“For Whom The Road Tolls”

Rt Hon Winston Peters
Baycourt, Exhibition Hall, Tauranga
Friday 31 Oct 2003, 12.30pm.

The purpose of this meeting today is three pronged.

First it is to get the Transit board to revisit its decision and declare the Harbour Bridge Link a state highway – this is absolutely imperative if Tauranga is to move forward with the strategic roading network project.

Second, once the harbour bridge link is designated a state highway Transit and Transfund must commit to fully funding the $140 million needed to complete the project.

We must not take these road tolls lying down!

Finally we must look at the long-term funding of roading.

It is essential that the Government come up with a fairer way of distributing the excise tax to ensure that all areas are adequately funded.

The Government is trying to weasel its way out of having to pay for Tauranga’s road upgrades by saying it can’t give you the money but it can give you (the council) the legislation to allow you to toll your roads.

The Government knows Tauranga is the only place it can do that – do you think Aucklander’s would put up with tolling on their harbour bridge?

The Transport Minister (Paul Swain) has given his categorical assurance that there will be no tolling put back on the Auckland Harbour Bridge – where is the fairness in that!

The Government needs a shining example to illustrate how road tolling will work and it is prepared to resort to trickery to achieve it. To this end it is prepared to treat the people of Tauranga as fools.

It is time for the Government to listen to the people of Tauranga and stop the underhanded tricks.

There is no shortage of money – how can there be when the Government gloats of a $5 billion plus budget surplus?

A huge proportion of which comes from the country’s roading taxes.

Now it is asking the people of Tauranga to pay again! Essentially meaning they are being taxed three times!!

But in our case four times – twice for the old bridge, third for the new bridge, and fourth whilst we go on paying roading taxes.

Tauranga is one of the fastest growing cities in New Zealand.

The Port of Tauranga is New Zealand’s largest port by cargo volume.

With population growth comes traffic growth, with business growth comes traffic growth – which means the traffic going in and out of the city and port is vast.

All this points to extremely congested roads.

Tauranga could grow even more economically if the infrastructure could cope with the rapid growth – this would be a gain for the whole country.

By all the stipulated criteria it more than qualifies for State Highway status.

This was recognised by Transit management and a recommendation was made that the Harbour bridge link project should become part of the State Highway structure.

However, the Transit Board has over-ruled its own management by refusing to accept the recommendation.

In addition, it is our understanding the Transit Board has:
Refused to give any reason
Denied that the decision was ever recorded in the minutes
Refused, as individuals, to respond as to why the recommendation was over-ruled.

Therefore, the only option, they seek to deceitfully impose on us, to build the Harbour link in a reasonable timeframe is by tolling, including tolling the existing bridge. (The Harbour Link could take up to another 18 months to go through if tolling is accepted)

Tolls went off last year and will be back on next year.

The question is – is that acceptable?

We in Tauranga must say ‘No’.

Tolls are a bureaucratically sadistic relic of the times of evil Prince John and Sherwood Forest.

They will become a pox on the road map of New Zealand.

We must stop them now and make the world safer, cleaner and fairer for future generations of New Zealanders.

It is outrageous that this Government thinks it can get away with pushing through legislation without proper consultation with the people of Tauranga or New Zealand.

We must work to force the Government to change its policy and force also Transit to reverse its inexplicable decision – the time for Government and Transit deceit to end is now.

The Harbour Bridge Link must be classified as a state highway – and Transit and Transfund must commit to fully funding the project.

The cost of $140 million, we are already paying in our road taxes, must be met by Transit and Transfund.

Why should the people of Tauranga have to pay for road upgrades here when the rest of the country does not!

The Land Transport Management Bill is proceeding through Parliament.

The principle thrust of this legislation is to provide a framework for Generic Road Tolling.

This means the legislation provides for communities to use road tolling coupled with public private partnerships to fund the development of roading.

It changes the current position, which now requires any potential toll road to have its own specific legislation.

Route K needed its own legislation, as did the previous Harbour Bridge toll.

Under this legislation, the Land Transport Management Bill, toll road proposals require only an Order-in-Council made on the recommendation of the Minister.

The question is why should we have to accept generic tolling and public private partnerships?

That would only be needed if the money wasn’t being collected to pay for roading development.

But it has been - except it has been burgled by Governments.

A generic tolling regime means:
Basically, a road can come into being if the road fits into the national plan or has a high degree of community support;
Has gone through the consultation process;
Has sufficient approved investors.

Up to now, wherever a tolled road has been introduced there has always had to be an alternative route.

The new Bill no longer requires this; in fact it will be possible now for an existing road to be tolled – so the alternative route stipulation has been watered down.

Clause 53(2) is known in Wellington as the “Baldock Clause”.

The bill will also provide for money raised from road tolls to be ‘siphoned off’ and spent on such items as public transport, cycling and walking projects, with no cap on how much can be spent, and subsidising coastal shipping, including foreign shipping operating on our coast. Some even believe toll funding will go into maintaining the rail track.

Which means we are essentially back to square one – not enough money to go around.

There is also considerable doubt as to whether there will be sufficient interest by potential investors in the development of road tolling in Auckland as it would not be worth their while financially.

Auckland escapes again and the rest of the country will pay for its road upgrades.

There are political parties who want to make the regime more favourable to potential investors.

There are some MPs who believe if you do not support road tolling you are a “whinger”.

We are not in either of those groups.

We do not believe in road tolling in principle, because:

Road tolls influence driving routes and encourage drivers, to some degree, to use alternative routes.

This can result in restrictions being placed on the alternative routes to encourage use of the toll road, all at extra cost.

With public private partnerships there needs to be a profit component, which looks like a sneaky way of the Government letting in foreign investors to make profits out of public utilities the road user has already financed.

There is some financial risk, in which case the liability could fall on non-users (ratepayers?).

Thus it makes sense to us to have roads charged for by an “across the board method” in which drivers pay and choose the most acceptable route.

To our minds, road tolling only makes sense if you intend to rob New Zealand motorists yet again.

Roads are all there for each and every one of us to use, as and when we see fit.

In short, roads should be funded by the taxes and the charges currently paid and only when that money is insufficient should alternatives be looked at.

At the moment money is raised through a range of road, petrol, road user and other charges.

This amount to $635m plus per year.

Vehicle registrations amount to $202m.

Fuel excise for petrol (and gas) amounts to $550m (Petrol 17.725 c/l)

Miscellaneous income amounts to $50m.

GST on all that equates to $180m.

- All that totals $1.623 billion

On top of this, for every litre of petrol we purchase, 18.5 cents is siphoned off into the Crown Account (Consolidated Fund).
This amount is estimated in the order of $550 to $600 million per year.

So the real total is $2.223 billion.

That money is spent approximately as follows:
LTSA safety and education reg. $47m )
MOT administration $64m ) $333m (GST inc.)
Police safety enforcement $222m )

Transfund gets the balance - $1.29 billion.

This is spent on:

State Highways
Local Roads jointly with Rates
Passenger Transport (which is also subsidised by Rates

Next time you fill your car’s tank (50 litres) you will pay $27.25 in taxes and of that only $6.95 will actually be spent on roads.2

Fundamentally, roading in New Zealand has not kept pace with traffic volumes or vehicle types.

Compounding this, successive Governments have treated the motorist and road user as a ‘cash cow’.

As a result, and by numbing deceit, roading has been starved of funding.

Now a huge amount of money needs to be injected into roading to bring it up to “21st century standard”.

There has been a range of estimates of just how much cash needs to be injected into roading to achieve this.

These estimates range from $6 to $12 billion, depending on which “expert” the issue is discussed with.

However first there are a number of things that need to be done:
identify the projects
determine the costs
specify the timeframe
raise the money by borrowing on the security of existing and future road taxes.
use the 18.5 cents per litre on petrol to repay the loan.

In other words, finance our roading now by debt funding into the immediate future.

Currently billions is going into non road programme expenditure or into the Government’s coffers – No wonder the budget surplus looks so good.

The solution is simple and is in front of us.

In the 1998 budget as Treasurer I introduced a policy of returning on a compounding rate over ten years an extra 2.4% each year of the money going into the consolidated account back to roading. Alas in 1999 the National Party stopped that plan and the rest as you know is history.

All money earned from petrol and road taxes must be put back into roading programmes. This is the only way to ensure that our roads meet our growing needs.

If lack of funds is the only reason behind transit not classifying the harbour bridge link as a state highway then there is the answer.

But first the Government must change its policy and second we have to get Transit to change its ruling – The Harbour Bridge Link must be a designated state highway. This is the first step to fixing Tauranga’s terrible congestion problems.

This is not something that would be ‘nice’ for Tauranga this is an absolute necessity! The Harbour Bridge Link project must go ahead!

It is time for us in Tauranga and across this country to send the Government and Parliament a clear message.

We’ve had enough and we’re not going to take their exercise in deceit on this issue anymore.

ENDS

P.S. As another example of roading plans stalled is the Orewa to Pohoi motorway. All planning procedures have been completed and the project should go ahead but Transit say they do not have the money so want it to be a tolled road – this should not happen as it is a natural progression of the motorway from Auckland to Orewa.

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