Developing an implementable forward-looking cost base

Public consultation on the Implementing a forward-looking cost base for heavy vehicle charges – Consultation Regulatory Impact Statement (C-RIS) concluded on Friday 12 June 2026.

The consultation sought feedback on a proposed forward-looking cost base model and a range of implementation options that could be used to set heavy vehicle charges from 2027–28 onwards, subject to ministerial approval.

During consultation, the NTC held a series of information sessions providing an overview of the proposed model and implementation options. Watch a recording here.

The NTC will now consider the feedback received to inform the final forward-looking cost base model and recommendations for heavy vehicle charges from 2027–28 onwards. These recommendations will be presented to infrastructure and transport ministers in a Decision Regulation Impact Statement in late 2026.

The forward-looking cost base will only be used to set heavy vehicle charges from 2027–28 onwards if ministers fully endorse the model and decide to adopt it.

Developing a forward-looking cost base 

In May 2023, the Infrastructure and Transport Ministers’ Meeting (ITMM) approved heavy vehicle charges for 2023–24 to 2025–26. The process also identified opportunities to improve how charges are set. 

Accordingly, ITMM asked the NTC to develop a FLCB, which could potentially provide a basis for setting future heavy vehicle charges.

The forward-looking cost base is an alternative to the current PAYGO (pay-as-you-go) approach for setting heavy vehicle charges. Under PAYGO, significant increases in government road expenditure have led to growth in the heavy vehicle cost base, while charges have not kept pace - resulting in an increasing gap between costs and revenue.

The FLCB addresses these issues by spreading the cost of road construction and maintenance over the life of road assets, aligning more closely with approaches used in other regulated infrastructure sectors. 

This approach is intended to improve the stability and predictability of heavy vehicle charges, and better align charges with long-term investment in the road network.

If endorsed by ministers, the model could form the basis for setting heavy vehicle charges from 2027–28 onwards.
 

As part of this work, we consulted on a Consultation Regulatory Impact Statement to seek stakeholder feedback on options in developing an implementable forward-looking cost base.

The consultation sought feedback on:

• the overall design of the FLCB model, including the starting point,
• any advantages and disadvantages of the proposed implementation options,
• industry affordability and impacts on government revenue needs, and
• any alternative options or issues stakeholders believe should be considered.

The following supporting materials were developed to assist stakeholders in providing their feedback:

• C-RIS Overview (short overview document summarising the C-RIS)
• FLCB model and calculation of usage data (Excel workbooks)
• Summary spreadsheets of C-RIS tables (provides the calculations behind the tables and graphs within the C-RIS)
• Cost of Capital and Inflation review – final report (Appendix B of the FLCB C-RIS)
• Expenditure Reporting Guidelines (Appendix D of the FLCB C-RIS)

An online interactive module is available at the bottom of this page to help users estimate annual charges under the options presented in the C-RIS. 

The NTC is now considering the feedback received to inform the final forward-looking cost base model and its recommendations to infrastructure and transport ministers.
 

The model has been designed to be robust and to produce outcomes that, over the long term, are broadly comparable to those under the existing PAYGO methodology, while addressing key shortcomings such as volatility and departures from full cost recovery.

The model design and assumptions were tested with industry and government working groups prior to public consultation.

If you'd like to express interest in this project, or ask us a question about our work, send us an email as we'd like to hear from you.