Transport – It’s the economy, stupid

Transport – It’s the economy, stupid

By Glen Koorey

In New Zealand, transport is a very hot topic in local government yet barely features at the national level. A number of mayoralties have been won and lost in the past on the back of controversial transport projects (road through Hagley Park, anyone?) but I have yet to see it become one of the defining issues in a general election.

It is ironic therefore that the majority of transport funding in this country is so tightly controlled at the central government level. Local cities and districts can talk all they like about what they and their residents would like to see for transport in their area, but they are ultimately beholden to the whims of the government of the day.

And so it is that the latest National Land Transport Programme (NLTP) just released (The Press, 30 Aug) continues to propose a distribution of funding that appears to be at odds with the wishes of the general population, and also best-practice international evidence.

When the current Government came into power in 2008, they made fairly sweeping changes to the pattern of transport expenditure. The revised Government Policy Statement (GPS) on transport substituted “Roads of National Significance” (RoNS) funding for many other sustainable transport and road safety programmes. At the time, the Government claimed that these investments were needed to address the economic crisis facing the country.

Last year’s updated GPS for the coming 10 years repeated the RoNS mantra even more strongly. Given the fact that the economy still needs some spending prudence, and the evidence for future constraints on oil supply and price is stronger than ever, it was incredibly galling to see that the new plan is essentially more of the same.

New state highway construction (mostly RoNS) already consumes 40c of every transport dollar (excluding policing). This is over seven times as much as is spent on local road construction, four times as much as public transport expenditure, and over 50 times as much as walking/cycling. But this is not a short-term blip: over the next 10 years the GPS proposes that half of all transport investment will be spent on new road construction, with worryingly decreasing proportions of expenditure in road maintenance and safety, public transport, walking, cycling and travel demand management.

The stated goals for the NLTP are “economic growth and productivity, value for money, and road safety.” Every Government agency is struggling to trim "fat" from their budgets, but still $9 billion of RoNS projects remain on the table. These seven major roading projects are touted as being needed to “encourage future economic growth”, yet the evidence doesn’t support that hypothesis.

The best performing RoNS project has already been built: Auckland’s Victoria Park Tunnel, returning $3 of benefits to the country for every dollar invested. Of the remaining six projects, five have benefit-cost ratios of no more than 2:1 and three of those don’t even have a ratio of 1:1. When most road safety or walking/cycling projects routinely have benefit-cost ratios of well over 5:1 (if not 10:1), it is difficult to see why we are investing in so many expensive projects with such poor returns.

A recent study at Auckland University found that completion of the entire Auckland cycling network (a cost of about $600 million, or one small RoNS project) would generate benefits in the order of 20 times as great, in terms of health (by far the biggest benefits), safety, and reduced driving costs. It’s not hard to envisage that similar investments throughout the country would have equally impressive economic returns.

To make matters worse, the economic predictions for the RoNS project have been based on typical historical assumptions about future traffic growth creating more benefits from growing congestion. However, since 2005 state highway traffic volumes have been stagnant. Traffic congestion isn’t growing, so why do we need to build more motorways?

The national cost of congestion (less than $2 billion annually) is considerably less than the annual cost of road crashes to our country – over $4 billion. Yet the investment in road safety initiatives pales in comparison with the amount of money being spent to save a few seconds of travel time.

Perhaps a focus on roading projects can be justified in terms of jobs created? Research from the UK and US however shows that investment in sustainable transport projects generates more new jobs than road construction, up to twice as many. Road maintenance was also found to produce more jobs than new road construction. Even the much-maligned NZ Cycle Trail has produced more jobs per dollar than the RoNS programme to date.

So why hasn’t all this attracted major news coverage and discussion? Is it because transport is seen as only a minor portfolio? This is taking the wrong approach, because the underlying problem is actually about our economy and how we reboot it.

Our highest categories of imports by dollar value are motor vehicles and the fuel to power them (which is currently causing plenty of pain at the pump). A roads-focused programme does nothing to reduce this reliance and help balance our deficit. At the same time it puts a huge burden on our health system. Unless something dramatic happens soon, that will mean a continuing strain on our country's transport system and finances.

Dr Koorey is a senior lecturer in transportation at the University of Canterbury’s College of Engineering.

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