As well as revealing that the government would be making an announcement on road pricing this week, Mayor Phil Goff also made another interesting comment in relation to transport in his interview on The Nation on the weekend. He mentioned that the funding shortfall from ATAP over the first decade has risen from $4 billion to $7 billion.

You’ve got a $4 billion shortfall for your transport projects, so over the next decade—?
Yeah, I’ve got news for you – it’s not 4 billion. It’s more likely to be 7 billion, because when we put forward – and we did it together with Government – the Auckland Transport Alignment Project—
Okay, so it’s worse than first anticipated?
Yeah. No, let me just explain it. It was based on a 16,000 rise in population by Auckland each year. We’re now growing by 45,000, so we add the population the size of the city of Tauranga every three years. And the Government knows – I’ve given them all the figures on that – they know that with that growth, 800 extra cars on the road each week, they’ve got to work with us to resolve this problem – for the sake of New Zealand as well as Auckland.

….

Is it going to be good news for your city?
It is. I think it will be good news in the medium-term. But we need something in the short-term. You know, think about that $7 billion deficit I mentioned before. We cannot leave it like we left the City Rail Link. We’ll get the City Rail Link – it’ll really help – but it won’t help for another five years, and in the meantime, the city is becoming more and more gridlocked. We need to bring that expenditure forward, and that is the case that I’m making, and not just me, but all of our Auckland councillors are making to the Government.

There are a few things to work through from Goff’s comments on this.

The main reason stated for this increase is that is that a number of projects will now be needed sooner to deal with Auckland’s current growth. When the Government and Council were working together on ATAP last year, they modelled the impact of various packages of investments. Those models included various assumptions about things such as population and employment growth. The Foundation Report released in February 2016 outlined some of the core assumptions that were used. On population growth, they note that they used the medium-growth projections from Statistics NZ. That projection would see the region’s population rise by around 700,000 to 2.2 million by 2043.

However, as Goff points out, we’re currently growing at a much faster rate than anticipated and we’re even ahead of the high-growth projection. While actual results can vary in the short term, it’s safe to assume we’re still going to need a lot more transport infrastructure, like the Congestion Free Network. Below is how we’re currently trending with our growth compared to the most recent projections.

Interestingly the one area where growth is occurring considerably faster than was projected is in the City Centre, just another reason why it’s important we do more to improve the city centre for people with projects like the Victoria St Linear Park – but that’s an issue for a separate post.

So just what projects are likely being brought forward as part of that extra $3 billion that is now said to be needed? We don’t know what the exact projects are but we can get an indication based on some of the information within the ATAP documents.

ATAP separated out projects to be built over the coming three decades, these are shown below (note: it doesn’t include projects already underway, such as the City Rail Link). Some of the projects currently in Decade 2 are the most likely to be brought forward.

As mentioned earlier, ATAP assessed a number of different potential packages of investment. Before arriving at the final recommended approach, they had boiled things down to two packages with different focus’. One focused on trying to spend a lot more to improve things and one more focused on influencing demand (such as with road pricing). The various assessments showed the latter performing better so ATAP ultimately recommended an approach more closely aligned with it. But not everything from the Influence Demand package was adopted and so it stands to reason that projects that just fell just short of being included in the 1st decade would now be brought forward. Chief among those is ‘mass transit’ across the isthmus, something we now know will eventually be light rail. It’s also worth noting that the Influence Demand package has a PT only harbour crossing as a 2nd decade project and no road crossing at all.

As well as light-rail on the isthmus and given the expected announcement on road pricing, other projects I would hope that would be brought forward would be ones that help provide alternatives to driving and have significant capacity to help deal with the growth. As such, if this extra shortfall was to be addressed then perhaps we could see significant potions on the Congestion Free Network implemented relatively quickly. That would certainly be welcome.

Share this

70 comments

  1. Short term poll/focus group based government give so little but take so much.

    The clever dicks that make up our government knew mass inward migration equals “growth”, that equals tenants for rentals for the bubble, equals a facade of economic success (temporarily), and equals re-election under the auspices of astute economic management. It is the ultimate economic sugar high.

    But the serious negative side effects of this unplanned mega short term thinking such as transport, waste water, schools, health and a host of other hidden costs truly equals economic stupidity. And it biting us Aucklanders badly.

    Meanwhile central government whose policies created this cluster f@#k don’t know what to do next, look on blankly, do nothing in spades and are quite content to send the clean up bill to Aucklanders.

    This is not the time for that nor their well honed do something for appearances sake response either!

    1. Phil Goff though has made a strong move on this ongoing ‘game’ between local and central government.

      If Wellington denies to fund Auckland’s reasonable (evidence based etc) requests for infrastructure to keep up with population growth then that exposes the National party’s line that high immigration rates/high property prices/congestion…. is a sign of economic success.

      If infrastructure funding is not forthcoming then that indicates National’s economic model is not sustainable. If that line of thinking becomes embedded in the wider public’s thinking then that is a big setback for National politically.

      I predict Phil Goff will get more infrastructure for Auckland.

      1. Richard Harman the political journalist and editor of Politik website has also written an article on Phil Goff’s The Nation interview. Stating;
        “While over the weekend Mayor Phil Goff was trumpeting an imminent announcement on congestion charging for the city, it appears that the announcement will simply be the terms of reference for the inquiry into congestion charging.”
        http://politik.co.nz/en/content/politics/1107/

  2. Why was the medium growth projections used when the Auckland Plan was sitting on the high growth projections?

    Also given the Mayoral proposal had this: Population growth has continued to outstrip projections included in both the last LTP and ATAP. This has contributed to additional pressure on the transport network through added congestion, significant pressure on housing and, for council, on the supply of infrastructure to support new housing development. Work on the Future Urban Land Supply Strategy has also identified close to $20 billion of investment (including state highways) required over the next 30 years just to service greenfield development.

    I wonder who cocked up?

    1. Medium projections seem logical to me, you wouldn’t want to over invest in unnecessary infrastructure. While our short term growth is above the upper level it doesn’t mean this will be the case in 20-30 years.

        1. “6 years at high level and at least another 10 with that level.”

          What makes you think we’ll have another ten? This property bubble’s gonna pop and take the whole economy with it.

          1. another thing to consider is high number of Kiwis returning from AU, if the policies there change enough to make life too difficult (like paying for primary school, no easy access to medicare).

          2. Popultion growth does not necessarily stop when an economic boom stops. Look at Australia after the mining boom ended in about 2014. Population growth pressures are still huge. If people migrate to your country at an age when they are likely to have kids, some further population increase is locked in.

            Bottom line: this problem is not going away.

            An obvious question – if Auckland’s share of national population and economic activity is increasing, why shouldn’t its share of national transport funding increase? Answer: because too many RONs are political gifts to regions, not allocated on a true needs basis.

      1. According to figures presented at one of the Auckland Conversation sessions in 2013, including by the former head of Statistics NZ and Statistics UK, Len Cook, Auckland’s growth has tracked above the official High projection for decades.

        Given the evidence of how our infrastructure has never kept up – and what we know about the demographics of the next few decades – why would we plan for less?

        Ben Ross’s post is here though much of the original presentation material seems to have vanished from the web: https://voakl.net/2013/06/15/population-trends/

        1. I have no idea how the projections are calculated but if the upper projection is the most likely to happen then it should be the medium projection.

          There is a difference between planning for growth through the UP for example, and planning to spend lots of money. There are real consequences for the latter, upper growth could just as easily see Mill Rd or the harbour road crossing being being built unnecessarily.

  3. Numbers don’t lie – Auckland is the destination and it looks like it’s snowballing nicely, so we have to get on cracking on those critical projects. CFN2 has to be implemented in the first order. Since traffic management is coming perhaps we could simply get rid (i.e postpone) all the project that add more road capacity?

    1. “Since traffic management is coming perhaps we could simply get rid (i.e postpone) all the project that add more road capacity?”

      What makes you think it will reduce road capacity ? . I see it as a funding mechanism. the CBD is a different story as it should just shift capacity to mass public transport

      1. Currently we build more roads because using the extra capacity is virtually free to the driver (i.e. it doesn’t cost the driver more to drive on a newly added lane that it would on the old lanes of the motorway). Once congestion management is here it will actually cost to use the resource which is likely to drive the existing and new demand down (like it did in London or Stockholm). Hence we wouldn’t need to build more road capacity to accomodate for growth.

        1. CBDs of London or Stockholm are not areas where new capacity can be added ( or afforded). You could say the same about public transport, adding more buses doesnt cost passengers anything, so why do it . But its done anyway , as it should, as it increases capacity.
          Roads are funded like our hospitals, single payer, the public good of healthcare supports that, as does roading construction and maintenance. Do we need little Uber type apps that say this 10km journey has cost you $1.50 in tax ? the road pricing charge is much clearer for diesel cars ( and trucks)- but surprising numbers of diesel car/van drivers dont realise this.

          Pricing is used for tobacco to reduce demand but initially it was done to raise money. Lets be clear the traffic management is to raise money, ask Phil Goff.

          1. “The Government has also made a clear undertaking that any form of variable pricing will be primarily used to replace the existing road taxes that motorists pay. This is about easing congestion, not raising more revenue” – Minister of Transport

          2. “adding more buses doesn’t cost passengers anything, so why do it . But its done anyway , as it should, as it increases capacity.”

            Except that it does. High usage routes such as the NEX, Dominion Road, and Mt Eden Road more than cover their costs. Adding buses increases ridership, thereby increasing the profit made on that route. So the *new* riders cover the cost.

            Low usage routes are subsidised as a public good, just like lightly used roads would be under congestion charging. On some of these the frequency will be increased as a loss leader to get people to the profitable services, or to build a larger future market by influencing development.

            Proposals to implement congestion charging are actually proposals to treat private transport the same way we treat public transport by charging profitable rates to use the trunk routes which can then be used to cross subsidise the access routes.

            So yes, charging for congestion will raise money, which can be used to mitigate the adverse effects and fund the social goods from the private transport network. This is comparable to healthcare, where we charge tobacco and alcohol consumers an additional tax to cover the social costs of their health decisions.

  4. Can I suggest as a cheap starter to reducing traffic problems is that traffic light controlled intersections be controlled in a smarter way than phasing to suit a timer. Many an hour of the day is spent sitting at a red light at an empty intersection. It’s as if they are set up to a programme and the “engineers” walk away, never to review them again or if so, very occasionally.

    Yes I know such equipment exists and in Auckland they are out there somewhere but they are hard to find. It’s a sad indictment but when the lights cease working, traffic flows better.

    By my reckoning traffic lights are the biggest contributer to traffic delays after too many vehicles on the roads!

    1. Your right they do exist, but you are wrong to suggest it is cheap. Those that have developed these algorithms don’t just give them away.

      This would be a significant cost for what may well be quite a small improvement, when the biggest problem we have is too many cars on the road at any one time.

    2. “Many an hour of the day is spent sitting at a red light at an empty intersection” – are we talking on peak or off peak? I don’t see many empty intersections at peak…

      1. In my experience, both. During peak there’s often one direction which is just a long queue, and traffic crossing that queue is basically blocked as well because it only gets a few seconds of green light every few minutes. While that intersection is not technically empty, you’re still waiting for no good reason.

        And off-peak: all the time, everywhere.

        1. +1, Symonds Street Wellesley is a classic example. 60s straight of green time for Symonds Street with the exit blocked by traffic for 55s while 100s of pedestrians wait.

        2. Network design often requires that queues found further back in the system.

          For the same reason why they have lights of entry ramps onto the motorways, they will control the arrival rates at the next intersection by controlling the departure rates from the previous intersection(s).

        3. Its a capacity problem, no point giving you a green light for too long when the traffic on the road ahead cant support it.
          Think of it as socialism for cars, everyones needs are met, but you dont get all you want.

          1. Yes, I get that part. But:
            • “green light for too long when the traffic on the road ahead cant support it” → that is exactly what happens all the time. Eg. during the PM peak, Hobson Street still gets a full minute of green light, even though nothing moves because it’s just a big queue for the motorway on-ramps.
            • Often the same happens outside rush hour in light traffic.
            • Often a right turn into a street is severely restricted, while a left turn into the same street lets heaps of traffic through. That contradicts the capacity argument.
            • In the CBD often the largest group being held up are pedestrians. I don’t think we have a pedestrian capacity problem.

    3. Well they have a few annoying quirks.

      One which you can regularly witness is the behaviour of right turns. It appears that if there is a gap in the traffic turning right, the light will turn red again. Sounds good in theory, but here’s how that works in practice:

      Often you see long queues at right turns, even in relatively light traffic. Here’s what happens when that queue gets green light: there’s almost always at least one driver in the front who’s a bit slow to get moving. The traffic light detects this a a gap and turns red again. So that queue can only move through the intersection 3 or 4 cars at a time. Sometimes a dozen or so drivers can get through, but only if they all vigorously stick to the bumper of the car in front of them.

      Another is evenings. Do we really still need 3 minute cycles at 9pm? It’s annoying enough for drivers, but at least they have green light in one direction. This is especially aggravating for pedestrians, who usually don’t have green light by default in any direction.

      @jezza if they only would mean a small improvement I don’t think the people who develop those algorithms would be paid to develop them in the first place.

      1. I suspect they have come out of universities which means return on investment isn’t quite as important. They are appealing to cities with a bit of dish to throw around as they give the impression of a significant improvement as there is less dead time, but in reality it is spent in longer queues.

        Also there is another cost factor – cameras and sensors to read the traffic queues are considerably more expensive than a coil under the road surface.

    4. Biggest problem at traffic lights as I experience them is that many of the pedestrian phases are far too far apart – leading to plenty of delay for what should be a short trip, and jaywalking, and that cyclists – not having enough metal – are often not picked up by the sensors, and sit there completely ignored until a car comes along. But I imagine this is being worked on as I believe some of the sensors don’t pick up the lighter modern cars that don’t have so much metal.

    5. Totally agree. It seems at any set of traffic light I’m waiting for what seems like eternity and when it does turn green the next set 50m down the road is now turning orange

      1. Just do what I do and turn right at a red light intersection when there’s clearly a view of no oncoming traffic. I just treat it as an uncontrolled intersection and apply the give way rule.

        Sometimes It just seems brainless IMO to sit and wait twiddling your thumbs when you have a clear path from all oncoming directions.

          1. Ha ha. We shouldn’t build any more roads (or raise speed limits) until motorists follow the road rules!

        1. So you superior in your wisdom than parliament, which in its sovereign role passed clear laws? Are there any other laws you ignore when it suits your purpose?

          1. lol using wisdom and Parliament in same sentence.

            And yes I always find myself breaching S123 of the Crimes Act 1961 as what is the point of life without some Blasphemous libel

        2. I’ve always wondered why the red right turn arrow is in use at 9pm.

          If this was turned off after 5 seconds of the associated green phase, I’m sure we would have less frustration and higher compliance to a law that is widely applied, but is occasionally impractical in it’s application.

          1. +1, keep it red for 5 seconds, until the queue on the other approach clears, or until the pedestrian phase ends, whichever is last.

    6. The problem is not money but people with the correct skills. AT already has a quite sophisticated software set that does this work. But computers are still far from perfect at optimising signals. It usually takes a (quite skilled) engineer a month or two to fine tune signal coordination on a single arterial road. With traffic growth and redevelopment the settings usually need to be updated every 3 to 5 years as traffic patterns change over time. I fear with current growth pressures the people with these skills in AT are simply too few.

  5. It’s worth unpicking what the “7bn shortfall” means.

    First, there’s no magic number about how much we should spend, and how much we should earn (we being Auckland Council).

    The expenditure amount is derived from the costs associated with a particular set of projects, which have a particular set of objectives. This gives a particular dollar figure.

    The revenue amount is derived from a particular projection of rates/other income. These give a particular dollar figure.

    At the stroke of a pen, either by reducing cost, or increasing revenue, the “$7 billion shortfall” could be eliminated.

    If I said “New Zealand faces a $50 billion health shortfall over the next decade” it would make good headlines, but it would be appropriate to deconstruct what I’ve said and realise I’m proposing a plan that involves doubling hospital bed capacity while reducing Vote Health.

    1. Yes this is a good point, and so is the point in Matt’s post that the cheaper option of influencing demand is more effective. Even simpler would be to focus only on projects that improve accessibility without inducing more vehicle traffic, and see where that leads us in 5 years’ time…

  6. whichever political party proposes road tolling or congestion charging will be committing political suicide i think

    1. I think the day is fast approaching when every political party (except maybe the Flat-Earthers) will be proposing road-pricing of some sort. There is no dodging this issue unless we want Auckland to de-generate to 3rd-world-city status in regard to traffic-problems.

      1. I agree. Already a cross party consensus consisting of National, Labour and the Greens on road pricing exists.

    2. Except all the parties who have been asked about Congestion Pricing support it

      National – Tick
      Labour – Tick though would want some better PT in place first
      Greens – Tick though also would want some better PT in place first
      NZF – Tick at least I believe 2014 Policy had it.
      ACT – Tick

      AA membership also support it.

  7. Surely with the population rising faster than expected (at least at the moment) revenue will rise too. More people = more houses/higher land values = higher rate revenue (plus increased council revenue from more people using council services like swimming polls e.t.c.) and hopefully this will deal with a big share of the $3bn shortfall

    1. “more houses/higher land values = higher rate revenue”

      I am continually astounded by how many people don’t know how their rates are calculated.

      1. Rates are calculated “backwards” – that is, the first step is calculating anticipated council expenditure for the financial period. This identifies the “rates pool”. Step two is calculating how these rates will be apportioned across rateable properties.

        Compare this to taxation, which is calculated “forwards” i.e. (simplifying by focusing only on income tax) x income earned times y rate of tax = z tax revenue.

        I’ve been deliberately simplistic as there are complexities around other types of funding for particular types of activities, but by and large, this is how it works.

        1. I suspect rates are calculated by Auckland Council by them determining how much ratepayers will allow them to take without spitting the dummy.

          According to LOUIS XIV’S FINANCE minister, Jean-Baptiste Colbert, “the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

          This year Phil Goff determined that 2.5% rates increase was the largest tolerable amount ratepayers would accept.

    2. Rates revenue goes up when Auckland builds more houses -as each new house is a new rate paying entity. But existing ratepayers are pretty much tapped out -at best rates can go up by the inflation rate -about 2.5.%.

      The problem is infrastructure costs are rising faster than Auckland can build houses. Especially transport infrastructure to address congestion. Motorways the government’s preferred mode of new transport infrastructure has not relieved the pressure. Even worse, infrastructure needs to be paid in advance of development. New houses cannot be built unless infrastructure is already in place -pipes, roads, parks, public transport…..

      Historically Auckland has built new housing areas on the cheap -car dependent urban sprawl. This deferred costs -like congestion to later periods. Auckland/New Zealand is now reaping what it sowed.

      This is why congestion road pricing is a potential game changer. It creates some breathing space to get ahead of curve wrt infrastructure and housing. Thus addressing the two major problems of Auckland -unaffordable housing and congestion.

      1. “Rates revenue goes up when Auckland builds more houses -as each new house is a new rate paying entity. But existing ratepayers are pretty much tapped out -at best rates can go up by the inflation rate -about 2.5.”

        This is not correct. What happens when a new house is built is that the overall share of rates changes. Whether rates go up or down depends on the council expenditure level.

        Example: the Council wants to spend $100k next year and has 100 houses. $1k rates each. If another house is built (101 houses), but total expenditure stays the same, everyone pays $990.10. However, if expenditure rises to $120k, everyone pays $1188.12

        It’s significantly more complex as not every house pays the same amount due to different rating values.

        Example: Council wants to spend $100k next year and has 10 houses. However, 1 of the houses is worth $900k and the other 9 are worth $100k each ($900k) total. In this situation, the 1 house would pay 50% ($50K) and the other 9 would pay $5.5% each ($5.5k)

        NOW, let’s say that for some miraculous reason, the 9 100k houses are suddenly worth 200k each, but the 900k stays the same, and council still wants to spend 100k. Now we have

        900k+(9x200k)=2.7m rating value. Now the 900k house pays 33%x100k (33k rates) and the 9 houses now pay $7333 each.

        1. JDELH -nope -keep it simple. As soon as Auckland Council (or any other Council) registers a new house has been built -a new rates bill is created for the increased improved capital value -the council then gets increased rates revenue. I do not believe that every other ratepayer in Auckland gets a tiny fractional decrease in their rates every time a house is built to maintain some weird fixed total revenue amount.

          1. Only if Auckland Council chooses to keep a fixed total revenue amount. In reality, what happens is that the revenue amount increases, and the new house becomes a very small share of that overall total amount

            Oh, and my source = briefings by Council financial planning staff associated with the Long Term Plan

          2. JDELH I think you are kind of right. Rates are not a fixed proportion tax in relation to capital value or land value -if they were then as the average house price in Auckland has doubled in value in the last 8 years then Auckland’s rate revenue would have doubled too. But there would have been massive howls of protest from ratepayers. Rate increases instead are carefully calculated not to be too high.

    1. Yep that is an interesting hint at what Joyce and English might do.

      In my opinion Tim Watkin’s the Executive Producer of Podcasts & Series at RNZ has the best handle on the issue with this article. https://www.pundit.co.nz/content/wellington-this-is-auckland-calling-let-us-out-of-this-maze

      “Goff – and to an extent Auckland – is like a rat in a maze of National’s making. He can’t move down the path marked ‘borrowing’ because the city has hit its debt ceiling in borrowing for its half of the Central Rail Link. He can’t try the ‘rates rises’ route because citizens (and councillors) won’t accept more than the 2.5 percent increase he promised on the campaign.

      He tried the ‘regional fuel tax’ path, but Joyce et al blocked that off. He (and his predecessor Len Brown) have been banging at ‘congestion charges’ door, but again, National has said no.

      Every way Goff tries to turn in this maze, National has a wall built. And if you doubt their determined obstructionism, think on their stalling the CRL for years, on their removing the regional fuel tax and their decision to spend a year – a year! after so many years! – trying to get “alignment” between council and government on transport priorities.

      So why the obstruction? Because National is trying to force the rat in a certain direction. First, it wants Auckland Council to cut spending. Second, it wants it to sell assets. The cheese is at the end of those corridors.

      So Goff is in a bind with few paths to choose. He’s gone a wee way down the assets path, divesting Auckland Council of its stocks and shares and even talking about selling off the Ports of Auckland company. He’s cut spending (a programme begun under Rat… I mean Len… Brown).

      But rather than just follow the path to the cheese, wily old Goff has chosen to keep banging his head at the wall of the maze, insisting that unless the crazed National party scientists open a few more doors, all those Aucklander stuck in traffic and unable to afford a house are eventually going to look up and start recognising who’s to blame for the fact they’re trapped in this insane maze.”

      1. The only asset worth enough to cover the shortfall are the roads themselves. Propose to sell off a few streets in Nat electorates and suggest $20 per use. Then watch the reaction.

  8. I would’ve thought the increased tax revenue generated by the increased migration would have been helping to fund the infrastructure needed?

    1. Additional tax buys additional services, but will it all be spent on infrastructure or divided into all of the services immigrants may use?

      The only place I know of where the cost of an asset isn’t paid for up front is accrual accounting. Even if you borrow, you still pay upfront, but then rent the money over a period.

      So the infrastructure is required at time point zero and that needs to be paid for in the present, with the tax revenue being a future cashflow.

  9. Well, there’s all sorts of guess work and heroic assumptions in this stuff.
    For example, will Auckland’s population really grow so much in the next 20 years?
    I, for one, doubt it.
    Many people I know have left Auckland or are thinking of leaving.
    The city is unlikely to attract the levels of immigration it has in the past. One of its great pulls for immigrants – in the past – was the relatively affordable cost of living – that has been destroyed in the past 10-15 years.
    It will still grow of course, because it is NZ’s main centre and economic engine room. But I’d pick the mid-growth scenario, definitely not high.
    Auckland – the victim of its own success and all that…

  10. Time to look at limiting the number of cars on the roads as in Singapore, Beijing, and back here in Auckland in the 1970s? Or introducing prohibitively high congestion charges as in London?

Leave a Reply