Major shake-up for transport
Climate change is set to become the government’s top priority when it comes to deciding on where investment in transport is made.
Ministers are finalising a strategy to go out for consultation this year that will lay down where tens of billions of dollars of funding will be spent in the next three years.
It is likely to result in a shift to public transport and away from emissions-intensive investments, such as new highways.
And an overarching goal will be to reduce the amount of driving and thereby emissions. While officials say projects that will increase emissions will not necessarily be axed, they are likely to face a “high threshold” to get funding.
Michael Wood, Minister of Transport, has proposed changes to the way $2 billion of maintenance money is spent each year, reports the NZ Herald based on a briefing released under the Official Information Act (OIA).
Wood, pictured, says that after being frozen for three years, increases in fuel taxes and road-user charges (RUC) are on the table, but no decision has been made about increasing them yet. The last time the current government hiked fuel taxes was in 2018.
Wood’s plan is likely to be in the next Government Policy Statement on Land Transport (GPS). These are drawn up to set out where Waka Kotahi should spend what it earns from fuel taxes and RUC over the next 10 years. The transport agency uses the GPS as a guide for its National Land Transport Plan, which sets expenditure over the next three years.
The last GPS was touted as $54b over 10 years. The NLTP that resulted from it is estimated to come to $24.3b. Each GPS has priorities, such as road safety or maintenance.
This time around, Wood has decided to single out emissions reduction. This will be followed by five other focus areas – safety, integrated freight, sustainable urban development, maintenance, and resilience.
“What comes out of the events of the past month has been that we have to bring forward even more strongly the focus on climate change,” the minister told the NZH.
First up is the need to be building a resilient system that’s better placed to manage more extreme weather. Then there’s “the need to increase efforts to reduce our emissions so we’re not contributing to that problem and making it worse”.
This year’s extreme weather events have delayed the draft GPS from going out to consultation because the Beehive didn’t want to overload councils dealing with disaster response.
“We need to make sure that we’re fully taking into account the magnitude of what we have experienced in the way we’re shaping priorities for the GPS,” Wood says.
Labour’s first GPS, unveiled in 2018, shifted funding from state highways to local roads causing some highway projects to be scrapped. However, it ended up borrowing money to build the roads anyway.
A briefing on priorities for the GPS from October released to the NZH under the OIA shows the government planning a greater shift towards emissions reduction by using road maintenance funding to shift road space from private cars to buses and cycleways.
At the moment, nine per cent of the road network is renewed or maintained each year. This is expected to cost $2b annually by 2024.
Wood says Waka Kotahi and councils needed to “start planning for these changes now” to make investments to “decarbonise the transport system”, such as including bus lanes in high population-growth areas when completing road maintenance.
Julie Anne Genter, the Greens’ transport spokeswoman, describes using maintenance funding to achieve emissions reductions as “pretty sensible”, adding “all this time we should have been able to use maintenance and renewal funds to improve the design of urban streets”.
National’s transport spokesman Simeon Brown says Wood wants to “raid the maintenance budget for our roads to put in place cycleways few New Zealanders use to go to work”. Brown told the NZH that National will can Wood’s proposals and “start again” on the GPS if National wins the general election.
Another big part of the debate focuses on how the GPS will be paid for. Labour put up fuel taxes in its first GPS by 3.5 cents a litre a year for three years. It then froze them in its second GPS. This has put funding pressure on Waka Kotahi, which has had to grapple with rising construction costs.
Any increase would come on top of the 25c/l that will be added to the cost of fuel when the government rolls back its temporary fuel tax cuts. These costs exclude GST, which adds 15 per cent to any increase.
In his paper, Wood notes there’s “greater uncertainty” about funding for transport than in the past. His briefing adds “cost increases” across the land-transport programme means most transport funding “will need to be devoted to maintenance and meeting existing commitments”, meaning less money for building new projects.
Wood says a decision to continue the freeze or lift taxes had yet to be made yet. “We’re very cognisant of cost-of-living pressures. At the same time, we do have a challenge to ensure we fund the system appropriately.”
He adds giving people “more transport choices will give them more of an ability to manage cost-of-living issues”. This could mean public transport, walking and cycling in cities, or taking logging trucks off the road and onto rail in rural areas.
Wood points out National hiked fuel taxes by 14c/l when in office. Brown hasn’t ruled out hiking fuel taxes either he was to redraw the GPS after the election, adding National doesn’t “have any intention at the moment”.
Other funding sources will also make themselves felt in this GPS, reports the NZH. In 2022, the government created the Climate Emergency Response Fund, which used the billions of dollars generated from the emissions trading scheme to fund emissions reduction policies. Wood confirms some of this funding will make its way to the new GPS.
The number of new roads the GPS allows to be built is likely to be another issue. This will be the first GPS published since the first emissions reduction plan and the government’s infrastructure strategy. Both documents state New Zealand needs to stop or slow down building infrastructure that encourages emissions. Click here to read the NZ Herald’s full story.
