Connecting New Zealand – Central and local governments’ role in the transport system
Last updated on
31/01/2012 11:44 a.m.
The government plays a number of roles in the transport system and works in partnership with local government, including subsidising local roads and public transport by, on average, 50 percent.
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Central government performs a number of important roles in the transport system, alongside local government, the private sector and individual transport consumers.
Central government’s roles include:
- setting the policy and regulatory framework for the transport system, including legislative frameworks, participating in international transport forums and negotiating international transport agreements
- ownership responsibility for transport Crown entities, including the NZTA, KiwiRail, the Civil Aviation Authority, Maritime New Zealand, and the Transport Accident Investigation Commission
- key infrastructure provision (including for State highways, KiwiRail, Airways New Zealand), a majority shareholding in Air New Zealand, joint venture owner of six airports and shareholder in four corporatised airports
- investing in transport infrastructure and services provided by others including subsidising public transport services, and transport infrastructure provided by local government
In fulfilling its roles, the government has a range of issues that it:
can control — including transport law through Parliament, performance of its transport Crown entities and their transport infrastructure, and funding of land transport services
can influence — including through its participation in international forums that set standards which impact on New Zealand’s transport system, by negotiating international agreements that enhance our international connectivity, and by providing information that enables the market to make better transport decisions
needs to respond to — these are issues that are beyond the government’s direct control including the price of oil, an ageing population and the effects of climate change. The government will continue to respond to these issues carefully and proactively
Much of the planning and development of the land transport system is undertaken through a partnership between central and local government. Local authorities have responsibility for regional and local transport planning. They own the local roading network, which provides access to the wider network from the properties of ratepayers. Some local authorities also have an ownership interest in sea and air ports.
Central government owns the State highway network which links individual towns and areas together. Each network carries about 50 percent of the country’s traffic.
Central government pays for 100 percent of the costs of developing and maintaining the highway network, and an average of 50 percent of the cost of the local roading network, with the other 50 percent being paid by ratepayers. Central government and local authorities are each expected to spend approximately $12.5 billion over the next decade on local roads and public transport. The NZTA has responsibility for State highway planning and development, and engages closely with individual local authorities.
Central government agencies also influence the development of communities and the demand for transport through their decisions on where to locate schools, hospitals, social housing and other infrastructure and services. Central government transport investment decisions can also influence demand for transport and local land use patterns, and have long-term economic impacts.
Most government funding for transport comes from the National Land Transport Fund, most of which comprises fuel excise duty, road user charges and motor vehicle registration and licensing fees (Figure 11). Legislative changes in 2008 provided for hypothecation of all revenue from these sources into the National Land Transport Fund, to be used for land transport purposes only under a permanent legislative authority. The principle that revenue raised from road users should be spent on the roads they use also allows funding of some related infrastructure and services, such as road safety promotion and public transport (which benefits road users by reducing traffic congestion).
The government also invests separately from the National Land Transport Fund (for example, rail). This investment covers rail infrastructure that is not paid for by road users. In addition to the fund, the government is investing:
- $1.6 billion in the development of Auckland’s metro rail system, which comprises:
- $600 million for Project Developing Auckland’s Rail Transport (DART)
- $500 million for the infrastructure required to support electrification
- $500 million loan funding for the purchase of electric trains
- $400 million for Wellington’s metro rail upgrade, which has included double-tracking to Waikanae and the purchase of 48 new two-car Matangi trains
- a further $88.4 million for upgrades to the Wellington metro rail network as part of a funding and ownership package with the Greater Wellington Regional Council
- $750 million of funding for the first 3 years of KiwiRail’s $4.6 billion 10 year Turnaround Plan. The government also does not expect to receive shareholder returns for the period of the plan, allowing KiwiRail to provide the rest of the $4.6 billion investment from customer revenues
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