approvals?
- Couldn’t the charging of an hourly rate for a non-standard approval lead to unreasonably high costs for approvals?
- What do the proposed annual licensing fees pay for?
- If operators already do what’s required by the law, why should they pay more so that the law breakers can be investigated?
- Why should all operators have to pay the same annual licence fee?
- Why do the current fees need to be increased by so much?
- Will an increase of this size happen again in the future?
- How will the quality of the statutory services Land Transport NZ provides be monitored?
- How did Land Transport NZ consult on this?
- When will any change come into effect?
- The annual licence fee for vehicles operated under a transport service licence (TSL). In this context, a TSL is a permit to operate a goods service, passenger service, vehicle recovery service, or rental service. These fees no not apply to rail service licence holders. The TSL fee for vehicles is a component of the vehicle’s licensing fee.
- Application fees to become (a) a TSL holder, (b) for approved taxi organisation (ATO) status, or (c) for non standard approvals.
| Chargeable activity | Current fee (incl GST) |
Proposed fee (incl GST) |
|---|---|---|
| Annual licensing fee for each vehicle operated under a TSL | $24.00 | $55 |
| New Transport Service Licence (TSL) Application* | $30.00 | $440 |
| New Approved Taxi Organisation (ATO) Application * | $30.00 | $3,678.15 |
| Hourly rate for non-standard approvals under new rules, where a standard fixed fee is not appropriate due to the size and / or variability of the task (eg fatigue management scheme approval). It is based on the average cost per hour of TSL approvals. | No hourly rate fee | $115.73 |
| Fee for notification of a change of person in control of a transport service or taxi organisation. | $6 | No fee. |
*This is a one-off payment for new entrants
Who will be affected by the annual licensing fee increase?
The increase to the annual licensing fee applies to all TSL holders who operate a vehicle under a TSL.
Who will be affected by the TSL application fee increase?
The increase in TSL application fee applies to persons who are not currently TSL holders and apply to become a holder.
Who will be affected by the ATO application fee increase?
The increase in ATO application fee applies to persons / organisations who do not have ATO status and apply for approval.
Why does the ATO application fee cost so much?
The ATO application fee corresponds to the time and effort required by Land Transport NZ staff to process and make decisions on the application.
Applications for taxi organisation approvals are quite complex, involve many components and take considerable time to assess. For example, before granting an approval, the Director must be satisfied that: those in control are fit and proper; the communications system is adequate and satisfies the 24 hour service requirement; and, that the ATO rules are adequate to control its members and comply with relevant legislation.
It is recognised that in some circumstances, such as applications for approval of very small operations in small towns or rural areas, the fee may present a considerable barrier to a service being established. In such cases part, or all, of the fee can be waived by Land Transport NZ.
Who will be affected by the introduction of fees for non standard approvals?
Most operators won’t need to incur this cost. There will be some approvals in the future that will require specialist assessment. This may include approval of fatigue management schemes. The time taken to assess these non-standard applications will vary considerably depending on the organisation seeking that approval or the scale of the scheme. Because these are specialist assessments, they take more time than standard assessments.
Couldn’t the charging of an hourly rate for a non-standard approval lead to unreasonably high costs for approvals?
Land Transport NZ will provide clear guidelines regarding the requirements for non-standard applications and how they must be completed. The guidelines, if followed, will minimise the cost of approvals, which may be agreed at the time of the application. Charging for non-standard approvals in this way will ensure that the cost of approval will be met by those making applications, rather than by a cost passed on to all operators.
What do the annual licensing fees pay for?
The annual licensing fee fully funds Land Transport NZ’s monitoring activity of transport service operators to ensure that operators comply with legislative requirements. This covers, for example, the taxi, trucking and rental industries.
Monitoring activity includes: providing operators with information and support; reviewing operators for compliance; investigating operators who demonstrate non-compliance, and; removing non-compliant operators.
Land Transport NZ will use money from increased fees to strengthen its regulatory approach and meet its running costs in this area. This increase in activity will also address concerns raised in recent reports by the Controller and Auditor-General concerning regulation of the taxi industry and truck safety [Effectiveness of Controls over the Taxi Industry, June 2005; Progress in Implementing Key Recommendations of the 1996 Transport Committee Inquiry into Truck Crashes, March 2005] and an independent review of vehicle safety compliance initiated by and prepared for the Secretary of Transport [Vehicle Safety Compliance Review: an Independent Review of Commercial Vehicle Safety Compliance and Enforcement, November 2005], this highlighted the need for more regulatory monitoring and management in the commercial transport sector.
The fee increase will enable Land Transport NZ to employ an additional 17 regulatory services staff. The additional resources will allow Land Transport NZ to spend more time working with road transport operators to increase their ability to comply with rules and regulations, and support new entrants to the industry. The extra resources will also improve Land Transport NZ’s ability to remove those that are not willing to meet these requirements.
Proposed regulatory activities to support the new approach, estimated on a yearly basis, include: 2300 operator reviews; 1780 follow up reviews; 610 investigations; and 450 investigations into complaints.
If operators already do what’s required by the law, why should they pay more so that the law breakers can be investigated?
The road transport industry has been calling for ‘a level playing field’ for some time. Those operators who do not work within the rules and regulations gain an unfair advantage over those who do ‘play by the rules’. Strengthening Land Transport NZ’s regulatory capacity will benefit the industry as a whole by ensuring operators who currently do not meet rules and requirements are either made to comply, or are removed from or kept out of the sector.
Why should all operators have to pay the same annual licence fee?
All vehicles operated under a TSL are subject to the same regulatory controls. While it is possible that different sector groups may require more or less regulatory monitoring than others, Land Transport NZ has not to date recorded its regulatory activity in terms of sector groups. Consequently, it is impossible to determine the proportion of resource concentrated on each sector group.
Land Transport NZ has now started recording activity against sector groups. This will enable disaggregation of fees by sector group to be considered in the future.
Why do the fees need to be increased by so much?
The old regulatory system was in place for more than 17 years, yet, other than an adjustment in 1997, there was no review of the fees or of monitoring activity.
The increase in fees reflects an increase in costs since the fees were first set, and will allow Land Transport NZ to enhance its regulatory management system to ensure a high level of compliance with legislative requirements by licensed road transport operators.
The level of monitoring that the fees will pay for result in meaningful contact with five percent of operators per year. This level of contact was reached after consultation with industry.
Will an increase of this size happen again in the future?
Operator licensing fees and charges will be reviewed again in 2009 for the introduction of the Operator Rating System. In addition, a project is underway at Land Transport NZ to develop a business model that will enable all transport licensing fees to be reviewed regularly.
How will the quality of the statutory services Land Transport NZ provides be monitored?
Land Transport NZ has a statutory mandate from government to manage the regulatory environment related to licensed transport operators and related legislation. As such, Land Transport NZ is subject to scrutiny from a number of sources, from our independent commercial licensing managers to various select committees and the Office of the Auditor General. Land Transport NZ also reports regularly to government on progress against transport outcomes. The approach that Land Transport NZ is taking to work with the road transport industry to improve the industry’s regulatory performance will enhance communication on progress made and allow for greater coordination of the efforts of all involved.
How did Land Transport NZ consult on this?
Consultation was led by Land Transport NZ and took place in September and October 2006. The business case for the proposed changes was released to a number of industry groups and submissions were encouraged via advertising in a range of national and community newspapers. Land Transport NZ also encouraged submissions via the consultation section of the website and an 0800 number.
The feedback from the consultation period was incorporated into the final business case and resulted in changes to the original fee recommendations.
When will any change come into effect?
The increased fees and charges will come into effect on 1 October 2007.
Page updated 28 September 2007