Spending up a storm?

In Newsletter Editorial5 MinutesBy Gavin MyersAugust 18, 2023

As they say, money talks, and the draft Government Policy Statement (GPS) on land transport 2024 released by government yesterday offers up a good indication of where the incumbent’s priorities lie – and how much it’s been listening over the last GPS update period.

For those unaware, the GPS is the government’s strategy for the land transport system over the next 10 years, updated every three years. It proposes how funds will be raised and spent via the National Land Transport Fund (NLTF). $60 billion is the total figure for the decade.

It’s hard to ignore the timing of the draft release (it was expected months ago). Naturally, the Beehive’s PR statement includes phrases like “the highest by any Government” (with reference to the $5.3 billion/34% increase on the 2021-2024 period, to $20.8 billion), and “the road maintenance crisis that it inherited” (with reference to the $5.4 billion allocation/41% increase in road maintenance). The who-did-what of it all is inconsequential. This is the situation now, and charting a realistic way forward is what counts.

Naturally, there’s commentary on the draft from all corners. There are indeed some highlights worthy of discussion…

As we know, the NLTF is largely funded by the excise duty on petrol and RUCs. One of the more controversial proposals in the draft is an initial 2 cent increase in petrol taxes and equivalent increase in RUC, to be increased in stages to a total of 12 cents over the three-year period. Government says the initial 2 cent increase would add 44 cents a week to the average motorist’s spend, increasing to $2.64 per week at 12 cents by July 2026. The result is $1.4 billion in revenue over three years.

I understand that the business community, especially road transport, might have a different opinion, but from a personal perspective I’m willing to accept the increase and pay my fair share for using the roads ­– so long as it’s ploughed back into the road network and not used to subsidise other modes.

As we’re used to, that would continue to not be the case under the draft; the government stating investment from the NLTF will “help make rail and coastal shipping a more competitive way of carrying freight” and “help reduce the number of trucks on the roads”. Yes, the government is aiming for a multi-modal freight system. That’s good, each mode has its merits, but it can only work if each pays its fair share and receives its dues for the proportion of heavy lifting it does. It adds road users will “benefit from reduced emissions, more resilient freight options, safer roads with fewer trucks and less damage to roads…”

Speaking of damage to roads, it’s unsurprising to see improved resilience and increased investment in maintenance as key priorities given recent events. There are also 15 Strategic Investment Programme projects that “present an opportunity for transformational change”, of which 10 relate directly to state highways. It’s encouraging to see SH1 (Cambridge to Piarere), SH29 (Tauranga to Tauriko) and SH6 (Nelson, various) listed.

SH1 Warkworth to Whangārei (including Te Hana to Brynderwyns, Warkworth to Wellsford and Whangarei to Brynderwyns) is rightly included too. We ventured north at the start of this week, and to say the region’s roads are in serious need of investment is a mild understatement.

It’s disappointing, however, that routes into other vulnerable sections of the country, such as SH5 Napier-Taupo and SH2 into Gisborne, are not listed. The critical link between the Waikato and Bay of Plenty also seems to be missing.

Public consultation on the draft GPS 2024 is now open until 5pm on 15 September. It’s in all our interests to have a say and ensure the government puts its money where its mouth is.

Take care out there,

Gavin Myers