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Transport Package Welcome But Flawed

"The overdue response to Auckland's roading crisis is welcome but the package is riddled with unjustifiable elements reflecting unsatisfactory political compromises", executive director of the New Zealand Business Roundtable, Roger Kerr, said today.

The Business Roundtable had long argued that roading projects, like many in Auckland, that met proper cost benefit criteria should be funded, that more efficient means of charging for road use should be introduced, that road management should be moved away from political control into more commercially oriented structures, and that undue obstacles to new projects caused by the Resource Management Act should be removed.

"The government's package basically only addresses the funding aspect", Mr Kerr said. "Moreover, it does so in a particularly crude way by increasing fuel tax across the country.

"The government's own Tax Review last year recommended that the general revenue component of excise tax should be scrapped, and a uniform nationwide roading component does not accurately reflect congestion and other costs in Auckland.

Petrol taxes have also become an increasingly poor proxy for charging for road use because increased vehicle fuel efficiency has meant static revenues despite 4-6 percent annual increases in traffic volumes. They are simply not a credible long-term option for charging for the use of roads.

"Instead, the government should be putting greater emphasis on the move towards toll roads, and Infrastructure Auckland assets of $0.7 billion should be used to solve Auckland problems.

"The extravagant subsidisation of public transport seems to be driven purely by politics. The government should be asked to demonstrate that such projects are economic ­ projects such as the Waitemata Waterfront Interchange fall far short of meeting that test. There are no sound reasons to make car users subsidise bus and train users.

"While action on roading problems in Auckland and other regions is welcome, and many of the problems are not of the current government's making, a continuing pattern of flawed decisions is undermining New Zealand's prospects for economic growth", Mr Kerr concluded. "New Zealand cannot hope to see its income levels restored to the top half of the OECD rankings if resources continue to be spent so wastefully and the roading system is not made more responsive to the needs of users and their willingness to pay."

Ends

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