People who oppose public transport, whether directly or through concern trolling are an increasingly small minority in Auckland but those that are left tend to be quite vocal. There are also plenty of people outside of the region, especially in rural areas who don’t see value in it and these people often spout all sorts of various urban myths to try and back up their claims. Well my fellow bloggers and I decided a few weeks ago that it might be a good idea to start doing some myth busting around public transport and other urban issues. We also thought it might be a good idea to try and make these posts as a bit of a resource that people can easily refer back to in the future should you ever need to. As such this is the first post in what will become a series that we will have links to at the top of the page (like the CRL links) that attempt to try and bust some myths. Further if you have some ideas for either how to improve these articles or have some myths that you want to see busted, let us know.
Myth: Public transport requires subsidies but roads are all paid for by road users.
The reality is that its simply not true to say that roads aren’t subsidised. A decent proportion of council rates are earmarked for the purposes of transport, most of which is for roads. At a high level, the way our current transport system is funded is as follows:
- The National Land Transport Fund (NLTF) is where the money goes that comes from fuel taxes, road user charges, vehicle licencing and the money gained though the leasing or sale of surplus state highway property. This is administered by the NZTA.
- The development and maintenance of State highways is the responsibility of the NZTA and paid for out of the NLTF
- The development of local roads is the responsibility of the local council (or Auckland Transport in Aucklands case). The NZTA provides funding assistance out of the NLTF to each project differently but the intention is that the national average is 50%.
- The NLTF is also used to subsidise public transport but more on this point later in the post.
Now it is that funding assistance that is key, whether it’s a billion dollar construction project like AMETI or just resealing the little road outside your house on average only half of it is coming from road taxes. The rest has to come from the council and that most commonly means rates. This is shown quite clearly in the Auckland councils long term plan where $5.4 billion is proposed to be spent on road operating costs along over the next decade with $3.8 billion coming from general or targeted rates to pay for it.
Further even if all of the money that comes from the NLTF and that is budgeted for use by PT was instead put onto roading, there would still not be enough money to pay for everything. This is shown in the most recent National Land Transport Programme (NLTP) which the NZTA released also showing the level of contribution from local government. Over the next three years $2.6 billion is coming being paid by local councils towards transport, yet in total only $1.7 billion is going towards public transport.
In a way I guess that only providing a certain level of funding assistance is a way of providing some checks and balances on the system to ensure that a) local authorities don’t go crazy with demands for all sorts of stupid projects b) the locals who are promoting it are actually prepared to pay for part of the benefit they will receive from it. In fact it’s probably a shame we don’t have the same system in place for the state highway network, after all would Aucklanders have been so keen on all of the motorway projects of the last decade, let alone the five before that, if they had to pay half of the costs of them through increased property rates?
Another area where there roads are subsidised is in new subdivisions. When new, mostly residential roads are built for development they are paid for by the developers. Developers then gift these roads to the council who then have the responsibility to maintain them out of budgets . But developers don’t build these roads for free and the cost of them is included into the prices that people pay for sections. In areas where roads already exist, developers often need to provide a development contribution towards future upgrades of other roads in the area to handle the additional traffic generated by the new development. Effectively the buyers of these new houses are paying for the costs of building new and upgrading existing roads.
I think we can safely say that this myth is busted but this post goes a little deeper. Not only are there the direct subsidies for roads in the form of rates, there are arguably a ton of indirect ones, mostly related to parking. Current and former councils have poured millions into car parking buildings, some of which are empty, in an effort to support the use of cars. There are also the issues of minimum parking requirements which have forced developers to include huge swathes of parking in anything they do and there is also the hordes of on street parking that is provided, mostly free throughout our cities. Finally there are probably increased road construction costs to make new streets wide enough so that there is enough space for other vehicle to easily get by in case someone parks on the side. All of this parking has the effect of making it much easier and often cheaper to drive rather than consider alternatives.
Lastly on the issue of subsides for PT, in acknowledging that they may not be ideal we also have to realise that providing them can also prevent much larger ones being needed to continually build new roading infrastructure. As an example, the $200-$300 million spent on the Northern busway along with perhaps subsidies in the tens of millions a year to run services (NEX and other bus services that use it) have probably delayed the need for a new harbour crossing by decades at least. That’s billions that we now don’t need to spend so a huge saving for the whole nation.