Monopoly Pricing Won't Replace Infrastructure Need

Monopoly Pricing Won't Replace Need for Infrastructure

"Road pricing will not replace the need to develop the road and public transport system", says NZCID Chief Executive Stephen Selwood.

"NZCID welcomes the Transport Ministry led initiative to look at alternative means of transport funding, but considers the better approach would be to look at the long term infrastructure needs of the country and then determine how best to fund it.

While Wellington does have a good public transport system, Auckland and most other New Zealand cities are car dependent.

It's difficult to see Auckland motorists accepting road pricing in the short term when their transport alternatives are so limited.

A better option would be to use tolls to fund new roads, as seen internationally.

There are a number of strategic roads in New Zealand that could be funded, or at least part funded, through tolls. This would free up existing fuel tax to expand and develop public transport services.

In the longer term, charging for road use could gradually replace fuel tax as the primary source for transport funding. This will tend to be a natural process over time as the government's revenue from fuel excise tax reduces through improved automotive technology and increased fuel efficiency.

The current approach is all about managing demand down through charging for road use on a constrained network. This is commonly called monopoly pricing.

A far better approach would be determine is what transport services we need and how best can we fund them through a combination of tolls and petrol taxes."

ENDS

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