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Transport Summit addresses road funding issues

Transport Summit addresses road funding issues

Today in Wellington, more than 160 local government leaders are meeting to discuss and debate key issues about road funding at Local Government New Zealand’s Transport Summit.

Roading is of strategic importance to New Zealand’s economy because our rural roading network makes a huge contribution to national profitability and is crucial for the farmgate to factory process.

New Zealand Transport Agency is currently reviewing its Funding Assistance Rates (FAR) on how roading costs can be shared between the National Land Transport Fund and local government.

Local Government New Zealand (LGNZ) president Lawrence Yule says transport is a key area where local government plays a significant role, and one where future funding will be an issue for many councils.

“Local and regional roads make up around 88% of our country’s road length and carry up to 8 times as much tonnage of primary produce as the processed and manufactured products carried to port on the state highway network,” Mr Yule says.

“Funding changes being proposed will certainly impact our councils. As the proposals are currently drafted there will be winners and losers. This may lead to affordability issues for many rural and provincial councils and result in a high impost on local ratepayers to maintain existing service levels. Alternatively service levels may fall in areas that disproportionately contribute to the generation of New Zealand’s economic wellbeing.”

Mr Yule says vigorous debate is expected today at the Transport Summit on the impacts of the FAR proposals.

“Following on from the Summit there is also likely to be a close look at the new Government Policy Statement for transport which decides the size of investment in the roading network across New Zealand.”

Local councils spend $800 million annually building, fixing, renewing and maintaining roads. Funding for this investment is drawn both from a council’s rating base and the contribution councils receive from national revenue streams primarily delivered through the FAR.

NZTA, which administers the FAR, is seeking local government's views. The different factors and approaches they should use, the trade-offs that will need to be made and how it should all fit together will be discussed at LGNZ’s Transport Summit.

The One Network Road Classification (ONRC) system will also be discussed at LGNZ’s Transport Summit. The ONRC is a new approach led by a group that includes NZTA staff, council managers and LGNZ representatives; that would operate roads in a consistent, strategic way across all of New Zealand and aims to help local government and NZTA to plan, invest in, maintain and operate the road network.


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