Introduction - Government Policy Statement

Purpose

1. This Government Policy Statement on Land Transport Funding 2009/10 – 2018/19 (GPS) is issued by the Minister of Transport.  It details the government’s desired outcomes and funding priorities for the use of the National Land Transport Fund to support activities in the land transport sector.  The GPS covers the impacts the government wishes to achieve from its investment in land transport, how it will achieve these impacts through funding certain activity classes, how much funding will be provided, and how this funding will be raised.

2. The GPS covers the financial period 2009/10 to 2014/15 and provides indicative figures from 2015 – 2019.  It will be in effect from 1 July 2009 to 1 July 2012. Another GPS must be released before 1 July 2012.

3. This GPS is an amendment of the GPS issued in August 2008.  It has been amended to reflect the current government’s priorities for land transport, and replaces the August 2008 document in its entirety.  The government’s main priority is national economic growth and productivity. The GPS will ensure the use of land transport funding supports this goal.

Legislative requirements

4. The GPS has been developed and issued under the Land Transport Management Act 2003 (the Act) (see Appendix One).  The Act is the main statute for New Zealand’s land transport planning and funding system.  Regional councils, city/district councils, the New Zealand Transport Agency (NZTA), and other approved organisations under the Act  can receive money from the National Land Transport Fund for the land transport activities they deliver, such as the construction and maintenance of State highways, local roads and public transport services.

5. Under the Act:

• The NZTA must give effect to the GPS in developing the National Land Transport Programme and take account of the GPS when approving funding for activities
• Regional Land Transport Strategies must take account of the GPS
• Regional Land Transport Programmes must be consistent with the GPS.

6. The Minister of Transport’s expectations of how the NZTA will give effect to the GPS are provided in Section E.  The NZTA provides guidance to local government on how Regional Land Transport Strategies and Regional Land Transport Programmes can meet the legislative requirements.

7. Figure 1 illustrates how the GPS links with other land transport planning and funding documents.

Figure 1: Land Transport Planning and Funding Documents (PDF v7.0, 84.1kb)

Funding for land transport

8. Central government funding for land transport is provided from a number of revenue sources including:

• fuel excise duty (FED)
• road user charges (RUC)
• motor vehicle registration and licensing fees (MVR)
• general taxpayer funds.

9. FED, RUC and MVR are defined in the Act as land transport revenue and are paid into the National Land Transport Fund for land transport purposes only. The GPS indicates likely changes to the levels of FED, RUC, and MVR and guides the allocation of the National Land Transport Fund through the National Land Transport Programme.

10. Land transport activities that are delivered by local government are part funded from the National Land Transport Fund according to the relevant funding assistance rate (FAR). The local funding share may come from rates, development contributions, borrowing and investments. This local funding share is not included in the GPS.

11. There are a number of additional funding tools available to central and local government which are not included in the National Land Transport Fund. These tools are not described in detail in this GPS, but are mentioned below to provide context.

12. The Act enables toll schemes for funding new land transport infrastructure. The Act also allows projects to be developed using private sector financing and expertise. The first tolling project, the Northern Gateway , opened in early 2009.

13. Additional funding may be applied by government to land transport from general taxpayer funds or borrowing in the form of Crown appropriations. These funds may be applied through the National Land Transport Fund, in which case that funding must be reflected in the GPS. The government can also invest in land transport outside the National Land Transport Fund. This investment is not included in the GPS.

14. The government intends to simplify the current arrangements for funding rail infrastructure.  Previously, rail infrastructure was to be part of the National Land Transport Programme.  However, in future, the intention is for this is to be funded by the government outside of the National Land Transport Fund.  This is more consistent with the principle of hypothecation where revenues generated from road users are used for their benefit. As a first step, $258 million of Wellington rail capital funding has been removed from the National Land Transport Programme and will be funded by Crown appropriation.

The government's plan for infrastructure investment

15. The creation of an infrastructure portfolio within government is a key component in the government’s economic plan. The infrastructure portfolio is overseen by the Minister of Infrastructure with support from other Ministers with infrastructure responsibilities.

16. The infrastructure portfolio will play a coordination, motivation and overview role in infrastructure investment and activity.  It will influence other Ministerial portfolios, including transport, through best-practise assistance and advice. The infrastructure portfolio will have a wide economic focus, spanning the following policy areas:

• Core economic or ‘network’ infrastructure, including the development of a National Infrastructure Plan.
• Funding/financing and regulatory reform.
• Public sector management of capital budgets and assets, including ‘social infrastructure’ such as schools, prisons, hospitals and housing.

17. An Infrastructure Unit has been established in the Treasury to give effect to the government’s infrastructure goals.  An Infrastructure Advisory Board, which includes stakeholder representatives drawn from industry, local government and elsewhere will provide independent advice to the Infrastructure Unit and the Minister of Infrastructure.  It will also help coordinate the development of the National Infrastructure Plan (the Plan), and will monitor progress against the objectives of the Plan after it is released.

18. The Plan will have a twenty-year outlook and will be updated every three years.  It will present a high-level view of the state of New Zealand’s public infrastructure and describe the principles that will guide future investment.  The Plan will include a stock-take of New Zealand’s existing infrastructure and likely future requirements.  It will draw on and complement existing infrastructure plans and stock-takes, including the National Land Transport Programme and Long-term Council Community Plans.  It may also include examples of major private-sector infrastructure investment where that information is publicly available.  The Plan will identify gaps in current investment, where future investment might be needed, and where complementary investment opportunities exist.  The government’s Roads of National Significance will form part of the National Infrastructure Plan.

19. The Plan will act as a guide to infrastructure development, rather than a binding pre-determined timetable.  The Plan will recognise that trade-offs will need to be made and that the context for development can change.  Infrastructure planning, spending and sequencing decisions will still sit with the relevant Ministers responsible for particular infrastructure development, or agencies that are the custodians of established decision-making processes.  The first Plan is expected to be completed by December 2009.

20. As set out in Section C, Funding Policy, the National Land Transport Fund and the National Land Transport Programme will support the delivery of transport objectives in the National Infrastructure Plan.

Roads of National Signficance

21. The government has listed seven initial Roads of National Significance as a statement of national road development priorities.  This statement serves as a focus for investment to achieve economic growth and productivity.  The seven roads listed are:

• Puhoi to Wellsford – State highway 1
• Completion of the Auckland Western Ring Route – State highway 20/16/18
• Auckland Victoria Park bottleneck – State highway 1
• Waikato Expressway – State highway 1
• Tauranga Eastern Corridor – State highway 2
• Wellington Northern Corridor (Levin to Wellington) – State highway 1
• Christchurch motorway projects.

22. These are seven of New Zealand’s most essential routes that require significant development to reduce congestion, improve safety and support economic growth. The purpose of listing roads as nationally significant is to ensure these priority roading developments are taken fully into account when the NZTA develops the National Land Transport Programme. 

23. Planning for the future development of the land transport network should reflect the importance of these roads from a national perspective and the need to advance them quickly. The National Land Transport Fund can be used for the future development of the Roads of National Significance. Roads of National Significance will be part of the National Infrastructure Plan. 

24. Further Roads of National Significance may be added over time.

Safer Journeys

25. Safer Journeys is the government’s road safety strategy to 2020.  This strategy is designed to reduce the number of people killed and seriously injured on our roads over the next decade and takes a system wide approach by looking at the safety of roads, road use, vehicles and speed.  The top priorities for action in the strategy are:

• young drivers
• alcohol and drug impaired drivers
• motorcycling
• roads and roadsides
• safer speeds

26. The strategy identifies a series of actions that the government will consider implementing to improve road safety.  These actions include the introduction of alcohol interlocks, zero blood alcohol limits for repeat drink drivers and improvements to motorcycle licensing requirements.  The actions will represent the government’s priorities for improving the safety of our roads.  The implementation of these actions should be considered when the NZTA delivers the National Land Transport Programme.

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