They’re banging heads against the brick wall again. The consensus building group, which Auckland mayor Len Brown appointed to identify alternative methods to fund the expansion of transport around the region, once more came up with fuel tax & road pricing charges as the primary tools.
The Government has already ruled out a regional fuel tax and Transport Minister Gerry Brownlee did so again. He also rejected raising extra taxes, which road pricing charges would be, as an unsatisfactory solution.
And so, stalemate – or an arm wrestle. The Government introduced a national fuel tax of 3c/litre on 1 July and will follow that with 2 more 3c increases over the next 2 years.
All very well, but the Auckland reference group’s chairman, Stewart Milne, said total fuel tax revenues were forecast to be relatively flat as vehicles became more fuel efficient.
In the group’s release of its final report on Monday, he suggested further fuel tax increases of 3.5%/year from 2015 through to the end of the Auckland Plan’s first decade in 2021, along with rates increases of 0.6%/year dedicated to transport purposes to help meet the estimated average $400 million/year shortfall over the next 30 years.
Government responses have included telling Auckland to sell assets such as its port & airport company shareholdings. The arm wrestle again: The reference group carefully explained that doing that equates to transferring money from one hand to the other – from future income to a capital fund which would be depleted – but isn’t a long-term solution.
Not stopping there, the group also ruled out mechanisms such as public-private partnerships and raising loans to cover the estimated $12 billion shortfall over 30 years. Why? Those mechanisms don’t generate extra money over time but, instead, have to be funded themselves. Beyond them, there still has to be a source of more money.
Mr Brownlee has government officials investigating transport funding solutions, without divulging what those might be. The Auckland mayor said government officials – from the Ministry of Transport & NZ Transport Agency – had been kept informed of the Auckland reference group’s deliberations and, “by & large”, the Government was comfortable with the programme.
The arm wrestle again: The Government imposed a single council on Auckland in 2010, which most involved with it would agree makes sense in eliminating inefficiencies & giving the region a common purpose (though ratepayers generally see no reward so far). The previous regional council did not have the stature to advance common programmes and, in land use, the 7 territorial councils were at odds over intensification (favoured at the centre) versus a need for perimeter councils to strengthen their rating bases, which meant developing commercial & industrial zones outside the traditional areas.
As has been seen in the housing sector, having given the new unitary council the mechanisms to create long-term solutions, the Government has come in with its “we know best” approach, advancing immediate answers which would damage the pathway to long-term solutions.
In transport, the Government is taking the opposite stance of asking Auckland “What’s the rush?” when the reference group said a decision on funding should be made within 2 years so the framework can be set up.
Since the Regional Growth Forum was set up in 1996 – 17 years, nearly a generation, ago – Auckland has been trying to plan well in advance of population growth it knew was coming. The recent Government response has been to wait for demand to reach the point where it will provide a much better return, akin to waiting for the boil to burst before applying a salve.
Attribution: Reference group report & briefing.