Media Statement

26 July 2011

No surprises GPS good for short term certainty, but lacks longer term vision

"The Government Policy Statement on Land Transport Funding released today confirmed the Government's commitment to the Roads of National Significance (RONS) and provided support for Christchurch, safety programmes and showed the Government is thinking more broadly about how it delivers infrastructure," said Chief Executive of the New Zealand Council for Infrastructure Development, Stephen Selwood.

"But longer term there are a number of issues not recognised in the GPS. Perhaps the most significant of these is the limited future of the fuel excise duty. More efficient vehicles and drivers are lowering the relative tax on each litre of fuel sold, while the regulatory costs of delivering transport infrastructure increase. That means we're getting less road for our dollar and less tax every time a commuter uses one. It's a double whammy and the GPS only recognises 1-2 cent per litre per annum increases over the next three years.

"Adding to a dim long-term funding future, several big ticket items are conspicuously absent. An additional Waitemata Harbour Crossing, for example, will need allocations from the National Land Transport Fund within the next decade if it is to be delivered before restrictions start affecting the existing Auckland Harbour Bridge. The GPS provides no assurance that these costs have been recognised and will be met.

"Nor is there mention of Auckland Mayor Len Brown's CBD rail link project, reaffirming that the Government has no capacity to contribute to this $2.4 billion project. That's $2000 that every Aucklander is going to have to stump up if the region wants a CBD rail loop.

"The only way centres such as Auckland are going to be able to deliver big ticket transport projects not included in the GPS is if there's some adoption of road pricing. The GPS acknowledges such mechanisms may be required long term, but doesn't enable or facilitate them. We need these types of funding sources today. Without additional funding it is clear that the growth plans set out in the new Auckland Plan will not be able to be realised.

"Christchurch residents will be happy to see they've been acknowledged in the statement, and the establishment of a Road Maintenance Sector Task Force to improve value for money in the delivery of roading infrastructure is a great development. Hopefully the taskforce can turn around productivity growth in the construction sector which has flat-lined for a number of years. They will need to. Funding for renewal and maintenance of roads see a reduction in real dollars committed over the next decade.

"The GPS provides good certainty of direction in the short term but signals some significant funding challenges in the near future," Selwood says.

ends

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