NZ Transport Agency Waka Kotahi says new revenue needed, is discussing structure of transport infrastructure debts

Chairman Simon Bridges said NZTA was not concerned about the current plan. Photo / Jed Bradley

NZ Transport Agency Waka Kotahi (NZTA) says it has enough revenue to pay for the current three-year National Land Transport Plan (NLTP), but by the end of the decade it faces a massive $6 billion deficit, thanks to the number of expensive projects it is tasked with completing.

Asked about the deficit by Green Party transport spokeswoman Julie Anne Genter, NZTA’s chair Simon Bridges said there was a “broad consensus” that the country had an infrastructure deficit and that the Government had shown “significant ambition” in its plan to close it.

That “ambition” has come at a cost, which was revealed earlier this year when NZTA’s NLTP showed the $6b annual deficit in the plan, thanks to costs rising and falling revenue from fuel taxes and road user charges.

Bridges said tools like value capture, tolling and pricing might be used to plug the gap. He said direct Crown funding might also be used to plug the gap for particularly “significant infrastructure projects”.

He said he was not “concerned” by the funding gap, but “motivated” to fix it.

Transport spending will vastly exceed revenue. Graphic / NZTA

“We are funded to do the job, [but] given the aspirations, we need to be thinking very carefully about funding and financing in the future,” Bridges said.

NZTA group general manager commercial and corporate Sara Lindsay added to Bridges’ answer, saying that while the current three-year NLTP was funded, NZTA’s revenue needed to be addressed over the long term and a solution needed to be found before the current plan ends in 2027.

She said that while “funding and financing” was “part of the picture”, the agency “must stay focused on the revenue”.

Lindsay’s complaint is a fairly common one at the moment, with many in the infrastructure space noting that developing sophisticated finance tools was helpful, but fixing revenue is more important.

NZTA has historically raised revenue from fuel taxes and road user charges. Fuel taxes are contributing less revenue as cars become more efficient. Neither fuel taxes nor road user charges are indexed for inflation, meaning the spending power of the revenue they raise erodes over time.

Lindsay said the Government had given NZTA assurances it would step in and help the agency if forecast increases in fuel taxes and road user charges do not eventuate. The agency had other levers it could pull if this were to eventuate, including reducing spending, she said.

Another problem was the repayment of NZTA’s significant borrowings, which it had partly been forced to take on as governments ratcheted up expectations of what the agency should do without giving it additional revenue tools, Lindsay said, and NZTA was looking at changing how it repaid that debt.

“In reality, both the Ministry [of Transport] and Treasury are looking at ways to spread that debt, different ways to add certainty about what the revenue might be,” she said.

Lindsay said the gap would be plugged with a “suite of tools”, including revenue increases, Crown funding and debt changes.

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.