Information release: Advice provided to the Minister on the potential impact of COVID-19 on land transport revenue and the NLTF

Between April and June 2020, we provided advice to the Minister of Transport on the potential impact of the COVID-19 lockdown on the National Land Transport Fund (NLTF). We also provided advice on new funding requirements across the transport sector generally (rail, maritime, aviation) relating to COVID-19.

Our advice on National Land Transport Fund revenue used scenarios based primarily on the number of months at each alert level and the length of the lockdown. Due to the rapidly changing circumstances at the time, the estimates were quite uncertain. Most of the estimates were made before the move to Alert Level 1. Because of the earlier and faster than expected nationwide move down alert levels, the likely actual impact of COVID-19 on land transport revenue is expected to be less than those indicated in the papers.

To address the ongoing revenue shortfall associated with COVID-19, the Government agreed to several measures:

• a new borrowing facility of $425 million for the National Land Transport Fund – see Budget 20 COVID-19 Response and Recovery Fund - Foundation Package - Summary of Initiative(external link)
• a Crown grant of $600 million to the National Land Transport Fund to manage reduced revenue and COVID-related expenditure through 2020/21
• enabling Waka Kotahi to borrow a further $300 million against its balance sheet, if required to mitigate lower revenue and higher expenditure – see Budget 20 COVID-19 Response and Recovery Fund - July Package – Summary of Initiatives(external link)

You may note some of the options canvassed in the papers to address reduced revenue include adjustments to the rates of petrol excise duty and road user charges. The Minister of Transport has ruled out any increases to petrol excise duty and road user charges for the next three years (until 2023).

We continue to monitor land transport revenue, including the potential impact on revenue from the re-emergence of the virus, and a further update to revenue forecasts will be included as part of the Half-Year Economic and Fiscal Update 2020. We also continue to work with Waka Kotahi NZ Transport Agency to understand the potential implications of COVID-19 for investment in the land transport system, and the impact it may have on future expenditure commitments.

Documents

• 20 April 2020: COVID-19 Impacts for the National Land Transport Fund and Waka Kotahi NZ Transport Agency [PDF, 795 KB]
  Withheld some information under section 9(2)(a) and section 9(2)(f)(iv) of the Official Information Act 1982 (OIA).
• 28 April 2020:  Memo to Cabinet on planned increase to Road User Charges on 1 July 2020 [PDF, 746 KB]
  Released in full. 
• 30 April 2020: Letter from the Chair of the NZ Transport Agency [PDF, 151 KB]
  Released in full. 
• 22 May 2020: Aide Memoire — Fiscal impact of COVID-19 on the transport sector [PDF, 345 KB]
  Withheld some information under section 9(2)(a) section 9(2)(b)(ii), and section 9(2)(f)(iv) of the OIA.
• 27 May 2020: Briefing — Impacts of COVID-19 on revenue to the NLTF and GPS 2021 [PDF, 329 KB]
  Withheld some information under section 9(2)(a) section 9(2)(b)(ii), and section 9(2)(f)(iv) of the OIA.
• 27 May 2020: Letter from the Chair of the NZ Transport Agency [PDF, 181 KB]
  Withheld some information under section 9(2)(b)(ii) of the OIA.
• 5 June 2020: Briefing — Impact of COVID-19 on the NLTF — further advice [PDF, 264 KB]
  Withheld some information under section 9(2)(a) section 9(2)(b)(ii), and section 9(2)(f)(iv) of the OIA.
• 22 June 2020: Letter from the Minister of Transport to NZTA: Approach to financial support for the National Land Transport Fund [PDF, 613 KB]
  Released in full. 

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