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Rudman rightly slams the NLTP

Brian Rudman was in fine form in yesterday’s NZ Herald, highlighting that behind all the fancy words of the National Land Transport Programme, both Auckland and public transport get a pretty raw deal:

In Auckland’s case, of the $3.37 billion Mr Brownlee plans to invest, $816 million comes from Auckland Council.

When this shared funding is taken into account, the Government’s claimed love affair with public transport – support up 21 per cent, according to NZTA – suddenly looks rather weak. Of the $802 million expenditure highlighted for Auckland public transport, nearly half ($365 million) comes from ratepayers. As for building and maintaining local Auckland roads, it’s almost a dead heat, with NZTA paying $301 million and Auckland Council $295 million.

Wading through the small print, it quickly emerges that expenditure on vital public transport infrastructure over the next three years nationally will be a miserable $115 million, a 31 per cent drop on the previous three years. What enables NZTA to claim a 21 per cent increase in public transport spending is they’ve combined this low infrastructure spend with a 35 per cent increase in payments for public transport “services”. This $830 million covers investment in new rolling stock, “and increased track access charges”, the latter being the Government’s way of gouging more money out of Auckland ratepayers for the hire of the public railroads we need to run our trains on.

NZTA really has tried to be quite sneaky in their reporting of PT funding, by lumping together PT services and PT infrastructure, then saying that together their funding level has gone up. While that’s true, it masks a really big drop in PT infrastructure funding – with most of the services increase being eaten up by EMU loan repayments and increased track access charges.

Auckland also gets a pretty raw deal when it comes to our share of the funding pie – getting a lower proportion of the transport spend than our contribution and a lower in terms of our population:

What’s worse, Aucklanders have been dorked again. Despite talk of Auckland doing well out of the new transport budget, the truth is we’ve been short-changed. Again. As the home of roughly one-third of New Zealanders, and the payers of at least 33 per cent of central taxes and petrol imposts, the $2.6 billion of NZTA cash to be spent in Auckland represents 28 per cent of NZTA’s funding. On a per capita basis, we should be getting another $500 million at least.

Another thing to consider is population growth. Between 1996 and 2006, over half of all New Zealand’s population growth was in Auckland:
In the future this dominance of the country’s population growth only increases:
With population growth being one of the most important arguments for “more transport infrastructure in the future”, the fact that Auckland gets only a quarter of the country’s transport spending becomes even more unfair. Sadly there’s nothing new in the story of Auckland missing out when it comes to transport spending. Rudman continues:

But what’s new. In 1991, after an earlier battle for a light rail service, regional councillors calculated that Aucklanders then paid $150 million a year in fuel taxes but only got $84 million back in central transport funding. More recently, Green Party researchers have calculated that in the 15 years to 2005, Aucklanders paid $7.022 billion in fuel taxes and the like but only got back $3.222 billion in transport-related expenditure – less than half what they put in.

In the past year or two of the Clark Labour Government, government transport funding finally started to match Auckland’s contribution. This week’s proposal is a retreat to the short-changing of past years. It is also a refusal to accept the Government’s own evidence showing that Aucklanders – and New Zealanders – want a greater emphasis on public transport.

And finally, perhaps the greatest irony of all that Rudman points out relates to the fact that in most parts of the country, traffic simply isn’t increasing.

┬áThe big ticket item is once again the maintenance and building of state highways. Together that comes to just over $5 billion. That’s more than five times the public transport spend. This despite NZTA graphs, based on more than 100 survey points across the highway network, showing that motorway traffic has plateaued. NZTA’s own gurus have discovered motorway traffic peaked around 2003 after steadily climbing since the monitoring began in 1989. A year or two later, heavy traffic followed suit.

So let’s summarise:

  • Public transport infrastructure spending is down 31%, even though PT trips have increased by 7% across the whole country in the past three years (and around a 20% increase in Auckland’s patronage growth in that time)
  • The biggest chunk of the NLTP funds are being spent on new state highways, even thought traffic growth rates are negligible since around 2005
  • Auckland gets 28% of the transport spend, even though we’re 33% of the population and well over half the country’s population growth

Rudman’s article really highlights that, despite all its pretty words and big numbers, the NLTP is bad news for public transport, bad news for Auckland just a further example of how utterly stupid our transport policy is in this country at the moment.

41 comments to Rudman rightly slams the NLTP

  • Sacha

    Thanks, Peter. That future focus is really important. If we are funding and building infrastructure that lasts 50-100 years, it needs to work for future people, not just us.

    This government is acting as if the way people and goods got around 50 years ago is how it will always be. That is just shortchanging our children, grandchildren and everyone else. We owe them our best thinking and care, not bluster and dissembling.

  • Putting the PT issue aside as we all knew it was being shafted anyway, I was reading the news headlines overseas and was thinking ‘hang on a sec, something doesn’t add up here’ and so was going to do a post suggesting that Auckland had been shafted again but Rudman beat me to it. I got the impression that the NZTA/Govt put out a separate press release for Auckland highlighting the $3.4b we are getting as a way of trying to make it sound like we were getting heaps when we aren’t. Of course they don’t say who is getting a lot more than their share but I can make a good guess as it will most likely be the same region that always gets more than its share, Wellington.

    As Rudman points out, if we had our share we would be getting at least another $500m which could go a long way towards things like the CRL. The problem is I can’t see this kind of unfairness changing, even with a different government as the rest of the country continues to think that Auckland is gobbling up all of the funds no matter what the numbers say.

    • Sacha

      Shortchanging Auckland doesn’t help the rest of the country either – it just lazily puts off the investment, and the continued productivity damage affects our national books.

    • Rob Mayo

      A change of government in 2014 will help Matt – it will help initiate that sea change in understanding of Auckland’s needs by those living south of the Bombays.

      • I don’t think so Rob, every single government has treated Auckland the same way as while 1/3rd may live here, 2/3rds don’t so they play to that. Those outside of the region often fail to realise the sheer size of Auckland compared to their region and like to think they should be treated the same. I have been looking at how much each region is getting and will do a post on it shortly as there are some interesting results.

  • Greg N

    I read that Rudman article, and when he is on target, he can nail the facts well.

    A few points I’d like to add on Peters post.

    1. The lack of recent Census data from the cancelled 2011 census is really starting to bite on the planning side isn’t it and not just here, but everywhere.
    – the last figure you have is the one officially from the 2006 census, thats over 6 years ago now, and while The Dept of Stats produce interim estimates, they are just that, estimates.
    If the missed census figures were out as they would by now and showed that the growth in the last Census period was over 57% then the politicians and their minions like NZTA will have to sit up and take notice. It seems that the census figures seem to be the only ones that really count in both the politicians (and MSMs) eyes.
    But it won’t be for another year before we get the 2013 Census figures and by then the 3 year NLTP plan and resulting spending shortfall is old news for the Government as they gear up for the election in 2014. So who cares by then if it shows Auckland is (again) getting less than its fair share – after all (as I’m sure Gerry thinks) “they’ve got that new electric train set to play with”.

    2. The need to plan for the inevitable long term growth is cited (by Gerry) as the reason why we need the RoNS to be built now – not when traffic builds up again
    – but in the same breath he is saying – but “PT investment can wait until the numbers build up (and the EMUs are paid off) – thats also assuming the PT numbers ever increase.”

    3. Whats going to happen when petrol hits $3 a litre or higher as it will sometime in the next 1-2 years and users start flocking to PT in even more droves?
    Even with stagnant and declining traffic volumes PT usage is way up in the last 6 years and won’t the whole PT system be sagging at the knees in 3 years time even with EMUs, PTOM in force, Snapper a distant memory and even assuming the current petrol price remained as it is for the next 3 years?
    How will the RoNS, the NZTA/ NLTP and Government assist with solving these problems anytime?

    4. How long before we get the message from Brownlee that due to cancelled Assets sales (or worse, asset sales that go ahead and produce way less revenue than forecast), that the spending program for everything (but the RoNS) will have to be cut back as it was dependant on the money from asset sales after all we said it wasn’t.

    • Stu Donovan

      1. Yes the lack of census data really is an issue – especially given the ramp-up in patronage that has occurred since then in Auckland.
      2. Did you not know that the saying “build it and they will come” applies only to road projects? Pfffttttttt – Brownlee’s logic is so circular it makes me dizzy.
      3. What will happen is that the services will become over-loaded and people will be unhappy and they will vote National out at the next election
      4. Interesting suggestion – I was hoping that the cancellation of asset sales would be the “excuse” they’re looking for to pull the bad RoNs.

      • SteveC

        the flip side of Field of Dreams planning is . . . . . if you don’t build it, they can’t come. i.e. without the investment in sensible PT services and infrastructure (and I deliberately put them that way around), people become captive to their cars. In one sense Brownlee was right when he said demand for travel is relatively inelastic, but it isn’t fixed to a particular mode, which appears to be his underlying argument.

        To come back to services and infrastructure, I really think that greater investment in commuter bus services to growing, but non-traditional employment centres would make a huge difference, no argument that the CRL is vital, but the CBD’s share of regional employment has fallen from 18% 20 years ago to 13% currently, so if Auckland is missing out nationally, I’d also argue that greater Auckland is missing out regionally.

        • Steve – most of the spending in Auckland in the next three years is not in the CBD, Waterview and AMETI being the big projects sucking up well over $2b of funding alone.

          • SteveC

            Matt, I probably should have made my point clearer, passenger transport services are focussed on the CBD when the growth of employment is in areas poorly served by PT, East Tamaki and the Apollo Drive area on the Shore come to mind and these areas have essentially been abandoned to the car for work trips, which in my view is not acceptable.

            It will be interesting to see if the revised PTNP addresses these gaps.

  • Sacha

    Thursday’s Radio NZ story headlined “Auckland pockets lion’s share” of the funding includes some cogent comments from Julie-Anne Genter, Cameron Pitches and Phil Twyford about warped priorities. 4 mins, listening options: http://www.radionz.co.nz/national/programmes/morningreport/audio/2529701/auckland-pockets-3-point-4-billion-dollars-in-transport-investment

    • Stu Donovan

      Come on Radio NZ, that title is incredibly misleading. Since when does 33% of the population/economy receiving only 28% of the transport budget equate with the “lion’s share”? Sounds like someone at RNZ was trying to play on provincial angst towards Auckland … how childish.

      • Greg N

        Stu,
        To be fair to RNZ, Auckland is receiving the largest amount of any one region (Wellington included). So they may well be correct with their headline.
        But within the context of the entire spend its misleading.

        What should be done is a fresh region breakdown table with the effect of the RoNS spending removed (and also remove the local body contributions NZTA are double counting as well).
        Then rank the results by region/per capita etc, you may very well see a different “lions share” pattern emerge.

        • Stu Donovan

          Interesting – after a little bit of research it seems like there’s two definitions of “lion’s share” that are different in a rather subtle way:
          1. The Free Dictionary define is as “all, or nearly all” and “the best or largest part”
          2. Mirriam’s define it as “the largest portion.”

          I always thought it meant the first definition in #1 (i.e. “all, or nearly all”) but it seems that this was an incomplete understanding. Yes, maybe I was a little too harsh on RNZ there …

  • Stu Donovan

    Rudman was in fine form with this article, good on him. I’m amazed that some of the business commentators in the Herald have never criticised the Government’s mismanagement of its transport spend and how that is negatively impacting on productivity and growth in NZ’s largest city.

    The MoT’s brief to the incoming transport minister clearly showed a deterioration in the economic quality of transport spending under National. How is that not bad for business?

  • Sacha

    Ah, Julie-Anne’s parliamentary question to Brownlee on Thursday directly addresses this topic – and shows how easy it is to confuse people like the Speaker about the difference between infrastructure and service funding (5 mins, embedded clip): http://inthehouse.co.nz/node/14859

    • JeffT

      Julie-Anne is doing some good things in Question Time but Thursday’s session didn’t seem to go her way. Maybe a bit more of the tag team stuff with Phil Twyford would take Gerry to task more rather than just leaving her on her own. Gerry’s obviously been doing some reading to prepare his answers. He’s learnt the term ‘elasticity’.

    • Sacha

      Cooperation would be good to see from potential partners in government, yes.

      If Brownlee wants to add together the PT infrastructure and service funding lines, can someone please do the same for the roading/highways ones?

  • Bryce

    The whole Auckland vs rest of NZ issue doesn’t bother me too much. I am more interested in value for money projects around NZ being completed before those that do not make sense. The CRL is such a project but also the reinstatement of the East Coast rail line, the Christchurch rebuild – including the best PT format for the future, fixing roads where people regularly die due to poor road design. These are important. Big 4 lane highways for diminishing traffic levels are not, no matter where in the country they are.

    This regional infighting does nothing for NZ. Another example is the Waikato could potentially have a big part to play in absorbing the expected population increases in the Auckland area but seems to be ignored because it is not Auckland.

    • Sacha

      I agree the money should be spent on what produces the best economic, social and environmental results over the next 50 years at least.

      Would be interested in seeing a series of posts about each region’s stated transport priorities. We know Auckland’s has the Core Rail Link at the top of its list, which unlocks a whole lot of other potential like better service frequencies and smarter bus routes.

      I guess Waikato might prefer better freight connections to Tauranga and perhaps some pedestrian measures in central Hamilton than blowing it all on a big motorway to Auckland. It would be shame to see some of NZ’s most productive agricutural land turned into spralwing subdivisions through lack of basic vision and intelligence.

      • Bryce

        I don’t mean all growth but is it more sensible to spend up to $2b to build a road to Wellsford or would it be more cost effective to upgrade rail to have fast passenger rail trips to Hamilton and Tauranga? Would more people settle in Pokeno, Huntly, Hamilton or Tauranga if they could more easily access Auckland central? What potential benefits would it add to other towns on the line in the terms of population or local economy? Would Aucklander’s use rail to holiday at the Mt? If a higher speed rail service existed, would tourists use it to access Taupo or even Rotorua? After all, if you’ve just spent 12 (or more) hours on a plane do you really want to spend another 2 to 3 hours (including transfer time etc) to fly to your next destination, a bus trip or would a 1 to 3 hr trip on a train be inviting?
        These questions are theoretical but I think a lot of the supposed benefits of the RoNS are also theoretical For instance, how does the Puhoi – Wellsford hwy help Orewa and Silverdale as indicated by LTNZ? How does it help education in northland as indicated by Bill English? Would the rail link to Marsden Point be more beneficial to the economy in Northland?
        I think questions like this need to be asked before committing such big sums to projects. This isn’t meant to be anti road or pro rail but more like ‘what will be best for New Zealand (not Auckland individually) for the future?

        • Like all economic questions, the answers you get depend to a large degree on the assumptions you start with. We seem to be governed by people who will not consider if there are any risks to an entirely road and fossil fuel based economy. Do not belive that the externalities of a sprawlly, driving based society will ever have to be paid for. Do not understand the dynamics of successful cities, or even think that cities are useful things at all. This evaluation seems to hold for the MoT as well. In the light of this no amount of evidence seems to matter. Change will come when we change the people making the decisions, I guess in the meantime we should just keep piling up the arguments and the facts nonetheless.

  • St Nick

    I’m not from Auckland but I would be happy to see Auckland get 40-50% of national transport funding. My reasoning is that transport spend should be based on where the congestion is, Auckland has most of it so it should get the money, makes sense to me.

    • Glen K

      Um, should the spend also be based on where the serious crashes are (which is not likely to be urban Auckland)? Or where the roads are in most need of maintenance? Or where the greatest social severance for non-motorised travellers is? Or… etc. There are plenty of reasons why different projects should have merit and I agree with the view that they should be funded on these merits, rather than where in NZ they are located.

      It’s a bit silly to look at it on some kind of per-capita basis anyway. A large urban area like Auckland should be able to provide a considerably more efficient transport network (per $ spent) than say a sprawling low-population region like the West Coast. An urbanite who has work, shops, leisure, etc all within a 10km radius is obviously a bit different than a ruralite who has to travel 50km to access the same basic services. And I suspect that Aucklanders’ use of transport infrastructure in other regions is proportionately higher than the other way around.

    • Peter M

      I think you make a good point Glen. The point I made in my post was suggesting that we need better ways of working out what’s fair than just “per capita”. I agree that occurrence of severe crashes should determine safety funding etc.

      The thing is that most of the real “big bucks” are spent on projects designed to reduce congestion or enable traffic growth (presumably that’s how building a road actually helps generate economic growth). All that leads to Auckland surely being the prime place for investment, due to the population, the population growth and the GDP generated here.

  • hmmm

    I agree with the shortchange Auckland gets with the money however its unhealthy to have it all thrown into one city bursting at the seams, NZ is very Auckland centric, literally everything is based there and that’s where migrants tend to settle and at its current growth rate it will keep needing huge investment to try and stay on top of things while elsewhere around the country its a struggle to get any real growth going, you just can’t compete with Auckland really, and that’s sad, more should be done to promote the rest of the country. I’m personally glad Wellington is getting some money to try and fix the shocking bottlenecks, the dangerous northern corridor, the unfinished urban motorway,(yes unfinished, check out all the columns with nothing on top running next to current single lane motorway leading up to the terrace tunnel.) and the poor old Mt Vic tunnel-Basin Reserve congested paradise.

    I tell you what though, judging by some of the comments on Rudman’s story and even here, the differences between Aucklanders and New Zealanders are getting bigger by the year, like two different countries.

    • My understanding is that Wellington has historically done very well out of central government funding on a per capita basis, much better than most other regions.

    • Stu Donovan

      “hmmm” … I agree that a lot could be done to promote the rest of NZ, but doubt that infrastructure is the best way to achieve such an outcome. If you want to stimulate growth in a particular part of the country then why not just offer direct incentives for people to live outside of Auckland?

      I believe that’s what Norway does, where sparsely populated northern regions pay lower tax rates: “An important regional policy element of the tax system is the differentiated payroll tax paid by employers. This tax is differentiated by zone, ranging from 14.1% of wage costs in central areas to 0% in the weakest zone (North-Troms and Finnmark)” (http://www.iiasa.ac.at/Research/ERD/net/pdf/monesland_1.pdf).

      Now that’s not a particular policy that I support, but it’s one that is at least very direct in terms of linking public policy actions to desired social outcomes. Building infrastructure where it’s not needed is, well, simply foolish IMO. No disrespect intended.

      • Bryce

        Agreed. It needs to be ‘needs’ based infrastructure not just because the govt or local council thinks it would look good to voters. Does it make sense to just build motorways around Christchurch or would it be better to at least preserve RTN routes around the city for light rail or what have you as required? It will cost more but the outcomes will be beneficial to the city and residents in the long term. Why try to do it later once the motorways inevitably clog up at peak times?

      • MrV

        Swiss cantonal model also useful, but a huge reform to split NZ into a number of regions, say 5-7 with the power to set taxes as they see fit.
        Each region could adjust business, personal, GST taxes etc to suit particular requirements.
        The first x cents in the dollar go to central govt for basic national priorities, rest of services provisioned at canton level.

  • JeffT

    Maybe some policies to encourage regional migration rather than everyone arriving and settling in Auckland.

    What a terrific solution proposed by our government to the congestion problems resulting from their immigration policies – let’s just build some more roads.

    • Gian

      I’m an European immigrant and I just became an Auckland resident, and I tell you, I wouldn’t live in Waikato even if the highways were gold plated there…

      • Bryce

        Gian, you may not like to live in the Waikato (and I share that with you, I’d rather go North) but there are plenty of people that like it down there. Heck, I know people who commute every day from and to Hamilton. Why not at least give them the option of working in Auckland and living in the Waikato without having to sit in their cars in peak traffic? To give people the option of not having to live in Auckland will be good for Auckland’s land availability and also for the towns where these people can keep on living.

    • Stu Donovan

      JeffT I don’t think it’s reasonable to suggest that Auckland’s congestion is the result of immigration policies. It’s the result of Auckland being a popular place to live.

      • Peter M

        Plus the government’s main immigration/economic policy at the moment seems to be exporting as many people as possible to Australia.

        • Greg N

          Peter.
          That may be, but those leaving for Australia tend to come from everywhere in NZ not just Auckland, whereas the replacements tend to nearly always settle in Auckland.
          So the net effect of the current immigration policy (whether by design or by unintended consequence) is there a concentration of the population growth in Auckland region.

          This shows clearly in Stu’s original chart showing 57% of the growth happening in Auckland to 2006, and who knows since then?
          Immigration policy has historically not cared where the new immigrants settle. In the last 10 or so years, there were higher points added to your immigration score if you wanted to live outside Auckland (may have even lost a few points if you wanted to live in Auckland as well). But this is inly required a limited time, and who knows, if its actually enforced once the immigrants have their visas.

  • Eastern Westie

    In Auckland, a key factor is that immigrants tend to hire immigrants, as the policy is work or family tie linked.This creates a self perpetuating cycle of immigration based growth in the city. The current (and previous) administration tend to prop up the economy via population growth rather than say export growth. This keeps their mates who are landowners/property developers in business. Ironic as many immigrants move to the country for a better lifestyle, yet recent population growth is tending to destroy this. Pity the immigration and development fees don’t seem to be linked to the true transport infrastructure cost of this growth!

    As a side point, good to see TV3 at least looking at road funding finally http://www.3news.co.nz/Benefits-outweigh-new-road-costs–Brownlee/tabid/1348/articleID/267649/Default.aspx.

  • I find it hard to understand why they have mixed the public transport services and infrastructure categories the way they have – surely the loan repayments for the electric trains would have made more sense to list in the infrastructure category? Does anyone understand the rationale (if there is one)?

    Asides from that, Peter I think it’s important to note that the claims around increased government funding for PT (overall) are exaggerated at best and false at worst, depending on how you measure it. Yes NZTA has been very sneaky and presented it in the best possible light.

    The first point is that it’s not comparing apples with apples – rather than comparing to the full amount allocated/planned in the last NLTP, the 21% increase is relative to the ‘actual spend’ of the last 3 years, which took a hit of about $100 million as a result of the Christchurch earthquake. Compared to the actual allocation for the last three-year period it is only an increase of 11%.

    The second and more important one is where the bulk of the increase is coming from: local councils. In relation to the previous NLTP allocation, the central government component is actually only up 5% – so below the rate of inflation – while the local council component is up 17%.

    Assuming the proportions for the actual spend of the last 3 years were the same as for the full allocation, this would mean the central government allocation in this NLTP is up 15% relative to that, and the local councils allocation up 27%.

    The bottom line is that the Government is putting up less money in real terms for public transport than they did in the last funding round.

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