Last Thursday the government delivered its latest budget and while there wasn’t a lot, there were a few transport related items.
Half Price Fares Extension
Back in March the government announced that for three months they were cutting public transport fares in half, along with a 25c per litre reduction in fuel tax and equivalent decrease in road user charges, all in response to soaring fuel prices following Russia’s invasion of Ukraine.
Last week the government announced they were extending it for a further two months.
“We will extend the cut to fuel excise duty and road user charges, and also keep public transport at half-price for the next two months to provide further support in the face of high global oil prices.
The reduction in fuel tax was followed quickly by a reduction in import prices and meant the undiscounted cost per litre of regular petrol dropped from $3.21 to $2.72 within a week. However, since then import costs have risen again and are currently higher than they were in March meaning the undiscounted price is back up over $3 per litre.
That the half price PT fares was not being made permanent was somewhat disappointing as Deputy PM and Finance Minister Grant Robertson had hinted it might become permanent back when the original drop was announced. It’s also worth noting again just how cheap this is to provide. The two month extension is only expected to cost about $27 million. That means for a year it would only cost about $170 million and benefit millions of New Zealanders and is still way less than the $568 million the government are planning to spend subsidising an unknown number electric vehicles, mostly over just two years, in their Clean Car Upgrade programme announced as part of their response to the Emissions Reduction Plan.
Though even with the half price fares, PT usage in Auckland is still only sitting at around 57% of pre-covid levels.
The one piece of good news around this is the decrease has become permanent for those with Community Services Cards.
“Making it cheaper and easier to catch a bus or a train is also a critical part of our climate response. Through the Climate Emergency Response Fund we are funding the Community Connect scheme that provides permanent half price public transport for community service card holders starting from mid-September.
“That means about one million Kiwis will have access to cheaper transport which also helps us meet our climate change targets.” Climate Change Minister James Shaw said.
It will be interesting to see how Auckland Transport implement this, will they create a dedicated HOP card that community services card holders have to buy, like they have with the SuperGold card, or will it just be a concession that is applied to an existing card like with students. Either way, I hope some effort is put into making the process easy for those eligible
With the current plan of long tunnels we’re still a number of years away from starting any construction on Light Rail. The team are now working on a more detailed business case as well as design and consenting work. The budget included funding for this to happen as well as contingency for “strategic land acquisition”.
One thing I find incredibly frustrating about all this is Waka Kotahi had already started market engagement on ATs original surface design. Had the government not been side tracked by the glossy brochure of NZ Superfund scheme, they would probably be opening the line from the city to at least Mt Roskill this year.
While only a small amount, one interesting initiative funded in the budget is a study considering the technical feasibility of shifting Auckland’s port to the Manukau Harbour.
A new port on the Manukau Harbour has been suggested before in previous studies and the big benefit of it over other locations is that it would be close to existing industrial areas where most of the freight would be going, therefore resulting in lower overall transport costs. The previous study identified three potential sites for an artificial island based port on the Manukau, that would need to be connected back to the land via a bridge. They said at the time the Puhinui site was most likely as it would have lower construction costs due to being closer to land.
There is also the presumably not insignificant issue of dealing with the Manukau Bar to work through.
For a neat visualisation on shipping, take a look at the map below (note, it’s useful to change it to show routes instead of ships and to colour routes by the ship type).
Record Transport Spending
One thing that stood out in Treasury’s Vote Transport summary is that this year total spending on transport should top $9 billion, a sharp increase on even just a few years ago. There is also this useful breakdown of where that money is being spent, both in the past and expected in the future.
I took a quick look at previous budgets and was able to get the same breakdown as far back as 2009/10 and it shows just how quickly this has ramped up.
Much of the rail increase at the moment is related to the City Rail Link but it is also notable that this is still less than the loans and other funding from the Crown for roading projects – and that is on top of roading getting the lion’s share of funding from the National Land Transport Programme.
Was there anything else that stood out to you from the budget?