Transport Minister Simeon Brown has given a cast-iron commitment to build the Government’s 15 Roads of National Significance, despite advice obtained by the Herald that showed those roads were over budget by as much as $24 billion from consenting.
Brown heavily hinted the Government would include the roads in its fast-track consenting process, with details coming later this week, meaning the roads would be automatically consented, with consenting panels having the ability only to attach conditions to the consent, rather than being able to block it.
“Tackling consents certainly helps to drive down those costs, particularly around some of the conditions that we’re seeing attached to a lot of these projects,” Brown said. However, it is difficult to see the Government saving $24b by simply consenting the roads more cheaply.
Prime Minister Christopher Luxon gave a strong commitment to getting the roads built in his post-Cabinet press conference, despite cost challenges, saying they were essential to building a productive economy, and comparing the poor state of our roads to those overseas.
Brown agreed Luxon’s commitment was “no ifs, no buts”, and said the Government would not be allowing objections around cost and consenting to stand in the way of constructing the roads.
Speaking to the Herald after releasing his Government’s $20 billion draft Government Policy Statement (GPS) on Land Transport - effectively a draft transport budget - Brown hinted that fuel taxes would not be long for this world.
Despite the Government’s decision to hike fuel tax each year from 2027, Brown confirmed the tax would almost certainly be gone by the end of the decade, and be replaced by a universal road user charge (RUC), which will see all road users charged depending on the weight of their vehicle and how much they drive it.
Brown said he is getting advice in the middle of this year about how quickly he could move to an RUC system.
“I know the Iceland Government is also doing it [going to RUC-style charges]. They’re looking at doing it next year, so we will look to see what they’re doing. Technology is going to have to play a role in terms of making that work.”
He said the tax would “absolutely” be gone by the end of the decade. The advice he was receiving would look at the “transition”. A challenge is the sheer technological heft required to get a system capable of processing the RUC transactions of New Zealand’s millions of road users.
The first fuel tax hike will be 12 cents a litre in 2027, then a further 6c hike the next year, followed by 4c each year after that.
“We’ve indicated then going back to regular small increases in fuel excise going forward,” Brown said.
“That’s about securing the long-term financial sustainability of the National Land Transport Fund... so [NZ Transport Agency Waka Kotahi - NZTA] have confidence to enter into long-term contracts, confidence to get on and get things done for New Zealand,” Brown said, sounding a lot like his predecessor David Parker, who also made a pitch for raising fuel taxes to secure the sustainability of the transport system.
The GPS sets out how the Government would like NZTA to spend transport money over the next 10 years. NZTA uses those directions to put together a National Land Transport Plan (NLTP), which is a more detailed document that sets out where the money will actually go. Despite the GPS looking out over 10 years, the transport plan covers just three years.
Brown wants this to change.
“We actually want to move to a 10-year National Land Transport Programme. So we’ve got much longer-term thinking which will drive costs and lead to greater efficiencies and actually be able to deliver the infrastructure in New Zealand’s needs sooner.”
Brown also confirmed a renewed focus on using fines for enforcing safety, saying most fines had not increased since about 1999. He confirmed he wanted these fees adjusted, mainly to take account of inflation.
A seat belt fine currently costs $150. This would rise to $278 if adjusted for inflation since 1999.
The plan included some hefty cuts to spending lines used by local government to invest in building new public transport infrastructure and subsidise the funding of existing services.
Auckland Mayor Wayne Brown would not speak to the Herald last night, but Wellington Mayor Tory Whanau said, “We need a transport system that gives people other choices than just using the car”.
“We are expecting thousands more people in Wellington over the coming decades. If we don’t reduce congestion now our roads will be gridlocked on a daily basis,” she said.
Whanau said that while she was glad to see improvements in bus priority and rail for her city, it was “concerning to see nearly half a billion cut from cycling and pedestrian work. That is a backward step for our cities and climate action”. She said council officers would be working to understand what that would mean for cycle projects not already approved.
Funding for public transport has been cut dramatically. Labour planned to spend up to $3.2b on public transport infrastructure over the next three years. This has been slashed by nearly $1b.
The funding pot for council subsidies to public transport services has also been cut, which could mean councils being forced to hike fares. Labour had promised up to $2.8b in subsidies over the next three years. The new Government has cut this to $2.3b.
Simeon Brown said the last Government increased public transport funding by 71 per cent in five years, despite patronage declining by 23 per cent - although he conceded some of this was due to the Covid-19 pandemic.
He said the “private share” of funding for public transport had fallen from 32 per cent to 11 per cent in the same time.
Funding for walking and cycling improvements has nearly been halved from up to $1b under Labour to $510m over the three years under this plan.
One looming question for Brown to answer is who will own Auckland’s City Rail Link once construction is finished and the new line opens. The project was meant to be funded 50-50 between Auckland Council and the Crown, but blowouts had seen the Crown pondering dipping in a greater share of funding and potentially taking a larger stake in the project, although Brown told RNZ’s Checkpoint the deal had already been done to keep the funding split at 50-50.
“The decision has been made about the funding envelope,” Brown said, saying his focus was now on getting the CRL open.
Ownership was a key question raised by transport officials in their annual review select committee meeting in Parliament last week. There has been no indication who will own the project and by what mechanism it will be owned.
Asked whether he had given thought to who owns the project once City Rail Link Ltd, the company delivering the project, hands it over, Brown said, “there’s lots I’ve given thought to, but the key thing at this stage is making sure it’s ready to go.
“It’s a partnership between Auckland and the Crown.”
Asked whether 50-50 ownership was no longer a foregone conclusion, Brown said: “At this stage, it’s not something that I’ve been giving a lot of my thinking to. My thing has been really about making sure that it’s ready to operate,” he said.
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.
Expectations tempered around return to surplus in 2027/28.