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Govt to raid regional growth fund and motorists' pockets

Govt to raid regional growth fund and motorists' pockets to fund new transport priorities

By Pattrick Smellie

April 3 (BusinessDesk) - The government is proposing to raise petrol excises by between 9 and 12 cents a litre over the next three years and to funnel cash from its $3 billion Provincial Growth Fund into improving local roads, new public transport and rail services, which it says the last government ignored.

Releasing a draft National Policy Statement on Land Transport for public consultation, Prime Minister Jacinda Ardern was flanked by Ministers from across the coalition government to outline an approach to land transport more focused on safety, local road maintenance and improvement and alternatives to cars than the previous government's flagship Roads of National Significance highway projects.

That said, Transport Minister Phil Twyford confirmed that the five of seven RONS projects still under construction would be completed, while Ardern and Regional Economic Development Minister Shane Jones were less clear on the possible four-laning of the main highway between Auckland and Whangarei, which Jones described as a "pipedream" that was years away.

The fuel excise increase was at the lower end of a range of 10 to 20 cents per litre recommended to the previous Minister of Transport, Simon Bridges, but not acted upon, said Ardern.

Twyford foreshadowed a three-year implementation process, with an increase of 3 to 4 cents a year for three years. Aucklanders would face a double whammy, as they are already in line for a 10 cents per litre regional fuel tax to fund urgent transport infrastructure needs for the country's largest city, which is suffering increasingly from gridlock.

The draft policy statement also discusses lowering speed limits on dangerous rural and provincial roads, although Ardern stressed that decision would rest with local roading authorities rather than central government.

Twyford said the proposed new policy mix would see "increases to most activity classes, with specific focus on regional roading improvements, state highway maintenance and public transport, along with new investment in rapid transit and rail".

The four key pillars of the NPS are identified as safety, access, environmental impact, and value for money and, for the first time, will be "mode-neutral", meaning that both rail and coastal shipping can be considered in the context of land transport funding allocations. Previously, land transport policy has focused on roads exclusively.

Rapid transit features as a new activity class, focused initially in Auckland but with Wellington and Christchurch also progressing plans. Some $4 billion of investment is flagged for light and heavy rail public transport, peaking in 2021/22, and with additional investments likely in later years. Estimates for spending on mass transit appear highly dependent on major projects commencing, with a range for spending in the peak year of between $450 million and $1.09 billion.

Likewise, "transitional funding" to increase the capacity of the rail network to ease urban congestion is identified as a new class of activity ahead of a wider review of rail funding. Twyford said additional funding for KiwiRail would be dealt with separately from the capital injections the Crown makes annually to ensure the rail operator remains solvent. Annual investment could peak at $205 million a year in 2021/22, the document shows.

Ministers were unable to say how much of the $1 billion a year available for each of the next three years under the Provincial Growth Fund would be diverted to land transport, although Ardern said the criteria for PGF projects related to their contribution to economic development.

However, a 96 percent increase in funding for regional road improvements is envisaged, at around $200 million a year for the next decade, while improvements to state highways see an 11 percent decrease in funding. Highway maintenance, however, increases 18 percent over the decade, reflecting a new focus on improving safety features and fixing accident black spots.

Cycling and walking are also in for a large increase, with spending in 2020/21 peaking at between $60 million and $145 million, and representing a 248 percent increase over a decade, according to a summary of the proposals released with the draft policy.

Submissions on the draft NPS are due by May 2.

(BusinessDesk)

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