Building Nations 2024: Users to pay for new roads, upgrades

Transport Minister Simeon Brown. Photo / Mark Mitchell

Transport Minister Simeon Brown told delegates at the recent 2024 Building Nations conference the Government aims to standardise infrastructure projects to reduce costs and improve efficiency. He also talked about the need for a modernised transport revenue system, which will mean increasing user-pays charges and exploring new funding tools like tolling and public-private partnerships.

Brown says: “As a Government, we want to see far greater standardisation in transport infrastructure. Unfortunately, as a country, we can’t afford to have everything gold plated.”

Drivers can expect to see more tolls, road-user charges and other costs as the Government’s road building ambitions push well beyond existing budgets. “Our existing funding models aren’t fit for purpose. We’ve had significant cost increases in recent years, and we have not been collecting enough revenue. Our roads are increasingly relying on Crown funding, not users and beneficiaries. The Government has agreed to undertake a review of our transport revenue system to ensure that it is able to sufficiently fund the infrastructure we need.”

Brown says the Government will reform road toll legislation: “The current legislation doesn’t allow tolls to be used for a road that’s been upgraded, such as the Hawke’s Bay Expressway.” He says being able to toll upgraded or extended roads means improvements can be brought forward. “The Government Policy Statement 2024 on land transport outlines the expectation that [New Zealand Transport Agency Waka Kotahi] will consider tolling to construct and maintain all new roads, including roads of national significance”.

As part of a renewed focus on road tolls, Brown plans to reduce collection costs: “Currently, 32% of toll revenue is spent on tolling system administration, which is unacceptable. Some of the options we’re exploring include finding efficiencies in the back office.”

Other ways of raising the funds needed to pay for new road projects updates include moving everyone to the road-user charge scheme: “We will make decisions this year on a transition plan to move all light petrol vehicles from paying fuel tax to road-user charges. As vehicles become more fuel efficient, using fuel consumption as a proxy for road use is becoming less effective.

“Transition to RUC will ensure that all road users are contributing fairly to the upkeep and maintenance of our roads, regardless of the vehicles they drive. The transition will be complex but is already happening, with the increasing number of EVs on our roads and increased preferences for light diesel vehicles.”

In a question-and-answer session following Brown’s speech, the minister was asked about the concern in the infrastructure sector regarding the short-term supply of work given the incumbent Gvernment cancelled several projects started by the previous government. The fear is the short-term supply of suitable projects is not enough for companies to retain workers at a time when Australian infrastructure businesses are actively recruiting New Zealand talent.

Brown says the major cancelled projects, light rail networks in Auckland and Wellington, were not yet at the construction stage anyway. He says the focus is on completing the major projects which had started: including the City Rail Link and the Eastern Busway. Beyond that there are major roading projects in the pipeline and additional funding being spent on maintenance and renewals.