It's time to reform land transport funding and management

I'm not usually a supporter of new bureaucracies, but I'll give the Infrastructure Commission its due, it's done quite a good job at summarising the main strategic problem in land transport funding.  That being that political ambitions, which match a lot of public ambitions, for spending on roads, railways and public transport, exceed the political willingness to tax the public to pay for them.

More precisely, it seems to exceed the willingness of the public to pay more fuel tax and road user charges, or rates, or for public transport, fares.  I say this because I think it is a fair bet that Luxon and Ministers Willis and Bishop don't think the public would swallow double digit increases in fuel tax or percentage increases in road user charges largely to pay for big highway projects, mostly in the North Island and mostly near Auckland, Hamilton and Wellington. 

The Infrastructure Commission notes that:

Since the late 2010s, spending on roads and rail has far exceeded user revenues, requiring large top-ups from general taxes. In the 2024–2027 funding period, Crown grants and loans totalled $12.8 billion, or nearly 40% of the $32.9 billion in planned expenditure. 

Source: Infrastructure Commission

The Commission continues:

New Zealand spends more on land transport than any other type of infrastructure. Mature road and rail networks connect most parts of the country, supporting the smooth movement of people and freight that underpins a well-functioning economy. While these networks perform reasonably well against peer countries, some important gaps remain. Land transport infrastructure providers face limited external oversight and no economic regulation to protect consumers – which is unusual compared with network sectors where consumers can’t choose between multiple providers. Transport faces several challenges, such as rising congestion on urban road networks, rising carbon emissions, and high health impacts from air pollution and road crashes

What's new

So this gives the impression that there are problems, today in 2026, with congestion, emissions and safety. You might think that this isn't exactly new, and you'd be right. Let's turn the clock back over 27 years...

Maurice Williamson, Minister of Transport, 18 November 1998

For years we have seen steady growth in traffic volumes. Currently, the traffic on our roads is increasing by about 4 percent each year. Also, the way we use our roads has changed. Expanding industries like forestry, dairying and tourism have increased road use in many rural areas beyond their capacity. Population growth in areas such as Auckland, the Bay of Plenty and parts of Waikato has meant that road use in these places is growing more quickly than in other parts of the country.

Some roads are less safe than they could be because they were not designed to carry either the volume of traffic or the amount of heavy vehicles they do. We can improve the safety of our roads, and reduce the human and financial costs that crashes create. The increasing use of our roads also puts greater emphasis on the environment - the environmental impacts of road use can be reduced.

Traffic growth is causing increasing congestion problems in many, particularly urban, areas. It is also increasing maintenance costs and the demand for new roads. We are struggling to meet these new financial demands.

Simply spending more money on the problems would add costs to our total economy, which we would all have to bear. What we need is a system that is smarter at informing road users of the costs they are creating, and smarter at deciding where new investments should go.

A system that results in our road resources being used very wisely. If we wait the problems will get worse and the costs of changing will be greater. If we act now, the changes can be managed in a gradual process with minimal upheaval.

That press release was in the context of announcing a major reform of the land transport funding system, that didn't proceed.  

What did happen was three things. One of them is the most obvious, politicians threw money at the problem, and as happens so often when government spending increases exponentially, it doesn't deliver the value for money that it used to.

Spending spree

If we compare 1998 in real terms (using CPI inflation to bring 1998 prices to 2025 dollars), spending on road infrastructure and public transport alone (there was little government spending on rail infrastructure in 1998), has increased by around 350%. That's 3.5x increase over and above inflation in spending on roads and public transport.

As you see above, 40% of current land transport spending isn't coming from motoring taxes (let alone charging rail users even a quarter of the costs of maintaining their infrastructure), it's coming from general taxes. 

Taxpayers are literally subsidising the movement of goods and people by rail and by road, or to be more precise, subsidising those engaging in the construction and maintenance of the network. In 2025, $4.211b was collected from motoring taxes (fuel tax, road user charges and motor vehicle registration/licensing fees). User fees are sufficient to cover road maintenance and a little more, but not to cover road maintenance and all spending on public transport, or road maintenance and all spending on road improvements.

This table below outlines that increase, using the budgeted spending in 1998 (it being harder to access reported spending online) compared to reported spending in 2025.

Comparison of 1998 and 2025 land transport spending: New Zealand

Where has the money gone?

Public Transport

Despite what you might think if you pay attention to the likes of Julie Anne Genter, or some environmental lobbyists, by far the biggest increase in spending over this period has been on public transport subsidies and infrastructure.  That's money to subsidise the operation of trains and buses, and money to subsidise renewing or improving infrastructure, such as railway stations, busways, the City Rail Link in Auckland and the National Ticketing Solution.

This has been over a twelve-fold increase in spending on public transport. 159 million trips were taken on public transport in the 2025 financial year. It was around 60 million trips in 1998.  With a 40% increase in population during that period, that's an 89% increase in patronage, but I'll leave it to others to judge whether that increase in land transport spending by central government has been good value for money.

Then roads

Also notable has been a big increase in maintenance for local roads and state highways. While some of that may be attributable to increased heavy vehicle traffic, it also shows a remarkable drop in productivity and inflation in costs.  The system has not incentivised or encouraged much in the way of efficiency in managing existing assets.

While much is rightly made of the increase in spending on state highway construction (and much more is planned), but what hasn't happened is that local road construction has not grown anywhere near as much.  The demands for local road improvements are, on average, likely to be lower than the state highway network, as most local roads are either suburban streets or lightly used rural access roads, but there is little real indicator as to whether this split in spending is appropriate or not.

What does seem clear is that highway construction and maintenance costs have grown exponentially, especially in maintenance which, in real terms, should not have increased that much above inflation. 

Warnings about risking poor quality spending.

However, this was exactly what was forecast in the late 1990s if there had been no substantial reform.  When spending on land transport infrastructure was increased then, there was concern about the capacity of the contracting sector to efficiently accommodate growth without inflating the cost of capital works.  After 1996, the Government increased spending gradually. Lowering the threshold for funding from a BCR of 5:1 to 4.5:1 in one year, then down to 4:1 in the following year, and at that point there were ample projects to advance. It was, at the time, thought that spending might be increased further, alongside increases in motoring taxes and reducing the diversion of part of fuel tax to the Consolidated Fund (this diversion ended completely in 2008). However, the view from Treasury at the time was that the threshold of spending should be a BCR threshold of 2.5:1.  

(Footnote: Be cautious about comparing BCRs of projects in the 1990s and 2000s to today, because today's BCRs include a lot of additional benefits, the evaluation period is longer and the discount rate is much lower than it used to be, but that's another story).

The main conclusion in the late 1990s was that just pouring more money into the system was far from optimal.  Big reasons why the system was not ideal were identified:

• The PAYGO method of funding capital from cashflow could not support large scale capital spending that has transformative impacts
• The artificial distinction between new capital and renewing capital/maintenance, with short term funding cycles for the latter generates poor incentives to optimise spending on maintenance across the asset life of roads
• Without better pricing of road use, some roads would be overused at certain times, with some road users not paying enough, and some paying too much to the use the roads.  Far better to enable pricing to reflect demand, capacity and the costs of supply on a more refined scale than the national average across all roads across the country.
• Little relationship between road users and road providers, with very limited feedback from road users to road managers and poor incentives on road managers to respond to the needs of the former.

Quite simply the incentives for innovation, especially for efficiencies was not good enough. This is particularly an issue for territorial authorities, which are more reluctant to engage in long-term contracting for road maintenance, or to consolidate contracting across multiple councils.  While it is possible to have political direction around some of these matters, none of this matches having financial and institutional incentives to optimise maintenance and performance,

On new projects there are five big factors that have influenced inflation in project costs:

1. Contractors do not think there is sufficient risk that large projects, once committed, will be cancelled or scaled down, so price accordingly. This is because the projects are explicitly politically identified, and contractors know that the risk of a politician cancelling a project because of cost, especially after a project has started, are low. Look at City Rail Link and Transmission Gully. Nobody was going to pull the plug on projects already underway because costs went up, and the New Zealand contracting market is too small to fear someone else being brought in to finish it. That's what happens when it is a politically-driven, not commercially-driven model of managing assets. By contrast, look at the M6 project in Sydney, which may be abandoned because the contractor is unwilling to complete the project under the current budget, following an unexpected collapse of part of the tunnel.
2. Gold-plating of projects to meet either institutional or political aspirations. The Northern Gateway toll road north of Auckland had its design speed increased and a tunnel included in its scope specifically because the agency involved wanted to "show off" what a great toll road the first new generation toll road would look like in New Zealand (the original design had a gully instead of a tunnel, and 80 km/h design speeds). Whether that was justified or not, the reasoning for doing it was nothing to do with economics, it was driven by a belief that the money would be spent anyway and for a Crown Agency to "show off" to the public. Likewise, insisting that the Northland Expressway is four lanes throughout with grade-separated interchanges its full length, amplifies costs with insufficient economic benefit to justify the cost.  There are very sound reasons to rescope (and indeed this used to happen in New Zealand from time to time).
3. The start-stop-start cycle of project development. The infrastructure sector advances this as the main reason, which is false, but it is an important factor. Long term strategies for corridors would help plan both the resourcing, sequencing and encourage competition in project delivery, so that equipment and skilled professionals could be guaranteed being occupied for a decade or longer. Starting and stopping projects is wasteful, unless of course, the projects were poor value in the first place (like Auckland Light Rail).  The presence of a long-term pipeline of economically viable project would be a good thing to help build a competitive industry and build capability.  A sector which sees commitments to projects appear and disappear depending on who is in power will charge more to manage that business risk.
4. Incremental growth in the costs of doing business. Part of it can be blamed on local government through the RMA, but it can be seen in the significantly higher amounts of planning, consultation and investigation work needed today compared to the 1990s. The process has become more complex, time consuming and seen a vast increase in the numbers of people involved in these projects. Some of this reflects increases in the cost of doing business, contracting and employment in the sector, due to incremental measures implemented by successive governments. However, the effects of this have been insufficiently appreciated (though this is also seen in construction more generally)
5. Rent-seeking behaviour by professional organisations in the sector. Competition has simply been insufficient. While there have been increased in construction costs, part of this has been opportunism for extracting greater profits from a sector that has been flush with money for some years. It has also been outrageous that the professionals involved in investigation and design work have increased their scope and fees at the same level, even though they don't face the increased input costs for construction.  On average it was always assumed that the pre-construction phases for major road projects were around 15% of the construction costs. Quite why these costs should increase at the same rate is unclear.
6. Higher labour costs for a shortage in professionals. There aren't enough technical experts to go around, and they are working in a global market for their experience. This is expensive for a country with a relatively low exchange rate, low GDP per capita, that is far away and has relatively high housing costs compared with say the United States.  However, having a steady stream of work for projects should help that over time.

The Infrastructure Commission notes:

The RoNS projects are expected to cost significantly more per kilometre than earlier New Zealand motorway and expressway projects, and significantly more than the OECD average. Indicative target cost ranges published by NZTA suggest costs should ideally be much lower. The Northwestern Busway is expected to cost much more than previous New Zealand busways, potentially exceeding the per-kilometre cost of many underground rail projects overseas. These cost increases constrain what can be delivered without displacing other needs.

The thing is, NZTA seems unable to fully understand why this is the case, let alone be able to contain these costs. 

Politicians have made the system worse

The entire system is not particularly well set up to challenge these, and since 1998 two major reforms have made it much worse:

• Creation of the New Zealand Transport Agency
• Almost complete politicisation of the National Land Transport Programme

In 1998, funding was decided by an arms-length independent funding agency called Transfund. It was small, nimble and focused on essentially buying the best value for money for maintenance and improvements to roads and public transport for motorists, who fully funded it through road user charges, fuel tax and motor vehicle registration and licensing fees. There was no Crown money from general taxation. The 1998 National Roading Programme was fully funded by road users, and money was allocated first to road maintenance, public transport subsidies and then whatever was left was available for capital improvements.  

The Clark Government merged it with the Land Transport Safety Authority in 2004 (then responsible for regulating drivers, vehicles and commercial vehicle operators, and managing the motor vehicle register and collecting road user charges).  Making the new agency - Land Transport New Zealand - a regulatory and funding agency. However it was in 2008 that it was merged with Transit New Zealand - the state highway manager - to make a land transport agency monolith - the NZTA. The National Land Transport Fund was now being allocated by the same agency which also is the largest spender of those funds.  No longer would the state highway manager have to be worried about convincing Transfund about what funding it needed, or on its performance, to justify funding it wanted.  NZTA funds itself.

That mistake would not have been quite so bad had the Clark Government not also all but destroyed the independence of NZTA through the Government Policy Statement (GPS) process of directing land transport funding. The GPS essentially politicised land transport funding, with the Minister of Transport able to simply direct how much money would go into whatever funding categories the Minister wanted.

That meant that three-yearly National Land Transport Programmes were politically directed.  From a system that rationed maintenance and focused on optimising maintenance so that capital spending could be maximised without degrading the road network, to a system whereby the whims of Ministers could redirect money where they saw fit.  Roads of National Significance,  public transport subsidies, rail projects, cycleways, whatever was wanted, could be funded. Furthermore, when Ministers or Governments changed, the whole programme was up for grabs. Projects might be cancelled and new ones started, with Ministers demanding to know "how soon" a project could be "shovel ready" to show progress, because once it started, it was hard to stop.

Imagine the incentives that puts on the contracting sector, both to please NZTA by getting work started, and to not be concerned about cost inflation once a project has commenced. It also sent a signal about investment in capital and professional staff through a political cycle.

The Infrastructure Commission puts it politely:

NZTA acts as both funder and deliverer of projects – combining functions previously kept separate. Between 1997 and 2008, one Crown entity (Transfund, renamed Land Transport NZ in 2004) was charged with administering transport funding and making investment decisions. Transit New Zealand was responsible for state highways and had to bid for funding alongside local road controlling authorities. Maintenance took precedence over new capital works, and only the highest-value projects were funded.

The Government Policy Statement on Land Transport (GPS-LT) directs spending in the sector. Unlike other network providers that invest to meet demand, land transport investment is heavily influenced by the Government of the day’s objectives. The Minister of Transport determines funding ranges for expenditure categories through the GPS-LT, based on advice from the Ministry of Transport but without independent oversight. In recent years, Governments have also directed specific projects for delivery, leading providers to spend more than user revenues allow.

That was destroyed by the Clark Government, and the Key/English and Ardern/Hipkins Government did nothing to change this, but rather all doubled-down on growing the NZTA's role and functions, and demanding ever more money be spent on their "objectives".

So what next?

The 1998 warning was part of an announcement to radically reform how roads would be funded and managed. They would become businesses, like state owned enterprises. They would be paid by users, directly. They could borrow against that money for new projects. They would be subject to regulatory oversight, and it would have removed ratepayer funding for roads. There would have been maybe eight local road companies, and they would have been expected to make a profit and pay company tax. 

Obviously that didn't happen, and there is little sign of it being revived, but there does need to be a change... more on that to come...

UPDATE: Corrected earlier PT figure estimate which was too high.

The climaxes of those who absolutely love expensive and scarce oil

There are people absolutely loving the price of fuel going up and eager for there to be fossil fuel shortages. It’s getting them terribly agitated, in a quasi-sadistic scolding way. “Told them so” said one, “those car fascists are going to pay” said one politician, “if only there were cycleways, the teachers and nurses would use them to get to work” said an earnest unionist. “It’s ironic that the white supremacist genocidal Zionists are helping up” said keffiyeh wearing angry woman.

It started online of course, chatting together getting all excited. “Shortages will show them we were right all along, public transport is better, that’s why we need to tax people more to make it free” said the urban planner. “The people, well I mean they aren’t really human are they, that own Ford Rangers or RAM are going to feel it bad, and they’ll realise how uncool and hate filled such vehicles are” shouted the Greenpeace staffer. “Child murderers!” cried out the neurodiverse kindness campaigners. “They’re not all ACT or Winston supporting straight white men who don’t have degrees though right?” said the elder gentleman who once marched against apartheid”. “No, but 90% of them are” said the suspicious purple haired non-binary student. The university lecturer noted “Look this will expose the far-right white supremacist Zionist Trumpist terror supporters to the mass of good people who support a powerful exemplar of decolonising resistance”, before the photographer yawned and said “steady on now, we need to be practical if we are to free people from the car addiction they don’t want.

A failed list candidate said “Great, even though the climate destroying far-right scum are in power, it’s election year and can get The People on our side.  We can finally show people how wonderful it is to share journeys with others on public transport, or enjoy being with nature in a cycleway”. A sick, sniffing one said “and it doesn’t matter about the Nazi Ranger drivers, all we need is for the Greens to give Labour enough of a boost to kick out Peters and Seymour”.

I might jest, but they really are almost tumescent in their excitement. 

This is the chance, the central planners can take more taxes, they can impose new rules, they can spend more of your money and direct the poor “addicted” car users to the more enlightened future of more public transport use, more cycling, more walking and of course freight should go by rail.  Not having convinced enough people that abandoning driving was necessary to save the planet, they think they can convince people that it is for their own good to abandon their transport choices.  

What do they want? You don’t even need to ask it’s all pretty clear:

• Make driving less attractive. Slower speed limits, remove general traffic lanes, remove parking, tax cars more.

• Tax you more (now or later) to subsidise public transport even more with cheaper fares, despite demand being up and the cost of providing services going up as well.

• Tax you more to subsidise rail freight, because businesses that use it already need a helping hand from… you.

• Tax you more to subsidise people who can afford to buy new cars to buy EVs, and for other people to buy e-bikes. 

Lunatic fringe academic Timothy Welch is one of these people . He’s a senior lecturer in urban planning, which of course is something we need much less of.  He gets republished by leftwing media because he plays to its unconscious bias, as he really knows little about the commercial side of the transport sector and is keen to selectively quote data as facts to support his own point of view.  His claims are mostly value judgment nonsense. 

His latest piece of polemic sees him supporting taxing buyers of petrol vehicles to subsidise buyers of EVs (it wasn't long ago he was bemoaning EVs saying "EVs require the same amount of road space and, due to their increased weight, potentially cause more road damage. But EV owners don’t buy petrol, which means they don’t pay excise tax – the same tax that pays for expanding roads". EV's don't cause more road damage, but then after the Government put EVs onto road user charges he bemoans it making EVs "less competitive".  More generally he supports making new vehicles more expensive (through the “Clean Car Standard”) which helps ensure the vehicle fleet stays older for longer, but Welch doesn’t like cars at all.  He loved that fewer utes and SUVs sold under the Clean Car Standard.  He bemoans the car ownership rate of 815 cars per 1000 people “one of the highest in the world”.  This should be celebrated that so many can afford a car and have the freedom it provides (urban planners aren't big on this), but he ignores that NZ is larger than the UK with 8% of the population. He claims that every decade there is an oil shock, which isn't really true, but even when it happens that all dies down (remember people like him warned us of Peak Oil? That was until fracking discovered more).  The 1979 oil shock one provoked Rob Muldoon to advance Think Big, and every single one of those projects turned out to be a net drain on the economy, because in a few years oil prices dropped right back. Welch doesn’t let that stop his excitement for reducing car ownership.  He finishes with this absurdity:

Every bus electrified, every cycleway built, every train funded is a direct reduction in exposure to the next crisis. The question now is whether New Zealanders begin to treat their car dependence not as a lifestyle choice but as a strategic liability.

What utter rot. Unless the bus is taking people out of cars, and unless a cycleway takes enough people out of driving cars to offset its cost of construction, it does nothing to reduce exposure.  He advocates fully taxpayer funded public transport, which has been shown in multiple examples (e.g. Tallinn, Estonia) to largely replace walking instead of driving (in Tallinn car use dropped 5%, but walking dropped 40%, and car mode share climbed back up because public transport was overcrowded with people riding it for short trips). 

There’s photographer Patrick Reynolds made a name for himself as an urbanist, and has for some years been an activist for the Green-left’s war on private motoring. This is why he was appointed to be board of NZTA in the first term of the Ardern Government, as the Greens strongly advocated for him.  He’s positively excited about the crisis on the Green Party Greater Auckland blog. He says we should think strategically (i.e. don’t just react to the crisis, but think of the “long term”).  His next step is to “rapidly reduce demand” and to “ensure an equitable path”. He said we are “structurally addicted” to driving. Curiously he floats the idea of lower speed limits for everyone but EV drivers, which is nonsense of course. Of course he doesn’t talk about aviation or shipping because These are blind spots because, by and large, governments don’t tax you to pay for their infrastructure, vehicles or services, because you’re willing to pay for them yourself (directly or indirectly through freight).

Of course it is now rounded off by the Greens. Chloe Swarbrick has, finally, taken time out shouting for the destruction of Israel and touting Hamas propaganda to demand "free" public transport and a new tax.

This wont excite the car hating mob though. Nothing gets them over the top quite as much as penalising car driving. Cars, the epitome of individual freedom, expensive capital assets that exist purely to sit idle for the owner to use when wanted, to go when and where they want to go.  So unlike public transport which is planned (!) and scheduled and directed to be a sharing experience, not so fast, not so direct and not so "selfish".  

And No.  Unlike the control freaks, I really don't care how you get around, or how goods get around, as long as people pay for it themselves.  No modes of transport are "bad" or "good", they just are well suited for different purposes. For as long as this fuel crisis continues, people will respond to the price signals in the ways they want.  Some will drive a bit less, some may buy vehicles that use less or no fuel, some will ride public transport, some will bike and some will walk.  Most people are quite happy buying their own cars, fares, bikes and shoes, and the way it SHOULD work, is the more people buy of one mode, the more that can be provided.

Funny how the planners don't really think that should be the way isn't it?

UPDATE: Oh look another one, this time from Professor Alistair Woodward, from the University of Auckland's Faculty of Medical and Health Sciences, who RNZ conveniently cited without counter-argument that there should be regulations on people buying vehicles he thinks are bad.  The public health lobby's appetite for micro-managing what everyone does, because a small handful engage in bad behaviour has no end.

SH1 improvements in Wellington - a lot to like, but it wont complete the job

So this was a quick couple of hours of thoughts... Feedback to NZTA is due by Sunday 14 December if you are interested.

Background information is here (PDF)

A video flythrough is here 

Apologies, I've been following this whole segment of road for far too long, from growing up being driven through Mt Victoria Tunnel, to some work on the Inner City Bypass 20 odd years ago to living near the tunnel today.

....

The Government’s proposal for a 2nd Mt Victoria Tunnel, 2nd Terrace Tunnel, reconfiguration of the roads around the Basin Reserve and widening of Vivian St is the latest set of proposals to fix the unfinished business of the Wellington Urban Motorway.  We will see whether all, some or any of it proceeds, but for the sake of Wellington at least some of it should (specifically the tunnels), because the status quo, notwithstanding the largely evidence free claims of Green Party politicians, is an absurd waste of time and energy in a city of this size.

History

It wouldn’t be hard to write a book about the history behind all of this, which started with then US consultancy firm De Leuw Cather, preparing a “transportation master plan” for Wellington. It considered the option of a waterfront motorway (see Seattle and San Francisco for now demolished versions of this), but preferred what was known as the Foothills Motorway. It follows the existing motorway, with two instead of one Terrace Tunnel (3 lanes each way), with 2 lanes continuing on a motorway going under and over various streets and, initially, demolishing the Basin Reserve for a motorway interchange, before finishing up at a second Mt Victoria Tunnel (2 lanes each way using the existing tunnel). De Leuw Cather also proposed placing the Wellington commuter rail service underground to Courtenay Place, through the reclamation land.  Of course that latter proposal wasn’t going anywhere, but the motorway started from Ngauranga (not connected to Ngauranga Gorge, but rather as just an extension of the Hutt Road from the Hutt). In the 1960s and early 1970s, the motorway cut a swathe through Thorndon and Kelburn, with much of a cemetery dug up and interred in a mass grave (don’t think that this was an era of much consecration to Christian religious values). However, the 1974 oil crisis (entirely stemming from the Yom Kippur War) saw a slowing down of the project, with the Muldoon Government ultimately deciding that it (and multiple other road projects) would be terminated at Willis Street, with the segment from Bowen Street south halved in scope. One Terrace Tunnel, one lane southbound, two lanes northbound.

At the time, with the motorway only being SH2 (SH1 still being the Hutt Road from Ngauranga to Aotea Quay, and continuing along the waterfront to the termination point of Jervois Quay and Taranaki Street), this made some sense. It was never congested, and the scale of traffic through Te Aro was easily handled by the Vivian St/Ghuznee Street one way pair. 

In 1983 the Ngauranga Interchange changed all that, by around doubling traffic on the motorway, the end of the motorway became a bottleneck, exacerbated by the single lane in the tunnel. Further bottlenecks existed with Ghuznee Street and Buckle Street, with the dog leg route from the Basin Reserve to the motorway being utterly unsuitable for the traffic volumes going through it.  This situation persisted for 12 years.

Meanwhile, a scaled back proposal to ease the traffic pressure came from the then National Roads Board. A motorway extension designed as an arterial highway with 70km/h speed standards. The original plan to destroy the Basin Reserve for a motorway interchange (which had been shelved some years previously) was replaced with a highway bridge across the northern boundary of the park.  The Terrace and Mt Victoria Tunnels would be linked by a fully grade separated highway going under Willis and Victoria Streets, severing Cuba Street (except for a pedestrian bridge), passing over Taranaki Street before darting under Tory and Sussex Streets. One lane would extend from Mt Victoria Tunnel under Sussex Street to join a second lane from the south. Whereas one lane would exit at the Basin to Cambridge Terrace and Dufferin St, with one lane extending to Mt Victoria Tunnel.  

1980 scaled down motorway extension proposal before it got dropped in a trench in 1991

Fully trenched but not covered in this brutalist image that looks like it was designed to kill it

The next decade or so would see the project rise up the regional priority rating, as other projects were built: Upper Hutt Bypass, Mungavin Interchange, Silverstream-Manor Park 4-laning etc, but then the funding system for roads was reformed. The Ministry of Works was abolished, and shortly thereafter, Ruth Richardson slashed funding for roads. At the time, funding was mostly allocated based on a cost/benefit analysis, with 25 year return periods. For around two years funding was not even sufficient to keep up with maintenance, and as the 90s progressed, the Wellington Urban Motorway arterial extension went up in cost and was always borderline for funding. However, it always had a BCR of over 2 when the threshold for funding was 5 or 4. 

At the same time the nascent Green Party campaigned vehemently against it.  To try to address concerns the project was first redesigned to be trenched the whole way across Te Aro, then put in a cut-and-cover tunnel to the bridge on the north of Basin (called Tunnellink).  However, it was clear by the mid 1990s that funding wasn’t likely for over a decade. So a three stage project was advanced. First a simple one-way pairing of Buckle and Vivian Street, followed by what is now known as Karo Drive. Karo Drive literally took around 12 years from its inception to opening, largely because of the opposition to it by the Green Party spreading vast amounts of misinformation. Then Green MP Sue Kedgley always called it a “motorway extension”, and eventually when it got funded by Transfund, and all legal avenues under the RMA to stop it were exhausted, it got built.  It was only meant to be a ten year stopgap until the Tunnellink could be built.

However, by then Transit NZ (later to be merged with Transfund and the Land Transport Safety Authority) had largely given up on the idea of a cut and cover tunnel.  So the next step was to fix the Basin Reserve, and plus ça change it was stopped by an organised campaign of the Greens and Mt Victoria NIMBYs. This was for a two-lane 50km/h one lane bridge clear of the Basin Reserve, westbound. 

2001 - preferred Basin grade separation without Tunnellink

2008 - one of the options for the Basin Bridge 

At the tail end of the Key/English Government there was a commitment to a second Mt Victoria Tunnel, but of course that all was stopped under the Ardern Government, as the Greens made sure that the Let’s Get Wellington Moving project would prioritise emission reductions, and put little value on reducing general traffic congestion. 

The Ardern/Hipkins Government did support a second tunnel, but it was to close the existing tunnel to motor vehicle traffic, and build a new one with four-lanes, two for buses. In short, no relief for general traffic.

What’s been proposed?

So here we are today with essentially five main elements to upgrading SH1 through Wellington. Once again the Greens are talking about “building a motorway through Wellington” which it absolutely does not do. It doesn’t build one metre more of motorway, but it does widen one section along an existing motorway corridor. The five elements are:

- Second Terrace Tunnel

- Upgrading SH1’s one-way pair through Te Aro

- Basin Reserve reconfiguration

- Second Mt Victoria Tunnel

- Widening eastern approach roads to Mt Victoria Tunnels.

Second Terrace Tunnel:  This is sensible, because it will the single biggest measure to remove 20% of traffic from the waterfront route. It is on a smaller scale than the original proposal (will be two-lanes not three southbound and the existing tunnel will only be two-lanes northbound), but should not be controversial.  What will constrain it is…

Upgrading SH1 through Te Aro: Reversing forty years of planning, Te Aro will still be blighted by heavy highway traffic pushing through it, by widening Vivian Street (which has been designated on the Wellington District Plan for many years) to three lanes one way.  As a stopgap this is satisfactory from a traffic flow point of view. but is hardly a long-term solution. It should have a cut-and-cover tunnel along the line of Karo Drive, which would be expensive and disruptive, but would be transformational for Te Aro. A proper bypass would make a huge difference, but for now with the two tunnels being the major bottlenecks, that idea isn’t progressing. In short, this will be the new bottleneck, exposing the greatest number of pedestrians (and traffic) to delays and emissions. It’s the cheap part of the package, and it will need to be addressed at a later date.

What’s disconcerting is that there is little future proofing to enable a solution to his, especially with this proposal…

Basin Reserve reconfiguration: There is no shortage of options designed to fix this problem, which is essentially the need to separate east-west traffic from north-south traffic, while also allowing it to interchange.  The latest proposal partially separates traffic, but it means the same number of traffic light controlled intersections westbound and eastbound on SH1. See below:

No doubt clearing Mt Victoria Tunnel congestion will improve eastbound flows, but it is far from clear that retaining a network of pedestrian controlled traffic lights and keeping SH1 at ground level in front of the Basin Reserve will not create new bottlenecks, and worsen the concentration of traffic/emissions across the northern side of the Basin. The Rugby/Dufferin Street sections outside the schools will be quieter, but be a ratrun for traffic from the city to SH1 west, and from Newtown to SH1 east. The big winner is north-south traffic to and from Newtown towards the city.

No doubt there will be a net improvement, but it is clear from the proportion of benefits of the total package that this is where not much will be gained. What’s particularly concerning is that it doesn’t look like it provides for future proofing building a parallel eastbound pair of lanes to take traffic from Vivian Street and over to the second Mt Victoria Tunnel. I understand the reluctance to elevate SH1 near the Basin, but it could be done by elevating Sussex Street over SH1 and building an artificial hill to carry the road with significant mitigation of the visual and noise impacts of a bridge. This is a mess. The new Green Link looks like it is preserving an option, or maybe it is preventing it.

Second Mt Victoria Tunnel: This is like past proposals and is entirely suitable as a solution to this problem. It is a shame that westbound its capacity will be constrained by unnecessary intersections at the Basin.

Widening eastern approach roads:  Four-laning Ruahine St and Wellington Rd (six lanes at points) has long been the right approach, but the design of intersections seems bizarre indeed. Grade separating at Hataitai Park (to a new road where houses currently exist) seems over the top. The removal of Taurima St access to Mt Victoria Tunnel needs a solution, as does access to Hataitai Park, but why is this intersection getting such lavish treatment, but Wellington Rd/Ruahine St (which enables access from Newtown to the airport, from Hataitai to Newtown, and for access to southern Newtown to and from SH1 bypassing the bottleneck in front of the Hospital) is curtailed to simple slip lanes in one direction only? The latter should be a full scale intersection. Previous plans simply had an elaborate intersection at Goa Street, although there is some merit in having grade separation, it seems odd that a low traffic intersection gets it, but not the much heavier traffic ones at Kilbirnie Crescent and Evans Bay Parade (although imagine the outcry if that were proposed). 

There are lots of minor details in this section which make access between Kilbirnie, SH1 and Hataitai worse, presumably to save money from more comprehensive wider intersections. Much of this looks worse for residents. In particular, anyone driving from Newtown to the airport will weirdly have to drive through Kilbirnie’s CBD (but not in the other direction). Anyone driving from Hataitai to Newtown will either have to go through Mt Victoria Tunnel to ratrun past the stands at the Basin Reserve, or go into Kilbirnie and ratrun up Duncan Tce. (a narrow street with poor visibility at the top). 

This is all details though in intersection design, which I expect locals to have their views on. The Greens are claiming a big increase in traffic in Moxham Avenue will occur, but that’s mostly a shift from Taurima Street and the existing intersection on Ruahine Street.

Thinking more widely

There is talk of tolling the route, although no details have been presented, it is difficult to envisage it not simply being at the tunnels. On its own this would have merit if the whole proposal enabled free flow traffic all the way. It doesn’t.  Paying a toll to drive through the Terrace Tunnel to end up at Vivian Street isn’t a compelling proposition, and would divert local traffic from the tunnel to The Terrace.  Likewise paying to use Mt Victoria Tunnel to reach a pair of traffic light controlled junctions by the Basin Reserve. A full scale freeflow bypass would be another proposition, offering a high value fast trip, but that isn’t what is proposed.

On the other hand, a central Wellington congestion pricing scheme within the boundaries of SH1, which helps pay for this, would have much more merit as it would reduce traffic towards the city at peak times, and enable better flow of traffic around it.  An AM peak inbound, PM peak outbound price for driving in and out of Wellington on weekdays would have some merit.

Much has been raised about the BCRs of the project, but although I put some value on economic analysis, when it comes to tunnels, the return period for them is much longer than any conventional highway or bridge. Tunnels last almost forever once dug, and only need moderate upgrades throughout their existence.  So I treat the two tunnels as very long term investments in addressing the resilience of the city’s transport network, and enabling a future full scale bypass of the city.

Claims from the likes of the Greens that “car tunnels” (a deliberate misinformation campaign to diminish the role of freight and buses) will just induce more traffic are largely nonsense, especially if congestion pricing is introduced in parallel. There is no more capacity that will be build north of Ngauranga Interchange, so more traffic cannot be attracted from that direction, and with much of the traffic on the route bypassing the city, little of that is going to be attracted from public transport to driving. Modern cities have good bypasses, Wellington has lacked it for decades. 

So I’m in favour of the tunnels, in favour of the widening east of Mt Victoria Tunnel (with some caveats), but the upgrade through Te Aro is cheap and nasty, and needs to make provision for something better once the two tunnels are built. It will be obvious the city needs a proper bypass. The Basin Reserve proposal is messy and poor value. It’s unclear why north-south traffic going in a four-lane trench is better than being on a four-lane bridge over the east-west traffic, and why so many light controlled intersections should be kept. It should be reconsidered.

And for the opponents...

"A City for People" is, of course, a Green Party oriented activist site (they always claim to be non-partisan, even though the members are largely not) ideologically and philosophically aligned to the other Green oriented activist ginger groups (which have a lot of interchangeable members) like Generation Zero, Parents for Climate Aotearoa, Cycle Wellington, Women in Urbanism, Renters United and the Sustainability Trust.  

The propaganda inference is that if you don't support their policies, you don't want a "city for people". It's a shade of the People's Republics, which imply if you oppose them, you're opposed to The People.  While I have some support for their campaign to enable more intensification, this isn't a group in favour of more freedom and less government. It is not in favour of people who want to drive, or people who ship goods or deliver goods. 

It claims "A whole generation of people are being forced out from the city spending hours every day in traffic jams".  While I have  lot of sympathy about housing prices, the idea that people in Wellington are spending "hours every day in traffic jams" is nonsense. 

It states:

The cost of this project is truly bananas. Per kilometre it’s the most expensive roading project in the entire country. It’s $2.9-3.8 billion (with a B - looks like this).

And it’s all about a relatively small aspect of Wellington’s transport problems: private-car congestion at selected times.

It makes no attempt to fix what will make the most difference to people (and LGWM’s origin story): the bus-network that’s already at capacity and hamstrung by being stuck in general traffic.

Even just for general traffic congestion, this project is jumping to a platinum-plated mega project solution before we’ve tried all the other things first.

It could do irreparable harm to Wellington, just as we’re starting the transition to being a real city.

It IS expensive, but tunnels are. I'd note that the Let's Get Wellington Moving project to build a single tram line to Island Bay and a second Mt Victoria Tunnel that added no new road capacity (but freed up the existing tunnel entirely for cycling and walking, and added lanes for buses) was $7.4 billion.  That would have delivered a tram to Island Bay that would have been no faster than current bus services, and only modest relief to traffic congestion at the Basin Reserve.

The claim that the proposal is just about addressing "private car congestion" is misinformation, and minimises a situation that exists most of the day during weekdays and much of the weekends. It also affects bus congestion from the eastern and southern suburbs at the Basin and Kilbirnie Crescent. It isn't just cars, it's also trucks (the Greens pretend freight doesn't matter), taxis and rideshare services, besides the majority of trips undertaken in Wellington are by car, either as drivers or passengers.

It WILL fix bus network capacity issues, especially at the Basin Reserve, Kent Terrace and from the Eastern Suburbs, as traffic will flow much more freely, and take 20% of traffic off of the waterfront route.  It's wilful blindness to pretend otherwise (because these people think any new road capacity is malign).

The claim it is a "platinum plated mega project solution" before "we've tried all the other things first" is pejorative nonsense, especially from people who were happy to spend double that, mostly on a tunnel and tram line.  The only option that might help somewhat is road pricing, but the advocacy for that is muted. There is no realistic chance of significant modal shift for trips that bypass the city, because they have a diverse range of origins and destinations. Likewise, without an additional tunnel to the eastern suburbs, there will not be modal shift from there as buses cannot flow freely.  It's fair to object to spending a lot on transport infrastructure, but not when you're solutions are more expensive and require significantly more taxpayer cost over time to subsidise their operations.

The claim it could do "irreparable harm" to Wellington is pejorative hyperbole. The land for the second tunnels is hardly significant, part of it is within the motorway corridor in any case. 

Finally, their claims about the proposals are weak:

• It aims to “fix” traffic congestion by building a bigger road in the centre. Never, not ever, has this worked.
• If you look at the numbers for how LGWM’s package was going to “fix traffic”, it wasn’t the very expensive road-building that was going to do the heavy lifting: it was congestion charging (digital infrastructure and some gantries) and the second spine for public transport (paint, signage, timetabling). And the costs for civil construction (which this expansion project is all about) have rocketed since then.
• There are lots of flaws with the logic: smooth, faster-flowing traffic through the city centre while also somehow not worsening severance in Te Aro, and while also allowing lots of cars to turn on and off it…
• Its Cost-Benefit Ratio is already low (even with the extra-low discount rate now allowed to be used) and the Inner City Bypass was found to have been probably not worth the money spent on it (we lose more than we gain from having it) so it’s highly likely this will be worse given its far greater costs. The opportunity cost of this public money is dismaying.

First bullet is wrong. It is not a bigger road in the centre at all, and yes building new roads has fixed congestion in many cases, especially in smaller cities. Many cities have inner bypasses that work, such as Oslo, Berne and Bergen, and they DO relieve congestion.  The first motorway in New Zealand, the Johnsonville-Tawa segment, remains adequate for traffic at most times and there is NO proposal to widen it.  It's time that the oft-claimed "every new road induces traffic until it fills up" is tempered by reality that this is only true in some cases.

Yes, congestion charging will have a big impact on traffic, which is also being enabled by this government.  The second spine for public transport wont work effectively without a better bypass to take through traffic off the waterfront (and any good congestion charging scheme enables traffic to bypass it because public transport does not do well serving most demand that does not start or terminate in the central city).  Furthermore, just converting lanes on the waterfront to bus lanes will make congestion worse, which backs up to buses elsewhere in the network. 

The third bullet has a point. Not building a proper bypass under Te Aro will worsen the severance due to SH1, but the Greens spent years campaigning against a cut and cover tunnel under Te Aro to fix this.  Nothing will magically fix this problem, short of kneecapping the economy and demand for travel.

Yes it is a low value project, but it underestimates the real lifecycle benefits of tunnels (which last for much longer than any appraisal period).  It is fair to argue about the opportunity cost of the money, but then I don't think the people pushing this want people to pay lower taxes and spend the money themselves! The Greens opposed the project when it had BCRs of 2-5 in the 1990s, with a much higher discount rate and 25 year appraisal period.  It is difficult to believe that if it had a BCR of 5 or 10 the opposition would change, it is a blanket opposition to any new road capacity regardless of whether it is priced or not.

The whole wording of the opposition is childish and sneering towards people's choices.  The language that sneers at ""popping down to Moore Wilsons” and “going to pick the kids up cos it’s raining”" is misanthropic.  So what if people want to do that, as long as they pay at peak times.  Most people can't live within walking or cycling distances of where they want to go. 

These groups stopped Wellington getting a proper bypass in the 1990s and beyond, and the blight of having at at-grade SH1 through Te Aro is because of this philosophy. 

Could it be better? Yes. Should there be pricing? Yes.  Should it mean the tunnels shouldn't proceed? No.

No to another mega-Ministry

One of the ideas getting traction within the Government is the idea of merging the Ministry for the Environment (MfE), Ministry of Housing and Urban Development (MHUD) and the Ministry of Transport (MoT) into a mega agency. The “logic” behind it is threefold:

• More integrated policy thinking that will not only enable more housing to be built, but also the infrastructure to support it;

• Diluting the de-growth and pro-central planning culture of MfE (which most recently decided it was appropriate to submit on the Regulatory Standards Bill);

• Saving money (through administrative rationing).

This is a mistake, because its theoretical basis is rooted in some assumptions that don’t bear close scrutiny. Working backwards the notion that mega-departments are more efficient is largely a chimera. The larger the bureaucracy the slower it works and the less responsive it is, and it more difficult it is to retain specialised knowledge and experience as it gets swamped within multiple layers of management. Treasury likes mega-agencies for two reasons:

• Fewer managers is said to be more efficient;

• Fewer agencies makes them easier to monitor and hold accountable.

Unfortunately, this ignores the behavioural responses of public servants to this sort of structure. In a large department it becomes harder to get the attention of the top layers of management. In some cases that can help, because clever and competent public servants can get on with their work unbothered by the chief executive or deputies, but that also means the less clever and competent have their work not subject to the same scrutiny. The Adam Smith Institute in the UK has called for the UK Home Office to be broken up for exactly that reason. The incremental savings of a few fewer managers (which is disputable when you look at the structure of MBIE – New Zealand’s existing mega-Ministry – which has large units, with branches under them and sub-branches) is lost when there is significant failure both in delivery and public policy.  

The UK already has had experience merging Transport, Environment and Local Government, from 1997 until 2002. Transport was split out again because the cultures of the agencies clashed internally, slowing down progress and making it difficult to get institutional focus on major reforms.  

Australia by contrast does have a mega-agency responsibility for transport policy at the Commonwealth level, in an organisation called DITRDCA (Department of Infrastructure, Transport, Regional Development, Culture and the Arts), which struggles to retain institutional knowledge in any segments of its activity. However, as a Federation, many of the functions in those sectors are carried out by States and Territories, so it is less of a day to day concern. Similar mega agencies do not exist at the State level.

The benefit of smaller agencies is that they can be nimble and responsive, and can pivot quickly when policy priorities change.  They can readily collaborate and work together with each other, if there is clear project leadership across agencies. The idea that collaboration within a large agency, with managers and branches with their own interests is necessarily easier than between smaller agencies is largely theoretical, because it depends on the individuals. Bear in mind MoT implemented radical restructuring of ports, airports, land transport funding, the governance and delivery of urban passenger transport all as a small agency, stripping down its functions over the years.  It's not clear what radical reforms MBIE as a major agency has done, and it is abundantly clear that DIA, with its de facto oversight of the water sector (i.e. next to none) did little until the Ardern Government saw it as a way to bail out local government and start to implement the principles of He Puapua (which remains on ice). 

On the second point, the idea that a key reason to merge agencies is to dilute the culture of the one you don’t like, or which is corrosive to government policy is not a good way of diluting the poison, because it spreads the poison across a wider field. The answer for the Ministry for the Environment is not to merge it, but to cull its responsibilities and split what remains among other agencies.

The Partnerships, Investment and Enablement business group should be abolished because Government should not be seeking to “tangibly shift mindsets and change behaviours in New Zealand through effective partnering and engagement within the public and private sectors”. The culture of MfE is anti-development, anti-growth and it the behaviours that need changing are those ones.  

At best the Environmental Management and Adaptation business group should be placed within the Department of Internal Affairs to work with local government, specifically regional councils on their statutory function, and the Climate Change Mitigation and Resource Efficiency business group should be part of MBIE, which has oversight of economic regulation of natural resources.  

It is so obvious that the next time a Labour-led Government takes power, almost certainly with the Greens, that a Ministry of Housing, Infrastructure and the Environment would be rebranded into a Ministry of Sustainable Development or the like. The culture that would be dominant will be the one inherited from MfE and will seek to decimate private provision of housing, as well as turn transport policy into one big behavioural change programme that treats active travel and public transport as being good, at any cost, while treating private motoring and the movement of freight by road as being malignant. 

One of the legacies of Labour Governments is that they implement structural reform of Government that National Governments rarely reverse.  Don’t forget the optics of splitting MfE (“integrating environment across policy”) may not be great and of course the Opposition will cry that it is about decimating the environment, but the public largely will not care (other than the ones who vote Green anyway). Splitting MfE into Internal Affairs and MBIE will dilute MfE’s culture because it divides it. Merging it with MHUD and MoT keeps it intact, despite pleas from some that it will dilute the priority of the environment, it will place it in the centre of two agencies seeking to resolve issues that are, in part because of the prioritisation of the environment through the RMA that stops stuff being built.

The MHUD is essentially an oversight agency for Kainga Ora, as well as the regulator of rental housing and other accommodation. The synergies with the MoT are weak, especially given MoT’s functions range from monitoring the land transport funding and regulatory sector, through to the economic functions of all transport modes. There is little that MHUD can bring to aviation policy, and indeed most of the transport policy issues affecting MHUD are undertaken by local government. 

If there is a case for a merge, then MBIE makes more sense for MoT than MHUD, because MBIE does look after network industries in infrastructure, such as energy and communications, but that was tried before in the late 1990s and ultimately abandoned. 

So the idea of merging agencies should be put in the bin. There is a better case for reviewing their functions and determining whether some should exist at all, and if so, who is better placed to manage them.  Putting climate change policy in the DIA or MBIE is likely to be preferable than having it dominating housing and transport.

Merging MfE, MHUD and MoT smells of something that the Greens or TOP (remember them?) would advocate. MfE is by far the agency with the most dominant culture, and it is one that is philosophically antagonistic to the Government it is meant to be serving. It should not poison housing and transport policy with that culture. 

The Government should run a mile from it.

A poor critique of National's transport policy

It’s entirely in keeping with their philosophical bent, for taxpayer funded RNZ to publish as a lead article on its website, a piece by Timothy Welch, senior lecturer in Urban Planning at University of Auckland. It’s also hardly surprising that the taxpayer funded Spinoff has published the same article, as they share a common view of the world, which is predominantly sympathetic to the objectives and ideology behind transport policy in NZ since 2017. 

I am sure Mr Welch is a smart man, so it is pity that it seems to have been written in a rush because it is such a poor critique of the National Party’s transport policy. The views he expresses exemplify why I’m sceptical of urban planners. The very problems they seek to fix are in some considerable part because their predecessors had an overly simplistic view of the complexities of cities, economies and the wants and needs and preferences of human beings.  However, even more important is to understand that the philosophy of transport policy expounded by the Government, which also comes from some academia and is essentially the ideology promoted by the Green Party, which is to treat transport modal choices as a hierarchy that essentially devalues the personal preferences of the public relative to what the planners think is “good for society and the planet”. It devalues people’s time (by wanting people to travel more slowly), money (by wanting to tax them more for infrastructure and services they don’t use) and comfort (by wanting people to use less comfortable modes), in favour of choices that whilst certainly having merits in many circumstances, are for many users inferior to their own preferences (and do not reflect people’s willingness to pay).  What is worst is that much of the argument is based on overly simplistic rhetoric and claims that some of people’s choices are either morally wrong or based on them being “addicted” to driving.

So what about Welch’s article?

It was clearly written as a hit-job on National’s recently released transport policy, which itself has strong hints of central planning, command and control in picking projects it wants to advance, although these are mostly projects to facilitate faster and safer travel of motor vehicles, whether cars, buses or commercial vehicles.  Let’s be clear National is hardly advancing a free-market libertarian vision of transport, but it is a contrast from the view of the Greens and the Labour Government, which want to cut kilometres driven by cars and light commercial vehicles by 20% on average across the country (which in cities means much more than that, given the scope to cut driving in rural areas is much lower).  Just consider that, Labour wants you to drive 20% less, regardless of whether or not you have an EV.  Labour hasn’t quite swallowed the Green approach completely, as the Greens treat any road building as at best a waste of money, and at worst a crime against the planet which fuels people’s “addiction” to their cars (which they would only break away from if they were instead forced to pay for billions in subsidies for other modes of transport). 

Welch starts by claiming there is an old joke about “just one more lane” to relieve congestion, even though the main part of this proposal is actually about building intercity 4-lane highways between major centres, in the manner of countries like Finland, Switzerland, the Netherlands, Denmark, the UK and Ireland. Sure there are a few proposals that expand urban road capacity, but in none of these cases does it involve adding lanes to roads recently expanded. For example, New Zealand's first motorway - Johnsonville to Tawa, has the same number of lanes today as it did when it opened in 1950.  Maybe the old trope of the Greens that lanes just keep having to be added isn't universal after all?

He claims that National wants to build a four-lane highway from Whangarei to Tauranga for $6b when the $6b claim is only for four projects that cover only a fraction of the route (noting 205km of the route is already motorway/expressway with 177km remaining). He ties himself up in a rough calculation to say it couldn’t cost $6b, when he could have simply read the policy document in the first place.  It literally proposes $6b to four-laning Whangarei to Port Marsden, Warkworth to Wellsford, Cambridge to Piarere and Tauriko West SH29. 

He then claims that “The opportunity cost of these projects also needs to account for those who don’t – or don’t want to – drive a car”.  That begs two questions, why? And how don’t they? None of these projects hinders people who don’t want to drive, indeed building new highways offers opportunities to improve cycling on existing routes, and can support faster and more efficient bus services, and improves the amenity of towns bypassed for walking and cycling.

Furthermore, what is the opportunity cost of using funds collected from motor vehicle users (fuel excise and road user charges) to pay for roads? He would have a point if Crown (general taxpayers’) funds are being used to pay for them, but it is the opportunity cost of using ANY taxpayers’ funds? It takes money away from people spending on their home, their kids’ education, books, food, investing for their retirement. It doesn’t need to account for those who don’t want to drive, anymore than it needs to account for those who don’t want to consign freight by road. If people don’t want to drive they can catch scheduled bus services between Whangarei-Auckland-Hamilton and Tauranga, they can fly and if they are keen they could bike, but there is a curious blindspot among some planners about intercity bus services. They simply pretend they don’t exist because they see rail as the holy grail of virtuous, environmentally friendly transport, but it’s a shame they actually don’t want to pay for it out of their own funds.

He critiques National wanting to scrap light rail proposals for Auckland and Wellington, but then gets it wrong saying “National argues that additional motorways and tunnelling in Wellington would be more cost-effective”. National is proposing no new motorways in Wellington at all, but rather a second Mt Victoria Tunnel (which is not a motorway) and improved approach roads to it. 

The policy says “National supports bus rapid transit and bus priority lanes for Wellington to make it easier to get into and around the city. A duplicate Mt Victoria Tunnel will allow for greater bus access to the east, bus priority lanes on the roads leading to the tunnels, and much more free-flowing traffic through the tunnels, including for buses”. So did he just blank-out that National actually thinks bus rapid transit is better in favour of agitprop that it’s all about motorways, when literally no motorway is proposed?  Furthermore, the current LGWM Mt Victoria Tunnel proposal doesn’t include light rail anyway, but bus rapid transit.

Welch continues by claiming that light rail is “fast, efficient and equitable”, yet the LGWM proposal for light rail to Island Bay would still be slower than driving and slower than the current express bus service from Island Bay, because it would stop frequently.  It wouldn’t be efficient because it could never recover its capital costs, and it would be much worse in recovering the costs of operation compared with bus services. It wouldn’t be equitable because its eye-watering cost would be paid by ratepayers and road users throughout Wellington even though most would never use it (and it would, if LGWM is to be believed, significantly uplift land value along the corridor thanks to that subsidy).  He compares it to Sydney’s Randwick and Kingsford lines recently opened, even though the NSW Auditor Office notes that the project, originally costed at $2.1b ended up at $3.1b and that the project benefits have had to be revised downwards. Of course Sydney does have a population greater than New Zealand

Welch continues by claiming buses and trains produce about 80% less carbon emissions per passenger kilometre than cars, which is entirely dependent on patronage. Trains and buses with few people on them are not exactly environmentally friendly, and it is highly dependent on type of vehicle.  A plug-in hybrid has lower emissions per passenger km than a diesel bus. Bear in mind the ETS internalises the costs of climate change by putting a levy on the price of fuel, so motorists are already paying for the emissions they produce, and that price will be rising over time. In short, policies to reduce emissions are incentivising people to change behaviour, it’s just that it’s not enough for Welch.

Welch makes the claim that “Given the observable realities of the climate crisis, many have questioned the logic of leaning into road expansion as a policy, especially at the expense of efficient public transport”.  I’ll let you speculate on who the “many” are (and let’s leave aside the abuse of the term “efficient” again), but the whole basis of this is a widely cliché’d claim that “More roads encourage more traffic and more driving, often leading to even worse congestion”. Bear in mind that the bulk of the National proposal is for intercity highways to be upgraded and be faster and safer and have more capacity, and is not about congestion.  However, the “build more roads, watch them fill up” claim is neither universally applicable, nor takes into account a key element – price.

Most roads in New Zealand carry traffic volumes at a tiny fraction of their capacity, because the mere presence of a road doesn’t generate demand beyond what origins and destinations generate for personal or freight transport. Sure, expansion of an urban highway, especially one parallel to a public transport route, without any price signals to reflect cost and capacity, can encourage more demand and relocation of housing and businesses to reflect the lower generalised cost of travel.  Auckland has witnessed this as its population has increased and motorways improved, this has reduced travel times and encouraged more use of them. However, this is not a problem if the roads are paid for by those using them and price signals are set to manage demand.  This is where Welch is being wilfully blind because

“National will also introduce congestion charging as a new tool to help reduce travel times in our congested cities”

Congestion charging can mean new roads can be built and not get congested, it can mean motorists pay more to use roads as a scarce resource at times of peak demand and less when there is plenty of capacity.  Congestion charging is supported by the Greens (albeit as a tool to punish motorists), but it would do more to reduce emissions than building boondoggles. LGWM estimates congestion charging could reduce car trips into central Wellington by 8%, but you can speculate for yourself as to why Welch doesn’t celebrate this and rethink his narrative. Bear in mind also that the Labour Government received reports on Auckland congestion pricing in late 2019 and has essentially sat on it for three years, and Phil Twyford actively opposed Wellington congestion pricing when he was Minister. 

Welch then rightfully points out that EVs are a small proportion of the fleet, yet ignores the significant growth in hybrids and plug-in hybrid vehicles as well, which cut emissions by between 55% and 85% respectively on average. In short, the light vehicle fleet profile is one of lowering emissions, and this is likely to continue as such vehicles get cheaper, and the secondhand import market’s share of hybrids grows so much.

Then we get Welch’s weirdest comment:

“EVs require the same amount of road space and, due to their increased weight, potentially cause more road damage. But EV owners don’t buy petrol, which means they don’t pay excise tax – the same tax that pays for expanding roads”

The differences between EVs and petrol and diesel powered cars in terms of weight are insignificant in terms of road damage, this is why there is one rate for road user charges (RUC) for vehicles under 3.5 tonnes.  Around half of road damage costs are due to the effects of weather, and most of the rest are due to heavy vehicles, a few hundred kilogrammes of additional weight in a car are not important in terms of road wear. The bigger error is ignoring road user charges RUC by weirdly saying EVs don't pay excise tax (on petrol), but then neither do diesel vehicles.  EVs used to be liable for RUC, but have an exemption until 1 April 2024. Assuming the exemption is not extended, EVs will start to pay on a per kilometre basis then. This comment of his is fairly pointless.

Finally Welch claims the policies are akin to those from the 1950s and 1960s, which is perhaps an overly simplistic view of the time. In the 1950s Wellington had its biggest expansion of electric passenger rail in the country’s history to date, with construction of the line through the middle of the Hutt Valley and electrification to Upper Hutt, along with the development of Tawa that followed EMU service introduction to Paekakariki from 1949.  Yes governments did embark on gradual motorway building, but did so in a haphazard manner (Auckland’s North-Western Motorway didn’t even extend all the way to the city until 1983), largely responding to a public that preferred driving to the monopoly local authority owned and operated bus services, which suffered from regular strikes, lack of capital spending on new vehicles and poor quality of service (e.g. exact fare requirement in Auckland for many years).  It was also hardly car-centric when central government for decades taxed the importation of new cars by up to 60% or simply restricted the numbers permitted. This saw the price of cars inflated above market prices, and the fleet remain much older and less safe than it would have been otherwise. This didn’t completely end until 1998.  

There is nothing behind the claim that the road building of the past made transport “less efficient and less equitable”. Indeed the 1950s and 1960s were also dominated by a law that prohibited freight being moved more than 30-40 miles in competition with railways, because Welch’s predecessors in the world of planning thought they knew best how freight should be moved about in NZ.  The shackles of regulation on freight and passenger transport, and tariffs and import restrictions on vehicles were thrown off in the 1980s and 1990s making transport significantly more efficient. The idea it would be more efficient for motor vehicles to be using the Great South Road to travel between the Port of Auckland and Waikato, than the Southern Motorway is just ludicrous.  There are sound arguments to be made that the highly invasive motorway building through central Auckland did not take into the opportunity costs of the land used, which could have encouraged an alternative approach such as tunnelling or redirecting through traffic towards the west, but the simple point is that the past saw enormous inefficiencies and costs to safety and the environmental because one set of planners decided they knew what was best.

There are reasons to criticise the National transport policy. Who knows what the net economic benefits are of the proposals? Why isn't there a bypass of Te Aro for Wellington? Is Waka Kotahi the right structure for undertaking so many operational and regulatory activities? What should be the future of road user charges and fuel duty?  Should Kiwirail be split to encourage more rail operators to come to the market? What are the barriers to competition in various transport markets?  It's unclear how road safety will be addressed, and are there too many road controlling authorities? Is Auckland Transport performing efficiently and responsive to the needs of transport users? What about the public transport funding framework implemented by the Government.

Unfortunately Welch’s rant seems like an ill-focused take that could have just come from the Green Party press office. I expect he can do better than just ‘cars and roads bad, trains and trams good’.