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Home / Business / Business Reports / Project Auckland

Project Auckland: Other options available for transport funding

By Michael Barnett
NZ Herald·
8 Dec, 2014 06:00 PM4 mins to read

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Chief executive of the Auckland Chamber of Commerce, Michael Barnett. Photo / Dean Purcell

Chief executive of the Auckland Chamber of Commerce, Michael Barnett. Photo / Dean Purcell

An ‘open book’ debate to find the revenue to fund Auckland’s $300 million a year transport investment shortfall is required, suggests Michael Barnett.

Auckland's number one "growth pain" issue is probably how we are going to fund Auckland's transport infrastructure.

I note that Transport Minister Simon Bridges has welcomed Auckland having a debate about future transport infrastructure investment plans, but has stated that the Government remains "sceptical" about the two options being presented.

The options are a toll for motorway users or a package involving increased rates, a regional fuel tax or an increase in national fuel tax.

The Government has been consistent in declaring that it is not supportive of new taxes or raising the fuel tax for the benefit of one region.

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Government has also been consistent in stating that a motorway toll is not preferred policy. Auckland's motorway system has been built by taxpayers, and any revenue raised from it would firstly belong to taxpayers.

So where does that leave Auckland's transport funding debate?

The rates option is already widely seen as a non-starter. It is hugely unfair that Auckland's 525,000 rate payers fund the $300 million a year of additional revenue needed to benefit Auckland's 1.5 million people plus some 2 million visitors to travel around Auckland.

The toll option is flawed in other respects. To avoid the toll, vehicles will shift off motorways onto local roads, defeating the purpose that motorways were built for. Second, having a tolled road network without a comprehensive, reliable city-wide public transport system will penalise many commuters unfairly, especially the lower paid.

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If Auckland wants accelerated action to fund the full Auckland Plan transport network, I suggest we need to go back to the start gate and have an 'open book' debate in which every practical option is put on the table.

I have been concerned that at a cost to Auckland Council of around $5 million the alternative transport funding group that came up with the two options didn't have a brief to seriously look at options such as asset sales or property development.

For example, Auckland Council is the ultimate beneficiary of the $2 billion assets of the Auckland Energy Consumer Trust, an asset that attracts an annual dividend of just over $100 million. Without any sell down we are one-third of the way to solving the $300 million transport funding shortfall.

In an open debate you could also discuss the cost benefit of selling down some of the Trust's asset, or look at a partial sell-down of Ports of Auckland - another multi-billion dollar asset. Port of Tauranga enjoys the commercial tension benefit of an ownership shared by the workforce.

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Many Aucklanders, I am sure, would jump at the chance to take a shared ownership of our Port, or our Airport (which council partly owns) or the Energy Trust. A shared ownership structure could help keep the commercial operators on their toes.

As in cities like Hong Kong, Tokyo and elsewhere, another fund raising option open to Council to consider is based on leveraging property developments on top of Auckland's transport hubs. Commercial tower blocks built over Hong Kong's train stations generate around 60 per cent of the railway system revenue against 40 per cent from ticket sales.

My point is that there is money available for Auckland to solve its transport funding problem without too much pain.

It is available in options that won't require Aucklanders to go through a painful process of adding to the rates or dipping into their pockets every time we travel on the motorway.

Given Minister Bridges has welcomed Auckland having a debate about future transport infrastructure investment plans, I am asking whether he might welcome Aucklanders having an open discussion that brings other options to the table. It would allow Auckland to understand the costs and benefits of ownership and demonstrate a greater Auckland willingness to find solutions to its growing pains and show it is prepared to take greater charge of its own destiny.

Michael Barnett is chief executive of the Auckland Chamber of Commerce.

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