$12.3b transport funding plan announced

Mr Brownlee said New Zealanders were driving more kilometres than ever. Photo / Natalie Slade

Spending on roads and public transport by central and local government over the next three years will increase by almost 13 per cent with much of the additional cash coming from fuel tax and road user charge hikes, Transport Minister Gerry Brownlee says.

Mr Brownlee and NZ Transport Agency chief executive Geoff Dangerfield this afternoon announced $12.3 billion in funding under the 2012-2015 National Land Transport Programme, a 12.8 per cent increase on the 2009-2012 programme.

Mr Dangerfield said the programme had a particular focus on growing Canterbury and supporting the recovery of Christchurch after the earthquakes.

The programme also prioritises continued work on the Government's "roads of national significance" and work in Auckland "where there are significant opportunities for improved transport to support the city's contribution to New Zealand's economic growth".

However Mr Brownlee said the Canterbury earthquakes, reduced growth forecasts and the tighter fiscal environment had put pressure on the National Land Transport Fund which contributes most of the funding - $9.38 billion in the new programme.

That meant targeted expenditure signalled in the Government Policy Statement on land transport funding for the coming years would exceed forecast revenue by around $220 million over the 2012 - 15 period.

To meet that shortfall, a package of initiatives had been developed, "to give the NZTA the funding certainty it needs to continue to deliver transport infrastructure and services, including State Highway improvements and the Roads of National Significance programme", Mr Brownlee said.

The initiatives were:
- Increases in petrol excise duty and road user charges from 2013/14 in order to lift revenue to match expenditure;
- A short-term, one-off $100 million borrowing facility for the NZTA to manage cash-flow variations; and,
- Setting the annual contribution to the Canterbury roading recovery from the National Land Transport Fund at $50 million a year with costs over this amount met from outside the Fund.

Mr Brownlee said New Zealanders were driving more kilometres than ever, but consumption of fuel to travel that distance was declining due to a more fuel efficient vehicle fleet and that was affecting the revenue going into the fund.

By helping match revenue to expenditure, future increases in fuel excise duty and road user charges would "keep momentum on a range of projects".

The increases would be "in the realms of the rate of inflation".

He said the short-term borrowing facility for the NZTA was "a one-off means for addressing an immediate funding gap and will help to spread costs out over a number of years".

The amount being borrowed would not breach the agency's current debt cap.

Additional borrowing by the agency which will be permitted under new legislation would not be required under the 2012 -2015 plan.

Final details and decisions of the funding package, including decisions on fuel excise and road user charges increases, would be announced before the end of the year.

The $12.3 billion National Land Transport Programme 2012-2015 includes:

• State Highways: $5.14b up 7 per cent on 2009-2012
• Local Roads: $4.06b up 14 per cent
• Public Transport: $1.74b up 21 per cent
• Emergency Works including Christchurch Recovery: $690 million