A very interesting article appeared in Friday’s Bob Dey Property Report, noting how NZTA is keen on developing arguments for them to be able to receive development contributions to help fund state highway upgrades – like Council can use them to fund infrastructure that is required by the new development.
The Government’s NZ Transport Agency wants to muscle in on a rural council’s developer levies, arguing the state-funded road network is a significant part of the local infrastructure.
The agency has lodged an appeal against the Kaipara District Council’s proposed new district plan, which could go to a hearing by mid-year.
The transport agency is tax-funded through levies on fuel sales & vehicle use. Council development & financial contributions levied on property development are intended to pay for infrastructure attributable to new development.
This is quite an interesting prospect. NZTA can only raise money at the moment through fuel sales, registration and road user charges – and as we know, as vehicle use declines (as it has been doing), NZTA’s funding source dries up.
The transport agency made a submission on Kaipara’s proposed district plan in 2009, but the council rejected it. The agency argued: “NZTA considers that, to achieve the long-term sustainability of the state highway network, it is necessary to ensure that growth & development contributes to the cost of any improvements to the network that are necessitated by such development.
“NZTA further considers that it is appropriate that such contributions are secured through district plan financial contributions provisions, particularly where increases in traffic generated by development necessitates the upgrade of state highways.
“NZTA considers that such contributions are particularly appropriate in the Kaipara district, where the state highways are the pre-eminent component on the transportation infrastructure of the district.”
In its appeal, lodged with the Environment Court in November, the agency said the council rejection of its submission “will not promote the efficient use & development of the state highway resource. Subdivision & development can have a significant effect on the state highway network, particularly in the Kaipara district, where the state highway functions as part of the local roading network.
“There is no resource management reason to distinguish between council-controlled & NZTA-controlled roads when levying financial contributions in a district. The decision will restrict the agency’s ability to assist in providing a safe, responsive & sustainable state highway system for the Kaipara district.”
I can sort of see the logic in what NZTA’s saying here. If significant development around the state highway network generates significant traffic levels that lead to an upgrade of a state highway being necessary, then there is a logic to that development contributing to the cost of upgrading transport to support it. If applied in Auckland, this could significantly add to the cost of new urban sprawl if its development had to make contributions to NZTA as well as to the council.
On the other hand, it seems equally compelling to suggest that if NZTA can’t afford new state highway projects because people are driving less and paying less fuel tax, then maybe we don’t need all those new state highway projects after all?
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Interesting. On the one hand Government is saying local bodies can’t access the fuel tax revenue, but it is fine for NZTA to be accessing what is effectively rate revenue.
Also in the Sunday Star-Times today was an article that NZTA have surveyed students and commuters. The survey found that 1 in 10 wouldn’t take a hypothetical teleporter get to their destination, because the actually prefer the break between work and home. 90% also said they wouldn’t use travel time savings to work more, instead they would sleep, read or have more for breakfast. To my knowledge this is the first time that NZTA have ever done this, and the outcomes are consistent with what we know from surveys done in the UK, which David Metz covers in his book “The Limits to Travel”.
This makes the underlying assumptions behind the economic evaluation manual rather precarious, where so much value is placed on the assumption that travel time savings would lead to increased amounts of work. Of course there is value in increased leisure time, but perhaps this is best represented by the increase in value of properties that are closer to work and education.
Perhaps the release of this survey is NZTA’s strategy to argue for access to revenue generated from the improved land value.
(Sorry, can’t seem to find a link to the survey story, but it is in today’s edition of the SST.)
Also note that those that said they enjoyed their commute were all on PT, doing other things, like reading, drinking, or online.
I’m pretty sure that the NZTA tendered out a project not that long ago to basically reassess its economic benefit models, which includes looking at things like the time savings benefits, what the discount rate should be etc. It is quite likely that this survey is part of that project.
The project was started after the MOT review of the CRL business case was released and the council fought back with its own review which was probably the first time the NZTA’s models had really had been questioned publicly. I also suspect there were a fair few questions asked behind the scenes about how there could be such differing results about the same project.
What about people like me who enjoy their morning’s WALKING commute?
But yes, same reactions – on the one hand, NZTA looking at something else beyond fuel tax money is good. At the same time, how much more do they want to control transport funding? They are already (counting state highways and the NZTA subsidy of local roads) controlling something like 2/3rds or more!
“the other hand” sounds right.
The rest is a blatant money grab.
It almost seems like the NZTA is getting desperate for revenue. Wonder why that could be…
Let’s pretend that NZTA is a company that manufactures red widgets, with widgets roughly corresponding to what we might call “road capacity”. The demand for red widgets is traffic volumes. Fuel tax is the revenue generated from the sale of our red widgets.
So NZTA are struggling with their revenue because demand for their red widgets is declining. The main problem with declining revenue is that they are struggling to fund a series of really expensive projects that will significantly increase their capacity for making red widgets (which have declining demand).
Instead of abandoning the project for hugely increasing the capacity for red widgets, they are instead cutting funding for the production of green widgets (let’s say that’s public transport funding), even though demand for green widgets are increasing. Or they’re finding different ways to help fund the increase in capacity for making red widgets.
Sound stupid? Welcome to the world of NZTA.