Land transport funding

June 16th, 2014 at 12:00 pm by David Farrar

The Government has published its long term policy statement on land transport funding. This includes the range of future likely expenditure.

Now it is worth recalling that the land fund is funded pretty much 100% by motorists through petrol tax and road user charges. Motorists fund not just the roads for themselves, but also a significant proportion of public and cycle and walking ways. That’s fine, as there are benefits to motorists in having fewer people driving – but’s remember that they are the funders. So what the expenditure ranges for the next three years. I’m going to take the midpoints of the ranges

  1. Improve state highways $3.75 billion
  2. Maintain state highways $1.58 billion
  3. Maintain local roads $1.49 billion
  4. $1.03 billion
  5. Road policing $915 million
  6. Improve local roads $593 million
  7. Regional improvements $225 million
  8. Investment management $171 million
  9. Road safety promotion $103 million
  10. Walking/Cycling $75 million

There’s also an additional $220 million for Auckland transport, which is being treated as a loan.

I’ve often said that you need spending on both roads and public transport. The problem is some extremists who are against any new roads anywhere because basically they hate cars.

The good thing with this level of transparency, is that political parties promising to spend more on public transport, have to now point to where they will spend less (or say they will increase petrol tax). Would Labour and the Greens reduce maintenance for state highways or local roads to pay for more trains? Hopefully they will put out detailed policies showing how they would allocate the funds available, so people can judge on which mix they most agree with.

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29 Responses to “Land transport funding”

  1. RRM (9,770 comments) says:

    The good thing with this level of transparency, is that political parties promising to spend more on public transport, have to now point to where they will spend less (or say they will increase petrol tax).

    Yoo wot?

    Don’t be silly, of course they won’t.

    It’s a lolly scramble, we will fund free stuff for you HERE and HERE and HERE and HERE and HERE and HERE.

    Where it all comes from is a mystery…

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  2. tvb (4,315 comments) says:

    It irks me that the motorist has to fund the recreation activities of cyclists. I am not talking going to a place. It is for recreation. They also should pay additional ACC as they are always getting injuries for their sport. And they have a sense of entitlement.

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  3. redqueen (552 comments) says:

    ‘Hopefully they will put out detailed policies showing how they would allocate the funds available, so people can judge on which mix they most agree with.’

    Will they? Bollocks.

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  4. prosper (146 comments) says:

    The vast majority of people use cars, therefore the bulk of the money should be spent on roads. That’s democracy.

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  5. Redbaiter (8,274 comments) says:

    What proof is there that $103 million spent on “road safety promotion” is money well spent?

    Just using taxpayer money to prop up a failing mainstream media.

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  6. Redbaiter (8,274 comments) says:

    A billion dollars spent forcing people to comply with speed limits that are purposefully set far too low. The number of tickets issued proves these limits are too stringent, and need review. Law enforcement should not be used as a source of govt revenue.

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  7. MT_Tinman (3,092 comments) says:

    Nowhere in that list is funding to attract people other than brain dead imbeciles into traffic management (both city and temporary).

    What a shame, NZ’s greatest traffic need ignored once more.

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  8. Ross12 (1,377 comments) says:

    The Greens must have been reading another report based on their PR statements on the Radio News services.

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  9. jallen (2 comments) says:

    What a myopic viewpoint. The purpose of government is to ensure the rights and freedoms of citizens, with the revenue it raises used to fund government programmes like health and education, to pay debts, and to build public infrastructure for everyone.
    To insist that revenue raised is primarily expended on the same people or infrastructure from which the revenue is derived is against the very moral compass of a government. What’s next – only spend on hospitals income derived from what medical related revenue? Education from revenue derived from what education revenue?
    This ridiculous level of thinking would have income tax only expended on industry in which is was derived. I very much doubt that tax from teachers salaries is anywhere near enough to cover education, or medical profession anywhere near enough to cover health.
    Let’s not go down the slippery slide of expecting that road related income should only be spend on road related expenditure!

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  10. OneTrack (2,970 comments) says:

    Detailed policies? Ha ha. Good luck with that plan. The beer coasters aren’t big enough and the treasury guy took his calculator with him.

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  11. Auberon (873 comments) says:

    What’s most notable for me about Phil Twyford saying the GPS was “1960s thinking” is that with less than 100 days till a general election, that’s actually all he said.

    Labour doesn’t have a transport policy yet (beyond excluding caravans from Road User Charges, and making it illegal for trucks to pass slow vehicles by entering the right hand lane).

    Keep it up Phil. You’re doing great!

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  12. srylands (404 comments) says:

    The response from the Greens will be predictable (I have not looked yet. I don’t need to.)

    I agree with Redbaiter on speeding. In the year ending 30 June 2012, there were 918,000 speeding infringements. By definition, that means the limits have no credibility. In a country this size, those numbers are crazy.

    It is always going to be a contentious issue, but personally I would increase most limits. Many of the 50 km/h limits could go to 60 km/h. I would increase all motorway limits to 130, and most open road limits to 120. The flipside would be to substantially increase the penalties for exceeding these limits.

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  13. Griff (7,254 comments) says:

    Its about time the cops actually treated the roads as a place to get from a to b as quickly and as safely as possible. Not a revenue stream for siting in a camera car penalizing those with more productive things to do than driving. Spend just a little effort on the road hogs who impede traffic flows everywhere.
    Every time I drive on Auckland motorway system and sate highways my efficient legal passage is disrupted by ignorant sods who clog the highways with their illegal time wasting inability to obey the basic rule of the road …. keep left.
    Often its some pratt who drives with their right hand wheel on the center line at 60kmh for miles of single line highway only to speed up to 100kmh when there is a passing lane so stopping any one legally overtaking.
    Stop the revenue collecting and concentrate on making the movement of traffic as efficient as possible ffs its why we have a roading network not so granny can dilly dally away her retirement,

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  14. RRM (9,770 comments) says:

    Road safety promotion $103 million

    Now that seems like a lot of money to spend on casting a fly out and hoping to get a bite, when you could be doing something a little more concrete and REAL with it..??!?

    If I was in charge of that $103 million, then I would radically overhaul the full license test, to a system whereby you have to travel to one of say half a dozen centralised testing facilities around the country. The full license would assume knowledge of the road rules has been covered by the earlier license grades, and this would be more about proving to the authorities that you are a competent and reasonably skilled operator.

    (I.e., not the sort of test where you instantly fail if you take slightly longer changing lanes than the instructor feels you should have, as is currently the case.)

    Part of the full license test would be that you are given the car described below, and you have to do a lap around the local race circuit within a fairly ambitious time limit. You are given up to 30 minutes of track time in which to post your qualifying lap.

    The car for the test would be owned by LTNZ or the testing agency, and would be an old, fairly high-powered front wheel drive automatic V6 like a Maxima or a Diamante. (These are cheap and obtainable everywhere, every middle manager had one ten years ago.) The excess if you break it is the repair costs up to $5,000.

    The cars would be specially prepared to a formula prescribed by LTNZ which includes:

    :arrow: Shocks replaced with ones that are about 2 steps too weak for a car of that size.

    :arrow: All four wheels replaced with ones that have tyres about 5 sizes too small for the car. I.e. 225s off –> 175s on.

    :arrow: All ABS, traction control, ESP etc are disabled.

    The idea of this is that the test car will have built-in handling flaws that greatly exaggerate the characteristics that real cars have when you approach the limits of handling and adhesion.

    So by the time you have practised and practised and posted a good lap time around a circuit, you will have experienced losing control of a big heavy car at some speed, and you will know what understeer, oversteer, and a 4-wheel drift are, and you’ll know what to do if you get into those situations, and you’ll certainly be accustomed to feeling for the early onset of those kinds of loss of grip, and you’ll hopefully have some sort of ability to drive out of it again.

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  15. davidp (3,573 comments) says:

    From the Green Party, regarding a policy illustrated with a photo of a bus:

    “Cities around the world enjoy public transport that is safe. That is convenient. That runs on time. Wouldn’t it be great if our cities did too?”

    Notice the emphasis on “safe”. The Greens, authorised by Julie Genter, believe there is something unsafe about NZ buses. This is an outrage and the government should really sort out our dangerous buses before they do anything to encourage more people to risk their lives using public transport. I suggest:

    + Seatbelts on buses and trains.
    + Buses should drive a lot slower. These killing machines shouldn’t be hurtling around our cities at high speed.
    + Buses should stop running people over in Wellington.
    + Bus drivers should stop running red lights.

    In the mean time, if anyone you know suggests you travel by bus then you should refuse. Tell them that the Greens say buses are dangerous, and that Julie Genter says you’re safer in your car.

    https://www.facebook.com/photo.php?fbid=10152085184891372&set=a.489359751371.266952.10779081371&type=1&theater

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  16. RightNow (6,966 comments) says:

    @jallen, so we should scrap petrol taxes and road user charges because other taxes should cover roads as well?

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  17. Nigel Kearney (969 comments) says:

    To insist that revenue raised is primarily expended on the same people or infrastructure from which the revenue is derived is against the very moral compass of a government.

    Not really. Many people believe it’s fair to collect taxes based on ability to pay, e.g. taxes on income or spending, regardless of where that money is spent. Few people believe it’s fair to collect taxes based on how much you drive your car, unless that tax money is used to pay for roads as a kind of user-pays regime.

    You could argue that roading is a public good and should be funded out of general taxation, not a levy on users. But you cannot sensibly argue that people should contribute more to the cost of education if they drive their car a lot.

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  18. ross411 (433 comments) says:

    davidp (3,454 comments) says:
    June 16th, 2014 at 1:09 pm

    Notice the emphasis on “safe”. The Greens, authorised by Julie Genter, believe there is something unsafe about NZ buses. This is an outrage and the government should really sort out our dangerous buses before they do anything to encourage more people to risk their lives using public transport. I suggest:

    Last time I regularly took a bus, the unsafe thing was the union member gorms they hired to drive them.

    If they weren’t shutting the back door on a granny, they were disabling the gps on the buses so that the indicators on the stops couldn’t inform passengers how long they had to wait, because it would indicate how lazy they were at doing their job properly. Either that or smashing the indicators at the bus stops.

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  19. alloytoo (525 comments) says:

    @Jallen

    It makes sense to link certain revenues to certain expenditures, especially as regards road infrastructure.

    Increased revenue generally heralds increased costs be they maintenance or expanded capacity.

    Uncouple that link and you run the very real risk of under investment in that area, which needs to corrected in a big bang fashion which is inflationary as it’s not related to current economic activity.

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  20. hj (6,813 comments) says:

    I’ve often said that you need spending on both roads and public transport.
    …..
    and you’ve often said we need a bigger population and population increase is Government policy (in our interests of course).

    The long-term level “misalignment” of the exchange rate:
    Some perspectives on causes and consequences
    Paper prepared for the Reserve Bank/Treasury exchange rate forum
    Wellington
    26 March 2013
    Final version: 19 April 2013
    Michael Reddell1
    Abstract
    Despite the huge, decades-long, and continuing deterioration in New Zealand’s relative
    productivity, the real exchange rate has not, on average, fallen. The persistently (and
    perhaps increasingly) “overvalued” exchange rate – itself a symptom of imbalances across
    the economy – is central to understanding why, despite the far-reaching reforms of the late
    1980s and early 1990s, the large gap between New Zealand’s standard of living and those in
    other advanced economies has not even begun to close. The exchange rate hasn’t adjusted
    largely because average New Zealand real interest rates have, surprisingly, remained so
    much above those abroad. That gap, in turn, appears to reflect New Zealand’s own choices
    (including policy ones) which mean that at any particular interest rate (the “world interest
    rate”) there is a bigger difference here between desired investment spending and the
    available national savings than is typical abroad. Higher New Zealand real interest rates
    have simply been the rationing device, reconciling the conflicting desires. There is little
    evidence that our policy frameworks adversely affect savings more than those in other
    countries, and little sign that house prices can explain much, if anything, about New Zealand
    longer-term savings behaviour. By contrast, population growth seems to have been much
    more important than has previously been recognised. New Zealand’s population growth
    slowed sharply in the 1970s and 1980s, as more New Zealanders pursued better
    opportunities abroad. But the marked liberalisation in immigration policy in late 1980s and
    early 1990s resulted in New Zealand once again experiencing materially above-average
    population growth. In combination, the substantial real domestic resources required to
    accommodate a fast-growing population and the quite modest savings of New Zealanders
    appears to have crowded out (through higher interest rates and a high average real
    exchange rate) other productive investment. Materially higher productive investment,
    especially in the tradables sector, was probably required if the big challenge of catching up
    again with the incomes of other advanced countries, and reversing the decline in New
    Zealand’s relative productivity performance, was to be met.
    If the rate of population growth
    over the last couple of decades had been materially lower, that would have resulted in lower
    average interest rates and a much lower real exchange rate. And New Zealanders’ longterm income prospects would, most probably, have been much improved.

    http://www.rbnz.govt.nz/research_and_publications/…and…/5200823.pdf

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  21. martinh (1,164 comments) says:

    Build build build but why the fuck does laying stones and bulldozing dirt cost so much

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  22. Stuart (41 comments) says:

    Road policing is not purely revenue gathering/tickets – Police 2013 SSP:

    28k P1 events dispatched
    86k traffic incidents attended
    65k traffic cases prosecuted
    2.9m breath tests conducted

    and more

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  23. GJM (62 comments) says:

    martinh – you nailed it.
    There is a series on Prime called “making New Zealand” on Sundays. It is an eyepener how much was built, and in how little time it took. The Auckland Harbour Bridge cost $205m in todays dollars. Len Browns tunnel is $3billion. Really?
    The power you are using for your computer probably comes from a power station built in the 2 decades after WW2, and they were no small projects. What has been done since Clyde – nothing thanks to the Nimbys and Bananas.
    Given modern technology such as tunnel boring machines, computer design etc, construction should be getting cheaper not many times more expensive. this country is riding on the infrastructure built by our ancestors, but never replaced or maintained. .

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  24. Tarquin North (254 comments) says:

    Bring on the holiday highway! We deserve it, we want it and the greens hate it. Therefore, it’s a win for everyone and a great idea. Seriously, I’m an hour and a half from Queen Street, a nice house costs$300,000 we’ve got plenty of land and an awesome deep water port – the best in the country! Beautiful beaches everywhere and a good work force that doesn’t have enough to do. They’ll probably find the six toe mud crab lives somewhere along the way and by the time they finish negotiating with the greenies and an invented iwi it will be too late for me, and the next generation will wonder why we didn’t do it sooner!

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  25. Viking2 (11,346 comments) says:

    Road policing $915 million

    Fucking hell.
    That much to fund the road nazi’s. contract it out. Quick

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  26. prosper (146 comments) says:

    One third of the cost of sealing a road is due to OSH. I do not know the cost of consent or the cost of mitigating the effects on dotterals, skinks, native flora etc.

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  27. PaulL (6,019 comments) says:

    I did wonder what the popularity would be of a roading party that promised as their headline policy to start building a 4 lane road from Auckland to Christchurch, and that the speed limit on said road would be 140. Problem is it’d have to be a toll road, and I couldn’t work out a way to make it pay for itself given likely traffic volume in NZ. But maybe we should build it just because….

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  28. Dead Earnest (160 comments) says:

    I would rate one of the single best achievements of the last 2 Key Governments is their actual committment to Road building. Transmission Gulley finally starting after a 5 decade talkfest. Kapiti Bypass under construction, Otaki Bypass progressing rapidly through planning stages, Waterview connection being built “over Helen’s Clarks dead body” and Hamilton bypass moving ahead. Thanks John and Stephen this is what the country needs You deserve anoher term for this alone.

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  29. campit (467 comments) says:

    Tax and spend, tax and spend. The sooner we get back to decision making based on cost/benefit, the better.

    Case in point, the Puhoi to Warkworth toll road. A toll road just 700m shorter than the existing route, with a travel time saving of just 3 minutes compared to the current journey time of 13 minutes. And useless for Warkworth and Matakana, because the northern junction of the toll road is 2km to the north of Warkworth. A waste of a billion dollars. Think about that on July 1st.

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