New roads are in and cycleways are out of the new Government’s first National Land Transport Programme (NLTP), which sets out where NZ Transport Agency Waka Kotahi spends the national transport budget.
Overall, the plan allocates $32.9 billion to be spent over 2024-2027, $8b more than was spent under the last Government’s NLTP. The funding mainly comes from fuel taxes and road-user charges, with some funding coming in the form of loans and grants from taxpayers and more than $5b coming from councils jointly funding transport projects and services in their cities and regions.
The big winner in the plan is the state highways improvement budget, with $7 billion going towards building additions to the state highway network, including the 17 new Roads of National Significance (Rons) promised by the National Party during the election campaign.
The big loser is the budget for walking and cycling improvements, which goes towards helping councils build new cycleways. This has been halved from $910 million in the 2021-2024 programme to $460m in this plan – a large cut when factoring in inflation that has occurred in that time.
Rail has also been cut from $1.3b in the last plan to $1b in this one.
Auckland is a big winner, getting about a quarter of the funding at $8.4b. A lot of that will go towards starting work on three of the four Rons promised in the city – although none will be completed in the next three years of this plan.
State Highway 1 from Warkworth to Wellsford will have property purchased for the new road as well as design and consenting completed in the next three years, but the actual construction will begin in a later programme.
Work on the SH16 northwest alternative will mainly fall in a future NLTP. Improvements along the Mill Rd corridor will be progressed in the next three years, but road construction will begin substantially only later. The East-West Link will have “project development and property purchase” underway in the current plan.
Auckland will also get $3.7b in public transport funding – about half the national total – to go towards building new infrastructure and subsidising public transport fares. Funding looks to be tight. The plan promises work will begin on the SH16 Northwest Rapid Transport corridor between Brigham Creek and the city centre. The Government’s other big public transport project in Auckland, the Eastern Busway stage 4 — promised by National during the election — has a question mark hovering over it, with the programme saying further progress on the project will be “subject to funding availability”. Stages 2 and 3 will be completed, however.
In Wellington, the programme used vague language to describe the timing of commencing work on a second Mt Victoria Tunnel. It makes clear the project is happening in some form, but it is silent on whether the Government can deliver on National’s pre-election promise to have spades in the ground this term — or even by 2027, the final year of the NLTP.
When asked about that commitment, Transport Minister Simeon Brown did not recommit to spades in the ground this term. He told the Herald the Government was investigating the feasibility of the long tunnel option, instead of simply building another tunnel much like the existing one. The long tunnel would bypass Wellington’s CBD completely.
“A second Mt Victoria tunnel will be one of the largest infrastructure projects Wellington has seen in a long time, and we want to ensure that we choose the right option for the city’s future. The project has been listed in the National Land Transport Programme as a priority and we look forward to NZTA beginning the project,” he said.
The NLTP is put together by NZ Transport Agency (NZTA) based on the direction set out by Brown in his Government Policy Statement on Land Transport.
Brown said the plan made good on his party’s election promise, with the Rons to be delivered in three “waves”.
“New Zealanders rejected the previous Government’s transport policies which resulted in non-delivery, phantom projects, slower speed limits, and an infestation of speed bumps.
“The Government is turning this around with record investment in transport projects that reduce travel times, improve public transport options, and build and maintain our roading network to the safe and reliable standard Kiwis expect,” he said.
He trumpeted the plan as a “record” investment in transport, which it is, increasing on the last plan by 35%. Even factoring in inflation, the plan spends about $5b more than the last NLTP.
But the additional investment comes at a heavy cost. Money earned from fuel taxes has fallen by $1b between the last NLTP and this one, while money earned in road-user charges has increased by just $700m. Vehicle registration fees help to bridge the gap, raising $600m more than in the last Budget.
Nevertheless, factoring in significant inflation, the transport system barely washes its own face, and the record investment is mainly helped by a $3.1b loan from the Crown to NZTA and a $3.1 grant – both paid for by central government borrowing.
Brown said last week that he is accelerating work to put the transport system on a more sustainable financial footing. NZTA’s figures suggest that work cannot come soon enough. Towards the end of this decade, spending will exceed likely revenue by more than $5b a year.
The minister defended the decision to halve the walking and cycling budget, saying the Government needed to move away from “nice to haves” and get back to basics.
The Green Party’s transport spokeswoman, Julie Anne Genter, described the move as “terrible”.
“It’s right at a time when we’re biking more than ever. It definitely means we won’t see more kids walking and cycling to schools,” she said, noting that it came as the Government was making it easier for councils to lift speed limits around schools.
She also raised concerns about the extent to which local roads – which are funded jointly by councils and the central Government – were being maintained and invested in.
Genter said the programme “only deepens our dependence on fossil fuels while kicking climate action down the road”.
The Government has slightly changed the way road maintenance is funded, making comparisons with previous years difficult.
It has created a new $5.5b pothole prevention fund for local roads and state highways while spending $4.6b on maintenance and operations for both state highways and local roads. The last Government’s plan spent $7.2b on operations and maintenance across both local roads and state highways.
The next big challenge is whether this funding is enough for councils to continue delivering infrastructure investment. NZTA chief executive Nicole Rosie said councils and others had put in $29.7b worth of bids for co-funding, but Waka Kotahi only had income worth $23.6b to distribute.
“We only have a limited pool of funding available,” she said.
Another challenge is whether the Rons can be delivered on budget. Leaked figures published by the Herald suggested they could cost $24b more than National had estimated during the election campaign.
The Government wants to have as many as possible delivered using public-private partnerships (PPPs), although it remains to be seen whether there is sufficient appetite from the sector to deliver the roads at a cost the Government would find acceptable.
Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
The Resources Minister came to the select committee sporting a Make NZ Great Again hat.