News

Fuel tax hikes to pay for rail lines

The Government’s draft land transport policy promises big rail investments paid for by an increase in petrol taxes, Thomas Coughlan reports.

The Government's draft policy on land transport promises big changes in what types of transport get funded and who pays for them.

They include extra fuel taxes to help fund $800 million of safety improvements on regional roads and $4 billion on rail and light rail infrastructure, mostly in Auckland. The Government has also abandoned plans for new four-lane 'Roads of National Significance' (RONS) near Auckland, Wellington and Christchurch as promoted by the previous government.

The Government has proposed an increase in fuel tax of between 9 to 12 cents per litre over the next three years on top of the 10 cents per litre regional fuel levy that Aucklanders will pay from July 1. It argued this was less than the 10-20 cents a litre recommended to the previous Government to pay for seven new RONS projects.

The Draft Government Policy Statement, or GPS, on transport was outlined by Prime Minister Jacinda Ardern, Transport Minister Phil Twyford and the two associate ministers of Transport, Julie Anne Genter and Shane Jones.

For the first time, spending on rail infrastructure will be included in the land transport policy. This means bids for rail infrastructure funding will be considered alongside those of other transport. Rail funding will now consider issues such as improving overall transport by decreasing freight times and taking trucks off the road. Currently, rail funding is siloed and bids for capital funding are considered independently.

This proposed system of fuel excise increases means road users will pay up to 22 cents a litre extra in excise to fund rail and road infrastructure. Depending on when this rail infrastructure spending falls, it could also mean regional road users are left with a large bill for urban rail projects. The total spend allocated to rail will be less than 10 percent of total spending.

Rapid Transit was also included in the GPS for the first time. This funding will exclusively benefit urban areas.

But the regions will not lose out completely. Equity between regions and centres was a theme of the report, particularly when it comes to road safety upgrades.

Twyford said the Transport Agency advised there were $800 million of safety upgrades needed on local roads alone. Once complete they could prevent 160 deaths and serious injuries a year.

Genter said the Government would be looking to invest in safety upgrades on local roads across the country, rather than large highways. This was a barb at National, whose transport policy included the costly Roads of National Significance, which were widely derided as unnecessary and costly.

Safety upgrades were “desperately needed” on local roads where people were doing most of the driving, Genter said. The road toll has increased in recent years, with the Easter number of deaths the highest in eight years.

“For half the cost of the East-West link motorway project, only a few kilometres long, we could afford median barriers down every kilometre of state highway in the country.”

She said the Government was proposing to invest $1.5 billion in regional and local roads in the next three years because that was where the “vast majority” of car and truck driving took place.

Political reaction

National transport spokesman Jami-Lee Ross accused the Government of gutting regional roading projects and making regional motorists pay for trams in Auckland.

“This is an extraordinary blow for regional New Zealand, from a Government which has claimed to stand behind it. Instead, the Government is saying their needs are secondary and ensuring tourists can get from the Auckland CBD to the airport is more pressing," Ross said.

“Motorists right around New Zealand will also be shocked at the extraordinary new taxes the Government plans to impose on them," he said.

“Aucklanders could actually find themselves paying as much as 25 cents a litre extra for their fuel within three years – once the proposed annual fuel excise and proposed regional fuel tax are taken into account."

National campaigned on plans to build seven new Roads of National Significance  including extending the Waikato Expressway from Cambridge to Tirau, extending the motorway from Warkworth to Whangarei, building a motorway between State Highways 1 and 20 in Auckland (East-West Link), extending the motorway from Otaki to North of Levin and extending motorways to the North and South of Christchurch. It launched petitions in early January to retain those plans.

Newsroom is powered by the generosity of readers like you, who support our mission to produce fearless, independent and provocative journalism.

Comments

Newsroom does not allow comments directly on this website. We invite all readers who wish to discuss a story or leave a comment to visit us on Twitter or Facebook. We also welcome your news tips and feedback via email: contact@newsroom.co.nz. Thank you.

PARTNERS