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$1 billion more for state highways

Hon Steven Joyce
Minister of Transport

16 March 2009
Media Release        

$1 billion more for state highways

As part of the government’s Jobs and Growth plan, Prime Minister John Key and Transport Minister Steven Joyce have today announced almost a billion dollars of additional investment in the state highway network over the next three years.

Mr Joyce says the benefits of this will be felt across the board and around the country through new jobs, increased growth and, over time, an improved state highway network.

The additional funding over three years will come from three sources:

·         $420m reallocation from non-state highway classes (including savings on administration costs).

·         $258m in new Crown investment (paying for the NZ Transport Agency’s share of Wellington Passenger rail infrastructure).

·         $283m increases in fuel taxes (commencing 1 October and replacing regional fuel taxes).

Mr Joyce says the plan will reverse the previous Labour government’s projected decrease of 9% in the state highway budget over the next three years.  “It will mean that a total of around $3 billion will be invested across the state highway network over the next three years”, he said.

Mr Joyce says that the new draft Government Policy Statement shows investment in State Highway Infrastructure continuing at around 33-34% of the total fund over the 10 year horizon, instead of dropping to 22-24% as predicted in the Labour Government’s Government Policy Statement (GPS). 

“This will provide around $10.7 billion over 10 years for investment in the state highway network, and that is a much more appropriate level given the importance of the network to New Zealanders.”

“This announcement today is about realigning the land transport programme to reflect the realities of how New Zealanders get around and how we transport our goods.

·         Around 70% of all freight in New Zealand goes by road, and about 84% of people go to work by car truck or motorbike, so we need good roads to grow and compete

·         Our state highways represent 11% of our roading network but they cater to around 50% of the traffic.

“While some shift in transport modes will definitely occur over time, the shifts in funding that the previous government proposed would lead to greater congestion, poor safety outcomes, and greater economic and environmental inefficiency”.

“This package will help to progress important roading projects like the Waikato Expressway, the Christchurch Southern Motorway, State Highway 1 from Puhoi to Wellsford and Victoria Park in Auckland,” says Mr Joyce.


What will $1 billion buy?

$1 billion is roughly 50% more than the last government planned to spend on state highways over the next three years.

Will this go towards Transmission Gully / Waterview / etc?

The NZ Transport Agency selects projects based on their own criteria, however I expect the NZTA to focus on the development of a strategy for taking the planning and delivery of the government’s priority projects forward in a cost effective manner, alongside other projects. We’ll have more to say on that shortly.

How will this proposed reallocation of funding affect transport activity classes?

Funding for state highway construction will increase significantly over the levels projected by the last government.  Labour was actually planning a 9% decrease in the state highway budget.  That’s not acceptable to us.

Investment levels across the other major activity classes will continue to increase from the levels for the 2008/09 financial year. 

Achieving better value for money from existing expenditure across all activity classes will ensure progress will continue to be made in all areas. 

How will proposed allocations affect funding at a regional level?

Funding will continue as before – the only change is that the pot will be bigger.

How does the state highway acceleration funding, announced in the February stimulus package, fit in?

The $142 million stimulus package announced in February is from the Crown and in addition to funding indicated through the Government Policy Statement (GPS).

Why does funding for state highways need to increase?

Good transport infrastructure is essential to growth.

The benefits will be felt across the board, through new jobs and increased growth, and over time, an improved state highway network

It’s about realigning the land transport programme to reflect the realities of how New Zealanders get around and how we transport our goods.

·         Around 70% of all freight in New Zealand goes by road, and about 84% of people go to work by car truck or motorbike, so we need good roads to grow and compete.

·         Our state highways represent 11% of our roading network but they cater to around 50% of the traffic.

Will the government be consulting on changes to the Government Policy Statement?

Yes.  I’m working with Local Government New Zealand and representatives from transport users and providers, and consulting with the NZ Transport Agency on the changes to the GPS. These organisations provided feedback as part of the development of the GPS released in 2008.

What sort of timeframe will engagement be undertaken in?

In order to ensure the 2009/12 National Land Transport Programme can incorporate the amended GPS, we’re working towards releasing the final amended GPS in April.

This means that the timeframe for engagement is constrained.  The Ministry of Transport will be engaging with Local Government New Zealand and representatives of land transport users and providers very shortly. 

Regional planning is already underway; does this mean planning of Regional Land Transport Programmes will need to begin again?

Most regions are now consulting on their draft Regional Land Transport Programmes and this should continue as planned. Once the proposed amendments to the GPS are confirmed the NZ Transport Agency will work with Regional Transport Committees to work through the impacts of the GPS amendments on individual regions.

(Regional Land Transport Programmes – are three-yearly land transport infrastructure and services proposals for funding from the National Land Transport Fund prepared by Regional Transport Committees.  In the case of Auckland, the Regional Land Transport Programme is prepared by ARTA).


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