Following on from the Greens walking and cycling to school policy last week, Julie Anne Genter was again asking about it in Parliament yesterday and the answers from Gerry Brownlee were quite insightful to the governments thinking while some were also quite comical.
You can read the transcript here.
To me there were three interesting parts in the exchange. Firstly the primary question which is based off this written question.
JULIE ANNE GENTER (Green) to the Minister of Transport: Can he confirm that by the end of this fiscal year the Government will have spent $1.5 billion on work classified as having a “low” benefit to cost ratio under its Roads of National Significance programme?
Hon GERRY BROWNLEE (Minister of Transport) :The analysis the questioner relies on is provided by the New Zealand Transport Agency. The Government makes its own decisions, though, about value-for-money expenditure. It is not a slave to bureaucratic formula and therefore considers other matters in making its decisions. The Government considers the roads of national significance to be excellent expenditure.
Julie Anne Genter: I raise a point of order, Mr Speaker. This was a question on notice and it was a yes or no question, and I did not hear a yes or a no in the Minister’s answer.
Mr SPEAKER: Order! Again, the Standing Orders are quite clear that no member can demand a yes or no answer. Again, I can understand why the member does not feel that it was adequately addressed, and I accept that. On this occasion, the question, in my opinion, has been addressed, but I will allow the member an additional supplementary question to try to tease it out to the member’s satisfaction.
Julie Anne Genter: For clarity, has he spent $1.5 billion on low-value work under the roads of national significance programme, as stated in his answer to written question No. 813, and is he now trying to justify that waste by calling it strategic?
Hon GERRY BROWNLEE: The question the member asked me to respond to indicates the benefit-cost ratio on both the 6 percent and 8 percent discount rate for a number of roads. The roads that she is most likely to be focusing on are the Waikato Expressway, the Tauranga Eastern Link road, and the Wellington Northern Corridor. The Government considers those to be very important. They are strategic, and we most certainly do not agree with the Green Party that it is inappropriate or low-value expenditure
Basically Gerry just confirms what we’ve been saying for a long time, that the government is building what are in some cases very stupid roads because they want to. Now while I don’t agree with that being how we should build motorways, in itself it isn’t necessarily wrong. However it is quite different to how the government have portrayed their road building programme, which is that the RoNS are good for the economy.
Following that was this exchange related to freight movements.
Julie Anne Genter: Given that none of the spending on the roads of national significance has been high value and that nearly half the spending on walking and cycling in the last year was high value, would it not be a better use of taxpayer money to prioritise high-value walking and cycling projects?
Hon GERRY BROWNLEE: One of the problems the member would leave unanswered is what you would do with the volumes of freight that have to get moved around New Zealand if you required them to be moved by bicycle or pushcart.
Julie Anne Genter: In light of the National Freight Demands Study released last week, which shows that road freight has fallen since 2006 and that the expected rate of growth is less than was forecast when his Government began this roads of national significance programme, is now not an appropriate time to reconsider whether spending billions of dollars on projects that his own Government considers low value is the best use of taxpayer money?
Hon GERRY BROWNLEE: The first point is that I dispute the analysis that the freight volumes have fallen. What I would say is that vehicle kilometres travelled have fallen, and that is largely due to a more efficient roading network, which has an excellent outcome for greenhouse gas emissions.
This relates to the freight study released last week, the outcome of which said that while the amount of freight being moved by all modes had increase, the tonne-kms (distance) had been dropped. There are a number of factors at play causing this however one of them is not due to the roading network being more efficient which implies road building to reduce distances (i.e. removing curves) like Brownlee suggests. Note: This is different from using the existing roads more efficiently through changes like allowing heavier trucks which is something that need motorways to happen.
And lastly
Julie Anne Genter: Does the Minister understand that duplicating motorways to the Kāpiti coast or Wellsford does nothing to alleviate serious congestion in our city centres—in fact, according to the New Zealand Transport Agency, they make congestion worse—whereas investing in smart projects like walking and cycling to school take cars off the road, eases congestion, and improves public health?
Hon GERRY BROWNLEE: It also very seriously inconveniences the people who pay for those roads, and their commitment to these projects will be seen at the ballot box.
So we can’t have more walking and cycling infrastructure as it might slow down car drivers by a few seconds, even if that infrastructure takes people off the road and helps to free it from congestion. Also as mentioned this morning, people simply don’t vote on transport at a National level when there are so many other important issues being discussed. If people did vote based on transport policy then I suspect we would be getting very different outcomes.
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Assuming that the cost/benefit ratio (they are talking about) is NZTA’s ‘magic formula’, I wonder if they know how this is calculated? From what I understand this boils down to basically how quickly a car will travel from A to B, with considerably less emphasis on other forms of transport!
It’s a lot more complicated, involving safety benefits / costs as well – and it does cover time benefits for non-car users too, not just car drivers and passengers. But it is still heavily slanted towards car projects – and even then, the government’s RONS projects perform badly in it.
Slanted, for example, by the officially-sanctioned assumption that vehicle kilometres will keep going up like a stockmarket boom, while for cycling, the calcs assume that the current slow growth will never really gain more speed.
…which fortunately has now changed somewhat in the new EEM so that the default growth rate for all projects is 0%, and you have to justify any estimated growth above that.
When did/does that take effect?
Interesting. Didn’t know the EEM default growth rate is 0% now. Do you have a link for this?
See http://www.nzta.govt.nz/planning/investment/economic.html. Changes took effect mid last year, so projects for next 2015/18 funding round in particular will apply them.
If we were talking projects worth a few thousand dollars of public money this might be excusable. But we are talking billion dollar decisions based on the whims of a few ministers who are clearly following their motoring dreams rather than economic rationality. Why does the media not call them out on this?
+1
It might be kind of funny, were it not for the vast sums involved.. because of which it’s possibly NZ’s biggest financial scandal, bar none.
+4.43 million.
i.e. everyone in New Zealand. It is extremely poor governance.
Well done Julie Anne! You are making Brownlee look very silly.
Although I think JA’s point would have been stronger if she had (repeatedly) linked getting people walking and cycling as both making streets safer, spending less, but also freeing up roads to move freight more efficiently in less congested roads – something Gerry might actually comprehend.
You’re very right! She is making excellent points, but just needs to make that final connection between the problem Gerry repeatedly points to (‘inconveniencing motorists’), and how reducing congestion through walking and cycling initiatives would actually help this ‘inconvenience’! However, no matter how good a point JA makes it seems, Gerry is is just so blind-sighted he will never see the connection.
And additionally, I can’t believe that he linked better environmental outcomes to a stronger economy from having ‘good roads’. This perspective is maddening!
More cyclists means more inconvenience to motorists, though. We can’t go wasting money on dedicated infrastructure for the pesky sods.
Matt, can you please explain to me how cycling infrastructure that would separate cyclists from the traffic, would inconvenience motorists? Furthermore, improved cycling infrastructure would encourage more people out of cars and onto bikes, which would help to alleviate congestion on roads during commuting periods, and provide an additional benefit for motorists…
Satire, irony and sarcasm are just some of the services I offer. Sorry if my parody of the Minister of Pies wasn’t quite apparent.
Oh! I’m normally quite good at picking up sarcasm, but clearly not this time! Thanks for clearing that up 🙂 Good to know that it was a parody!
Gerry can’t relate to Cyclists and Walkers or even PT users due to his morbid obesity. He physically can’t partake in theses activities and most likely despises or envies people who can. When you are talking about the amount of money being spent above the attitude of the the minister is just not good enough. The whole country suffers from this..
Throw in his ‘faith-based’ economics and there you have it. How this clown was ever given a ministerial warrant is beyond me.
Road aren’t just about fixing todays problems. You have to put them in for the future too. “Build it and they will come” style. More and more business is starting in Hamilton area (and even huntly) helped by good roads to Auckland and Tauranga
North of Auckland needs the same fix
Wellington just needs an escape route 🙂
We have a lot of roads, no one is suggesting destroying the ones we have, the questions are; do we always need more, if so which ones, and are there other transport investments that are of higher value?
Especially as it turns out that road demand growth is not what it was predicted to be, that GDP growth and road movements are no longer so tightly related, yet demand for other modes in our cities are growing much faster and that providing these system have all sorts of other benefits, including to road users.
We get it that the government ‘feels like’ building roads, as the minister explains above, and that the previous minister described the RoNS programme as Keynsian stimulus for a time of economic contraction, but now that growth is back and the spectre of inflation has apparently returned, is it not unreasonable to ask for some logic and up to date thinking to be applied to transport policy?
Pete they might be starting businesses in Hamilton because of good roads to Auckland but they are not using them. Traffic volumes between Hamilton and Auckland have been flat at best for 5 years. Maybe the businesses involved have moved slightly forward in their thinking and their products don’t need to be transported.
So national is claiming that I (who pay for his road projects, despite being a regular cyclist) will be inconvenienced by more cycleways? Thanks for stating your 1960s policies loud and clear National.
You are being sensationalist again Matt and provide another example of the love story between this blog and the JAG (or the greens).
ferry didn’t say he ignored the bcr info, only that the government also considered other factors in making their decisions.
And if you read the post properly you would see I said that it’s not necessarily wrong for the government to say there are other reasons behind the RoNS programme. The problem is Gerry and others in the party have been saying for years that the RoNS were needed for the economic benefits they provide when we’ve known all along that it isn’t true.If at the start they had come out and said “we’re building these roads because we think they’re good even though the analysis says otherwise” then it would be a completely different story. We still might not agree with the decision but at least they would have been honest about why they were being built.
The title of the post says that they ignore them when it suits them… So what you are saying is the title doesn’t reflect the actual content of the post?
The content of the post says precisely that the Government is ignoring the cost/benefit analysis because it suits them. Dunno which post you’re reading.
What a croc – Trying to argue that the Govt should divert funds from roads to cycle paths is disingenuous. The cycle project shows a better return simply because it has a low cost compared to a RONS but as Brownlee states quite eloquently – how much freight can you move on a bicycle.
Just cheap shots by a politician that was never elected (list candidate) from a party that will never be elected as a majority – Its easy for the Greens to demand this and that because they know they will never be in power and have to balance the books.
Get over the RONS – As Brownlee states – they will be endorsed at the ballot box. Lets face it – Labour doesn’t have a chance in hell of forming the next Govt.
I have no idea how much freight we could move by bicycle Phil. What I do know is that all of the cara qith one person in them around Church Street stop a lot of freight from being moved.
That’s right Phil, the BCR system is a one size fits all system that doesn’t scale well with project cost and doesn’t reflect any of the engineering complexities that large projects involve. If you disregarded project costs and just looked at the benefits the RONS would be huge compared to cycleway along the side of SH 137…. However ignoring cost isn’t realistic. Maybe thats why the government use additional criteria to assess projects because they know the standard assessment process isn’t perfect. This story is looking for a conspiracy where there isn’t one.
+1 Mandy
“the BCR system is a one size fits all system that doesn’t scale well with project cost”
BCRs are expressed as a ratio, which means the scale and project cost doesn’t matter. If a project is more expensive then it should deliver proportionately greater benefits otherwise it is a poor use of money.
“If you disregarded project costs and just looked at the benefits the RONS would be huge”
If you disregard project costs of course the benefits would be huge. If the government was to buy everyone in the country a spa pool the benefits would be huge (if you ignore the costs).
I understand very well how BCR and economic analysis works thank you very much Frank. You have stated the obvious but don’t seem to understand the concept of what I was talking about and are being facetious. Sometimes projects are just plain expensive but are still required. If you prioritised projects strictly on the outcome of a BCR analysis a lot of very needed projects wouldn’t be carried out.
This is all without any mention of whether or not the actual costs and benefits that are used in the assessment are valid or not. If I remember rightly NZTA had awarded some research tenders to determine if the whole Economic Analysis / BCR was even fit for purpose.
Ultimately there needs to be some realism and pragmatism with regards how projects are delivered, comparing a multi regional suite of packages against installing some additional cyclepath / widened footpaths that only benefit a few isn’t really a fair comparison.
Mandy we, like i suspect Julie Anne Genter too, do agree that the BCR is a rough tool. Originally devised only for comparing between variations of proposal for the same project. Like comparing between a tunnel or a surface solution to a route, or a two lane v a three lane motorway project etc. And certainly not much use for comparing between completely different modes at different locations.
Additionally we don’t disagree, as Matt says above, that the gov of the day shouldn’t think and act strategically, which would mean taking issues into account between the narrow confines of the somewhat limited BCR process.
However, what are opposition members to do to try force a discussion on these issues? I think we would probably all agree that there is little point in them standing up and asking the Minister to confirm that he sees the world differently form them. The BCR process is the closest thing around that approximates some objective analysis that can be appealed to. And while you may not agree we certainly think it is worth highlighting the fact that there are projects out there that have been through this process that record outcomes with greater than 20:1 Benefit to Cost Ratios that are not being considered because the current government has a policy or a prejudice for only one mode.
This surely is the point of Ms Genter’s questions; to highlight a narrowness of thinking in their strategy. And after that of course it’s all just a game, with Mr B batting off the questions in way calculated to annoy the opposition member as much as possible. The same will be the case when the roles are reversed.
And for us it is useful way to continue the conversation outside of the narrow structures of the debating chamber.
“some additional cyclepath / widened footpaths that only benefit a few isn’t really a fair comparison”
Why will they only benefit a few? Surveys all over NZ and experience overseas consistently show that many more people (especially women, children and the elderly – the elderly being the fastest growing cyclist demographic in the Netherlands) will cycle if they are given infrastructure that makes them feel safe.
Would people drive so much if we only had disconnected roads with only gravel roads in between? Of course not, which is why the motoring lobby (often alongside cyclists) fought so hard for paved roads in the early days of the 20th century.
Saying that people dont cycle now so we dont need infrastructure is like saying that we dont need a bridge because noone swims across the river. Our roads are not very safe for anyone right now by OECD standards (http://caa.org.nz/safety/children-friendly-new-zealand/).
Cycling has been hugely popular in NZ before and can happen again. It is a fantastic and cheap way to move large numbers of people around a city. As well as great health benefits for a country with a growing obesity problem. So in fact the exact opposite of encouraging SOVs by building more roads. Cycling is also great for business, especially small local businesses (http://caa.org.nz/government/auckland-council/cycling-and-business/).
Our cycling is so low because of the road environment that almost any money spent has an amazing BCR. The great gains to be made from more roading have gone, it is only small incremental gains now.
Forgive me for being rude Mandy, but this does sound somewhat like a tacit admission that the BCR system isn’t very good. Its true that I don’t fully comprehend the complexities of the system, and another commenter was labelled ‘facetious’ for saying the same thing, but the quote is
“If you disregarded project costs and just looked at the benefits the RONS would be huge…”
But as you go on to say
“Sometimes projects are just plain expensive but are still required.”
Ok fair enough. However there is an earlier quote that goes
“the BCR system is a one size fits all system that doesn’t scale well with project cost and doesn’t reflect any of the engineering complexities that large projects involve.”
It is somewhat troubling to hear from someone who “[understands] very well how BCR and economic analysis works” that it has problems with scale and cant account for some costs. But surely the intuition of a ratio is correct? After all (and this was said before), a project with a large cost ought to deliver a large benefit right? You go on to say
” If you prioritised projects strictly on the outcome of a BCR analysis a lot of very needed projects wouldn’t be carried out.”
Ok fine. But surely there must be some criteria for what constitutes ‘need’, even if its isn’t (or is only partly) a BCR analysis. As a non-expert, when I look at the RoNS packages I struggle to understand what they are for. The BCRs are terrible, sometimes as low as 0.2 (Kapiti Expressway if I recall, but feel free to fact-check me if I am wrong). Often they are below 1.0. But as we know, the BCR process doesn’t scale well, and anyway if we only used BCRs we might miss out on some much needed infrastructure. Well fair enough, perhaps we take the BCR as a comparative analysis and examine the ‘needs’ these projects fufill.
The ‘need’ is to boost the economy by moving freight, so we proposed a highway to Warkworth, a flyover in Basin Reserve, a road to Kapiti and so on, all places which move little in the way of high value goods (I understand we are shipping more logs though). The ‘need’ is to reduce congestion yet they are built in places with little traffic*. The ‘need’ is provide benefits to many drivers rather than few cyclists, yet VKT seems to be falling while PT and cycling uptake increases. The ‘need’ is to increase growth, yet we build in places where current infrastructure is not at or near capacity (eg: Kapiti Expressway). What vision can I conclude drives these projects?
One would think, for example, that were the CRL to have BCRs of a similar level to the RoNS, and were that project identified as serving a ‘need’ in the Auckland region, then it should surely get a similar consideration? But it has seemed to date that either the ‘need’, the BCR, or both have been perceived to be less by (for example) NZTA. (Note, I want to focus on the BCR methodology here, and am not interested in comparisons between the RoNS and CRL except as it relates to BCRs and your quote about relaxing them “[as] needed”)
Again, I’m not an expert in BCR methodology, and my comments here are simply a reflection of my opinion. But it do have trouble understanding how the concepts of BCR and ‘need’ are actually applied in practise. Because to my eye, it seems we get a lot of very expensive infrastructure that deliver what seem to be a set of vague platitudes. My understanding is that this is the result of the analysis. But I’m not sure what I can conclude about the methodology when it appears to be applied so inconsistently.
I’m interested to hear what you think.
*Perhaps the one exception off the top of my head is the Waterview Tunnel.
Spending on cycling projects is likely to have a far better BCR that the RONS have but that 20:1 BCR was arrived at without using any discounting. See Eric Crampton’s piece here: http://offsettingbehaviour.blogspot.co.nz/2014/03/discounting-cycling.html
I think using a flawed study like that harms the cause of promoting cycling rather than helps. You only need to show that cycling would have a 2:1 ratio to prove that it would be a better use of money than any of the RONS, so what is the point of manipulating the numbers to get a 20:1 BCR?
I agree Mandy the smaller a project is the more completely you can capture the benefits in the assessment. For bigger projects you end up trying to build a huge model so you can aggregate tiny benefits that occur kilometres away. Even then you never get all the potential benefits. I think is why for years we did heaps small scale crash improvement works and ignore bigger projects. Perhaps we should use Net Present Value instead for bigger projects or band projects and use BCR to order within funding bands. I dont think we should turn our back on the analysis as efficiency should still be a major goal. But we do need to modify the method.
mfwic: correct… the BCR process tends to favour the incrementalism of things like m’way widening projects over anything ‘transformational’. That is the aim and the potential value in a RoNS type policy. But it’s just that the RoNS idea as it is currently configured is fatally flawed by its single mode focus. It attempts to ask a question by starting with the answer.
I am hoping that gov will see the value in widening it to Infrastructure of National Significance this cycle as they do like to talk about the value of ‘multi-modal’ thinking.
Unfortunately because they are in the habit of muddling financial language [user-pays] with economic value [WEBs etc] I wonder if they will…?
I’m not looking for an argument SB, I take your point but it seems pretty obvious that National consider road spending as an investment in industry while the Greens just hate cars.
It is disingenuousxxx Dishonest for the Greens to suggest there is low value in the RONS to our economy as not investing in roads would result in a grid locked transport system that would harm our industry. Take the harbour tunnel project – that adds resilience to industry – imagine if the AHB was out of action and what that would do to the economy if transport then had to be moved to the upper harbour. We would be fracked.
Big picture boys – big picture!
“Take the harbour tunnel project – that adds resilience to industry – ”
The problem is, it needs to add around $5B worth of resilience in order to be worthwhile. That will include some opportunity cost for projects elsewhere. Saying that the AHB is a great idea (which you are fond of doing) is well and good, and may in fact be strictly true. But it is of little value to make that claim without some sort of funding context.
Broadly, this has been a core argument on this blog against the RoNS. Your claim about a gridlocked transport system pre-supposes that the transport system is gridlocked. Yet when we look at the actual levels of congestion in the proposed areas, they are typically empty for the vast majority of the time (most notably the Holiday HIghway and Basin Flyover, but basically all the RoNS suffer from this problem to some degree).
“…imagine if the AHB was out of action…”
Imagine if the volcanic cones erupted. Imagine if there was a catastrophic earthquake. Imagine there was a devastating tsunami. The point isn’t that we should shrug our shoulders and hope for the best, the point is that there is a finite supply of resource (represented as money is this case) with which to administer ALL the assets in Auckland, and the management of those assets needs to be prioritized among many things. Lets not forget (and someone correct me if I’m wrong) the single most expensive transport project proposed in the history of Auckland. And this is before we get to the questionable benefit of its final configuration (where does the traffic go?) , which can be argued delivers little benefit. That may mean this act of “future-proofing” prevents any other kind project with benefits of “resilience” being constructed for a significant time.
Really,it seems pretty obvious to me that The National govt hstrs cyclists and train passengers so lets put that aside and argue facts shall we?
For $5b we can either have the Crl,SE busway, Nw Busway Mt Roskill line and Dom Road Tramway probably with some change,or we can have the awhc, looking at those 2 options the benefits of the first are clearly better. Both in terms of congestion relief and transport network resilience.
Investing in roads has still resulted in a heavily congested transport system, Phil. Literally billions of dollars have been spent on Auckland’s motorway network over the last 50 years, and are still being spent, and it’s still heavily congested. The projected outcomes of the road-spending-heavy regional ITP are that congestion will get worse, too, so how does that square with your faith that building more, bigger roads will fix things?
I’ll never vote Labour or Green, butI don’t think this blog is biased to any political party. It is a blog about transport issues and frankly National’s transport policies are stuck in the 1960’s. So naturally you are going to see more criticism of National.
More roads (where we already have them) isn’t an investment in industry or into the economy. How the hell can it be an investment when the BCRs are below 1???? The government is getting less benefit than the expense. That is insane, no matter what way you interpret it, especially from a party that claims to be fiscally responsible, but in reality they are as profligate as the previous goverment.
All this road building is a massive SUBSIDY for the trucking industry. It doesnt really create long term jobs or industry. It used to, back in the 1950’s but not any more, because we have reached saturation point. Even if you build a 10 lane motorway all the way to Kaitaia, you arent going to save Kaikohe and you will see new business and industry appear in those areas for a whole host of reasons.
This subsidy is a tax being paid by all NZders to prop up the trucking industry. We are paying the huge maintenance costs of the damage (to the fourth power) being done by so called “high productivity vehicles” Those HPV’s certainly arent paying 50,000 times more in RUC’s than I am in my private vehicle. Because that is the reality of the costs of road damage that they are causing in comparison to me. I for one am against giving handouts to private trucking companies. All subsidies that distort the market should be removed and we should let the freighting industry compete on a equal basis with rail.I know in reality that the trucking industry would be dead overnight if they had to actually pay the costs of the damage they do to the roads. But then at least we would get transparent transport costs,not the huge distortion we have today.
Assuming you don’t vote NZF or ACT then a vote for Nat’s will encourage them to continue with their roads first policy.
All good points Ari if we had rail infrastructure to compete with road haulage – or the funds and capacity bottleneck to justify building an alternative rail network.
So we have tge capacity bottleneck to justify motorways but not to justify rail. Cute
We do have the funds. The funds are just being spent on projects that are not worth investing in
Freight, Freight, Freight, Freight, – thats the underlying chant of “The RoNS Song” isn’t it?
We hear all the time how badly Freight is being catered by roads and how costly that is to the country to have this poor situation so we must spend $$$ on RoNS for nothing else but to make Freight work better.
But as far as the freight mantra goes for justifying the building of RoNS especially in Auckland – the latest AT February public board papers show the the current “Level of Service” (LOS) for both car and Freight traffic in Auckland.
The current freight volumes according to AT have 80% of it at either LOS level “A” (the best) or LOS level “B” (second best). and about 50% of the freight traffic is at LOS level A (again “the best”) – for comparison these LOS levels and their share are way, way ahead of the LOS breakdown for car traffic.
What this means is that in Auckland Freight traffic is considered to be either free flowing or nearly free flowing according to AT’s measurements.
So, on that basis how will spending buckets of $$$ on more RoNS (like the East-West motorway between Onehunga and Highbrook will be for sure) actually help improve things much? We are told that many of the RoNS are justified on the basis of improvements in Freight traffic alone.
Especially in Auckland, if the Freight LOS level is already mostly A or B then what are we trying to do – get freight to have LOS level A all the time?
Yet its hard to guild further an already guilded lilly.
Happy to accept Brownlees truthfulness (for once) that “RoNS are a good idea” – **because we say so**
But thats not what has been said or used to justify them to date. Because this then leads to better questions around opportunity costs of this decision.
Future proofing
Or Gold Plating?
I thought the video was funny. A woman who doesn’t believe in strict adherence to benefit costs analysis questions a man who doesn’t believe in it either. Yet it was the Labour government that removed the ficus from efficiency to include policy outcomes in order to get more money into PT. Now the genie is out the government is free to use it to justify rons.
No it wasn’t actually. The investment framework changed after the election of national. Only then did efficiency become the third part of the profile and only then was strategic fit (aka alignment with government intent become the first part of the profile)
Yes but it was the Labour government that changed from assessing only on B/C analysis and brought in seriousness and urgency, effectiveness and efficiency method that allowed projects to be funded despite low B/C’s. National changed the order. But it was Labour that put that process in place. They dont mention that now.
The issue is the process followed by central government (and so the NZTA) of strategic fit, effectiveness and economic efficiency. One interpretation of this (the Brownlee version) is that the Governent (ie Cabinet) will not be held hostage to a narrow BCR analysis which does not take into account other issues. The NZTA version of this is that ‘other issues’ include such things as active transport, traffic calming, network efficiency (ie the need to complete networks to maximise their efficiency), where individual parts of the network may have low BCRs, but the ‘package cost-benefit ratio’ accounts for synergies. Included in the mix is the ability for approved organisations (ie mainly councils) to apply for NZTA administered funding by taking into account relevant regional land transport strategies & programmes, and council-community plans under the LGA. So in theory an integrated best fit accounting for long term strategic land use, social and economic issues, and environmental impacts.
But the NZTA has to give effect to Cabinet’s Government Policy Statement on Land Transport Funding. Genter’s point is that Cabinet’s interpretation of ‘other issues’ is narrow and overly-influenced by (a) the need to ensure economic growth and (b) an assumed connection between roads and economic growth. Point (a) is a philosophical debate while (b) is evidential and highly contested, as certain information is excluded from the package analysis (eg efficiencies of coastal shipping and rail for bulk cargo). If the full array of relevant information was included in deciding the strategic spend, including atmospheric carbon emissions (not currently included), allocation of transport funding would be significantly different.
The point is Steven that what Nzta is supposed to have is autonomy to give effect to the gps. It should be using tools such as bcrs to measure activities against each other. But what us happening us the government is prescribing that some activities have to occur. They are called Rons and the accelerated programme.
Hi Anna – If I understand your point correctly and am responding in a relevant way… Labour bought in the government policy statement in 2008 and the gps at that stage reflected the then newly-updated NZ transport strategy. In effect this reinforced efforts to define what the NZTA was trying to work out as meaning ‘sustainable transport’. The change of government shifted the gps away from this strategic direction. The NZTA has to give effect to the GPS and is supposed to do so without political interference. But if the GPS emphasises efficiency and effectiveness, this needs to be apparent in NZTA funding. So yes it should have autonomy (and legally does) but if the GPS lays out a certain philosophy, even if that is at odds with e.g. the NZ transport strategy (which has no legal weight), that’s the direction you will be going in.
On the related matter, BCRs have never been sufficient in terms of assessing strategic transport planning. Strategic direction is a political process. What benefit cost does is help identify what kind of benefits you decide to measure against the costs you decide to measure, These benefits and costs are associated with specific projects within your overall strategy. As I assume you are pointing out, what annoys many is the tendency for governments to ignore BCRs when it suits them (or downplay their importance is possibly a better way of saying it), and, in addition in the case of the current Government, making the assumed benefits and various costs of RoNS more opaque as these projects sit outside the process. Yet the RoNS have such a significant impact on transport patterns and road use that they marginalise other sustainability efforts.
The problem is that BCRs will not necessarily tell (and in best practice, cannot tell you) what the best strategic direction is. That is Brownlee’s point. Genter makes the same point. So I think the confusion lies in the way the debate is framed as being about using BCRs correctly. I think that is the wrong thing to focus on.
NZTA does have autonomy over those projects it assesses, but is directed by the gps. In addition, some projects ie the RoNS, sits to one side of this process. BCRs are used by the NZTA to compare alternatives for an already identified outcome. They are limited as a tool in comparing the best strategic outcomes. Other tools exist to do that (eg agglomeration economics) but these are (a) highly debatable in terms of accuracy and (b) do not effectively account for environmental impacts. Focusing in the BCR process is certainly relevant, but does not fully capture why strategic transport outcomes can be economically (and legally and politically) justifiable yet environmentally perverse.