Tuesday, May 19, 2009

Government moves transport funding towards state highways

The government released its policy statement on land transport funding which details what was previously outlined by Transport Minister Steven Joyce. National is moving from the heavy levels of subsidy of public transport advanced by the last government, and is using revenue from road users to spend on - roads. This has understandably upset the Green Party, which more often than not is a measure that the policy has some merit.

However, when you strip out the politics and get into the facts, the story is a lot more complicated

The statement outlines some useful facts:
- 84% of commuters travel by car, truck or motorcycle (no the rest do not all go by public transport, many walk);
- 70% of freight tonne kms move by road.

So in other words, let's not pretend that cars and trucks can be replaced by other modes, they are by far the most dominant means of transporting people and goods around the country.

What has the Minister decided?

NZ$258 million worth of improvements to the Wellington passenger rail system are no longer to be funded from the National Land Transport Fund (when road usage taxes go) but from general taxation. This should please the Greens as it means funding for railways coming from everyone, not just motorists, but it wont - because that means more money is available for roads. This is contractually committed spending, so can't be backtracked on, but where it comes from is changing, so everyone can now pay to subsidise the commuting of Wellingtonians.

We get a repeat of there being a National Infrastructure Plan being developed and Roads of National Significance, both utterly unnecessary, and smacking of central planning.

However, the real interest is what happens to the money.

What goes up?

Spending on state highways, local roads, road policing and public transport services. Yes, public transport service subsidies will be increasing (just less than under Labour), and road maintenance funding isn't decimated. Those are just utter lies spread by Labour.

State highway increases are understandable given state highways are where half the money generated for the National Land Transport Fund comes from. Funding of local road maintenance will grow far more slowly than state highways, suggesting the government sees room for efficiency there.

Local road governance needs serious reform though, I'd have local roads companies funded according to revenue generated from their networks (from road use taxes, parking fees and access fees for driveways). A single commercial Auckland road company I suspect would get enough money from fuel tax and road user charges that it could start upgrading many roads that need it. Sadly the "supercity" proposal is just going to make the current structure bigger.

What doesn't change?

In nominal terms walking, cycling, demand management, administration and transport planning funding do not change, which means they are cut in real terms. That will hurt bureaucrats and planners, and see a gradual reduction in spending on footpaths and cycleways. Not a bad thing.

What is cut?

Rail and sea freight subsidies are being phased out. Good. They never made sense in the first place.

Shift to economic efficiency

Another important shift is that economic efficiency will be of primary importance once again There will be an increased focus on economic efficiency.

"The NZTA’s evaluation processes will be adjusted to give projects with high benefit cost ratios (BCR) higher funding and programming priority and to give projects with low BCRs more scrutiny (high BCR is greater than four; low BCR is less than two). This change will place the onus on the organisations seeking funding from the NZTA to give priority to higher BCR projects unless there is good reason to do otherwise."

In other words, farewell to the days of Labour funding poor quality politically significant projects and delaying others that had high benefits but a lower profile. It does not bode well for Transmission Gully, or for large scale spending on public transport. Good.

All in all, no great surprises here. The Greens hate more money on roads, so think reducing the growth in spending on public transport is bad. Beyond that, the biggest win has to be the motorist, who will see higher proportions of their money spend on roads, and on projects that are to be primarily selected on economic efficiency grounds.

Don't forget the Nats have already promised three increases in fuel tax and road user charges during this term, so it doesn't come for nothing - at least the increases appear to all be going on roads.

It is still a cumbersome bureaucratic process, it still has little signs of commercial disciplines, I'd have flatlined public transport subsidies too at least. However, all money from road taxes is now being dedicated to the National Land Transport Fund (albeit a Labour initiative after the Nats campaigned on it in 2005), and the money will be spent more wisely.

and it is sadly, a lot better than funding arrangements in most other countries.

UPDATE: Darren Hughes is talking bollocks on transport again. His mistakes:
1. Of Steven Joyce "he failed to specify how much the Government was planning to strip from local roads and existing state highways and from road policing and public transport to fund spending on new motorways" Actually nothing is being stripped, but the forecasts have changed on the increases. All of those activity classes are increasing Darren, why don't you compare them the the forecast last year? It's not hard.
2. "Whenever public transport improvements are made, such as the Northern Busway, patronage increases sharply" Yep subsidies under Labour public transport subsidies increased fivefold but patronage increased nothing near that. Has patronage increased sharply in Hamilton Darren, for example? No.
3. "he plans to make roads less safe by removing $50 million from previously-budgeted spending on road policing" Actually Darren, spending more on state highways particularly north of Auckland, Waikato and the Bay of Plenty will save lives.
4. "he is stripping $75 million from local roads and $122 million from existing state highways" maybe Darren maintenance costs have declined because of the drop in fuel, cutting asphalt costs and the reduction in heavy vehicle traffic due to the recession? Oh yeah, evade that.
5. "Labour's approach to transport funding was also based on a multi-modal programme involving state highways, local roads, public transport, sea freight and rail. Sadly, Mr Joyce's fixated approach means that balance is now lost" Yep Darren, sea freight and rail have gone, all $8 million of it. Ridiculous spending when sea freight is commercially viable and the government already owns rail.

Yet ask Darren about Transmission Gully, a $1.1 billion road project largely unfunded (Labour only funded investigation and design, and allocated $405 million towards construction), and he'll slobberingly demand his own slab of pork for the electorate that rejected him in the election last year. Where was the money for that coming from Darren?

See for Labour, big motorway projects are just fine - as long as they are in the electorate of the former Prime Minister or the former electorate of the transport spokesboy.

UPDATE 2: The Greens use the word "force" to describe when other people are not forced to pay for their religion of public transport as much as they want them too. You see, because New Zealanders choose not to demand commercially viable public transport services, because motorists reasonably like their road taxes spent on roads, it is "forcing" them to drive. Yes, you were forced to buy a car, you hate driving, you hate cars, and you'd like nothing more than to ditch your own private space, with the stereo, air conditioning and being able to go from where you are directly to where you want to go, in favour of waiting for a vehicle, to share with strangers, having to use a MP3 player for music, while the vehicle meanders its way to somewhere within walking distance of where you want to go.

Jeanette Fitzsimons said "Today, Steven Joyce committed to widen that imbalance by spending at least $7 on roads for every $1 spent on a more sustainable alternative. From an environmental viewpoint, it's simply immoral". Actually Jeanette, since every dollar came from road users, isn't it immoral to steal from them to pay for what you want?

It remains utter bullshit to suggest that subsidising other modes makes a sizeable difference to traffic congestion. However, what is most ridiculous is the idea that people are "forced to drive". Perhaps Jeanette forgets that most of her own party's manifesto is about using force.

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