Over the last few weeks there has been a renewed media focus on Auckland’s transport issues. This has been spurred on by two main events the first was the Green Party launching their Reconnect Auckland campaign and the second was the announcement of alternative funding options to help pay for future transport projects. Along with that it has seen a resurgence of an annoying myth that members of the government like to perpetrate. In an effort to try and make their transport policy sound more balanced than it actually is they love to state that the government has invested $1.6 billion into the rail network. Government MPs talk about it on social networks or at meetings, Gerry Brownlee mentioned it in his recent interview on Campbell live and Steven Joyce, repeated it this morning on The Nation (on TV3).
Now $1.6 billion certainly sounds like a lot of money and of course it is. It is also true that it the amount of money that central government has, or will be spend on rail up until the electrification project has been completed. The issue I have is that a decent proportion of the money was approved or spent before the current government even came into office. So let’s look at the figure a bit more closely, the $1.6 billion can be boiled down into three key areas:
- $600 million for Project DART
- $500 million for the electrification infrastructure
- $500 million for the new electric trains
As the government are using the total figure to suggest that they are investing in a more balanced transport system, the question becomes whether the money was invested by the current government or not, so lets have a look.
Amongst other improvements it included double tracking the western line, various station upgrades, the Newmarket Station and changes to the junction, the New Lynn trench and station, reinstating the Onehunga Line, building the Manukau branch line. Kiwirails page on the project also states:
The 2006 Budget included funding of up to $600 million for rail infrastructure improvements to speed development of the Auckland network.
So yes this was paid for by central government but as you can see, funding started before the current government came to power which was late in 2008. Of course not all funding is spent in one year and as Brownlee said the other day, they didn’t cancel it. But even if they wanted to, how much could they have cancelled anyway? Well probably not much.
Interestingly the funding for this project was kept out of the normal transport budget and instead is listed under the finance budget. The government’s budget documents for the 2006/2007 financial year shows that the money was to be spent over a four year period and it was only the fourth year that National had any control over the budget. By then pretty much all of the various aspects to the project were either already completed or well under way meaning it was probably impossible to cancel anyway.
To me there is no way that the current government can claim the $600 million spent on Project DART as their spending or that they had anything to with it.
This includes new signalling, modifying existing infrastructure like bridges and of course the wires themselves. Funding for electrification was initially included in the 2007 budget and was separate to the funding allocated for Project DART.
Now from memory the government intended to pay for the Auckland work via a regional fuel tax which would work in conjunction with one the region would also impose to fund other projects, including new trains. When National came to power they stopped the regional fuel tax and put a hold on the electrification project. They eventually agreed to let it go ahead and paid for it out of the nationwide fuel tax increase. It is however quite clear that funding for the project was initiated in 2007, over a year before National came to power.
There is obviously not much point in paying $500 million for electrification without trains to run under the wires. As mentioned, the original electrification proposal was to see Auckland pay for the trains out of a regional fuel tax imposed by the regional council. The national governments cancelling of that fuel tax took that funding option off the table. When they finally agreed to let the project go ahead it was announced that the trains would be paid for by way of a loan that Auckland would have to pay back (without the extra source of funding). Worse still was that even after paying back the loan the proposal meant that Auckland still wouldn’t own the trains, Kiwirail would, however this has now changed and Auckland will own the trains directly.
Since then there has been some positive news, it was announced that Auckland would end up getting more electric trains that first proposed, that was partly possible due to better than originally expected exchange rates along with the government kicking in an extra $90 million. The NZTA are also going to contribute to the loan payments in the same way they provide money for PT operating costs however oddly it turns out that the government appears to be clipping the ticket on the loan by charging a margin on top of their cost of funding.
So when the government states that they have invested $1.6 billion in to rail in Auckland, it is frankly untrue. In fact the only new funding they seem to have provided is the extra $90 million they provided to buy extra EMUs and the 50% share of funding for loan repayments. Other than that all of the funding is the same as what was agreed to before they came to office.