Auditor-General’s overview
E ngā mana, e ngā reo, e ngā karangarangatanga maha o te motu, tēnā koutou.
Over recent years, on average, nearly one person was killed and another seven seriously injured on our roads every day. The Ministry of Transport estimated the social cost of road crashes and injuries to be $11.57 billion in 2022. New Zealanders want safer roads. Safe vehicles are a part of this.
Vehicle owners must have their vehicles regularly inspected to confirm they meet minimum safety standards before they can drive them on New Zealand roads. After passing an inspection, a vehicle can be issued with a warrant or certificate of fitness. New Zealanders have one of the highest rates of car ownership in the world. Each year, about five million vehicles are inspected before being issued with a warrant of fitness (for cars and other light vehicles) or certificate of fitness (for passenger service and heavy vehicles).
The New Zealand Transport Agency Waka Kotahi (NZTA) has authorised about 8400 approved vehicle inspectors and 3500 inspecting organisations to inspect vehicles and issue warrants and certificates of fitness.
Most vehicles are checked properly and given a warrant or certificate of fitness when they meet the required standard. However, in 2018, a car passenger died when their seat belt failed. The seat belt had not been properly inspected but the car had been given a warrant of fitness. This and other events prompted internal and external reviews of NZTA's regulatory systems and pointed to regulatory failure.
We all need to have trust and confidence in the vehicle inspection system as a regulatory failure could affect any one of us. We should all be confident that vehicles are inspected properly and that the vehicles on our roads have met minimum safety standards.
I wanted to know how NZTA makes sure that the people it authorises to inspect vehicles are inspecting them properly and issuing a warrant or certificate of fitness only when a vehicle meets all the required safety standards.
After the fatality in 2018, the reviews carried out found widespread failures in NZTA's regulatory functions. These included a lack of regulatory leadership and an approach that treated vehicle inspectors and inspecting organisations more like customers than regulated parties.
Since then, NZTA has made significant changes to strengthen its regulatory functions, including its regulation of vehicle inspectors and inspecting organisations. There is now a regulatory strategy, Tū ake, tū māia: Stand up, stand firm, and a dedicated regulatory position on NZTA's executive leadership team.
For this audit, my staff looked at NZTA's processes for appointing and monitoring vehicle inspectors and inspecting organisations, how it responds to non-compliance, and how it measures and reports on the performance of these activities.
What we found
Before it authorises vehicle inspectors and inspecting organisations to carry out inspections, NZTA ensures that those inspectors and organisations have the necessary technical skills and equipment to carry out inspections. It also checks that vehicle inspectors and the main representatives of an inspecting organisation are "fit and proper".1 After this, NZTA visits them at least every three years to check their records, make sure they understand the current safety standards, and watch them inspect a vehicle.
When NZTA has concerns, it acts quickly. For serious cases, NZTA can suspend or remove authorisation for inspecting vehicles. In the worst cases, where deliberate fraud is involved, NZTA has prosecuted people under the Crimes Act 1961. As of January 2025, nine people had been prosecuted. In my view, NZTA is now much more likely to identify poor inspection practices, and to act quickly when it does, than it was before the events of 2018.
However, NZTA knows there are still improvements to be made. These include making requirements for inspecting vehicles easier to find and understand for people carrying out inspections, and modernising the information technology it uses. With more than 8000 people inspecting vehicles, it can be a challenge ensuring that they are all kept informed about the most current requirements.
NZTA also needs to strengthen how it assesses its performance and reports to the public on the difference its regulation of vehicle inspectors and inspecting organisations makes. Clearly articulating how its regulation contributes to the broader outcomes of safer vehicles (and, ultimately, safer roads) would help with this.
Data indicates that in New Zealand vehicle faults contribute to less than 4% of serious crashes. At the same time, vehicle age, design, and safety features can have an influence on the severity of crashes. However, there is no data that shows whether the lack of a warrant or certificate of fitness is a factor in the number of crashes that occur or their severity.
In my view, there should be publicly available information that makes it easier to see how the requirement for vehicle inspections, and NZTA's regulation of vehicle inspectors and inspecting organisations, contributes to vehicle safety. This could include information about the levels and types of non-compliance that NZTA is finding. There might also be opportunities for NZTA to improve efficiency by focusing on vehicle inspectors and inspecting organisations that have a higher risk of non-compliance. More use of data and analytics would support their ability to identify these risks.
Making these improvements is important, but there are wider challenges that NZTA needs to consider. The current model for inspecting vehicles is based on an assessment of the safety features that can be checked with a physical inspection. Many of the advanced safety systems found in newer vehicles rely on software that cannot be assessed with a physical inspection and are not looked at for a warrant or certificate of fitness. However, vehicle owners rely on these features to keep them safe and might assume they have been checked as part of an inspection.
In a 2022 insights briefing, the Ministry of Transport recognised that, as vehicles become more automated, their safety features are less likely to be covered by existing safety standards. Vehicle safety inspections will need to have an increased emphasis on vehicle software and sensor systems. The vehicle inspection industry might need a different approach and different skill sets.
In my view, it will also be important to consider how best to create a flexible and future-proof system that supports greater consistency and makes it easy for inspectors and inspecting organisations to understand and comply with requirements.
I have made five recommendations for NZTA and the Ministry of Transport to strengthen the regulation of vehicle inspectors and inspecting organisations. Other regulators might also find the recommendations and the other observations in this report applicable to their own regulatory systems.
Acknowledgements
I thank NZTA and the Ministry of Transport for their engagement with this audit. I also thank the industry organisations we spoke to for sharing their views with us, and the vehicle inspectors and inspecting organisations my staff visited.
Nāku noa, nā
John Ryan
Controller and Auditor-General | Tumuaki o te Mana Arotake
25 February 2025
1: A "fit and proper person" is defined in the Land Transport Rule: Vehicle Standards Compliance 2002, section 2.6. It includes consideration of an applicant's criminal history, transport-related offences, and any complaints received about them for any transport service they have provided or operated.