KEY POINTS:
The Government is assuring motorists that all their fuel taxes will eventually be devoted to transport spending, despite concern from the AA that it may be getting cold feet.
Transport and State Services Minister Annette King alarmed the association yesterday by announcing that the Cabinet had agreed to all key recommendations of a land transport sector review - but with the exception of a call to completely "ring-fence" fuel taxes and motor registration fees for transport purposes.
Among recommendations approved by ministers are a merger of Transit NZ with funding agency Land Transport NZ, with the aim of speeding up transport planning under three-yearly policy directives from the Government.
The move to reduce the plethora of transport agencies has been welcomed by the Auckland Business Forum but criticised by National, which removed funding decisions from Transit in 1996 and warned of degraded accountability if that body was allowed to "hide" inside Land Transport NZ.
"They used to be one entity and were separated for very good reason," said National's transport spokesman, Maurice Williamson.
"Transit NZ is a provider of the state highway network and competes for funds against territorial local authorities who provide local roads - they would become both poacher and gamekeeper if they were to merge with Land Transport NZ."
But Ms King expressed confidence in the ability of a single board of such an agency to run a balanced transport portfolio in keeping with a new system of directives from the Government, based on policy advice from a strengthened Ministry of Transport, which she said was "gutted" in the 1990s.
The directives would set broad investment priorities, such as the Government's desired balance between public transport, state highways and local roads, but would stop short of prescribing individual projects.
She also said the AA need not be alarmed that the Government wanted more preparatory work done before it was ready to funnel all road taxes and vehicle registration fees into the national land transport fund, instead of the much-criticised current practice of diverting 18.7c of each litre of petrol sold into its consolidated account.
"I have no doubt we are well down the track - it's just that we have to get it right before we reach that point," she said. "I am confident we will reach a point where we will have ring-fenced transport money."
AA motoring affairs manager Mike Noon said earlier yesterday that it was his clear understanding from the minister at a Budget briefing that the Government had already made a decision to ring-fence road tax.
He was therefore concerned that this was the one key recommendation of the review not to have been adopted. Mr Noon was unavailable for later comment, but AA Auckland transport spokesman Simon Lambourne said the organisation accepted an assurance yesterday from Ms King's office that all fuel taxes would be ring-fenced.
