Transport package will be music to the ears of Auckland business

By FRAN O'SULLIVAN

A major national land transport and road safety package, which could cost up to $250 million a year, will be finalised within the next few months.

The package will be music to Auckland business, which has been lobbying for months now for a sensible transport platform to underpin New Zealand's business capital.

The package is one of several major Government policy initiatives yet to be announced which is tucked away as a quantified or unquantifiable risk to the Budget numbers in the 2001-2001 fiscal year.

State-owned enterprises will also be asked to cough up surplus capital in the coming year to fund other investment programmes such as the new Crown Seed Capital Fund.

In the absence of a privatisation programme, the Government will resort to borrowing to invest in major infrastructural developments.

The Minister of Finance, Michael Cullen, announced yesterday that the $100 million the Government will invest in the new Crown-led venture capital fund would be financed 50:50 through taking capital from the Crown Research Institutes and SOEs.

The Budget Economic and Fiscal Update suggested the expected capital withdrawal from SOEs might not go ahead.

But officials said last night that the measure was back under active discussion and obviously had to come from somewhere.

Minister of Transport Mark Gosche's package is still in front of a cabinet committee and has yet to be fully costed by the Treasury.

But it contains a range of options for dealing with the roading component of Auckland's transport platform, and national roading programmes, as well as measures to improve pedestrian safety.

The $250 million estimate, if approved by Dr Cullen and the cabinet, would come from a mixture of capital and operating funds.

The transport strategy is being developed in a rare partnership between central Government, local authorities and business.

Under consideration are raising excise duty on fuels, increasing road-user charges, using a mixture of public and private sector equity to ameliorate the upfront cost of new roading investment and toll roads.

The Government has not costed the purchase of the Auckland rail lease from Tranz Rail and the associated instrastructural assets to ensure it keeps its bargaining leverage in upcoming negotiations.

Another so far unquantified risk comes from Television New Zealand's move to a public service charter, which is expected to reduce the flows of dividends and taxes.

In Budget Economic and Fiscal Update documents a table shows Government cashflows producing $12 billion over the next five years, but it will need to spend $19 billion, leaving a $7 billion borrowing requirement.

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