There were two interesting announcements in the last few days.


Ferry changes

On Friday Auckland Transport announced on Friday it has struck a deal with ferry operator Fullers to make changes to the commercially operated Devonport and Waiheke Island routes, but also a major change to how ferries will operate in Auckland in the future. the press release is a bit convoluted so let’s break it down.

Devonport Services

Devonport services will come under full AT control the same as all buses, trains and other ferries (except Waiheke) in Auckland.

One key component of the agreements signed today is the full integration of the Devonport to downtown Auckland route into AT’s ferry network, meaning the service will no longer be a privately operated route exempt from New Zealand’s regulatory Public Transport Operating Model (PTOM). Contracts for Fullers360-operated services between downtown Auckland and Hobsonville Point, Half Moon Bay and Gulf Harbour have also been renewed.

This is a good outcome though it’s unlikely to make much immediate change for travellers given it was already treated as part of the network for things like integrated ferry fares. The services start under the new contract today.

Waiheke Services

Unlike Devonport, Waiheke will continue to be a commercial route (the last one in Auckland) but AT say a new agreement will make some improvements via a ‘Quality Partnership Agreement’ (QPA).

Fullers360’s passenger ferry services between downtown Auckland and Waiheke Island will continue to be exempt from contract regulation, but subject to new minimum service levels and extended legal minimum service withdrawal notice period.

Under the QPA, Waiheke residents will also be able to access a new AT HOP adult monthly pass which includes same-zone bus and train connections at either end of the ferry journey. The pass will be priced the same as the equivalent existing Gulf Harbour and Pine Harbour ferry monthly passes, providing a saving of 14% for commuters and will be available in the coming months.

AT’s Mark Lambert says that although Waiheke services will remain outside the regulated Public Transport Operating Model (PTOM), which means continued exemption from a contracted status with AT, there will now be much greater accountability as these services will be measured against AT’s service standards.

“AT recognises that the QPA for the Waiheke service does not involve removing the exempt status. But, as a negotiated outcome, provides immediate interim benefits for service levels, service certainty and fare prices, as we now step through the exemption review process led by government”.

Interestingly, in a separate fact sheet they provided, AT blamed a lack of funding for not being able to change this.

Considerable time was spent by both parties discussing the viability of Waiheke Island route under PTOM. We appreciate that many members of the Waiheke community have advocated for Fuller360’s exemption status to be lifted. However, the reality is, that under PTOM the service is not commercially viable without additional funding from Auckland Transport or central Government.

Though they also note that the government are currently reviewing PTOM and just last month Transport Minister Michael Wood stated he had started the legislative process to remove the exemption.

More New Ferries and change in ownership

Perhaps the most interesting part of the announcement though is that AT are changing the ownership structure of ferries, changing them to be more like trains where AT own the vessels and they will be used by whatever company is running the services. I think this is a positive change as long-term it will make it easier for new operators to enter the market and provide competition to Fullers.

Along with the change in ownership structure, AT are working with Fullers and using funds from the Climate Action Targeted Rate recently introduced by the council to design and build five new plug-in hybrid ferries. These are on top of the two electric ferries the government is mostly funding that were announced in April. They are also purchasing four existing ferries.

Auckland Transport Group Manager Metro Services Darek Koper says the move to AT procuring the new electric ferries will help increase the pace of Auckland’s transition to an all-electric and electric-hybrid ferry fleet.

“The plug-in hybrid ferries utilising design and innovation developed by Fullers360, Incat Crowther and HamiltonJet are in addition to the two EV Maritime fully electric ferries recently announced, increasing the government and Council investment in new electric or electric-hybrid vessels to seven, which will allow us to significantly reduce our emissions,” Mr Koper says. Q West will be builders for the first of these vessels.

“Passengers travelling on services like the Devonport route will be some of the first to travel on the new electric and plug-in electric-hybrid ferries, which will be comfortable, quiet and will deliver a fantastic experience for our passengers. The new partnership leverages the significant investment made to date by Fullers360 in design and development of new vessels for Auckland.

“The four existing fleet ferries are needed to maintain services while we build and transition to the new electric fleet, requiring investment to refurbish and retrofit with lower emission engines to help ensure that we are reducing our emissions and improving vessel reliability in the immediate term.”

Fullers actually announced these back in December so this is essentially AT taking them over, though with Fullers still helping on the project. AT say the first of the five new ferries are likely to arrive in mid-2024 though that could be impacted by supply chain shortages.


Half Price PT and Fuel Tax cuts extended

Yesterday the government announced they were yet again extending the fuel tax/road user charges discount and the half price public transport fares. This was initially meant to be a three month change but the government extended it by two months at the time of the budget. This time they’re pushing the changes out another five months to the 31-January 2023.

“We know that inflation is rising across the world, and cost of living pressures are making it tough for New Zealand right now. High fuel prices, particularly driven by the impact of the Russian invasion of Ukraine, are a global problem affecting households and businesses in New Zealand,” Grant Robertson said.

“That is why we moved in March to cut fuel excise tax by 25 cents a litre and road user charges by equivalent levels, along with halving public transport fares.

“At the time of the Budget we extended those reductions, and are now extending them again by more than five months until January 31 because we want Kiwis to have some certainty over the coming months in the face of volatile prices at the pump.

“The Treasury’s estimate is that the combined impacts of this policy will reduce headline inflation by 0.5 percentage points in the June 2022 quarter. Even though many commentators are forecasting that inflation will peak in the June quarter, it is likely to stay for some time at levels higher than we have seen in recent years.

……

“The global fuel price crisis is not leaving many untouched so we’re pleased we’re doing what we can to ease pressure on motorists,” Megan Woods said.

Transport Minister Michael Wood said since half price fares were introduced on April 1, public transport use has increased in the three largest centres, Auckland, Wellington and Christchurch.

“We know this makes a real difference for people feeling cost of living pressures, particularly lower income households. Because half price public transport will now be available for all New Zealanders until the end of January, the Community Connect scheme will now start on February 1 next year.

“This will also give more time for local authorities to put in place the systems required to efficiently administer the Community Connect scheme that will give those who have Community Service Cards half-price public transport permanently.

“Extending the reductions to fuel excise duty and road user charges will also help to reduce the fuel burden on the road transport sector, and in doing so keeping the cost of food and essential goods lower,” Michael Wood said.

Extending the fuel excise and RUC reductions until the end of January is estimated to cost $589 million. This is money that goes directly to the National Land Transport Fund to pay for building and maintaining roads, and funding public transport, walking and cycling initiatives. The cost to extend half price public transport is an estimated $63.1 million.

The extension is unsurprising given the price of fuel is now higher than it was before the 25 cents per litre was dropped. Combined it means the total amount of ‘lost’ tax the government is having to cover is now up to $1.174 billion. That’s a huge amount they’re paying just to maintain the status quo that their own plans say needs to change.

Though to be fair, for most people the viable alternatives to driving are actually reducing because due to the woeful reliability of public transport at the moment with up to 2000 services a day being cancelled in Auckland. So while the half price PT fare extension is welcome it is unlikely to do much to get more people using public transport.

There is also a bit of a tie in between this the PT half-price fare extension to the ferry news. That’s because Devonport and Waiheke were excluded from it due to being commercial services. AT have been covering the cost to include Devonport services given it would have been hard for them to be excluded from the Integrated Ticketing solution. Presumably this means the government will now provide half-price funding support for them. However, given it’s still a commercial route, the same is unlikely to be case for Waiheke services.

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64 comments

  1. What about unemployed people, That they get a free public transport pass for a month, if they can prove to work & Income that they have been to job interviews for that month. and maybe the first month of employment.

  2. Was there any discussion as to the policy justification for subsidising Waiheke commuters? Its not like they are taking cars off the road

      1. We have no choice but to pay our rates to subsidise your PT on the mainland. Perhaps we should get a rates rebate instead. Also, the “rich” on Waiheke never go on the ferry, they have their helipads. Median incomes are actually lower on Waiheke than average. Please, keep your class war rhetoric in check.

        1. Zero PT where I live. Waiheke folks have PT, gold cards (and helicopters).

      2. I think this falls into the category of a myth being repeated so many times that it becomes “fact by repetion”.

        I can’t find it now, but I’m sure I’ve seen figures in the past which shows that Waiheke has the LOWEST GDP per capita of any of Auckland’s Local Board areas. So to my mind, given these people pay their rates and taxes like everyone else, they absolutely deserve subsidised PT and fares to downtown Auckland that are commensurate with those others get.

        1. Could that be because they keep their earnings in their businesses to classify themselves as “poor” or because they retired at 40 and are now classed as pensioners?

    1. We would have our cars on the road when we are forced to come live on the mainland due to sky high ferry fares.

  3. Yeah, the fuel tax will never be raised again. Next year they will be in election mode, do you really want to increase it before the election? And of course every party will promise to not raise it after the election for votes. More of my tax money for fossil fuel interest! Thank you Jacinda and Grant and James!

    (Don’t get me started on the half price PT; even for free PT in NZ is overpriced)

  4. I have never understood the Waiheke ferry route. It’s commercial, but every gold card holder gets 100% free off peak trips that cost like $35? Every time I have gone there, the boat is loaded with older folk who go to a pub, have few beers then sail home. How is this a good use of resources?

    Also the why do community service car holders not have gold card PT conditions? That is a group that could be massive helped PT use.

    1. Completely agree, one time on my way out there I got chatting to a homeless guy who had just turned 65 and gotten his gold card. He called it his golden ticket. He was off to Waiheke for the first time in his life to ride around on the buses and check out the beaches, he was super excited about it. Blew my mind that a community service card didn’t give free PT.

      1. Don’t blame the oldies! It’s because the ferry fair is dam high, no one afford it! Only solution is to bring competition and Government to hand on to lower the price by as least 65%!

    2. You know the answer. Set up by National/NZ First to appease their core voting block.

      I’ve noticed similar things with Te Huia. Most users are just on it to kill time between lunch and dinner. They would not drive HLZ-AKL-HLZ just for a ticki tour at their own expense. I’m stauchly in support of Te Huia but do wonder how many actual tax paying users use it regularly.

      I’m personally hoping to use it for work quite a bit soon if Air NZ can come to the party with a salary sacrificed season ticket as airport staff in the UK get from the airport’s/airlines.

  5. 2017: Climate change is our generations nuclear free moment
    2022: Here’s another $1b subsididy for the oil industry despite them posting record profits.

    Looking around the world, its prob best we start pumping this money into climate defence and mitigation anyway. Ther’s no chance we will keep things under 1.5 and even at that target its going to be significantly worse than the weather events we are seeing now.

      1. There was every chance of 1.5. Here’s an interesting read you’ll enjoy, miffy, slightly off topic, but not really: https://www.nytimes.com/2022/07/16/science/pandemic-nature-anthropause.html

        “No one can say anymore that we can’t change the whole world in a year, because we can,” Dr. Bates said. “We did.”

        We know that if people put the effort in to becoming informed, that they make good decisions. We simply needed deliberative democracy and proper leadership. And a few trolls to start fighting for their kids’ future instead of allowing their cynicism to push decision-makers to aim low.

        1. Meanwhile the 10th amendment means the federal government can’t stop the states burning coal so any commitment the USA makes is meaningless.

        2. The problem for change is that it requires agreement and that agreement needs to be almost universal. We have never had that and likely never will. In fact we are further away from that now than at any time in the last 30 years. The status quo (warming) doesn’t need any agreement at all.

    1. Our nuclear free moment was possible because we have a small population on a large area where we can harvest renewable energy.

      For climate change we should be in a similar position. With all this land area we have I was a bit bemused at New Zealand buying overseas carbon credits.

      Dealing with the fallout of climate change may very well be much more expensive than measures we can take now to avoid much of it. If we can’t make +1.5° anymore, then +2° is still better than +3°.

      The problem is that game theory pretty much dictates that nobody will try. For any given group of people (eg. our 0.7% of world population) the costs of mitigating climate change fall mostly on themselves, but the benefits are spread worldwide. So mitigating climate change is almost completely a dead loss.

      However there are a few big blocks who, just like everyone else, stand to lose a lot if climate change strikes, and who are big enough to make a difference. Europe for example is going to either have to dam the North Sea (they did a study about just how insanely expensive that would be), or let the Netherlands and surrounding low lying areas drown into the ocean. They may very well decide it is better to pre-empt the worst of it, and they will not be kind to us if we keep burning oil like it is still the 1960’s.

      So I’m not totally sure how this will go.

      1. I think you have hit the nail on the head. Carbon reduction is a Prisoners Dilemma. The optimal solution is everybody reduces carbon. But the Nash equilibrium is nobody reduces carbon. Short of one world government it will be the Nash equilibrium that occurs.

        1. But cooperation (mixed with retaliation against non-cooperators) is the winning strategy in an iterated prisoners dilemma. Politics decisions are not a single event frozen in time. If one actor stiffs another, the other actor has a chance to retaliate. The issues are more the delays between cause and effect and the possibility of cheating of various kinds.

        2. But that requires a meaningful threat or coercion from a significant player. We don’t have that. The USA is 50 states doing what they want, Russia want global warming, China will do whatever makes the most money, India doesn’t want a bar of rules, Germany has an economy based on chemicals made from cheap gas and the rest of Europe will burn coal rather than freeze. It will be like free trade, all talk and only NZ actually doing (if we are dumb enough).

        3. And it is finite because the leaders who actually make the decisions know they will not be around in the long term. Most answer to a short term electoral cycle.

        4. You might be correct that we don’t make the necessary changes and by default ecosystem and societal collapse cuts both supply and demand of fossil fuels. I still think we should move towards lower energy systems, so we’re ready for that possibility too.

      2. Roeland, NZ does not have 0.7% of the world’s population. You’ve dropped a zero. It is actually 0.07%.
        But NZ does manage to produce 0.17% of global carbon emissions!

        1. We export more food, import more manufactured goods, and fly and drive more per capita.

    2. Climate change is. Good slogan to add what ever you like! NZ is just a small economy, even this 5 million people not eat, not drive, it will not help the world climate!

      NZ oil price also the highest in the world!!! Why?

  6. It’s mental that the cost of the fuel bonus is almost the same as that cycle bridge that nobody asked for or wanted. Even though it was a bad solution, we could have had it for almost the same cost!
    Central and local govt really need to step up their game about communicating the benefits of mode shift.

    1. Or we could get a reasonable chunk of the busy bits of the rail network electrified? Massive opportunity cost.

  7. The Governments decision to extend the fuel tax relief until January is bizarre, it makes the Auckland fuel tax levy into a punishment for living in Auckland,not a means of achieving transport improvements. The climate change levy ,proposed by Auckland Council,should also be rescinded as ,it is equally a punishment on Aucklanders ,while Central Govt hands out,tax relief to the rest of NZ.

  8. I wonder what price the big heavy transport fleets are paying for diesel. I bet its not $3 per litre. And all the loyalty price schemes make things pretty opaque. Anyway its business as usual with only a few switching to half price public transport. So less tax take less money to spend on roads at least until our finance minister runs out of his borrowed war chest money.

    1. Commerical consumers of transport diesel will be paying 25 to 30c/l below pump price, excluding GST of course. Remember this is off the levy, so industrial use, diggers, plant, generators etc this makes no difference to the price.

  9. Can someone explain for me how the removal of a tax is equivalent to a subsidy to that industry ?

    I get the argument that a reduction in price will increase the demand and therefore benefit the industry, but I fail to see how removing a tax will go to the industry.

    I also would have preferred to see the tax level increased slowly, so that we got back to a tax neutral place in the longer term, while retaining the PT subsidy, sending the message that this is a lever to be used to change behaviour in the longer term.

    1. Tax goes down 25cent, oil prices go down 10 cent, price at the pump goes down 20 cent.
      This basically happened in Germany where a tax cut made fuel approximately 30 cent cheaper and because of holidays (generally higher prices because people have to pay them anyway) and profits the price at the pump was only only ~10 to 20 cents per litre. So while people saved some money and demand was increased, the petrol companies made 20 to 10 cent more per litre than before.

      1. This. An apple costs $2 because it’s the maximum people are willing to spend on it.

        The government removes GST for apples, but the price for an apple remains at $2 because that was the price people were willing to pay.

        Fuel is expensive, but people are still buying it. If the government removes a fuel tax here or there, it doesn’t matter because the market has proven people are willing to pay that price.

        The price will only come down if people are no longer willing to pay that price for fuel, which admittedly isn’t going to happen.

        1. Bang on. Having just driven home along the 110kph highway. You would think that people would be driving in the sweet spot of revs etc to save them some money. But no, I passed two trucks and was passed by every one flying along at 115 to 120 kph.

  10. Good to see the electric and hybrid ferries. I suppose Waiheke is a bit like Tranzscenic trains except regular commuters get a bit of a subsidy. Te Huia and the capital connection attract a higher level of subsidy. Just thinking a consistent policy across all public transport modes which recognises benifit and externalities would be what we should strive for. For instance air transport receives subsidies but not from the land transport fund. And let’s include long distance buses in the mix.

    Who will be responsible for maintaining the ferries now AT has taking over the ownership.

    1. No. No subsidy at all, I think. Rather, as far as I can tell, this agreement is simply that Fullers will make slightly less profit on an adult monthly pass on the Waiheke route, but will continue to make their full monopoly-operator profit on all other tickets (but will hopefully cancel fewer ferries at random). There’s been no subsidy in the past and I don’t think any is proposed now. It is very much like the most minimal change one could imagine in order to try to avoid the route getting brought into PTOM.

  11. While I support the fares cut on equity principle, I note that it seems to have had no effect on actual PT use. Which surely blows a hole in the arguments that fares are the main barrier to mass take-up of PT?

    1. Potentially. I suspect many people have the following as barriers. These are mine ranked in my order.

      Reliability, distance to nearest service, frequency, travel time, cost.

      1. I would say travel time is the least of the problems. Other ones are equally relevant for me. With the ‘cut’ prices are on the level that they should normally be. It should be permanent. Instead of fuel subisdies. And then they could focus on building PT network. Anyway it’s nice to dream. When the prices go back to ‘normal’ level I think we will see many people stop using it…

    2. Not sure where and who makes that argument? Only seen the Greens say that.

      The largest barrier to PT uptake, is bad PT.

      1. I’ve never even seen the greens say that it’s the primary barrier. Seems to be a few people in the PTUA and that’s it

    3. With Covid around many (most) people don’t want to be sitting in a poorly ventilated bud next to someone coughing and sneezing etc.
      Then add in thousands of cancellations (presumably due to COVID sickness) and you end up with an unpleasant and unreliable experience.

      Does anyone know if AT have a separated out cost for operating HOP and all the HOP readers etc? The reason I ask is that if it’s costing many millions each year to run (think website, back office, system, cards, readers etc) then perhaps just getting rid of it all and having free fares might make more sense – even more so since it would speed up services (and the savings there from wages, fuel etc might be considerable).
      Would still need transport police/security to prevent people abusing the system (homeless using it as accommodation etc).

      1. The department tasked that job would disappear with the fareboxes… So even more savings.

      1. “It’s also worth noting from this data that it’s really hard to see from the this data just what impact the government’s half-price fare scheme has had. Perhaps usage would be even lower without it but more likely is that the PT market hasn’t changed all that much and it’s the quality of services that are driving usage, not the fares.”

      2. That’s off the lows from pandemic with lockdowns etc. It is still far below pre-pandemic levels despite petrol being nearly double.

  12. ‘Woeful reliability of PT’ seems a bit harsh when the workforce has been decimated by Covid and other winter illnesses.

    1. I’ll tell you what harsh is, it is having to walk 2.5 km to get home after 2 successive buses were cancelled and realising that an hour wait to see if the next one would be cancelled was pointless. At least it wasn’t raining.
      Also as of lunchtime today there is a signal fault on the track to Britomart causing delays on all train routes. Good thing I am not using the train today.

  13. It is not really a tax cut. The government are only missing out on the windfall that is the extra GST on their high tax and fuel price increases.
    And as a reminder of how much we are still being ripped off by the fuel companies and the government, in Sydney CBD the price of 91 is around AUD1.90 (NZD2.10)

    1. NZ Government help the oil companies to earn more, they use a magic number to charge fuel tax, that no one know how much it is.

      Oil prices in NZ is as least 50% higher than Australia probably due to the magic number.

  14. PT fare and petrol price cuts simply add to the subsidies in the existing transport system. Yes there is some possible justification given the oil price shock but they are no long term solution.

    Our cities will continue to sprawl while vehicle drivers remain heavily subsidised and cross subsidisied:
    a) no congestion tolls or direct road pricing
    b) no air pollution levy
    c) ratepayer subsidy
    d) developer contributions subsidy
    e) underpayment towards cycle and pedestrian facilities which are only required to be separate from cars as they want to go > 30kmh
    f) underpayment towards crash costs

  15. This is a magic place.

    After the fuel tax cut, we are still paying the same fuel price, despite world fuel price has dropped below 100 dollars.

    The fuel tax cut is only helping oil companies to earn more. This is a magic game no one know how the price is calculated.

    In Australia, fuel tax is 45 cents per litre, but in NZ, fuel tax is add on per dollar amounts, its magic that help oil companies to play around the magic number. Why NZ charge fuel tax per dollar amounts instead? Believe they wish to help playing the magic games.

    In NZ, there’s already GST on every dollar spent, then, why a fuel tax charge necessary? Perhaps to help the oil companies to earn more.

    NZ just a small economy with less than some countries county population, even all 5million people living NZ not eat, not drive, they will not help the climate change, than why NZ spending so much in the cost of their poor economy? NZ GPD rank almost the bottom of the world!! Can someone explain!?

  16. Waiheke needs to revisit becoming independent from Auckland council. It’s not worked before because of money concerns, but make it financially possible by govt transport subsidy and charging ferry companies a tax for bringing each visitor and vehicle.

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