In Part 1 of my series I wrote about the third main between Westfield & Wiri as being an ATAP ASAP, a first decade project that in my opinion needed funding straight away. My second post of this series was about the need for extra trains prior to the completion of the City Rail Link. The third chapter is about a project that had kinda fallen off the radar, the Eastern Busway but specifically the Pakuranga to Botany section as opposed to the Panmure to Pakuranga section AT are looking to consent.
In ATAP the project is listed as a 1st Decade Project, we haven’t heard much since June when AT made public the AMETI Sequencing Delivery Strategy for Panmure to Botany, which was likely in response to AT initially trying to defer the Reeves Rd flyover. That was to allow them to accelerate the Pakuranga to Botany section of the busway and add bus lanes on Pakuranga Rd up to Highland Park. Unfortunately, and in part due to political pressure, AT ultimately backtracked on the flyover, putting it back on the table and leaving a funding gap again for accelerating the busway.
The report put the projects in the following order:
- Panmure to Pakuranga Busway; (Stage 2a)
- Pakuranga Town Centre Busway, Bus Station and Reeves Road Flyover, including implementation of bus lanes on sections of Ti Rakau Drive (until the busway can be delivered) and localised widening at Gossamer Drive / Ti Rakau Drive intersection; and
- Completion of the Pakuranga to Botany Busway as early as possible.
And “There is a $172m shortfall between the current Long Term Plan cash flow and the recommended AMETI delivery strategy.”
Progress however continues to be made on Stage 2a, which AT are now just calling the Eastern Busway, with the consenting process now underway. By chance I happened to be at Panmure station on one of the days the team where talking to the public, they confirmed two things for me:
- The intention is still for a median alignment busway for Stage 2b which is great.
- That bus lanes are being planned on Pakuranga Rd as far as Highland Park which is also great. Pakuranga Rd is an ideal candidate for bus lanes as is 3 lanes each with with slip/turning lanes/medians in sections so it should be a relatively easy from a infrastructure perspective to put in place those lanes.
However, recently AT have put out a tender for the design/consulting of stage 2b.
This project is a critical link needed in the development of our rapid transit network and alongside bus lanes to at least Highland Park, will be important in delivering vital PT improvements to an area that has very poor access to decent public transportation. It is surely is a prime candidate for central government to step in and fill the funding gap as for a small amount of the the NZTA’s expected overall transport budget. Perhaps the Government could announce a quick win for coming up the elections by being able to say the Eastern Busway is funded, as well as giving the community, developers and businesses confidence to get moving with the certainty the announcement would bring, just as they did last year with the CRL.
There has been an impression over the past while about how the government has adopted a more conciliatory approach to transport in Auckland. In some respects this is true, as they’re no longer getting in the way of quickly progressing the City Rail Link, they stumped up the Urban Cycleway Fund which is delivering some fantastic projects, and through ATAP there’s now alignment between the council and government on Auckland’s future transport needs including expanding the rapid transit network and a more open mind to road pricing. These are all very good things that are a big step forwards from where we were 4-5 years ago.
However, in other respects it seems that relatively little has changed. We still see crazy boondoggle motorway projects being announced before a proper business case has been done. We still see the highly sensible proposal for a regional fuel tax being knocked back for no good reason. And, when it comes to the Government’s most important transport document – the Government Policy Statement (GPS) – we still see a very State Highways focused strategy for transport.
This is the fifth GPS created since legislation was changed in 2008 requiring the document to be prepared. Only four of those have ever actually taken effect though, as the GPS released by the Labour government in mid-2008 was quickly replaced in early 2009 by the new National government. Each GPS provides a variety of strategic directions, objectives and measures, but where the GPS really has “teeth” is in defining upper and lower bounds for how much NZTA can spend on different funding areas – known as “activity classes”. By way of example here are the “funding bands” in the 2015 GPS (we don’t yet have the full 10 year bands for the current Draft GPS):
The real impact of these “funding bands” is that they prevent NZTA from continuing to spend in an area once that “allocation” has been used up, regardless of the merit of that potential investment. So, for example, even if a public transport project had a fantastic cost-benefit ratio and aligned really strongly with the strategic direction outlined in the GPS (and how NZTA gives effect to the GPS through more a more detailed framework), if there are too many PT projects in any given year then NZTA will be unable to fund them.
Given that this is the 5th GPS to be released, we can track how the proportion of investment in activity classes has changed over time. This task is made a bit more difficult as some of the activity class names have changed (for example PT services and PT infrastructure used to be separate but were then merged). To get around this issue and to also simplify it a bit, I’ve narrowed things down to State Highways (both improvements and maintenance), Local Roads (also both improvements and maintenance), Public Transport, Walking & Cycling, Road Policing and Other. While GPS’ are 10 year documents, we only need to consider the first three years as that’s how often the GPS is refreshed. I’ve summed the upper and lower bands for each three year period which is shown as the lighter shade. The (L) and (N) signify a Labour or National Minister of Transport who released the document:
What immediately stands out is how massively State Highway investment has grown over the course of time, nearly doubling from under $4 billion in Labour’s 2009 GPS to over $7 billion in the most recent draft. This has primarily been to fund the government’s expensive Roads of National Significance. Other areas have either remained fairly similar (road policing), grown slowly (local roads) or declined (public transport). Public transport funding is only just getting back to the level originally proposed in 2009 by Labour in the new Draft for 2018-21.
What’s also important to remember is that the overall size of the NLTF grows each year, so it’s worth looking at how the proportions have changed over time. For this I have used the “upper limit” of the funding bands as they are the most crucial in determining what NZTA can and cannot fund.
The most stark change is for State Highways, which have gone up from 42% of total investment in the 2009 GPS to around 55% in the most recent. Public transport, on the other hand, has declined from 14% in the 2009 GPS to 10% in both the 2015 and 2018 documents. Even Local Roads investment has declined, from 25% in 2009 to 22% in the 2018 plan.
Regardless of arguments about modes, it seems like we have a strategic approach to transport funding that is continuously putting more and more eggs in the basket of State Highway improvements. Many of these large State Highway projects have struggled to generate good cost-benefit ratios (another way of saying they’re pretty crap value for money) so it seems odd that we keep shovelling more and more money into them.
Over the next few weeks we will gather some key submission points and put together something to help you make a submission on the draft GPS. Feedback closes at 5pm on March 31.
Last Thursday Finance Minister Steven Joyce announced that the government was “ruling out” using a regional fuel tax as one way to fill the $4 billion transport funding gap that was identified by ATAP. He noted a few reasons for this decision:
And second, I stress that we are not interested in introducing a regional fuel tax. I have reiterated to Mayor Goff this morning that we do not see regional fuel taxes as part of the Government’s mix for transport in Auckland because they are administratively difficult, prone to leakage and cost-spreading, and blur the accountabilities between central and local government.
In some respects it wasn’t particularly surprising that the government made this decision. They have long had a somewhat bizarre hatred of regional fuel taxes, not only cancelling Auckland’s proposed fuel tax in 2009 that was going to pay for the electric trains (a decision that probably delayed electrification for a year or two) but then also changing the Land Transport Management Act in 2013 to remove the possibility of Councils even applying to the government for such a tax.
Many of these “concerns” were addressed in a report (page 15 onwards) that the Council commissioned in 2012 to inform their submission on the LTMA changes. Looking first at the issue of cost-spreading (which basically means the risk that petrol companies will raise prices around NZ rather than just in Auckland to pay for the regional fuel tax):
With the level of scrutiny in this sector it seems pretty unlikely that we would see this happening. Furthermore it seems like there are good checks and balances that could be put in place to ensure it doesn’t happen. So, not really a valid excuse.
Now for “leakage”, which is the likelihood of people travelling outside Auckland to “fuel up” and therefore avoiding the regional tax:
Once again it seems like these issues are marginal and can be easily addressed. This led the commissioned report to conclude that concerns that were raised in relation to a regional fuel tax at the time (which seem very similar to those mentioned by Joyce last week) can be easily addressed.
Of course Joyce’s final point – about accountabilities between central and local government, is probably the real reason for the opposition. Essentially government doesn’t want to give up the power it has through collecting fuel taxes. But this seems a bit petty and I’m sure in relation to such a high profile issue in Auckland (the funding of transport) and the broad agreement between Council and Government on what the priority investments are, there would be clear accountability with the public.
This rejection of the regional fuel tax now puts the ball back in the government’s court to come up with some other ideas for addressing the funding gap. They’d better hurry up as the clock is ticking to get this sorted in time for the 2018 transport funding plans.
Yesterday the Ministry of Transport released for consultation the Draft Government Policy Statement (GPS) for 2018-2025. The GPS is refreshed every three years and as the name implies, it sets out the government’s policies and spending for transport over a 10-year horizon.
The single most important aspect of the GPS are the funding ranges for each of the 10 activity areas. The funding ranges set an upper and lower limit of how much money will be spent on each activity every year. These ranges are then used by the NZTA in conjunction with regional councils in setting the more detailed National Land Transport Programme (NLTP) and Regional Land Transport Plans (RLTPs) which will list specific funding levels. This is how the various transport documents are tied together and as you can see, other regional and national plans have to be consistent with or give effect to the GPS, meaning there aren’t a lot of options to stray from what the government wants.
In total, over $11 billion is expected to be spent over the six years from 2018 to 2024 but depending on circumstances that could be as high as over $12 billion.
And importantly, here are the individual funding ranges as a graph. This looks at the total range over three years and I’ve included the 2012-15 and 2015-18 figures as a comparison to show how they’re changing. Some notable things you can see:
- There is another significant increase for state highway improvements. Many of the big Roads of National Significance projects will be winding up over that 3-year period but other expensive projects, such as the East West Link and Northern Corridor are expected to getting underway.
- They’re lowering the bracket for local road projects saying it was consistently under spent but that the opposite is true of local road maintenance.
- On top of the State Highways fund, there is a separate activity for regional projects which they admit are mostly state highway projects too.
- Public Transport gets some improvements in range but it’s worth noting that this covers both services and infrastructure. Also with NZ’s weird funding rules, it isn’t allowed to be spent on rail infrastructure.
- Walking and cycling does get a little boost but not a significant one.
To give an idea of where investment has been in the past, this shows the funding ranges for the 2015-18 NLTP and where within those ranges funding was allocated.
Much of the text within the document feels like it has just been copied and pasted from previous versions of the GPS but I went through (most) of it anyway and a couple of things stood out.
The document states that the GPS takes into consideration a range of government policies relevant to transport, this includes the Kaikoura earthquake and tsunami recovery. But oddly it makes multiple references to the fact it doesn’t fully take into account the ATAP work agreed between the government and the council as it’s waiting on funding decisions. This makes me nervous that the government are planning on picking and choosing from ATAP.
30. The Auckland Transport Alignment Project is a collaborative exercise between Auckland local government and central government officials. It has provided analysis to inform the development of the GPS. The Auckland Transport Alignment Project identified four key strategic challenges and a strategic approach to investment for Auckland. The strategic approach looks to make better use of existing networks, target investment to the most significant challenges, and maximise new opportunities to influence travel demand.
31. The draft GPS 2018 recognises the Auckland Transport Alignment Project and Kaikoura earthquake but does not fully take the funding implications of Auckland Transport Alignment Project into account. There is expected to be changes to the final GPS 2018 once funding decisions have been made.
Previous GPS’ have talked a lot about getting value for money from transport investment while at the same time promoting programmes like the RoNS and other government initiatives that assessment has shown to perform poor economically. Now they’re starting to drop the charade government projects will be good value and saying they’ll be done anyway, simply because the government like them. This is a massive double standard from the government who have for years berated Auckland for projects they claim have a low economic value.
36. It is expected that maximising value for money will automatically advance economic growth and productivity and road safety. However, there will be investments with a low benefit cost return that are necessary to advance Government policies. In these cases there will need to be a strong policy alignment (as expressed in the GPS) with Government policies and transparency about the reason for the decision.
61. For many investments it will be possible to obtain good benefit cost returns while providing the right infrastructure and services at the best cost. However to sufficiently advance some government policies, investments may require a lower than normal benefit cost return (i.e. less than the average Benefit Cost Ratio (BCR) for the National Land Transport Programme (NLTP). Even in these cases, in general it is expected that the benefit cost ratio will at least exceed one.
One thing to remember about the GPS is that it only covers some areas of transport which seems short-sighted, even if they claim there will be integration with other modes.
39. Investment in movement of freight by road is covered by the GPS, but investment in movement of freight by rail, sea and air is not. However, coordination between the GPS and those responsible for different modes of transport can help to maximise the benefits of transport to the economy.
There are a few positive things to say about public transport and the role it has to play, such as:
115. Significant increases in public transport capacity have seen more people using and relying on public transport in the main metropolitan areas. These increases have occurred alongside increasing fare box recovery, indicating that the investment is resulting in more efficient outcomes.
116. The GPS will support this result by:
- continuing to invest in public transport, including modal integration where appropriate
- continuing the momentum set by GPS 2015 to increase the efficiency of public transport investment
Yet at the same time, they make some odd statements such as that forecasts are overly optimistic.
Passenger numbers have increased recently and are forecast to increase in Auckland and Wellington over the short term (and in Christchurch in the medium term). Although forecasts of increased passenger numbers have typically been overly optimistic. Auckland and Wellington public transport plans are based on an increased public transport task.
Fare box recovery rates have improved in Auckland and Wellington. Currently expenditure is in the middle of the funding range.
The proposal is for a gradual increase in the funding range to cover forecast passenger growth and for some public transport infrastructure work (such as park and ride facilities).
There is a need to keep focus on value for money, and ensure fare box recovery rates are at the expected levels.
Over optimistic forecasts, that’s a bit rich coming from the MoT, for example remember this graph showing actual vs forecast vehicle travel.
Of the big investments in PT in the last decade, the rail network and the busway, in both cases they are performing ahead of expectations. In the case of the rail network, we are ahead of those expectations despite the trains taking about 2 years longer to fully enter service like the earlier assessments had identified. We’re also performing ahead of the MoT’s expectations when it comes to ridership for the CRL. At one point, they claimed we wouldn’t meet the 20 million trips by 2020 yet at current rates, we’ll hit it this calendar year.
Consultation on the GPS is open till the end of March.
More was spent on transport in Auckland during the last financial year (to end of June 2016) than any time in the past, at least in nominal values. Based on the NZTA’s funding data, $1.435 billion was spent in the region in the year to June-2016, up slightly from $1.414 billion spent in the 2015 financial year. Although it’s quite likely that these figures only include spending associated with the National Land Transport Fund (NLTF) and not council direct spending, such as has been happening with the City Rail link where the council funded 100% of the early works (which the government will share the costs of in the future).
The graph below shows how much the council and the NZTA say they spent and it’s risen substantially from a comparatively paltry $400 million in 2002. Also on the graph you can see Auckland’s share compared to the entire country which has been hovering around the 35% mark. This is slightly more than Auckland’s share of the national population (over 34%) but below Auckland’s share of GDP (36.6%). Of the over $1.4 billion spent, 51% of it went on various state highway projects and maintenance.
Below is the same data but at a national level, although I only have it back to 2005. It shows that at $3.94 billion, we spent slightly less than the previous year. At a national level, an even greater share went on state highways with 55% of all spending going on them.
So how did other regions fare? Here’s how the 2016 figures broke down by region.
Because regions vary so much, I’ve also broken this down per capita to get a better picture of where the spending occurred. Like last year, the West Coast seems to dominate but this will be mainly due to the maintenance needed on a large road network covering a very low population base. Also like last year, the Waikato comes in second on the per capita stakes but this is more due to the large amount of construction going on with projects like the Waikato Expressway.
I’ve also looked at the results based on spending per vehicle kilometres travelled (VKT), as a proxy for spend per travel. This method is probably a little unfair primarily to Auckland and Wellington which have larger uses of public transport than other parts of NZ.
Next, I’ve taken a look at what the money is being spent on however I’ve excluded the small ones such as transport planning as it’s difficult to see them on the same scale as road spending. You can see that spending on new and improved roads increased in the last year while the opposite was true for road maintenance. Combined both road spending was slightly less than last year which is in line with the overall results above. But PT spending was also down too and down substantially. I’m not sure of their reason for this but as you’ll see shortly, it wasn’t the result of changes in Auckland. You can also see spending on walking and cycling becoming more visible.
Here is just the cycling info showing how dramatic a change it has seen in the last few years.
Finally, here is the same break-down by activity for Auckland. The thing you notice compared to the whole of NZ one is the difference in the levels of new road spending vs maintenance. Of course, public transport is also more of a factor in Auckland, as you would expect.
Overall some interesting data on what we spend our transport money on.
With the release of the Auckland Transport Alignment Project (ATAP) it once again got me thinking about a funding anomaly in our transport system, the Rapid Transit Network (RTN), or the Proposed Future Strategic Public Transport Network as ATAP calls it.
The general way in which we fund transport in New Zealand hasn’t changed for decades, if not close to a century. State Highways are fully funded by central government while local roads and public transport (except rail infrastructure) are funded roughly 50% by central government with the other half coming from local governments (by way of rates) – there are a few exceptions that sit outside of this but by in large it hasn’t changed.
One of the reasons for State highways being fully funded is that they are considered a strategic network. They’re the key roads linking regions, cities and towns together throughout the country. Within cities like Auckland they, primarily in the form of the motorways, do the same thing but also link disparate parts of the city. Here’s what the NZTA say about them:
The state highway network provides a strategic roading link between districts and regions. State highways help to facilitate the safe and efficient movement of people and goods throughout the entire length and breadth of the country. They link main centres of population to industrial hubs and tourism destinations. State highways also play an important role in delivering public transport solutions. In our planning, we work to build connections with local networks and maintain the functioning of the state highway.
As mentioned above, ATAP has described future strategic PT network to go along with a strategic road network. This is important as it’s a recognition that high quality PT has a key role to play in Auckland’s future. Here’s what ATAP says about them both:
Auckland’s strategic road, rail and public transport networks are the most critical elements of the city’s transport system. It is essential to maintain and develop strong, safe and resilient strategic networks that can cope with increased demand.
Further information in ATAP describes these strategic networks as the “Backbone”, linking major locations and providing for highest volumes of movement. Here is the proposed future strategic road network. Most of the Tier 1 routes are already state highways or proposed to be them (East West Link) with the biggest exception being Te Irirangi Dr and Ti Rakau Dr.
According to the NZTA as of 2015, across the country state highways make up just 11.5% of all roads (12.7% by the number of lane km) but in Auckland this is just 3.9% of roads (6.6% by lane km). Yet these roads are responsible for a large portion of traffic with as much as 48.5% of all vehicle km travelled estimated to be on state highways. These figures are shown below.
Because of their strategic status, state highways also get a lot of funding. In the current 3-year National Land Transport Programme (NLTP), across New Zealand state highways are allocated $4.2 billion for improvements and another $1.7 billion for maintenance. By comparison just $465 million is allocated for improving local roads, $1.7b for maintenance of local roads while public transport gets $1 billion, mainly for services – and around half of these figures are paid for by local rates.
A big question going forward is how we’re going to pay to develop that strategic PT network. One fear I have is that the deal for City Rail Link, where the council and government share the costs 50:50, has set a precedent in how we fund the rest of the PT network. Auckland needing to fund 50% of all PT, regardless of how important or valuable it is, while even every minor state highway project gets 100% funding will continue to lead to even more perverse outcomes than we already have.
So, given both the strategic road and PT networks are serving essentially the same purpose, why shouldn’t they be funding the same? Why should it matter what mode is being built if it’s considered a strategic network?
I feel this is going to become a greater and greater issue, especially with the upcoming completion of the Western Ring Route. Once Waterview early next year is completed we will have all the key inter-regional links in place. From that point out any motorway projects within the urban area are just about increasing capacity for local movements.
Ultimately, I think a wider funding discussion is needed. ATAP doesn’t break down the costs of developing transport too much but does suggest that over all modes there is a funding gap of up to $400 million annually. There will obviously be a lot of future discussion about how to close that gap and those discussions could go on for many, many years. In the interim perhaps it’s time for the government and council to rethink how funding is structured. Here are a couple of ideas:
- The strategic PT network is treated the same as the strategic road network and funded 100% from the NZTA out of the NLTP, this includes rail infrastructure which is funded directly by the government.
- Perhaps combined with 100% funding, the development of the strategic PT network is handed over to the NZTA
- Another option could be that Auckland is given bulk funding for transport and Auckland Transport’s role expanded to including the development and maintenance of the local state highway network and local rail network. This would allow all transport projects in the region to be assessed, prioritised and funded under the same conditions.
What do you think, should strategic PT corridors be funded the same as their corresponding road networks and how would you do it?
As I briefly mentioned last week, I think road pricing is a discussion that’s only going to increase in Auckland in the future. Len Brown has been talking about it for some time and Mayoral Candidate Phil Goff has already said he supports some form of road charging. We also know that road pricing is being considered as part of the ATAP process. With this post I wanted to look into it a bit more.
At a high level there are two main goals in the push behind road pricing. One is a desire to manage demand for roads thereby improving their efficiency, which can deliver a mix of benefits such as reducing congestion and potentially the need for expensive and increasingly contentious projects. In this situation the aim is to use road pricing tools to change individuals behaviour. The second main goal is a desire to use road pricing as tool to supplement fuel taxes and/or raise additional money which can then be fed back to spend on more transport projects. In this situation the aim is to collect as much money as cheaply as possible.
The ATAP process is looking at road pricing from a demand management point of view while the mayor’s Consensus Building Group and subsequent Long Term Plan discussion were examples of a revenue gathering focus. In the recent discussion the tool of choice for revenue gathering has been motorway tolling where people are charged for entering the motorway but there are other solutions too:
- Cordon pricing charges people for driving past a certain point and Auckland with it’s natural and man-made boundaries is almost uniquely set up for that.
- A slightly more advanced version and like what happens in London is an area charge whereby there is a cordon inside of which are a number of checkpoints to pick up trips made within the cordon.
As an example the two maps below from a report into road pricing in Auckland from 2008 show the difference – in this case using a double cordon.
There appear to be a are a couple of major problems with many of these solutions.
- Tolling just the motorways opens up the issue of diversion where drivers shift to non-motorway routes – as has already been seen without road pricing and if motorway tolling was turned on I imagine it would only amplify.
- Cordons can have significant boundary effects, in the example above those living in the inner suburbs, the ones who might have the most alternative options, pay nothing for driving within the area but those further out will pay for travelling over a line.
- The area charging is a little fairer on the boundary effects due to the scattered checkpoints to pick up on inter-area travel but as we also know, congestion isn’t limited to the city centre and a central area charge won’t stop Manukau from clogging up.
One of the problems with all of these technologies is they can be very expensive to install with multiple sites needing to be set up and maintained to capture the details of all passing vehicles. As a result, collection costs are normally quite high. In the case of the Northern Gateway Toll Road collection costs usually eat up 25-30% of the toll collected and reports indicate similar levels would be expected in these situations. In addition to just how revenue is collected there is also the issue of just how much is charged. Flat tolls can still leave roads busy and congested at peak times.
The holy grail of road pricing these days appears to be to use GPS to deliver dynamic road pricing. With it, people can be charged for how far they travel, where they travel, when they travel and just how busy the roads they travel on are. If the roads you want to travel on are busy then it will cost you more to join in and travel at the same time.
Interestingly some places are already starting to look at using GPS based road pricing to better manage their road systems. Singapore has been at the forefront of road pricing and was one of the first cities to implement it. They currently use a network of around 80 gantries located around the city that record passing vehicles.
An ERP gantry in Singapore
Just over a month ago, Singapore announced it had awarded a tender to replace their current gantry set-up with a GPS based one in 2020. The new system will cost about NZ $600 million and the cost and difficulty of maintaining the current system was listed as one of the reasons for doing so.
This next-generation ERP system will allow for more flexibility in managing traffic congestion through distance-based road pricing, where motorists are charged according to the distance travelled on congested roads, which would be fairer to motorists. It will also be able to overcome the constraints of physical gantries, which are costly and take up land space. In addition, off-peak car users can look forward to new policies which LTA is considering, which may allow them to pay only for using their vehicles for short periods rather than the whole day, or for using them only on uncongested roads. A new On-Board Unit (OBU) will replace the existing In-Vehicle Unit (IU), which can also be used to deliver additional services to motorists. For example, LTA will be able to disseminate traffic advisories through the OBU. The OBU can also be used to pay for parking, checkpoint tolls, and usage of off-peak cars electronically.
In my view, if we’re going to go to the cost and trouble of implementing a road pricing solution – and on the surface at least there seems a valid case to do so – it seems we might a swell skip the gantry phase and move straight to a GPS solution
Another interesting recent system is OReGO in Oregon. While not time of use pricing, it does introduce distance based pricing using a small device that plugs in most relatively modern vehicles. The basic version only charges based on distance and rebates users for the amount of fuel taxes they would have paid however 3rd parties offer GPS tracking and other features. It wouldn’t be a stretch to have versions in the future which enable time of day pricing.
One of the challenges of road pricing is whether it’s only needed in Auckland of if the solution is something that needs to be rolled out to the entire country. OReGO also gives an idea as to how GPS based road pricing could be implemented in NZ – this is also based on a post by Stu back in 2011.
- People can get approved GPS tracking devices from AT/NZTA or third parties to install in their cars. These devices record time/distance/location, for which users pay differential rates.
- Users that sign up to the time-of-use pricing scheme would then be exempt from fuel taxes (there would need to be some verification and/or refund process).
- People who did not want to participate in the scheme would remain with the current system. So fuel taxes would operate alongside the GPS scheme but prices would be adjusted over time to encourage the use of GPS tracking.
A voluntary system might not have the immediate impacts on congestion as turning on motorway tolls but ultimately it’s an approach that be required to get public buy in.
What are your thoughts on road pricing and would you sign up it (for those times you’re not on PT or walking/cycling).
It’s the last day of 2025 so it is a good time to run through the events of the last ten years in Auckland. A decade of profound transformation for New Zealand’s largest city. A coming of age.
This is Part 1 of a 2 Part scenario.
Global megatrends mean local megachange, and Auckland is fortunate to have been well placed and nimble enough to largely come out on the positive side of these forces. We have seen the global trends of the first decade and a half of the 21C accelerate over the last decade, particularly:
- Migration: Internationally another great age of people movement is clearly underway
- Urbanisation: Both the developing world and the OECD nations have continued to urbanise and cities have become the economic force of our age
- De-Carbonisation: The urgent need to reduce carbon emissions everywhere and in every way has been an increasing issue
The strong population growth in Auckland seen just before this period has continued consistently. Auckland grew at around 2.5% per year from 1.5 million in 2015 to approach 2m this year [cf 2015 pop growth was 2.9%]. This has of course not been without difficulty, requiring the government and the council to work much better together with the private sector to deliver the required new dwellings; hence the huge building ramp-up we are seeing, especially of apartments and terrace houses, but also the demand side controls finally enacted by government to reduce the more egregious forms of speculation. The adoption of the first Unitary Plan which reduced density restrictions in some areas helped enormously; and especially led to the new vibrancy around Rapid Transit stations such as Albany, Papatoetoe, and Glen Innes. Who’d have thought Glen Eden, among other places, would become as cool as it has with all those car yards and panel beaters shops around the station now sprouting apartments?
And although we are along way from the various crisis points we are still at the end of the global movement of peoples we’ve seen over the last decade as another one of history’s great ages of migration picks up strength, New Zealand remains an attractive place to live and Auckland in particular an increasingly attractive place to work. Not to mention all those returning New Zealanders and [smarter] Australians fleeing those seemingly endless destructive weather events across the Tasman. It has been much more difficult in other places, especially Europe, although there too these changes have helped offset natural declines and ageing populations, and are proving quite stimulatory as well as disruptive.
The ageing population is a huge issue here too; every year from 2011 another year of that demographic bubble from the post-war baby boom turned 65, the nominal age of retirement. The changes of this politically active and property rich cohort have had a big impact on the city and nation. Two main trends have been observable over the decade; one group have taken advantage of the secular price shift in Auckland property over their lifetime and sold up and headed for smaller centres around the country [providing population offsets there, but also en-greying these communities], the second group have downsized within Auckland; stimulating significant demand for rest homes but also smaller well placed dwellings, particularly apartments, in great locations near amenities. Thus we have seen the apartment boom driven by two very different ends of the market; older cashed up people and younger first home buyers and renters starting out. More on our new urban form below.
Next year of course, 2026, this group will enter a new phase as the first of them turns 80, we can expect further shifts in the retirement sector as well of increased hospital and care costs for the nation as a whole. The aged care sector is booming and the apartment market is diversifying as a result. And thankfully in Auckland the service and tourism sectors are growing strongly to contribute to these nationwide costs. We will need the regulatory changes that saw in the start of this period, the Unitary Plan, to continue to evolve in response.
The ‘Super Diversity’ trend has continued and strengthened, making Auckland a much more dynamic and vibrant place [eg Pakuranga Town Centre now in an intense rivalry with Balmoral for the bragging rights as the leading centre of Asian street style eating]. And a much more internationally connected and economically competitive one too; migrants always bring better and deeper connections back to their home nations for expanded trade and social interaction. Also the creative sector has witness a great outburst of productivity as people bridging more than one culture so often are stimulated to respond to the tensions of that situation creatively.
Urbanisation- and the rise of the Suburban Centres
Called the Metropolitan Revolution and the Great Inversion even before our period began, the stunning re-emgengence of cities as the economic, cultural, and environmental force of our age has continued strongly. The strength with which Auckland has risen to take its clear place as the Primary City of the South Pacific region has caused rumblings in the rest of the country, but happily successive governments have come understand the value of the city’s rise for the whole nation [and new urban policies have benefited our other urban centres too; for they too are having their own Metropolitan Revolutions]. Auckland is competing strongly with the equally resurgent cities of the Australian seaboard; Australian cities helping to soften the blow of the structural decline in the hard commodity extractive industries there, despite the climate impacts all through that continent.
Auckland City Centre population doubled from 20k in 2005 to 41k in 2015, and doubled again to over 80k now. These new apartment buildings substantially changing the skyline, and their new occupants substantially changing the street life below. Wynyard Quarter, the whole of the western side down from the Hobson St ridge, and elsewhere are now covered in new residential buildings and streets buzzing with new retail, hospo, offices, and above all that great resource; people. Architecturally the full range is on show, we all have our favourites [and otherwise]. I particularly like the new 50 story block with the grand atrium linking Fort St through to the new shared space on lower Shortland St, and of course the development of the parking stump [at last!] out the back of high street with new apartments above in the daring light-weight structure. Just a couple of examples.
But of course this growth of the centre is nowhere near the whole story, the strong boom in long dormant subcenters has been as a big if not bigger story this decade. New Lynn has its sixth apartment tower now, and looks unstoppable after the huge boost it received with the opening of the CRL [more on that in Part 2] and the conversion of industrial land to housing. Manukau City, is at last gaining a true identity on the back of its intensification, and even Pakuranga Town Centre is thriving, after that big fight over the now canned flyover; the Busway there is booming inevitably leading to talk of converting it to Light Rail in the future. Albany is now an actual place with residents in quantity giving even that maddeningly planed environment life and character, it has been extraordinary watching it really take off with the Busway extension and those new mixed-use apartments.
Every Metro Centre has benefited from the removal of Parking Minimums and the rise of ride-share [more on that tomorrow too], the range of small and affordable living spaces all across the city made possible by unbundling them from parking and the improvements in Transit quality has been great for everyone, especially students and the many singles and couples not wishing to share. It has also led to many new entrants in the development business as the cost barriers to entry are lower. Smaller building firms are now building multi-unit dwellings instead of only detached houses, creating a much more varied market.
Local quality and identity is the new groove; made possible by new high volumes of dwellings clustered around Transit Stations. All sorts of places are transforming on this model from Papatoetoe, Onehunga, and Albany and of course all along the Western line, where the transformed access to employment, education, and entertainment made possible by the CRL has led to explosions of activity.
The rapid re-greening of the whole city secured through the somewhat controversial Urban Canopy rules in the Heat Island Regulation of the second Super City Mayoralty is now accepted as universally successful. This by-law requires every public parking space to covered by a solid canopy of tree cover or face a sharp penalty was of course resisted by carpark owners, but is well loved by the public and has generated measurable heat island effect reductions and rapidly improved the city’s tree cover with all the additional ongoing positive outcomes urban trees bring. While also making many previously dreary places instantly glorious. Not to mention creating a whole industry for arborists and landscapers, that newly sexy profession. The many passionate debates about tree varieties often pitting the urban food growing movement up against the botanically correct: It is interesting to see how by choosing a consistent kind of tree a community can almost brand their neighbourhood.
But it is the Centre City that has seen the most transformation; Albert St now is giddily vertiginous with so many new tall buildings, the rebuilt leafy and peopled streetscape, and of course the sleek movement of trains below. Everywhere within the broader Queen St valley from the University ridge to the east across to the western slope down to Victoria Park is thrumming with people and largely absent of cars and fumes. And the whole roiling scene now tips effortlessly down to the newly opened waterfront which offers such an irresistable pull: This is so obviously an extraordinarily positive and productive revolution that it beggars the mind what took us so long to achieve it. Perhaps it really did need the right Zeitgeist, or simply enough people of vision in positions of power?
Part 2 up next: Transport.
NB: This ‘History of the Next Ten Years’ is a scenario, not a prediction, a possible future, perhaps even a probable one, but that depends on decisions made now and in the near future…discuss…
Two weeks ago John Key confirmed that the government would cover half of the costs of the City Rail Link and allow for main works to start in 2018. Immediately questions began about how the Auckland Council would cover its share of the expected $2.5 billion cost. Equally quickly Mayor Len Brown was once again raising the issue of road tolling, suggesting it was needed to pay for it.
The government confirmed yesterday it would pay about half the cost of the project, allowing work on part of the project involving a tunnelling machine to begin earlier in 2018.
Mayor Len Brown believes he has the backing of most Aucklanders to introduce higher road taxes and impose tolls to pay for the city’s half of the bill.
But Mr Brown told Morning Report road tolls were part of a range of transport funding options, and in the long term could not be overlooked.
“We know that we don’t have enough money through rates and borrowings, even if we sold things like the airport shares or the port shares, it’s still not enough.
“It is a critical issue with the growth of the city with the transport investment needs that we have and the City Rail Link in the end, with the $65 billion we’ve got to spend over the next 30 years, is only a small part of it.”
Mr Brown said he could not see any other way of raising extra revenue than with a motorway toll.
Quite why Len is suddenly raising the issue of road tolls again is odd for a few reasons.
Long Term Plan
Last year the council spent a lot of effort discussing the Long Term Plan – the 10-year budget. As part of that process they presented Aucklanders with a binary choice of either a programme of works that would build:
- a basic version funded out of rate rises of 3.5% but that built very little over the coming decades.
- almost every transport project ever dreamed up requiring lots of additional funding and still saw congestion predicted to get worse than it is today. To pay for the up to $12 billion extra that would be needed the council proposed either:
- road pricing on motorways
- a combination of additional rates increases and regional fuel taxes
The important thing though is that both versions of the transport plan included the funding for the City Rail Link. That means the project was never subject to the alternative funding options like Len is suggesting now.
To realise either of funding options for the Auckland Plan option it would have required government approval and that didn’t happen. So instead the council ended up implementing a three-year interim transport levy of $99 for households and $159 for businesses with the money from it earmarked primarily for PT, walking and cycling projects. There is absolutely no reason why the transport levy couldn’t be continued in to the future which is enough to effectively fund a sensible middle option of something between the two original LTP transport plans.
Just coming back to the CRL, the council’s own LTP documents show the project already has funding budgeted for it over the next decade. It includes the expected contribution from the government – which the council correctly assumed would be on board by then.
click to enlarge
As you know the Auckland Transport Alignment Project (ATAP) is currently going on and is reviewing options and timings for future transport projects in Auckland (the CRL and East-West link sat outside of this). In the Terms of Reference it specifically mentions road pricing, saying they will consider (I’ve underlined the important part)
all land transport interventions, including roads, rail, public transport, personal mobility services, walking, cycling, technology, network optimisation and demand management (including pricing for demand management purposes)
In other words, as part of the process they’re looking at what impact road pricing could have but not as a revenue gathering tool like Len wants but as a demand management one. The distinction between the two are important and would likely lead to quite different looking systems. As the name implies a demand management tool is really about trying to optimise the use of transport networks we have by using road pricing to keep roads from becoming congested. We’ve long suggested that if implemented it should be introduced in a revenue neutral way, lowering rates by the amount raised from the road pricing. In our view doing it this way would separate a potentially very useful tool from the more politically fraught issue of raising more money as by tying the two together it’s more likely neither will happen.
Perhaps the biggest benefit of road pricing is that it changes the question from how much traffic do we need to accommodate to how much do we want to accommodate. With it, it will almost certainly change the priority of many projects and it would kill off many projects altogether. For example, spending billions to widen or duplicate a motorway because an (unreliable) traffic model says vehicle volumes will increase in the future likely becomes a thing of the past. Every silly project that is no longer needed means a less extra funding that needs to be raised, easing pressure on Aucklanders and the government.
Of course to really implement road pricing we really need a much more complete range of good quality alternative options but if we know we’re going to do it in the future it should allow us to prioritise what is needed before that happens.
In conclusion, the council’s plans have the CRL clearly in the budget even if we had stuck with the no additional funding option. As such it seems that Len was perhaps trying to reignite the debate about road tolls from last year in a bit to push once again for a more build everything approach. But given the ATAP process is well under-way it seems the best option right now is to wait and see what comes from that. The only other option for why he would suggest it is perhaps to keep the idea in the government’s head so they know the issue hasn’t gone away.
For the year to the end of June the government and councils across New Zealand collectively spent $4 billion on transport – the first time spending has crossed that mark and about double what we spent a year just a decade earlier.
Helpfully the NZTA have just updated their data showing just were that spending and so with this post I thought I’d highlight some of that.
First up here’s how spending has changed over time at a national level. The NZTA figures includes their share of funding for local roads and other aspects such as public transport. In total just under 50% of money goes on local projects (which includes PT) while just over 50% goes towards state highways.
And here’s what this looks like for the Auckland region where over the last year $1.4 billion has been spent. In Auckland the share going to State Highways is slightly higher them getting 54% of the funding
By now some of you have probably already worked out that Auckland received about 35% of the total funding, which is slightly more than its share of the nation’s population – although given the level of growth that’s occurring not necessarily unreasonable. So how did the other regions fare?
Comparing the data to population information a couple of regions really stand out – getting considerably more investment than other regions on a per capita basis. Those are the three W’s Waikato, Wellington and the West Coast. The chart below shows how much we spent per person and includes the money council’s spent. One I expected to be higher is Canterbury given the amount of work going on however this seems to be more in line with the historically trend of the region having a lower per capita spend on transport
The next charts break down the spending by funding activity. I’ve excluded the small ones such as transport planning as it’s difficult to see them on the same scale as road spending. In the NZ chart you can see that overall spending on new and improved roads was reached $1.8 billion last year and was the largest single activity. At the other end of the scale you can see the impact of increases in the cycling budgets starting to come through and become more visible. I’d expect this to continue with the government’s cycleway spending coming through.
And in Auckland the spending on new and improved roads is even more pronounced with much of it being the money being spent on the Western Ring Route
The NZTA have quite a bit of data available and there are lots of ways of looking at this. Let us know in the comments if there’s some other way you’d like to see it cut or if you’ve done your own analysis.