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Under the new rules a 40km/h speed limit will apply when driving past all urban schools, and 60km/h passing rural schools - although it could take up to 10 years for the changes to be rolled out in some areas.
Some schools already have lower speed limits in place but the rules are not applied consistently across New Zealand.
Other changes planned include warning signs for fixed speed cameras, and adding more speed cameras on high-risk roads.
Associate Minister for Transport Julie Anne Genter announced the changes this morning at Owairaka District School in Auckland.
"On busy urban arterials and rural roads, lower speeds would primarily operate during drop-off and pick-up time only, using electronic variable speed limit signs," Genter said in a press statement.
"On residential urban streets, permanent speed changes would be supported by street improvements like wider footpaths and raised pedestrian crossings.
"In rural areas, a 60km/h limit outside schools will make it safer for parents and kids walking and driving in and out of the school gate.
Genter said many parents would like their kids to get to school on their own but were worried about fast-moving traffic.
"Safer speeds around schools is proven to make streets safer, more attractive and more accessible for children to walk and cycle."
The AA welcomed the safer variable speed limits, saying 94 per cent of AA members surveyed had supported a lower limit around urban schools.
A 60km/h limit in rural areas would be a big speed reduction for drivers on the open road - so it was important those limits were signposted with flashing signs to make it "absolutely clear" what the speed restrictions were, spokesman Mark Stockdale said.
Extra engineering treatments approaching schools should also make it clear motorists are entering a school zone, the AA said.
"This change will be rolled out over 10 years so there is time to get it right and have a uniformly consistent approach across the country. The AA looks forward to details on the additional funding that will be needed to help councils install these new signs and undertake other engineering works," Stockdale said.
Living Street Aotearoa, which advocates for more kids to walk to school, also applauded the announcement, saying research consistently showed most students wanted to walk to school, not be driven.
The group wants to see more than 50 per cent of kids walking all or part of the way to school by 2025.
It has advocated for a 30km/h speed limit near all urban schools.
The changes will be part of a wider programme to tackle unsafe speeds - including:
• Signs warning drivers to go slow through high-risk safety camera areas.
• Transferring ownership and operation of safety cameras from the police to the NZ Transport Agency.
• Adding more cameras on high-risk roads.
• Making it easier for communities and local authorities to decide on speed limits in their regions.
The focus on unsafe speeds was a "priority action" in the "Road to Zero" Road Safety Strategy, which is soon to be announced.
Legislation and rule changes to support the changes should be in place by mid-2020 following a select committee process.