A number of changes (most of them really bad) are proposed to the Land Transport Management Act, with the LTMA Amendment Bill open for submissions until October 26th before a select committee then hears the submissions and thinks about making changes to the Bill. One particularly bizarre change proposed is the removal of the ability for regions to apply to the Minister of Transport to have a regional fuel tax. If that sentence sounded a bit complicated and confusing, that’s because it is. Let’s outline the current situation in a bit more detail:
- If a region feels that it needs to raise more revenue for transport projects in a different way to traditional rates, it can go through a public consultation process and then propose to apply a regional fuel tax. This tax would only apply within the boundaries of the particular region.
- The Minister of Transport can then decide whether they agree with the region’s proposition. In 2008 Labour agreed to the Auckland Regional Council’s proposed regional fuel tax to pay for the electric trains (now being paid for out of nationwide fuel tax and Auckland’s rates).
- At any time, the Minister of Transport can revoke the ability to place a regional fuel tax – just as was done in 2009 (leading to a delay of probably at least a year or two in the delivery of Auckland’s electric trains).
Now that’s the current situation. Seems a fairly reasonable process that still leaves quite a lot of power in the hands of Central Government. What the Bill currently before parliament to amend the LTMA will do is remove the ability for regions to even apply for putting in place a regional petrol tax. So even though the government already has the power to say “no” and already has the power to stop a scheme, for some bizarre reason they want to remove the ability for the regions to even propose such a scheme in the first place.
Looking through the explanatory statement of the Amendment Bill, the only reference to why this change is proposed is as follows:
This will avoid the likely costs of such a tax in a single region being spread across all regions within our nationwide fuel market, and will ensure that the additional costs of a refund system for non-transport fuel use are not imposed on productive areas of the economy.
Back in August a report was presented to the Council’s transport committee which basically concluded that there’s absolutely no merit in either of these criticisms of regional fuel taxes. Here are the key conclusions: 
I’ve never quite figured out why this government dislikes regional fuel taxes so much. Ultimately they are put in place by local councils and therefore it is the local council taking the political risk by imposing such a tax. Secondly, regional fuel taxes have always seemed to me like quite a fair and sensible way of providing councils with funding for transport infrastructure – as it’s typically road users who benefit from Council spending on transport and building roads out of rates is really just another way in which roads are subsidised.
I tend to think that the government dislikes regional fuel taxes so much because they give Councils a bit more autonomy when it comes to transport spending. The government realises that its transport policies are increasingly out of step with those of pretty much every local council in the country (particularly in the big cities) and it’s desperately trying to reduce the power and influence of the Councils so it can ram through its own agenda. At the end of the day that’s a pretty pathetic approach, regional fuel taxes should at least remain ‘on the table’ as a transport funding option and this part of the LTMA Amendment Bill should be deleted.
There are a few other parts of the Bill which deserve some mention and I’ll get onto those in the next few days.
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more autonomy for Councils is one reason, the other articulated by Brownlee was essentially that petrol excises are the Government’s money, so hands off
pretty head in the sand view IMHO
If you ever read ATs board reports every month there is a page detailing what projects AT has gone bowing and scraping to NZTA for part funding. Every month NZTA picks and chooses what bone to throw to Auckland. How AT can operate efficiently under this model boggles the mind. Basically every project AT does will have some part NZTA funding, and because of that NZTA gets to set the timing and determine if a project will happen at all (CRL).
NZTA should only exist for projects that straddle council boundaries (ie national highways), and everything else just bulk fund each council to let them build what they want.
Currently NZTA has been putting off funding for upgrading Auckland train stations like mt Albert. One can only assume this would have been done well before now if it wasn’t for AT waiting for NZTA to finally pay its share of the project.
This current govt has a real bone to pick with local government. We will all need to be very viligant over coming changes to the local government act also.
That method has existed for a very long time. Not saying it is ideal, but it has nothing to do with the current government – unlike the fuel tax contortions.
A bit off-topic for this discussion I know but I thought the reason for the delays at Mount Albert was actually due to Auckland Coucil not yet finalising their development plans for the nearby shopping village. From what I understand Auckland Transport (or ARTA in these days) was asked to put off their upgrade of Mount Albert until the then Auckland City Council had finalised their plans for the development of the village so that the upgrade of the station would occur as part of the overall development of the village. I recall some interesting ideas such as building another overbridge directly from New Noth Road. It may well be that NZTA had some role to play in the delay as well but I can’t agree that they should take all the blame.
“I’ve never quite figured out why this government dislikes regional fuel taxes so much.”
Because they give councils too much power. Simple as that. This government and its backers are far more authoritarian than they’re often painted as.
The first Auckland supercity election showed them they can’t rely on winning control locally to impose agendas like restricting budgets and rates increases, or forcing local asset sales. The upcoming Local Government and Resource Management Act changes need closer scruntiny than they have been getting.
The reason National doesnt like it, is that it gives local authorities more control over the roads. I genuinely belive that National would be happiest if local authorities had no say whatsoever when it comes to transport.
Exactly. People vote on roads and transport on a local government level, not ot a central government level. So as long as central government don’t have to answer to their electors on transport matters, they can do whatever they like, based on their funders rather than based on voters. Methinks they would like to keep it that way.
So how can these unfair changes to the LTMA be stopped then?
They can’t, as such. You can oppose them, but unless they get enough submissions to start worrying them, they will just say “so what” and do them anyway.
Making a submission is worthwhile, particularly if you’re able to appear in front of the select committee in person (not sure if they plan to come to Auckland, probably not). The other way to do something about the changes is to raise hell about them in the media somehow.
central government makes local government more accountable to their communities than they are themselves, then get all hissy when the people choose stuff they don’t like!
kia kaha, Len and councillors
“I’ve never quite figured out why this government dislikes regional fuel taxes so much.”
Because the RTF told them so!