Myth: The Fuel tax increases are just to pay for Auckland motorways
The announcement a few days ago that petrol prices are set to rise by 3c per litre each year for the next three years was pretty quickly latched onto by the media and one of the traditional tools they use is the vox pop to go and get some sound bites from people. Whenever this is done outside of Auckland there always seems to be person who then goes on to blame the increase Auckland with something to the effect of “Why should we be paying more for Auckland’s motorways”. Most of this is probably purely out of a hatred, or jealousy, for Auckland while but I suspect there is also an element of misunderstanding partly due to people simply not realising just how much bigger Auckland is than their town/city. As an example of that last point, here is a map showing the cities that are close to or above having 100k people in them. Auckland is bigger than the rest combined and what’s more its growing faster than them all too. That means a $100m interchange project like say Lincoln Rd is likely to be much cheaper on a per capita basis than say a bypass or bridge upgrade in a small town.
But back to the myth at hand. One of the things I found interesting about the governments announcement is that they very clearly identified that the increase was primarily to pay for the Roads of National Significance. The total RoNS programme is costing around $10 billion spread out over the next decade or so. Of that nearly $3 billion is being spent in the next three years on them and that represents roughly 80% of the budget for new state highways around the country. That budget in itself is far larger than for any other funding category as shown below.
But where are the RoNS and how much are they costing. Well its a bit hard to get exact figures as the NZTA don’t clearly state on their website but after a bit of searching around the numbers below should be roughly right.
Now I don’t really count Puhoi to Wellsford as an Auckland project as there are very little benefits in it for Auckland and the government keeps telling us, they think it is primarily about improving access to Northland. That means that there are only really two RoNS within for Auckland, Victoria Park Tunnel which has been completed and the Western Ring route, the final pieces of which are now under construction. Combined they represent roughly $2.5 billion, less than a quarter of the RoNS spending. In fact many of the projects are in rural areas with low nearby populations.
Even more ironic was the vox pop that I heard that prompted me to write this post was from Wellington, on of the regions doing best out of this road building binge and which also has the dubious honour of some of the worst projects from an economic standpoint with the Kapiti Expressway having a benefit/cost ration of just 0.2 and Transmission Gully rumoured to be at similar level.
Further Auckland has traditionally received less transport funding that it provides in taxes as Brian Rudman pointed out a few months ago when the NLTP was announced.
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.
The levels have come back a bit following some increased investment in recent years but I suspect Aucklands level of investment is still well short of the amount of taxes provided. Of course those anti Auckland folk around the country are probably not that likely to read this blog so perhaps this is just a useful reminder for if the petrol price increases or Aucklands motorway investments come up in conversations with friends or family over the holiday season.