CTU Media Release

Strictly Embargoed to 3.00 pm, Monday 15 July 2013

3.00pm Monday 15 July 2013

Affordability key issue in funding Auckland’s transport

“Affordability is a key issue to come out of the recommendations of the Consensus Building Group (CBG) on Auckland Transport Funding,” said CBG member Robert Reid.

Robert Reid, General Secretary of FIRST Union, represented the New Zealand Council of Trade Unions on the CBG.

“As the CBG undertook the research to see how large the funding gap was, it became increasingly clear that local and central Government would have to avoid the creation of “transport poverty” and take affordability into account as they looked at ways to bridge the identified $12 - $15 billion funding gap over the next 30 years,” he said.

“Although the CBG has noted increases in rates, increases in petrol tax and some form of road pricing as possible mechanisms to generate the funds necessary for the projects, it also noted that the impact of each of these and other revenue generating mechanisms on the low paid and poorest sections of society needed to be mitigated.

“Higher rates, petrol tax or the introduction of road pricing are all forms of regressive taxation and hit those of low incomes the hardest,” Robert Reid said.

“The least regressive form of taxation is income tax and the CTU believes an increase on the top tax rate to cover New Zealand’s infrastructure needs, with Auckland having its share, would be the best outcome.”

“The Council of Trade Unions is pleased to see that central government has finally made a commitment to fund the Central Rail Loop which is a key part of Auckland’s Transport Plan.”

“We also note that Transport Minister Brownlee has dismissed the idea of road pricing or congestion charges on already existing roads.”

“That being the case, this government or a future government must come to the party with more central government funds to enable Auckland to complete its transport infrastructure projects. The more funds from central government, the lower the financial impact on Auckland’s poorest citizens.

Robert Reid said it was also interesting to note during the deliberations of the CBG, that local asset sales and public private partnerships (PPP’s) would not resolve the Auckland Transport Funding Gap

“Asset sales had been taken off the agenda by Auckland Council, but would not raise revenue anyway. Taking capital from income generating assets and applying it to the non-income generating Transport system, makes no economic sense.

“PPP’s did not find favour with the CBG either. In order to bring forward the building of some of the most needed transport infrastructure projects, Auckland Council and the government may have to take out loans. However the interest rates on such loans are at an all-time low and only a fraction of the interest payments that would have to be made within a PPP funding structure,” Robert Reid said.

“We look forward to on-going consultation with the union movement alongside other stakeholders in the lead up to 2015”, he said.

ENDS

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