Comment: Modal cross-subsidisation mars GPS

By: Ken Shirley, CEO Road Transport


Road Transport discusses the recent government policy changes on Land Transport

Much of the media commentary around the new draft Government Policy Statement on Land Transport have focussed on the Auckland Regional Fuel Tax and the Government’s proposed increases to fuel excise and, almost inevitably, RUCs. This is entirely understandable as those immediately affect people’s pockets. However, there are plenty of other policy changes that also deserve our industry’s scrutiny.

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The Regional Fuel Tax

Needless to say, we are in for a dramatic change in the direction of land transport policy in New Zealand under this Government. When it comes to the Regional Fuel Tax, the Road Transport Forum has consistently opposed the idea and not just because it doesn’t suit our industry but because fundamentally, it is just extremely bad policy. 

I could go on length outlining the inefficient and regressive nature of such a tax, the difficulties with its administration, and the myriad of loopholes and workarounds that will destroy its integrity.

The National Land Transport Fund

Unfortunately, however, the fuel tax is not the only poorly-thought-out policy in the GPS. The statement also signals an end to the era of transparent user pays in transport and turns the National Land Transport Fund, paid for by road users, into a free for all to be raided for whatever transport scheme becomes the latest cause du jour.

At least this Government has a sense of humour because, despite this blatant modal cross-subsidisation, the GPS claims it reflects a modal neutral approach to transport planning and investment.

It’s an extraordinary claim because two new activity classes have been added specifically to the GPS to provide a mechanism to pay for rail out of the NLTF, including the provision of light rail in Auckland and regional rail initiatives of dubious merit. Surely, proper modal neutrality only exists if it is reflected in both the inputs and outputs of the fund.

If the Government wants rail to have access to the fund, rail should be made to contribute to it. A nearly 250% increase in funding for walking and cycling infrastructure has also been signalled.

While this again primarily benefits a group that doesn’t contribute to the fund, there is a degree of common sense in the new spending and a direct benefit to road users, especially if it means an outcome where we have better separation of cyclists from trucks and cars.

The increased resources dedicated to safety improvements on the network should also be supported, and there is considerable merit in the 42% increase in local roading improvements, as we know that many regions around the country are struggling with the maintenance and safety of local roads.

The great shame on the output side though is that a number of significant and necessary state highway projects are to be cancelled, as the new GPS signals an 11% cut to the state highway budget.

Roads of National Significance projects

Transport Minister Phil Twyford has further clarified this by confirming that the seven Roads of National Significance projects currently under way will be completed, but the other nine projects signalled by the previous Government will not go ahead.

Unfortunately, this includes a new East–West Link in Auckland, four-laneing of Christchurch to Ashburton, and the major safety upgrade that is desperately needed for State Highway 2 between Katikati and Tauranga.

The cancellation of these much-needed state highway projects and the complete disregard for the integrity of the National Land Transport Fund, combined with the Regional Fuel Tax debacle, will further erode the public’s confidence that this Government is doing little more than milking road users to pay for otherwise unaffordable political rhetoric.

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