Parliament discusses Auckland’s transport future

There was a very interesting question and answer session in parliament today on how the Auckland local government elections may affect transport priorities.

A transcript of the discussion can be read here.

There are a number of matters that are interesting to comment on here. But first things first, I think it’s great that such a discussion is going on at the moment. It’s fantastic that there is open debate on whether rail projects should have access to funding from the NLTF (the pool of money that NZTA is funded from). It’s also fantastic to see a big debate over whether the CBD Rail Tunnel or the Puhoi-Wellsford “holiday highway” is the best way to spend the $1.5 billion that both projects appear to cost.

A few matters caught my attention in the parliamentary exchange, and require a bit of further investigation. For a start, it’s interesting to note the emphasis that has gone into “the government is spending $5 billion on transport in Auckland”. I really wonder what that includes, how far it stretches back and how far into the future it stretches forwards. Looking at the the $1.6 billion on rail projects, this is comprised of $600 million on Project DART, $500 million on the infrastructure that accompanies electrification and another $500 million on electric trains. So yes, that all does add up to $1.6 billion.

But is this government really spending that money on rail in Auckland? A closer look makes me consider perhaps not. The $600 million for Project DART is for a project that began in around 2006 and it about 95% complete now (with only the Manukau Rail Link to go). The project was funded to the tune of $600 million in the 2006 budget. So sure, this government has spent the remainder of the budgeted Project DART money over the past couple of years rolling out and completing a project that was approved and had funds set aside for it a long time ago – but that hasn’t exactly been a difficult task as the money was already there.

If we look at electrification, it is very true that the government canned the regional fuel tax, and we are getting electrification without the fuel tax. Yet once again, I think it’s a bit of a misnomer to say that it’s money they have set aside. As I noted above, there are two components of the electrification project: the infrastructure works and the trains themselves. Each half of the project costs approximately $500 million. The $500 million for the infrastructure side of the project was budgeted for in the 2007 budget, while the other half of the funding has been paid for by the government now – but there remains a huge question mark over whether Auckland’s ratepayers will have to end up paying for anyway in the longer term (as the government only lent KiwiRail the money for the trains, not actually funded them).

So I do think the government is being a little bit disingenuous when it comes to saying that they are spending $1.6 billion on improving Auckland’s rail system. In fact, they’re spending money allocated by a previous government, or money that Aucklanders had previously agreed to pay via the regional fuel tax.

Another part of the discussion above that caught my attention was when Steven Joyce said this answer:

Dr Russel Norman: Why is he taking taxes from Aucklanders and spending them on motorway projects that Aucklanders do not prioritise, rather than spending those taxes on the transport projects, particularly rail, that Aucklanders have said over and over again that they see as the main priorities for their city in order to reduce congestion in Auckland?

Hon STEVEN JOYCE: The other thing I should point out is that the National Land Transport Fund, and the road taxes and road-user charges that are used to create that fund, are hypothecated for road users. That was set up by the previous Government, which that member was a part of. So that funding is for the benefit of road users—

While it is definitely true that the previous government set up full hypothecation of money from road users to be spent on transport, it’s my understanding that this definition of transport also included rail projects. In fact, if you look at the May 2009 Government Policy Statement for transport (the document that specifically states that petrol tax dollars can’t be spent on rail), you come across the following in the foreword – written by Steven Joyce himself:

The fact that the $258 million proposed to be spent on Wellington’s rail system was coming out of the National Land Transport Fund prior to the May 2009 GPS suggests that actually it was quite possible for the NLTF to fund rail even after the previous government set up hypothecation of road user fees into the NLTF (this basically means that petrol taxes, RUCs etc. go directly into a specialist transport fund rather than into the government’s general slush fund). So Joyce is actually incorrect when he says that the current system – where the Puhoi-Wellsford holiday highway can be funded by NZTA but the CBD Rail Tunnel cannot – was set up by anyone other than himself.

Now this is not to say at all that the previous government did much of a good job when it came to transport matters (at least not until the very end of their third term), but they did end up funding Project DART, they did allow NLTF funds to be spent on rail, they did set in place a funding mechanism for rail electrification.

I’m still waiting for this government’s first new public transport project in Auckland to be announced.

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