Labour’s 2023 Election Transport Policy

A few weeks ago, the government released the a draft of their next Government Policy Statement (GPS) on land transport for consultation, though it also effectively doubles as Labour’s transport policy for the election. The Ministry of Transport explain the purpose of the GPS as:

The GPS is the Government’s strategy for investing in the land transport system. It outlines what the Government wants to achieve in land transport, and how it expects funding from the National Land Transport Fund (NLTF) to be allocated between types of activities (for example, roading, public transport and road safety) across the land transport system.

Each GPS sets out the priorities for a 10-year period and is updated every three years.

When it comes to the election, the transport policy from our two biggest parties is very much trending towards who can spend the most, and in a year where it has become more evident than ever of the need to reduce emissions, they seem to competing for who can do the opposite of that the most.

As part of this GPS, the government plan to spend more than ever on transport, increasing spending by $5.3 billion to $20.8 billion over 2024-2027, a 34 per cent increase on the 2021-2024 GPS. That’s an absolutely massive increase and it’s hard to see how the transport industry will have the capacity to deliver that. It’s not like there are transport planners, engineers and construction crews just sitting around twiddling their thumbs waiting for a new job.

Most of that $20.8 billion in spending will be through the National Land Transport Programme (NLTP) and for that the GPS sets an expenditure target for each year along with minimum and maximum levels. This chart shows how that expenditure target has changed since the GPS process was introduced. Waka Kotahi data suggests that actual expenditure is typically fairly close to these levels, usually being just a little under or over.

That’s quite a big increase but I won’t be surprising if much of that increase gets eaten up in project cost escalation due to all of the mega projects the government are focusing on competing for the same resource.

Those mega projects are also a cause of huge concern I have with this GPS. As well as with National’s transport policy, they represent an increasing politicisation of transport investment. Over the last 15 years this has seen spending becoming increasingly more pork barrelled as successive governments and opposition parties have tried to win votes by pushing larger and more economically marginal projects.

Technically, the decision on what transport projects get funded sits Waka Kotahi, which is why it has a level of independence from the government. They are meant to make that decision based on how well the various outcomes outlined in the GPS, such as how well it responds to climate change, the economic efficiency of the investment i.e. do we get more economic benefit than the project will cost etc. To get around this, Labour, like National did with the GPS introduce a mafia like logic of “you can build what you want but it should really be these projects”

For the non-rail projects, decision rights for funding from the NLTF rests solely with Waka Kotahi. But by highlighting these projects, the Minister expects that their strategic importance will be given particular consideration during NLTP development, given their alignment and potential impact on the wider government priorities outlined in this document

And here are the projects in the government’s Strategic Investment Programme. Many are the same as what was proposed by National and will only serve to encourage more driving and generate greater emissions as a result – not to mention many will likely include significant embodied emissions too. Yet they seem to think that because they build a few public transport projects, that’s all they need to do to tick the climate change box.

“My focus as Prime Minister has been on making sure we are investing in the priorities of New Zealanders. To achieve our full potential as a country, we need fast progress on key transport infrastructure that will support our economic growth and improve productivity,” Prime Minister Chris Hipkins said.

“The Government views these 14 new routes as critical nation building transport priorities for New Zealand over the coming decades.

The routes are:

• Warkworth to Whangārei – State Highway 1, including:
  • Te Hana to Brynderwyns
  • Warkworth to Wellsford
  • Whangārei to Brynderwyns
• Auckland Northwest Rapid Transit
• Auckland third and fourth rail line expansion
• Avondale to Onehunga rail link
• Level crossing upgrade and removal – Auckland and Wellington
• Cambridge to Piarere – State Highway 1
• Tauranga to Tauriko – State Highway 29
• Wellington CBD to Airport – second Mount Victoria Tunnel and upgrades to Basin Reserve/Arras Tunnel
• Wellington CBD to Island Bay – Mass Rapid Transit
• Napier to Hastings – four-laning State Highway 2
• Nelson (Rocks Road) shared path – State Highway 6
• Richmond – Hope Bypass – State Highway 6
• Christchurch Northern Link – State Highway 1
• Ashburton Bridge – State Highway 1

“These routes include a balanced mix of public transport and roads, which require work as a priority to reduce congestion, manage emissions, improve safety, grow the economy and open up areas for housing.

“These new priorities complement our existing investments in roads like Otaki to North of Levin, the Takitimu North Link and Melling under the New Zealand Upgrade Programme, as well as faster, more reliable public transport through Auckland Light Rail, the Eastern Busway, and City Rail Link.

“They also complement the major programme of repairs and resilience upgrades that we have already funded for state highways across cyclone-affected areas like Tairāwhiti and the Hawke’s Bay which is being supported through the National Resilience Plan.

We’ll look into some of these projects in more detail in later posts.

To fund all of this, government are proposing a number of changes.

• Increases to fuel taxes and Road User Charges
  The government say to fully cover the cost of the increased spending from these sources would require a 38 cents per litre increase. Instead, they’re proposing “two six-monthly 2 cents per litre increases for the first year, followed by two annual 4 cents per litre increases, reaching a total of 12 cents per litre in July 2026“.
• Hypothecation of traffic infringement revenue to the NLTF
  Currently infringements fees of approximately $100 million per year go directly to the general crown account. This would see that put directly into the NLTF.
• Crown Grants
  The government will give Waka Kotahi $2.9 billion with $500 of that coming from the Climate Emergency Relief Fund and dedicated to Walking and Cycling projects. The rest would from the general fund.
• Crown Loans
  The government will lend Waka Kotahi $3.1 billion which will have to be repaid from fuel taxes and road user charges.

This is at least a more realistic plan to fund transport than National’s approach to find $9.5 billion magic beans somewhere.

Perhaps one thing that highlights how the government have backed down on transport is seen in this table showing how the strategic priorities have changed with each GPS. Of particular note are the changes to climate change and safety. Climate change goes from needing to transform our transport system to just transition to one – in other words slower and less urgently, while the need to improve road safety has been significantly weakened.

The road safety aspect is also notable because the dedicated safety funding from the current GPS has been raided to fund more general state highway and local road projects.

Consultation on the draft GPS technically closes at 5pm on Friday 15th September 2023 but the real consultation will be the election on the 14th of October.

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