The impact from COVID-19 on the Council’s budget has been severe and even with a 3.5% rate increase, is set to see funding for projects slashed, with safety and cycling some of the worst hit. All up Auckland Transport estimate it could see $312m to $352m of “shovel ready” projects paused and more concerningly that could see up to 10 people die and 40 people seriously injured on roads that would have otherwise had safety improvements.

An article in Stuff a few days has highlighted that while Auckland Transport will suffer from the council’s budget cuts, it has already been suffering from reduced funding from Waka Kotahi – the NZTA.

An Auckland Transport (AT) submission to the Ministry of Transport (MoT) shows ongoing tensions over funding for the $29 billion Auckland Transport Alignment Project.

And it has also highlighted what it claims is a 10 per cent shortfall in the funds from the Waka Kotahi New Zealand Transport Agency (NZTA) for the project.

When Transport Minister Phil Twyford first announced the revised Auckland Transport Alignment Project (ATAP) in April 2018, he said it would see $28 billion invested in the city’s transport system over the next decade.

…..

Under the original proposal, the Government would contribute $18 billion through the NZTA administered National Land Transport Fund (NLTF) ($16.3 billion), City Rail Link ($1.4 billion) and Crown Infrastructure Partners ($0.36 billion).

Auckland Council would contribute $10 billion in funding through rates, development contributions and borrowing ($8.45 billion), plus the Regional Fuel Tax ($1.5 billion).

But that hasn’t gone according to plan – something highlighted in the AT submission to the MoT on the Government Policy Statement on land transport from last month.

It claims while NZTA was expected to come up with at least 50 per cent of the costs, it had in fact been closer to 40 per cent.

“This has led to delays and required additional council support.

“While these issues have been managed so far, Auckland Transport will be unable to deliver its part of the ATAP programme if this situation continues.”

I decided to take a look at NZTA funding data. The below graph shows the total amount of funding Auckland had approved from the National Land Transport Fund (NLTF), which the NZTA administer. As you can see, Auckland’s share in recent years has been below the city’s population share. It was above share in the early teens but over the 10-year period it averages out below our population share. This is doubly concerning when you consider that Auckland has grown faster than other parts of the country.

It’s also worth pointing out that the results above don’t include funding for the City Rail Link so it is not all crown spending on transport, although from what I can tell, it would still be just on or more likely below the line still.

That leaves the question of, if not Auckland, who is getting more than their share. The graph below shows just the share of funding over the last 10-years and compares it to population. As you can see, Auckland has had slightly less than its share in population while the Waikato has done very Wellington.

One thing that might balance this out a bit for Auckland will be the NZ Upgrade Programme, in which Auckland saw the bulk of the projects. As such it’s also rumoured that it means Auckland won’t get a fair share of the government’s post-covid ‘shovel ready’ projects.

The submission mentioned earlier is AT’s one on the draft Government Policy Statement and that gives a bit more detail as to the problem. It seems the issue stems from the fact that while NZTA data shows they fund about 51% of the costs of projects and services that qualify, there are a number of projects the NZTA think don’t qualify.

Some of these issues arise from the scope of projects that the NZ Transport Agency is willing / or able to consider through its funding processes. For example, although technology is considered a key enabler of modern transport systems and was highlighted as a key ATAP priority, we have historically struggled to have technology projects funded by the Agency.

These problems of funding share are further complicated by the cumbersome funding application and approval processes. Simply put, these processes are taking too long, are very inflexible, reduce certainty and increase cost. While we appreciate the need for a sound business case process, a more streamlined solution needs to be found – particularly where there is an agreement to an overarching programme such as ATAP. We will continue to work with the NZ Transport Agency to improve these processes, but seek stronger guidance from the GPS to address the issues we have encountered.

And their submission welcomes some of the changes signalled in the GPS but think it needs to go further with the following changes

  • set clearer expectations for certainty of funding for all projects in the ATAP programme list
  • broaden the scope of what can be funded from the NLTF to ensure all projects in the ATAP programme list are fundable (some categories, such as technology and advanced property purchases, where there has been difficulty gaining funding although they were part of the programme)
  • set clearer expectations around the achievement of the 50/50 funding share assumption that underpins the ATAP programme
  • set clearer expectations of a streamlined business case process, building on the steps that NZTA has already taken to remove the need for strategic cases for ATAP projects.

We think these expectations could be set out through further elaboration of the Government Commitment in Table 4 of the document. This codification of an existing agreement would avoid the issue of precedence for other parts of the country.

We also suggest considering a specific activity class for ATAP, along with the other Government Commitments. A stated allocation is already included in Table 4. Turning this into an activity class would enable the GPS to more clearly set out the expectations for ATAP and remove some of the uncertainty about the overall allocation remaining with the general activity class structure.

Government can also have greater confidence in the changes proposed, above as the ATAP programme is governed by a standing group of Chief Executives under the ATAP Governance Group.

The changes proposed above would remove much of the churn we currently encounter in navigating the current funding process. Importantly, they would allow AT to concentrate on delivery of the agreed ATAP programme, offer certainty to the construction sector and enable us to pursue new and innovative procurement mechanisms based on that greater certainty.

Having a dedicated ‘Auckland’ funding class sounds like a good idea – although it would be good if we could still compare the activity classes they’re a part of ?

Finally, AT get close to saying it but don’t quite so I will, I wonder if they should be bulk funded. By that I mean that they get a set amount of money as a blank cheque with it left up to AT to decide how to spend it. The drawback to that is they’d probably spend it on a bunch of big new roads.

At least in the interim, the NZTA needs to step up and start funding Auckland properly.

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35 comments

  1. We have very little chance of Auckland issues being taken seriously if things like Light Rail can fester with no political accountability, either from the opposition or the PM’s own standards for her cabinet. You can add the Urban Planning Authority into the mix there too.

    Until there’s some consequences for not making stuff happen, Auckland will continue to stagnate while places like Wellington do very well per head of population for some mysterious and inexplicable reason.

  2. Bulk funding AT would have to come with some pretty clear instructions! Which brings us back to who sets strategy. The Department of Transport in the UK is making things pretty damned clear:

    “Active travel can help us become more resilient. That is why towns and cities in the UK and around the world are making or proposing radical changes to their roads to accommodate active travel.

    We recognise this moment for what it is: a once in a generation opportunity to deliver a lasting transformative change in how we make short journeys in our towns and cities. According to the National Travel Survey, in 2017-18 over 40% of urban journeys were under 2 miles – perfectly suited to walking and cycling.

    Active travel is affordable, delivers significant health benefits, has been shown to improve wellbeing, mitigates congestion, improves air quality and has no carbon emissions at the point of use. Towns and cities based around active travel will have happier and healthier citizens as well as lasting local economic benefits.

    The government therefore expects local authorities to make significant changes to their road layouts to give more space to cyclists and pedestrians.”

    1. The British have made an art out of saying grand things as a substitute for doing anything. Their country is completely screwed and is facing the sort of long term economic malaise we had from about 1975 to 1984. Active travel will increase in the UK due to the population being a lot poorer than they were before. They have enjoyed really high levels of support for public transport and excellent roads. Those things cost a lot of money. They are facing a once in a generation change alright, but not a good one.

      1. You’ve not been following what they are doing, then? The UK is changing fast, and the sorts of measures they’re doing are the ones we should be doing too, because they’re cheap and comprehensive.

        1. The difference between talking about doing something and actually doing it is very significant. The UK is indeed changing fast but not for the better.

          As I understand it, in the UK local government is funded by central government. After the GFC local government funding (along with funding for everything else) was severely cut as part of the Conservative government’s austerity policies. The country still hasn’t recovered and this was a big contributor to England voting for Brexit.

          Due to gross mismanagement by the Conservative government (why do people keep voting for them??) the UK is experiencing one of the world’s worst Covid-19 outbreaks. Due to gross mismanagement by the Conservative government they still haven’t negotiated a trade deal with the EU, which looks likely to see them exit the current transitional arrangements without a deal in place (the dreaded No-deal Brexit). Even if a deal is reached then they’ll be worse off than before.

          Individually Covid-19 and Brexit will be extremely damaging to the UK economy. Together? It’ll be apocalyptic. Even with the very best government possible they’d struggle to recover but instead they have the most incompetent government of perhaps ever.

          It doesn’t matter how good their intentions are for transport policy if they can’t execute successfully. It seems very unlikely that they’ll have the capacity to do that in the foreseeable future.

        2. Heidi, they say they’re changing fast, but fast by UK standards is glacial by New Zealand standards. The reality on the ground is that the concils there are even more backlash driven than AT and won’t build anything with any level of public opposition.

        3. I’m sure all three of you have good points to make, but it is in the UK that I’m seeing Low Traffic Neighbourhoods being rolled out en masse.

          Whereas here, apparently *checks today’s notes* AT’s legal team have found legal reasons why they aren’t possible. (No surprises there, but FFS.) And I’ve just seen that some rather basic improvements to Mangere are going ahead here after THREE YEARS OF CONSULTATION.

          Also, in the UK they’re rolling out pop-up cyclelanes and making them permanent.

          Here are some interesting articles/tweets just on London:
          https://www.bloomberg.com/graphics/2020-london-cycling-streetspace/
          https://twitter.com/laura_laker/status/1268822550122987525?s=09
          https://twitter.com/mayoroflondon/status/1268233978189881344?s=12
          https://twitter.com/citycyclists/status/1267070382919561216
          https://twitter.com/wfcouncil/status/1265964303036944386?s=09
          https://twitter.com/citygeographics/status/1261596229592666114?s=21

          I have more, and more on other places in the UK.

          Is the difference in our understanding that you’ve not caught up with the Covid changes and with how far these tactical changes take a small budget, so looking at the budgets is no longer an indication of the level of change?

          Or is it that I’ve just seen the ra-ra on social media and these just cover a tiny fraction of geographical area and people’s experience?

        4. The difference is that you’ve just seen the ra-ra on social media. I was living in the UK for the last couple of years and low traffic neighbourhoods are absolutely not being rolled out en masse. The UK just thinks that doing 4 in 10 years counts as en masse.

          The Mayor of London tweet is telling. 15km of cycleways or 1.5mm per person. It’s the same as Auckland building 2km of cycleways, which we’ve basically done already with Tamaki Drive and Queen Street.

          I’m keen to see what you’ve got from AT’s legal team, though.

        5. We’re still working on getting the idea of buiding cycle lanes — even if it involves removing more than 0.5 parking spots — within the Overton Window. It is such an unspeakable taboo right now.

          Second problem is that the value of projects seems to be measured in amount of dollars they cost, not in the amount of stuff we actually get. Case in point there was this Grand Plan about cycleways a few years ago. It was great because it costs more than 500 million. But actually it would only have delivered a relatively small amount, 150 km, of cycleways.

        6. Popup lanes will become even more common in the UK as they head back into an early years Thatcher style society where most people have a very bleak future while a small minority do extremely well. (Queue UB40 I am a 1 in 10.) The problem with that type of society is there will be less money available to spend on public transport and other public services. Nationalism and racism will be the only growth sectors. Who would have thought back in 1990 that Ireland would have thought back in 1993 that Ireland would have money and the UK would be poor?

        7. I guess we’ll find out in good time if it’s just ra-ra… perhaps you left before Covid changed everything? Some more from London:

          https://twitter.com/MattWinfield2/status/1265280338424672257?s=09
          https://twitter.com/hackneycyclist/status/1265669702245912578
          https://twitter.com/hashtag/HackneyVision?src=hashtag_click

          On the LTN’s, AT seem to think they’re legally stifled, and there’s a need to update the TCD rules and overturn old case law to enable them to do LTNs… One would expect they would approach the Innovating Streets team at NZTA about this as soon as they saw the programme was welcoming low traffic neighbourhood applications, or at least when they realised the implications… But it seems not.

          However, I’m sure it can be sorted, because AT’s legal team is there to enable progress, not find excuses to prevent it… chuckle.

    2. The Mayor of London is trying hard to improve cycling, but outside its very hit and miss.
      Brexit was always going to be economic suicide and the effects will be covered up by COVID – which has also been badly managed.
      Labour under Corbin was a joke, so the UK missed an opportunity to elect a government that would have done some good.
      Miffy is right about the growth of nationalism and racism in the UK, it seems the only thing that they want to import from Germany.
      Public Transport is going to be tough in London as the tube is old and filthy. More people will try to work from home, but those that need to commute will want to drive. Cycling in London works, but it doesn’t in many other places in the UK. I would not want to ride a bike on the A40.

  3. The big cities should generally receive a smaller share of transport funding than their population share because it should be cheaper to move people around where economies of scale exist.

    Trouble is we’ve spent money on the wrong things and now have to spend more to fix it. The important thing now is to spend on the right things or we’ll always be spending too much money on an expensive transport network.

  4. The skyscraper graphic comparing regional population share with spending share may look different in even 12 months because of the cost of specific major projects.
    Wellington may be more in balance with the completion of the Otaki expressway and Transmission Gully, finally.
    Taranaki will be the other way because of the upcoming spend on Mt Messenger. Similarly Manawatu-Wanganui because of the Levin bypass and the Manawatu Gorge bypass. But expect Waikato’s share to stay high with the proposed extension of the expressway from Cambridge to the Tauranga turn-off.
    Bulk funding for a third of the population would make sense.

  5. It’s not often I disagree with your articles Matt but the whole premise of this article is wrong. It is the same idea that some in the motoring lobby use to argue that funding from the NLTF shouldn’t be spent on footpaths/cycleways/PT (“the NLTF is funded from fuel tax so should be spent on roads”). ‘Fair share’ is not how taxation and government works. If it was, the majority of government spending would benefit the richest in society.

    The job of government is to get the best outcomes it can for the money it has. It may be that the best way of improving transport in Auckland is to try and encourage people to live elsewhere, by improving infrastructure in the regions. It may be that the best way to improve road safety and decrease the road toll is to spend money improving roads in sparsely populated regions. In either case, or for any other valid reason, that is what the NZTA should do without worrying about ‘fair share’.

    1. I agree with your argument. However if NZTA was to only spend money where it could get the most value in terms of lives saved, carbon emissions reduced, congestion mitigated, productivity improved and national GDP increased then guess what would happen? 90+% of the spending would go to Auckland and the rest of the country would be moaning about ‘fair share’.

      1. Probably 🙂

        Actually, wouldn’t it be interesting if they did? If instead of talking about 4-laning Christchurch to Ashburton and other pointless roading projects, they rounded up all that effort and money and spent it on the Congestion Free Network? As a current Christchurch resident I’d understand that was a better use of the money.

      2. LB
        You make a very good point about spending money on roads where the best return is achieved. I grew up in the Hawkes Bay and there was two major roads and other smaller roads between Napier and Hastings. Combined I imagine they handled the same traffic as does Link Drive in Glenfield. (That road had little enough traffic that at 14 me and some mates would bike from Hastings to Napier for some fishing.) Someone had the grand plan that an expressway was necessary and at the costs of millions over the years it has been built and extended. Appreciable benefit for modern day HB – probably not.

        With scarce resources, and becoming scarcer let’s build the projects that deliver the greatest return regardless of where they are.

        1. Unless you grew up before the late 1960s, the first section of the Expressway was already open. It was called Napier Hastings Motorway until late 90s(ish). First section to open was Pakowhai Rd to Meeanee Rd followed shortly after by Meeanee Rd to Taradale Rd. Not building the initial Expressway/Motorway would’ve limited crossings of the Tutaekuri River to Waitangi Bridge (ex SH2 now SH51), Brookfields Bridge (1 lane, minor road) and Redcliffe Bridge (ex SH50 at Waiohiki) (plus well out in the countryside the bridge at Puketapu – 1 lane on a minor road).
          Busiest sections of the two lane HB Expressway carry more traffic than many sections of the four lane Waikato Expressway…

  6. Waikato is likely to have a smaller share going forward once the Expressway is finished. Sure they might upgrade a few more roads here and there but none will be of the scale of that project which is really a once in 50 year type project.

    1. Plus, Waikato is actually the fastest growing region at the moment. So ‘fair share’ based on current population is a bit meaningless.

  7. I can see an issue being that some other regions also underfunded according to that graph are proportionally much more underfunded than Auckland in a per-capita. So any re-direction of funds with a view to fairness is unlikely to go to Auckland in the first instance.

  8. I suspect that much of the need for building roading infrastructure is due to the 4 million odd tourists who used to visit NZ each year, most of whom fly-drive around NZ. They do so simply because we don’t have other transport options available. Unfortunately hard working kiwis pick up the cost of tourists who sometimes travel thousands of kilometres if they make their way from Auckland through the South Island and return.

    Yeah, some of them pay $50 and they all pay gst, but this doesn’t cover the cost of upgrading airports, roads, bridges, lay bys, freedom camping areas and other amenities.

    Rather than worry why Auckland is receiving its share, although that is important, I believe that all our state highway network should have a toll. In this fashion NZTA is most likely to build new roads only if they can be funded by toll revenues.

    NZ Transport Agency [[email protected]] I will be submitting that the tolling process starts with this section of new road.

    The incorporation of a tolling system may well change the way that we commute between cities. I have limited experience of how they operate in other countries, but certainly in Italy with tolls at about $11 per 100 km it is attractive to use buses and trains. In parts of Brazil my experience was similar and buses were an attractive option.

    1. They also pay fuel tax when driving around the country. Given the big roading expenditure has been on motorways on the edge of our cities I doubt that tourists are underpaying for the roads they use. Your may well be right about airports though.

  9. Most of the new rail which had being placed at Otahuhu station for the third platform has being removed. Just the rail the sleepers and ballast and clips are still in place. Hard case maybe they were short of rail for the Eastern line upgrade. They have left the points in place. Suppose they can slip the rail back in place when they get some more.

  10. Why is central government not giving a one off lump sum to AT to cover current shortfall?
    Must be a cheaper and quicker way to get projects moving than central government having to repeat all the work already done as well as establish new teams to replace the teams AT are disbanding in the mean time.

  11. An NLTF funding shortfall is justified if the region with the shortfall is also receiving big bucks from elsewhere. The CRL alone would put Auckland’s share well above it’s population share.

    Lets talk about getting more funding into Manawatu-Whanganui which has a clear shortfall and stuff all from other sources, whilst roads remain closed or reduced to one lane for years for lack of funding.

  12. Rather than comparing NLTF spending with population, it would be more relevant to compare NLTF spending with NLTF funding, because it’s those contributing into the NLTF that should be benefiting from the expenditure.

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