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GOVERNMENT ANNOUNCES MAJOR GEARSHIFT IN LAND TRANSPORT POLICY 
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The Prime Minister, Transport Minister and Associate Transport Ministers answered a number of questions around the new Government’s approach to transport with the release of a draft Government Policy Statement this week, but left others on the table.

The GPS is a cornerstone document, setting out the Government’s spending priorities from the National Land Transport Fund over the next 10 years.

It represents a major gearshift in transport policy and priorities, effectively cutting more than $5 billion from state highway upgrades while channelling funding into public transport like light rail, urban cycle ways and safety improvements on urban and regional roads. There is approximately $4 billion over the next five years for the early stages of light rail in Auckland, in line with Labour’s election promise for transport in the city.

In its draft stage the GPS does not fully answer how the programme will be funded, and the proposed timing of Auckland rail projects in particular has been highlighted as ambitious from both consenting and construction perspectives. The statement directs NZ Transport Agency to work with Auckland Transport in time on accelerating the development of Auckland's rapid transit network.

What's different?

The Labour-led Government, including its coalition partner NZ First and supporting partner, the Greens, have made it clear that transforming the land transport system is a priority. The new GPS takes in all modes of transport with the aim of seeing a new transport strategy integrate planning for roads, rail, public transport, private vehicles, existing bus and rail services and Auckland’s rapid transit network.

This new GPS prioritises safety and access to a wider range of transport options supported by second tier priorities: the environment and value for money. This is a shift away from the National-led Government’s focus on economic growth and productivity. 

This new approach and reprioritisation will determine how the Government’s transport investments are made. It will guide the $3.95 billion spend for the 2018/19 year through the National Land Transport Fund and provide signals to local government for its annual $1.5 billion annual spend on land transport and the $0.5+ billion annual Crown expenditure. The GPS allocates a total of $12.65 billion over the first three years (2018/19 to 2020/21).

The spending targets assume a 3-4 cents/litre increase in fuel excise duty each year for three years and yet to be confirmed annual increases in road user charges. Changes to these rates would be effective from 1 September 2018 pending Government agreement. These increases have been the focus of media attention particularly in Auckland where the fuel excise duty increase will combine with a 10 cent regional fuel tax. The fuel excise duty will alone add on average $30/year to consumer fuel purchases (excluding GST).

While Aucklanders do indeed face higher transport costs, and the Government has highlighted increased spending on regional roads, opposition MPs have returned to the perennial objection that those outside the main centres are subsidising a disproportionately high investment in transport in the country’s largest city.

How significant is this refocusing and reprioritisation?

Themes have been developed to underpin the decisions made on investments. These themes highlight the different approach the new Government is taking to transport. The themes are; a mode-neutral approach to planning and investment; technology and innovation are to be part of the design and delivery of investments; and integrating land use and transport planning and delivery.

The GPS aligns with the Auckland Transport Alignment Project (ATAP), which sees the Government and Auckland Council working on a strategic approach to transport investment. An indicative investment package is currently being revised to reflect the Government’s goal to accelerate Auckland’s rapid rail transport. Funding for the regions will be doubled to focus on transport connections and making higher risk roads and intersections safer.

The holistic approach emphasising public transport, rail and safety will reach into delivery agencies, refocusing policy work and reprioritising projects. NZ’s construction industry will be nervous about the disruption this could cause to the country’s project pipeline. 

What happens next?

To inform the consultation process the NZ Transport Agency will shortly provide a draft Investment Assessment Framework and State Highway Investment Proposal to reflect the Government’s new priorities and inform decision making for the National Land Transport Programme and Regional Land Transport Programmes. More work is required to determine how the National Land Transport Fund will interact with the Provincial Growth Fund to support regional improvements. Work is underway to enable funding for KiwiRail through the National Land Transport Fund – this requires a legal change.

Feedback on the GPS closes on 2 May 2018.

The scale of change to the country’s transport system sought by the Government means an updated GPS is scheduled for 2019. It will be informed by the development of a new safety strategy designed to significantly reduce deaths and serious injuries on the country’s roads.

Access the consultation document here. Kensington Swan will be monitoring progress, and will keep you updated on developments. If you would like further information on this topic, please do get in touch.

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Nicky McIndoe
Nicky McIndoe

Partner

Wellington and Auckland

+64 4 915 0818

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