Mileage Contribution – Why is it 70 cents per kilometre?
From time to time, members ask why NZPCA's mileage contribution is set at 70 cents per kilometre. As part of our commitment to transparency, we'd like to explain how the Board considers this decision.
The mileage contribution is intended to be a contribution towards travel costs. It is not intended to fully reimburse every cost associated with owning and operating a vehicle, as those costs vary significantly depending on the vehicle type, age, fuel efficiency and individual circumstances.
What does 70 cents per kilometre look like?
Using a typical mid-sized SUV as an example:
ExampleExample: 7070 cents/km
100 km journey: $ 70$70 reimbursement
Fuel cost (8–10 L/100 km at $3.50/L)Approximately $28–35
Fuel cost (12 L/100 km at $3.50/L)Approximately $42
For most vehicles, the mileage contribution covers the fuel cost and provides a contribution towards other vehicle operating costs.
What if the rate increased?
The Board also considers the impact that any increase would have on Clubs and NZPCA.
For example, increasing the mileage contribution from 70 cents to 80 cents per kilometre would mean:
Example – A Club
A Club that reimburses 20 trips of 100 km each year would see its travel costs increase:
70 cents/km: $1,400
80 cents/km: $1,600
Additional annual cost: $200
Example – NZPCA
If NZPCA has a travel budget of $3,000:
At 70 cents per kilometre, the budget funds approximately 4,286 km of travel.
At 80 cents per kilometre, the same budget funds approximately 3,750 km of travel.
That equates to approximately 536 fewer kilometres of travel, or around 12.5% less travel, unless the travel budget is increased.
Alternatively, to maintain the same level of travel, NZPCA would need to increase its travel budget from $3,000 to approximately $3,429.
Why doesn't NZPCA simply increase the rate?
This is an important governance consideration.
Neither NZPCA nor our Clubs receive an automatic increase in income when costs increase. Every additional dollar spent in one area must either be funded through increased income (such as membership or event fees) or by reducing expenditure elsewhere.
For NZPCA, additional travel expenditure would need to be balanced against the programmes and services we deliver to members. This includes work across our strategic pillars of:
Similarly, Clubs face the same budgeting decisions when determining how they allocate their own funds.
Ongoing Review
The Board reviews the mileage contribution periodically as part of its financial governance responsibilities and has recently completed another review.
Based on current fuel prices, typical vehicle fuel consumption and the financial impact on both Clubs and NZPCA, the Board considers that 70 cents per kilometre remains a fair and reasonable contribution towards travel costs.
As with all Board decisions, this will continue to be reviewed as circumstances change. We welcome constructive feedback and, where new information or evidence is available, the Board is happy to reconsider the matter as part of its regular review process.
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