Fran O'Sullivan: Government on right road to get NZ moving

The switch of emphasis in transport spending does not mean Labour is "anti-car". Photo / Dean Purcell

Seriously, does anyone truly believe hyperbolic claims that Government "lies" over higher fuel taxes have cost it the 2020 election? They certainly send my BS detector off the scale.

In my experience, a Government's fate does not get sealed by marginal lifts in the fuel excise to the tune of 3-4c a litre for the driver of an average car filling up a 50l tank once a fortnight — some $39-$45 more a year — even when followed by similar rises in the subsequent two years.

To me, this is rank nonsense.

What's more likely to have an influence at the next election is an epic bout of stoked-up rage caused by the failure of this Government to start on the necessary transformative change to get motorists out of their cars and on to public transport, freeing up the maddening congestion in city streets for those who stay wedded to four or more wheels.

If the Government similarly failed to make any real headway in its first term in office in addressing the severe housing shortage, the governing parties would certainly face a credibility test in 2020.

But in the meantime the Labour-NZ First coalition is simply doing what it said it would do — introduce radical change rather than maintain the status quo.

Transport Minister Phil Twyford's draft transport package has laudable aims. Increase the funding available to build rapid transit infrastructure in our major cities — instead of the current focus on building more and more major roads. And ultimately introducing a switch to "demand pricing" — using market signals to get people off the roads at busy times.

On an international scale, there is nothing really radical about the Government's proposals.

Singapore and Queensland for example have first-class road networks backed up by major investment in public transport infrastructure. Bespoke solutions for Auckland — particularly for proposals for congestion charging — have also been recommended rather than simply copying (for example) London.

Twyford maintains that an increase of between 3c and 4c a year over the next three years continues the track of recent years with charges going up by 3c a year in 2009 and 2010, 2c in 2012 and 3c again in 2013, 2014 and 2015 under the National Government.

"The funding increase will go toward a 42 per cent increase in spending on local road improvements, a 96 per cent increase in spending on regional roads and a 22 per cent increase in local road maintenance along with an 81 per cent increase in road safety and demand management."

This switch of emphasis does not make Labour "anti-car" either — it is very likely that more roads will be built over time but funded differently once Labour works its way around to showing open acceptance of public-private partnerships and tolls.

It's important that the Government holds its course.

It has been attacked for using semantics to claim the proposed excise hike will not be a tax hike.

That's because Finance Minister Grant Robertson said last September: "There will be no new taxes or levies introduced in our first term of government beyond those we have already announced."

In the scale of political wriggle-room it's really not worth entering this debate. National Finance Minister Bill English argued his tax switch — where GST was hiked to help fund cuts to personal and company income taxes — would turbo-charge domestic growth and shift New Zealand out of the economic cul-de-sac so we could start closing the gap with Australia.

English argued his "once in a generation" package was needed to fire-up growth by switching the tax system towards the productive sector and away from property investment (It did not do the latter).

Treasury also projected the funding shortfall from the switch would grow to $1.085 billion over a four-year period on what it called a "static" basis.

But the reality is despite prior promises not to raise taxes, National did just that and was elected with sufficient seats to form a government with minor party support at the next election.

What is more important is that the Government arms itself with sufficient support to deliver on these major policies in transport and housing.

It needs to arm itself with special powers to bust through the regulatory and planning laws that have the capacity to slow change. It has sufficient votes in Parliament to do this.

With apologies to George Orwell, the purpose of the revolution is to establish the new dictatorship.

Just do it.