Wow. What a crazy few days for public transport in Auckland. Firstly, on Friday we get what appears to be the worst news possible from Wellington, that the Regional Fuel Tax is likely to be scrapped. As electrification of the rail system, integrated ticketing, new ferry wharves and the PenLink road all depend upon regional fuel tax money, this threw everyone into a spin about how these things would be paid for. The justification for not wanting to go ahead with the regional fuel tax seemed pretty lame: “We have been considering whether the regional fuel taxes are the right way to go” says the Minister of Transport, Steven Joyce, also saying “Nine and a half cents over the next two years is just too high on top of the national increases as well. We’re into tighter economic times now.” Ironically enough, this came on the same day that petrol prices went down by 5c a litre, probably because someone sneezed too loudly or too quietly somewhere in the Middle East.
The point being that even 10c a litre is nothing in the scheme of things, at around 7% of existing petrol prices. When one considers that prices have gone from around $1.50 a litre up to $2.20, back to $1.30 and now sit around $1.60 a litre, the effects of a regional fuel tax could be negated (or doubled) in just a few days at the whim of nearly nothing on the oil markets. The other main point is that regional fuel taxes are actually an incredibly fair and efficient way to raise money for regional transportation projects. Whether or not the purchase of electric trains is the right project for regional fuel tax funds to go into, especially when one considers that general tax funds are being used for Wellington’s new electric trains, is not really the issue here. The issue is that a regional petrol tax allows for the region to improve its transport infrastructure by paying for it themselves through a tax that only applies in that particular region. It’s a good question to ask why someone in Invercargill should pay for Auckland’s electric trains, just as it’s a good question to ask why someone in Auckland should pay for Wellington’s new electric trains. A regional fuel tax gets around all those debates and means that the cost for a project is borne by those who are most likely to benefit from it. Even the Mayor of North Shore City – which will pay the tax but doesn’t have any railway lines to benefit from electrification – supports the regional tax because he realises that the benefits to Auckland from electrification will also flow on and benefit North Shore City. It’s a much tougher argument as to how the tax-payer in Invercargill would benefit.
But anyway, throughout the weekend the big question was “how else will electrification be funded then?” Today we get some good news, that (it appears) the government will step in and fully fund electrification – through KiwiRail. One could be cynical, and say that this move will just lump a huge amount of debt onto KiwiRail and further lead to calls for it to be privatised, but (for now) I think I’m going to go out on a limb and give some credit here. Although the taxpayer from Invercargill will now be paying for Auckland’s trains, at least it put us on level-pegging with Wellington as the government will be paying directly for their new trains. So I’m OK with the train being centrally owned and funded. This might also lead to fewer operators running, owning and managing the Auckland rail system – which will also hopefully lead to improvements.
However, a number of issues remain outstanding, and haven’t really been picked up on yet. The most obvious is to point out that it wasn’t just electrification that the petrol tax was paying for. Money for Auckland’s smart-card ticketing was also supposed to come from there, as was funding for the PenLink road improving access to the Whangaparaoa Peninsula. So was money needed to upgrade many of the wharves served by ferries. So what happens to those projects now? Are we never going to be able to fund a smart-card ticketing system, meaning that we’ll be left with half-arse backwards paper-based integrated ticketing (or possibly no integrated ticketing at all?) I’m not that concerned about PenLink, but I certainly imagine there will be a lot of annoyed people up on the Hibiscus Coast. The other issue that really annoys me is how central government appears to once again be totally walking all over local government. Why shouldn’t regions be able to impose petrol taxes? They have councils that are democratically elected, and are therefore answerable to the people, what makes central government think they know so much better?
There’s still certainly more to come on this, and I am particularly keen to find out about the future of smart-card ticketing. The optimism of my post just a few days ago seems to have now been dashed.