The Ministry of Transport have released the cabinet paper that accompanied the final version of the Government Policy Statement – released by Steven Joyce last week. It’s worth reading through, as cabinet papers typically provide a bit more of an insight into the real thinking behind some of the decisions governments make, without much of the pointless “fluff” in media releases. There’s also a summary put together of the feedback that was received on the draft GPS.
The cabinet paper highlights the ‘range’ of feedback received on the draft GPS:
I’ll come back to the details of some of the criticisms in future posts, because some of the criticism comes from somewhat surprising quarters, but for now let’s focus on issues relating to public transport funding – which was obviously a matter raised by a number of people in their submissions.
There’s also a graph included, which highlights one of the big problems facing public transport provision – that its costs seems to be rising much faster than its patronage:
As much as I hate to agree with Steven Joyce on anything, he probably has a reasonable point that when it comes to public transport services funding, there’s plenty of scope to improve things without requiring a further boost (beyond the money-go-round in rail funding that’s going on in this GPS) in the amount NZTA contribute to subsidies. The graph above would certainly indicate that the blue line of patronage should be able to increase quite a bit towards the green line. Quite simply, we need to get better value for money out of our bus and ferry subsidies (the graph above doesn’t relate to rail – which has very high per passenger subsidies so work can be done to improve that too).
However, and it is perhaps the stupidest element of what really is a pretty dumb Government Policy Statement, at the same time Joyce is demanding (quite justifiably) that we get better value for money out of PT operating expenditure, he is slashing the PT infrastructure budget. This is the very budget that makes improvements to the system so it can be more efficient, effective and attractive to passengers (thereby decreasing the reliance on subsidies). It is NZTA’s PT infrastructure fund that is helping to make integrated ticketing possible in Auckland, has helped fund rail station upgrades, could be used for bus priority improvements, parts of AMETI and the Dominion Road upgrade and so forth.
Furthermore, the government’s stubborn hatred of the Public Transport Management Act, seemingly in response to intense lobbying from NZ Bus owner Infratil, has the potential (depending on whether PTOM can be a success or not) to further lock us in to a system dependent on hugely increasing subsidies.
Ultimately, as public transport use increases there will be a need to increase the total level of subsidy – but the amount of subsidy per passenger should reduce quite dramatically. However, this is reliant upon reducing unnecessary costs and making the system more attractive. We must eliminate service duplication, avoid doing stupid things like running diesel train shuttles between Waitakere and Swanson post-electrification when a bus could do the same job at a fraction the price and ensure the system operates in a complementary and integrated way so it can be as efficient as possible. While Auckland Transport can do some of this work, I think the GPS decisions and the government’s refusal to implement the PTMA have made things quite a bit harder.
So ironically, by refusing to invest much in improving PT infrastructure (beyond rail projects already funded before this government came into power) and refusing to implement legislation designed to improve the cost-effectiveness of PT service provision, the government’s locking us into being ever more reliant on subsidies in the long run. Of course Joyce’s cabinet paper fails to mention this for some reason.
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There’s that bloody quote again of $1.6bn having been invested in Auckland commuter rail. Not from this Government it hasn’t.
Joyce seems to be saying that the capital and interest costs of the new electric rolling stock will be funded from the public transport services class. This is even worse than I thought.
I note the summary mentions that the Minister of Transport must “have regard to the views of Local Government New Zealand and representative groups of land transport users and providers (including representative groups of coastal shipping users and providers)(Land Transport Management Act Section 87 (1)(c)).
Public transport users have not been consulted at all. Can any lawyers out there tell me if a judicial review is possible? It would be good to test in the courts what “have regard to the views” actually means.
Non-stakeholder submitters get a tiny one paragraph mention close to the end of this document: http://www.transport.govt.nz/ourwork/KeyStrategiesandPlans/Documents/GPS-2012-Summary-of-Submissions.pdf
One wonders if MoT even bothered reading all the submissions.
If you push the price per user up (which is what you do if you don’t increase the subsidy per user), then you will be creating an obstacle to growth of use of public transport.
If people don’t use public transport they WILL demand more roads.
Steven Joyce’s strategy appears to be designed to choke off growth in demand for public transport so the public will demand the rods he wants to build anyway.
His argument isn’t reasonable at all….unless you want more roads and less rail…and you haven’t given a tiny though to peak oil.
That sums it up fairly well, I think.
I guess an increase to keep up with inflation is necessary to ensure we can maintain our existing level of PT service resource. What I am saying is that as patronage increases there should be less subsidy reliance and also that there are heaps of things Auckland Transport can do to improve the efficiency of the system.
Yup, Steve, that’s pretty much it.
I submitted, at no point did I argue for increased subsidies, but I did argue for increased infrastructure investment which, we know, grows use of the assets, new and existing, and lowers the subsidy per user. He knows with more investment PT use will grow, and with bold investment it will sky-rocket, and is determined to avoid this. By killing investment but so generously increasing state aid to Infratil through higher subsidies while adding taxes on the rail system through KiwiRail, he kills a whole bunch of birds with one GPS. And still lies like a flatfish about ‘supporting’ PT.
I wonder why the chart selectively picks bus and ferry? if rail had been chosen would that diminish the argument? Also the effect of choosing cumulative change is to make the lines in the chart go up at an extreme angle.
You would have thought that the CBT’s submission point questioning how the total annual expenditure can increase to over $4bn a year in 10 years at the same time as vehicles getting more fuel efficient would have been talked about too.
I do wonder how much of that increase in cost of services comes from Auckland? I suspect it would be almost all of it actually… I think we just have a really inefficient Pt system (which we all know) because for years and years the different bus and ferry companies have played the councils and got huge subsidies for a pretty crap service.
That’s a shocking graph. I wonder how much of that is simply higher fuel prices? Certainly not all of it – 250% in a decade is incredible.
The green line takes out ‘cost escalation’ issues such as higher fuel prices.