Cabinet has approved a new 10-year plan for transport which will increase investment from $3.6 billion in the year finishing on Saturday to a record $4 billion for the new financial year starting on Sunday, 1 July, and rising to $4.7 billion by 2027-28.
The Government will also invest $1 billion in the 2018-19 year in specific projects, such as the Auckland city rail link, and councils will invest a further $1 billion/year.
The main spend, under the government policy statement, is through the National Land Transport Fund, boosted by increases in the excise duty on petrol and road user charges on other vehicles.
The increased excise charges will support $5 billion of infrastructure over the next 10 years.
Twyford: Options to beat gridlock
Transport Minister Phil Twyford said yesterday: “Auckland alone loses $1.3 billion/year in productivity to congestion. We will tackle gridlock in Auckland by giving commuters options through major road projects and upgrades such as Mill Road & Penlink.”
But don’t get too excited – Penlink, crossing the Weiti River to the Whangaparaoa Peninsula to ease Hibiscus Coast congestion, is at the back end of the priority list.
And the lobby group Infrastructure NZ said that, as the NZ Government’s capital investment levels were half those of Australia, ongoing congestion, housing unaffordability & constrained economic growth would continue.
In addition, in Auckland, the chunk of funding for improving infrastructure, is on top of a “general” rates rise. The main part of that increase will be through a regional fuel tax levy of 10c + gst/litre. Auckland Council added several other specific rates to its bill to citizens yesterday as well.
The Government will increase the petrol excise duty in each of the next 3 years, starting with a 3.5c/litre rise on 30 September, followed by 3.5c/litre rises in the following 2 years, and equivalent rises in road user charges.
Mr Twyford put the extra cost at 83c/week this year for the average family, rising to $2.50/week by 2020.
The present excise on petrol-fuelled cars is 66.484c/litre – 59.524c for the National Land Transport Fund, 6c for the Accident Compensation Corp levy, 0.3c for a fuel monitoring levy and 0.66c for a local authorities’ fuel tax.
Selwood: funding system outdated & restrictive
Infrastructure NZ chief executive Stephen Selwood welcomed the funding certainty and said it was clear the Government was doing as much as it could with existing transport tools.
But he said, in response to the increases: “If we want to change our transport performance, we need to change our outdated & restrictive transport funding system.”
Mr Selwood pointed at the higher funding for infrastructure in Australia, and then to funding alternatives:
“New South Wales has announced an $A14.7 billion transport capital programme for the 2018-19 financial year. By comparison, just $2-3 billion of NZ government policy statement spending this year will be focused on improving transport networks.
“Even after top-ups from the consolidated account to pay for Auckland’s city rail link and council expenditure, New Zealand’s investment in transport improvements will be half what the New South Wales Government alone is doing on a per capita basis.
“This is why New Zealand’s cities are among the most congested for their size in the developed world and it is why we can’t unlock enough land to house our population.
“It is also why nothing is going to change, in spite of record investment, until we change the way we plan, fund & deliver transport.
“Asking road users to cover the cost of projects increasingly oriented towards urban development separates those funding improvements from those who will benefit – landowners.
“Constraining investment to levels road users are prepared to tolerate holds back the economy & urban development. We need to double investment if we are serious about tackling congestion, improving safety & delivering homes.
“Projects with strong benefit:cost ratios & significant strategic benefits need to be accelerated. Major transport projects need to be debt financed. It is not realistic to fund a long-term investment programme by an annual allocation from road user charges.
“Debt should be repaid by beneficiaries – road users, property owners & the Government via gst, income & corporate taxes which grow with the economy.
“A shift to road pricing would not only provide the mechanism to fund needed investment, it would also manage congestion much more effectively.
“Record transport investment is a step in the right direction, but New Zealand remains a giant leap behind our competitors.”
Attribution: Ministerial & Infrastructure NZ releases.