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By Matt L, on February 3rd, 2012 The government has released the briefings ministers received from their ministries and of course this blog is fairly interested in what the transport ministry has to say. The briefing has been split into two sections, one giving an overview of the portfolio and the other the policy challenges and upcoming decisions.
The first briefing gives a fairly high level description of what the portfolio is about, what the ministry does and what powers the minister has. It also goes through the various law and rule changes that have happened recently and the levels of funding that the ministry/portfolio is involved in. Overall there isn’t really anything new in here but that is what I would expect to see.
The second briefing on the policy challenges and upcoming decisions is much more interesting as it gives a good indication on the ministries thoughts which are what are likely to heavily influence the minister. The first section that really caught my eye was the section on oil prices on page 17. It seems that there is a bit of confusion in the message they want to deliver, first up there is a sort of high level comment about oil prices saying:
Almost all road transport is fuelled by petroleum products. This fuel source will persist over the next 20 years, but electric and plug-in hybrid vehicles will gradually become more widely used, as the real price of oil continues to increase. However, petrol and diesel will probably still fuel around 85-90 percent of vehicles in 2030.
In the short-term, people resist changing transport usage as costs increase. However,over longer time periods, oil price increases are more likely to induce changes in travel, lifestyle, and locational decisions.
but later on the same page they say
New Zealanders have a range of preferences for how they arrange work, shopping, socialising, and participation in education. These lifestyle preferences usually require travel. In the short term, individuals are reluctant to make lifestyle changes when the cost of transport increases. However, sustained oil price increases are more likely to induce change in travel patterns over longer periods:
• In the medium term (say 2–5 years), people can purchase more fuel efficient vehicles and make greater use of public transport, cycling and walking, where those choices are feasible.
• In the longer term (5–20 years), people will be more willing to make substantive and permanent changes to lifestyles in order to reduce their transport demand. For example changing patterns of social interaction, and living closer to places of employment and education.
So in 20 years time with high oil prices most vehicles will still be powered by oil based fuels but at the same time now where near as many will be driving them as most people would have made large changes to their lives to reduce their demand for transport or at least oil fuelled transport (but more on that soon).
The next thing that caught my eye was in the section on Land Transport starting at page 20. In the very first comment they say:
It will be increasingly important to manage the existing land transport network to its full potential.
There are wider economic impacts that cannot easily be estimated and considered in the traditional benefit cost ratio (BCR) evaluation framework. The current BCR assessment is based on a relatively high discount rate (8 percent real) and a 30-year horizon. This rate tends to discount away the benefits of long-life projects, such as motorways.
In the cities, cars remain the dominant means of people transport. Urban transport networks will need to become more effective through better use of infrastructure, urban planning, demand management tools and public transport increasing its role.
They acknowledge that we need to move away from the traditional BCR framework but this is exactly the thing they slammed the CRL business case for, it has also noted here in the past about just how much impact having a high discount rate and relatively short assessment time frame has on the outcomes of projects.
Continuing to work my way through the document I really had to have a chuckle at these two comments:
55. New investment in State highways is evaluated by the NZ Transport Agency (NZTA) using three criteria.
(a) Strategic fit which considers national strategic objectives as specified in the Government Policy Statement on Land Transport (GPS)
(b) Effectiveness which considers how well proposed activity would achieve the GPS impacts identified in strategic fit
(c) Efficiency which measures the BCRs
57. The major highway projects tend to score well on strategic fit. The BCRs for major improvements to the network have declined in recent years.
Basically that means the government tells the NZTA what projects it want and if the NZTA goes to do them then they can tick off two of the three assessment boxes which means that economic considerations get largely pushed out of the way and that is evidenced in the last part of comment 57. In just 5 years we have gone from have over half of all approved projects having high BCR’s to over half of them having low BCR’s. That’s an astounding change in such a short time considering there are a large number of projects out there that haven’t even been approved yet, things like Puhoi to Wellsford or the group of projects in Wellington.
The last thing I will cover in this post is showing just how much our transport expenditure has changed over time, as you can see spending has really ramped up in the last few years and in the space of about 5 years we have more than doubled how much we spend as a percentage of GDP. Of note the transport and storage sector accounts for around 5.2% of all of our GDP
There is quite a bit more to cover, especially the parts that relate to Auckland but I will leave that for the next post
By admin, on January 15th, 2012 While I have often complained about transport not being in the top of people’s minds when voting in nationwide elections, yet so many decisions are made by central government – the flip side of this (and unfortunately it seems that we do get the worst of both worlds) is seeing the transport debate becoming more and more partisan. For some reason, in New Zealand it would seem as though the political right tends to support roads-first transport policies; while the political left is more friendly towards public transport. There are some fairly obvious ideological reasons behind this: the individualised nature of auto-focused transport may appeal ideologically to those who lean to the right, while the more ‘collective’ nature of public transport can appeal to those on the left. Public transport also usually requires a level of subsidy, which further puts off those to the right of the political debate.
What’s strange though is how centre-right governments overseas often take a very different viewpoint of public transport – even of rail, which seems to be a particular dislike of centre-right politicians here in New Zealand. For example, just a few days ago we saw the Conservative Government in the UK approve the £30 billion+ High Speed 2 rail scheme, even in times of significant economic troubles. And, reading through the press release and reasoning behind the decision, it’s a far cry from our government’s approval of electrification – which seemed to be a very reluctant “oh we’d better continue this because we reluctantly promised to do so before the 2008 election”. Here are some sections of the UK government’s position on High Speed 2:
I have decided Britain should embark upon the most significant transport infrastructure project since the building of the motorways by supporting the development and delivery of a new national high speed rail network. By following in the footsteps of the 19th century railway pioneers, the Government is signalling its commitment to providing 21st century infrastructure and connections – laying the groundwork for long-term, sustainable economic growth.
High Speed 2 (HS2) is a scheme to deliver hugely enhanced rail capacity and connectivity between Britain’s major conurbations. It is the largest transport infrastructure investment in the UK for a generation, and, with the exception of High Speed 1 (HS1), is the first major new railway line since the Victorian era.
The HS2 Y network will provide direct, high capacity, high speed links between London, Birmingham, Leeds and Manchester, with intermediate stations in the East Midlands and South Yorkshire. There will also be direct links to Heathrow Airport and to the Continent via the HS1 line. It will form a foundation for a potentially wider high speed network in years to come.
A recognition that rail is the way of the future, and not (as I sometimes sense the attitude towards it in NZ is), some relic of the 19th century. The benefits of the project are well understood by the government, and clearly articulated. No Ministry of Transport hatchet job here:
HS2 will be built in two phases to ensure that the benefits of high speed rail are realised at the earliest possible opportunity. The line from London to the West Midlands and the connection to HS1 are expected to open in 2026, followed, in 2032-33, by the onward legs to Manchester and Leeds and the connection to Heathrow. The capital cost at 2011 prices of building the complete Y network is £32.7 billion. At present values, it will generate benefits of up to £47 billion and fare revenues of up to £34 billion over a 60-year period.
The benefits of HS2 will extend beyond the network itself; links to current lines will enable direct trains to run to cities such as Liverpool, Newcastle, Glasgow and Edinburgh and, with long-distance services transferring to the new network, space will be freed up for new commuter, regional and freight services on other lines, opening up new opportunities for Britain’s existing railways. Links to key urban transport networks, such as Crossrail, will help to spread the benefits further still.
There’s also some clear recognition of the project’s environmental benefits:
HS2 is entirely consistent with the Government’s objectives for carbon emissions. Electrified rail is a comparatively low-carbon mode of transport, especially with the continued decarbonisation of the grid. Speed increases power consumption, but also makes HS2 more attractive to those currently flying or driving. The faster journeys on HS2 – Edinburgh and Glasgow will be just 3.5 hours from London – could transfer around 4.5 million journeys per year who might otherwise have travelled by air and 9 million from the roads. HS2 will also create more rail capacity on existing conventional speed lines for freight – removing lorries from our busy trunk roads. HS2 is therefore an important part of transport’s low-carbon future.
I can’t quite imagine those words coming out of Steven Joyce or Gerry Brownlee’s mouth.
Another example is the Victorian State Government elections of 2010, where the centre-right Coalition was generally found to have better transport policies than the incumbent Labor government – which (apparently) played a significant role in their victory. Here’s what the politically independent Public Transport Users Association said about the respective policies heading into the election:
With public transport the big issue for many voters, the Public Transport Users Association (PTUA) has given its verdict on the transport policies of the parties going into the State Election, with the Greens coming out on top, followed by the Coalition.
PTUA President Daniel Bowen said that packed trains, slow trams, and infrequent buses had voters looking to all political parties for a solution to Melbourne and Victoria’s transport woes.
And he said the Green and Coalition promises for reform through an independent public transport authority were crucial in their party policies receiving the best marks.
“The Greens scored an A, and have an aggressive agenda to upgrade public transport, with a Public Transport Authority being central to better managing and planning the network. The vision of frequent public transport across Melbourne is welcome, and would provide more residents with a genuine alternative to car travel.”
Of the two major parties, Mr Bowen said the Coalition had come out with a stronger set of policies than Labor, and scored a B.
“The Coalition has a number of positive policies, underpinned by a pledge to buy 40 additional trains, and introduce a Public Transport Development Authority to provide central management and planning.
“While we have concerns over the Coalition’s push for the east-west cross-city road tunnel, the pledge of feasibility studies for rail to Doncaster, the Airport and Rowville, as well as level crossing eliminations are very welcome.”
Mr Bowen said that Labor were promising some worthwhile upgrades, ultimately they fell short of what is needed, scoring a C. “Labor seems to have no overall vision for a fast, frequent, connected network across Melbourne and Victoria, and have ignored community calls for a shakeup of the management of public transport, which has scores of organisations involved but nobody taking responsibility for such essentials as making sure buses meet trains.”
Mr Bowen said that despite Labor deservedly trumpeting Smartbus as a success story, it was disappointing that they had not pledging any new Smartbus routes. Labor also lost points for continuing to push the destructive North-East freeway link.
I am rather struggling to understand why New Zealand has to be so different from what is happening elsewhere in the world – where we see centre-right governments that really value public transport and genuinely want to see it improved (rather than having to be dragged kicking and screaming into any steps in the right direction). There doesn’t seem to be any particularly logical reason why the Conservative Party in the UK would value public transport investment so much, while our National Party seems instinctively suspicious that the whole thing is a communist plot.
But perhaps more important than speculating on why this is such a problem in New Zealand, we should start looking for ways in which we can change this. How can we sell the benefits of a smarter and more balanced transport policy to the political right? How can we reassure them that spending on public transport isn’t flushing money down the toilet? How can we enlighten them to understand the benefits of a well functioning rail network, so they’re actually pushing for improvements – rather than always being the skeptical ones sitting on the hand-brake? I know that readers and commenters on this blog come from right across the political spectrum, and I know many people with right-leaning tendencies who agree with the general thrust of posts on this blog – but something’s missing here. Some connection isn’t being made and I really feel that, as a country, we will probably only really start to make long-term structural changes to the nature of our transport system – so it’s more balanced, sustainable and sensible – when we can shift the debate away from being so partisan.
But how do we do that?
By admin, on December 31st, 2011 Trying to get my head around whether 2011 was a good year or not such a good year for advocates of a more balanced transport system like myself, is a bit of a challenge. There were a number of good things which happened, but at the same time there were also a number of steps backward. Here’s my brief summary of the year.
The early months of 2011 were a time when Auckland Council and Auckland Transport were still very much “settling in”. We saw some really interesting first glimpses of what the council’s vision for Auckland’s city centre was in January, we found out that Len Brown’s goal for public transport patronage was 150 million trips a year by 2021 (and we wondered how that would be achieved). We also saw construction of the now open Wynyard Quarter tram loop. Submissions on preferred options for the Puhoi-Warkworth section of the holiday highway were written.
The February 22 earthquake in Christchurch obviously stands out as the whole country’s biggest event of the year, but seemed to have a remarkably little impact on the transport discussion here in Auckland. The government passed over a golden opportunity to back down over Puhoi-Wellsford (or at least downgrade it to something more sensible at a time when the whole country would have understood such a move), while Auckland Council sensibly pointed out that it would be many more years before serious money for the City Rail Link project was required. Behind the scenes, it was becoming fairly clear that officials reviewing the business case for the CRL were unlikely to come to agreement on the project’s merits.
In March the Auckland Unleashed discussion document was released, outlining the Council’s vision – at a broad-bush level – for Auckland over the next 30 years. We saw a great video of Len Brown’s rail vision for Auckland, but once again this positivity was tempered by the government’s feedback on the document (weirdly released before the discussion document) that pushed for more sprawl and more roads. Following hot on the heels of all that spatial plan discussion, we finally saw some progress on the implementation of a smartcard ticketing system in Auckland, with the launch of HOP. Unfortunately the complexity of the deal done between Auckland Transport, Thales, Snapper, NZ Bus, NZTA and so forth meant that the launch was generally met more by confusion than celebration.
From the optimism of those early months (earthquakes aside), the middle months of the year were a little more depressing – although the superb patronage stats throughout the year tempered this disappointment. The 2012 Government Policy Statement for Land Transport Funding turned out to be even stupider and more roads-obsessed than its 2009 predecessor, proposing additional RoNS that were so crazy they didn’t even end up being adopted into National’s election transport policy. But perhaps the biggest disappointment of those middle months was the review of the City Rail Link project, with the narrow-minded thinking of Ministry of Transport officials ignoring matters as fundamental as the bus and car capacity of the CBD when assessing the merits of the project. It was not a great year for the MoT, who also managed to forget to record the spending of around $180 million.
On a brighter note, the actual implementation of the HOP card went smoother than most (including myself) had expected. Bus loading times declined dramatically thanks to the speed of tagging on (although I still get annoyed at the cash-paying idiots who block the whole entranceway – any chance of some signage NZ Bus?) On a personal note, June was a pretty epic month with baby Adele arriving five weeks earlier than anticipated, leading to a couple of weeks of very regular travel to the hospital.
August saw the introduction of the Outer Link bus, as well as significance reconfiguration of all Western Bays services. Although further tweaks have been necessary (and probably will continue to be necessary in the future), overall the changes were very positive and have led to an increase in patronage exceeding what was forecast. After that, all eyes turned to the Rugby World Cup, which began on that fateful day of September 9th.
The transport chaos of RWC opening night was very unfortunate, but told us some very insightful things. As suspected, the CCO model of delivering many of council’s services through separate agencies did mean that they became siloed and didn’t talk to each other over matters as simple as the number of people expected to attend opening night. The highly fractured structure of running public transport in Auckland meant that everyone could point the finger at everyone else, whilst avoiding responsibility for that happened. But more positively, we also saw (and hopefully didn’t put off forever) an unprecedented willingness of Aucklanders to use public transport. There were over 140,000 rail trips around Auckland on September 9th, there probably could have been over 200,000 if we had the system to cope with them. I don’t think we’ve seen too much long-term damage from that evening, but perhaps we might see some long-term benefit with the realisation that it very much is Auckland’s public transport system that lets us down in our quest to become a truly world-class city.
During, and just after, the RWC, we saw draft versions of a number of really important documents that will help guide Auckland’s future. These included, the Draft Auckland Plan, the City Centre Master Plan, the Waterfront Plan and an Economic Development Strategy. I put together a fairly detailed submission on the Auckland Plan, and overall many thousands of submissions were received by the Council. Final decisions on these plans will be made in the first few months of next year.
In September we also found out one of the best pieces of transport news for the year – that we would get 57 electric trains rather than the originally proposed 35. The excellent work by Auckland Transport to secure this deal probably hasn’t been given the praise it deserves, especially as many tens of millions of dollars were squeezed out of the government as their contribution to the additional trains. It was also very welcome to learn that the trains are going to look damn nice too.
After the RWC was finished, the election rolled around pretty quickly. While the overall result wasn’t particularly positive, as it seems we will see more of the same from central government, there were some interesting outcomes. We will have our first transport planner MP, in the Greens’ Julie-Anne Genter, Labour’s new leader David Shearer has been a long-time supporter of public transport in Auckland, while Phil Twyford becoming labour’s transport spokerperson should also lead to a greater focus on Auckland transport issues. In the interests of fairness, we should give new transport minister Gerry Brownlee a chance before passing final judgment on him.
So overall it has been a pretty damn busy year when it comes to Auckland transport issues. As I noted at the start of this post, there have been a number of steps forward but also a number of steps backwards. 2012 should hopefully see the resolution of a number of these issues: a finalisation of the spatial plan, hopefully some agreed way forward on the merits of the City Rail Link, the proper implementation of integrated ticketing and many more interesting things.
I’m just hoping for a slightly less crazy year than this one.
By admin, on November 16th, 2011 It’s no real mystery that providing better public transport has a lot of support among the general public. Firstly we saw Len Brown’s mayoral victory last year, with much of his support due to his push for making a “transformational shift” to Auckland’s rail system in particular. Then earlier this year the NZ Herald conducted a poll, asking people whether they preferred to see the Puhoi-Wellsford road or the City Rail Link proceed. The results were fairly conclusive:
Public backing for a central Auckland rail tunnel is more than twice as strong as for the Government’s proposed new “road of national significance” north from Puhoi.
Although a Herald-DigiPoll survey has found support for the tunnel strongest in Auckland, the $2.4 billion project is also enthusing other New Zealanders, who are taking an even dimmer view of the highway proposal than the city’s residents.
The 3.5km tunnel proposal between Britomart and Mt Eden won support from 63.3 per cent of Aucklanders, compared with the highway, which was backed by 24.8 per cent.
Although tunnel support weakened to 48.1 per cent among non-Aucklanders, only 19.2 per cent said they believed the highway should get higher priority. That compared with 27.5 per who did not know and just 5.2 per cent who did not back either project.
Another poll, this time undertaken by Colmar Brunton for the World Wildlife Fund, has found similarly strong support for increasing public transport funding:
A national Colmar Brunton public opinion poll released today shows seven out of ten New Zealanders want to see more Government money going to fund public transport improvements in major towns and cities. Only 1 percent of total land transport spending is allocated to new and improved public transport.
In Auckland the rate is even higher with 78 percent of people in agreement that the government should spend a greater percentage of its Land Transport Budget on improved public transport infrastructure in major urban areas or cities over the next decade.
I think some of the result is due to the way the questions were asked, which highlighted to respondents that 59% of transport funding (as outlined in the Government Policy Statement) over the next decade will go into new and improved roads, while barely 1% will go into new public transport infrastructure. Of course as the GPS excludes rail capital funding (for some bizarre reason), in reality we will see more funds going to public transport improvements of one kind or another than 1%. (Plus I really don’t have any sympathy for the government on this issue as rail capital projects should be able to be funded from the NLTF).
Nevertheless, the poll simply reinforces what I do think is widespread support, particularly in Auckland, for a more balanced approach to transport funding. I suppose the real question though is what weight people will give to transport when choosing their vote in the upcoming election.
By admin, on October 25th, 2011 With the world cup now out of the way, all eyes will begin to turn towards the general election – which is only a month away as of tomorrow. Obviously the lead up to the election will be of particular interest to the readers of this blog, and I hope that each party’s transport policy may play some part in helping decide who you end up voting for (even if I admit that’s relatively unlikely). With that in mind, it’s probably useful to start thinking about the issue of what would make for a good transport policy?
Obviously some aspects of transport policy will come down to political ideology – although I tend to think that transport policy should be a relatively non-partisan matter (as it was in the USA up until the last few years). Most political parties agree that transport infrastructure is important and that we want good value for money (at least theoretically). It seems to me that there’s also a general agreement among most parties that some lead-investment in transport infrastructure is useful in helping to get the country through the economic difficulties it faces: both in the short-term as an employer and in the longer-term as an enabler of economic activity. Where that investment should go is, inevitably, quite highly politicised.
I’m still in the process of forming what I think makes up good transport policy – in a non-ideological and non-projects based way. Of course I want as many political parties to back the City Rail Link and to oppose the Puhoi-Wellsford holiday highway as possible – but ultimately I take that position because of what those projects represent. At a broad brush level I think good transport policy should look address the following matters:
- Give more power to local government. When people vote in nationwide elections I think transport policy is close to the last thing on their minds, but when people vote in local government elections it’s very near the top of their mind. Yet in terms of funding, central government holds the majority of the purse-strings over which projects should and should not proceed. Giving more power to local governments in the process of deciding which projects they want petrol taxes (half of which are raised from travel on local roads) to fund seems to me as an important democratic step forwards in transport policy.
- Allowing projects to compete for funding across all funding classes. At the moment state highway projects only need to compete with other state highway projects for funding, the same goes for public transport projects, walking and cycling projects and so forth. This means that even if a cycleway (for example) has a much better argument for receiving funding than a new motorway, if there’s no money left in the cycleway budget then it won’t happen – but the motorway will if there’s enough money in its standalone budget.
- Allowing petrol taxes to fund rail projects. It’s completely obvious that road users benefit from rail projects that attract people onto trains who would otherwise be driving (and therefore clogging up the roads). While current government policy accepts this to some degree, by allowing fuel taxes to be used for rail subsidies, for some bizarre reason fuel taxes can’t be used to pay for rail capital projects – which need to come out of the general government fund and compete against tax cuts and the health budget, instead of against other transport projects, for money.
- Ensure urban impacts (positive and negative) are part of a cost-benefit analysis. Transport projects are generally measured in terms of their ability to speed cars up, but that’s not always going to be the best outcome for everyone. Faster traffic means a less inviting pedestrian environment and can mean significantly reduced land-values. Projects like two-waying Hobson and Nelson Streets may slow traffic down, but in this part of Auckland that is a very good thing – and the cost-benefit analysis process should recognise this as a gain, not just a loss.
- Plan for resilience and adaptability to change. The world is a changing place and our transport demands in 20-30 years could be very different to what they are today. Oil might become a luxury item in the future, with few people able to afford to burn it in their cars. Technological change may assist personal mobility, or may result in big advances in public transport operations. Long-term decisions should be assessed against risk profiles, particularly in relation to higher oil prices.
- Integration with desired land-use outcomes. Transport is really an enabler of the land-use outcomes we want, rather than and ends in itself. If we build motorways we will get sprawl, if we want intensification we need better public transport so it’s not necessary to dedicate so much of our towns and cities to cars (their movement and storage). A good transport policy would recognise this and ensure that a key factor in approving projects would become whether it contributes to, or undermines, desired land-use outcomes.
Feel free to add your thoughts in, or to debate/dispute/discuss what I’ve said so far. The key point being that hopefully a party of any political persuasion may be able to take up some of the policy ideas because they simply make good sense.
By admin, on August 9th, 2011 With a general election later this year there should hopefully be some good debate about transport matters. A lot of this will inevitably revolve around projects: City Rail Link of Puhoi-Wellsford? In Wellington, Basin Reserve Flyover or light-rail to the airport? But should we perhaps take a step back from these debates and give a bit more thought to the fundamental way in which we allocate transport funding? What are the flaws with our current system and how could that be improved? These are all interesting questions that should be explored by the transport policies presented to us later this year – particularly by opposition parties.
Whether there are flaws in our current system of funding allocation obviously depends on what you think of the current government’s decision to prioritise roading projects, particularly building new state highway projects. The proposed Government Policy Statement shows how building new state highways will dominate funding allocation over the next six years:
 At first glance, it doesn’t seem particularly smart for us to have one aspect of our transport funding so much higher than everything else – but maybe that is simply because I don’t think we should be spending so much on new state highways. Would I feel the same about such a huge focus on say public transport infrastructure? Well good question – these are all political issues, whether one thinks that we should have more of a roads-focus or a public transport focus.
Obviously one would expect political parties to have transport policies that reflect their particular political bent. But there are some elements of funding allocation which seem obviously open to improvement – regardless of our particular political position. At a broad level, I think these are:
- Giving the regions more say over how transport money is spent in their area. In other words, providing some level of “bulk funding” to local government and leaving them to decide how they spend it. The main justification for this is that local governments are likely to have a better idea about what’s needed for their area than central government and that people tend to vote on transport issues more in local government elections than in national elections (meaning that giving them more spending power is quite democratic).
- Allowing all transport projects to compete against each other for funding. At the moment the GPS splits transport funding into various “activity classes” as shown in the different bars of the graph earlier in this post. An upper and lower band of possible funding levels are outlined in the GPS, with projects within each activity class effectively competing against each other for funding – but crucially not allowing projects across the activity classes compete against each other for funding. So we can end up with very cost-effective projects missing out on money because that activity class has been exhausted, while other low-quality projects still get funding because they have a bigger allocation in the GPS. This seems fundamentally a very inefficient process, and I would prefer simply to see the whole National Land Transport Fund being available to any project each year, with the projects ranked for funding regardless of type.
- Ensuring that all project funding is adequately “risk assessed”: By this I mean that all projects should be assessed based on higher, lower and mid-level fuel prices in the longer term, as well as other sensitivity testing about slower or faster traffic/patronage growth than expected.
These three changes to the funding allocation system seem fairly obvious and independent of political ideology, except perhaps the issue of how much direction central government should give to transport policy and how much should be decided on by local government.
What other changes could we make to the process of allocating transport funding? Obviously some decisions will always depend on the political situation (as it should in a democracy, hence the desire to give more power to local government as that’s often where transport is more of an issue in voters’ mind) but there are probably other ways of improving the effectiveness of how we spend transport dollars. NZTA spend around $3 billion a year on transport, how can we better make sure that money is allocated in the smartest possible way?
By admin, on August 2nd, 2011 The Ministry of Transport have released the cabinet paper that accompanied the final version of the Government Policy Statement – released by Steven Joyce last week. It’s worth reading through, as cabinet papers typically provide a bit more of an insight into the real thinking behind some of the decisions governments make, without much of the pointless “fluff” in media releases. There’s also a summary put together of the feedback that was received on the draft GPS.
The cabinet paper highlights the ‘range’ of feedback received on the draft GPS: I’ll come back to the details of some of the criticisms in future posts, because some of the criticism comes from somewhat surprising quarters, but for now let’s focus on issues relating to public transport funding – which was obviously a matter raised by a number of people in their submissions. There’s also a graph included, which highlights one of the big problems facing public transport provision – that its costs seems to be rising much faster than its patronage:
 As much as I hate to agree with Steven Joyce on anything, he probably has a reasonable point that when it comes to public transport services funding, there’s plenty of scope to improve things without requiring a further boost (beyond the money-go-round in rail funding that’s going on in this GPS) in the amount NZTA contribute to subsidies. The graph above would certainly indicate that the blue line of patronage should be able to increase quite a bit towards the green line. Quite simply, we need to get better value for money out of our bus and ferry subsidies (the graph above doesn’t relate to rail – which has very high per passenger subsidies so work can be done to improve that too).
However, and it is perhaps the stupidest element of what really is a pretty dumb Government Policy Statement, at the same time Joyce is demanding (quite justifiably) that we get better value for money out of PT operating expenditure, he is slashing the PT infrastructure budget. This is the very budget that makes improvements to the system so it can be more efficient, effective and attractive to passengers (thereby decreasing the reliance on subsidies). It is NZTA’s PT infrastructure fund that is helping to make integrated ticketing possible in Auckland, has helped fund rail station upgrades, could be used for bus priority improvements, parts of AMETI and the Dominion Road upgrade and so forth.
Furthermore, the government’s stubborn hatred of the Public Transport Management Act, seemingly in response to intense lobbying from NZ Bus owner Infratil, has the potential (depending on whether PTOM can be a success or not) to further lock us in to a system dependent on hugely increasing subsidies.
Ultimately, as public transport use increases there will be a need to increase the total level of subsidy – but the amount of subsidy per passenger should reduce quite dramatically. However, this is reliant upon reducing unnecessary costs and making the system more attractive. We must eliminate service duplication, avoid doing stupid things like running diesel train shuttles between Waitakere and Swanson post-electrification when a bus could do the same job at a fraction the price and ensure the system operates in a complementary and integrated way so it can be as efficient as possible. While Auckland Transport can do some of this work, I think the GPS decisions and the government’s refusal to implement the PTMA have made things quite a bit harder.
So ironically, by refusing to invest much in improving PT infrastructure (beyond rail projects already funded before this government came into power) and refusing to implement legislation designed to improve the cost-effectiveness of PT service provision, the government’s locking us into being ever more reliant on subsidies in the long run. Of course Joyce’s cabinet paper fails to mention this for some reason.
By admin, on July 27th, 2011 Well I have had the chance to read through the final version of the 2012 Government Policy Statement for land transport funding and two conclusions immediately leap into my head:
- It’s remarkably similar to the draft version. All that “consultation” seems to have been just for show.
- It’s just plain dumb. Dumb to the extent that even the Road Transport Forum aren’t happy with many parts of it (on surprisingly legitimate grounds).
If we look first at the issue of whether much changed between the draft version of the GPS and the final, this is what the Q&A has to say:
A key concern raised by some stakeholders, was that the proposed funding ranges for the maintenance and renewals of roads would be insufficient to maintain the roading networks at current levels.
In response to this feedback, the Minister increased the upper funding ranges for local road maintenance by $40 million and local road renewals by $10 million both from 2012/13. The Minister also raised the upper funding range for State highway maintenance by $25 million from 2014/15.
At the same time, to encourage efficiencies in roading maintenance, the Minister took up the suggestion from the roading industry to establish a road maintenance task force. The role of the task force will be to identify opportunities for efficiencies in maintenance and renewals, including the adoption of innovative products and methods of procurement, and to encourage their uptake through the country. The task force will be made up of individuals from industry, local government and the NZ Transport Agency.
Some stakeholders also emphasised the need for a longer-term direction to give greater planning certainty to the transport sector. To address this concern, the Minister will be releasing for stakeholders a document that summarises the government’s overallpolicy direction for transport. It is intended that this document will be released in August 2011, It will include a full summary of the key policy decisions made since the government has been in office.
While the changes are a small step in the right direction, as this post goes on it will be obvious that they really don’t address the massive issues relating to maintenance and renewals.
Like every GPS, there’s a lot of “fluff talk” up front about how the government wants transport investment to boost economic growth and how (apparently) important the state highway network is to this – and how important the various Roads of National Significance are to these goals. But what really matters are the proposed funding allocations – because that’s the real impact of the GPS: it sets the maximum and minimum amounts that NZTA can spend its money on over the next six years (and it’s interesting to see that this GPS has a six year outlook, the previous one was just for three years). The important table is included below: Because everything’s a “funding range” it can be challenging to analyse the split – so to make that easier I have assumed that the midpoint of each funding range is what ends up being spent. This is obviously not what’s actually going to happen, but it’s as good a guess as anything. This is the result:
 Put the above table into a graph (without the sub-totals of course) and you can really see how dominant the “building new state highways” funding allocation is: The fact that the new state highways allocation increases significantly throughout the period of the GPS puts huge pressure on everything else – meaning that many other funding areas have to be frozen or even decreased.
This leads to the first really dumb thing in the GPS – even if we just look at road funding there is a huge squeeze on the maintenance and renewal of roads throughout the country: both state highways and local roads. This means that while we’re going to be hugely expanding our road asset – through the giant investment in building motorways – we may not actually have enough money left over to look after what we’ve got. This is the classic outcome of political interference in transport funding: as politicians much prefer to cut ribbons on new projects than be concerned with the day-to-day maintenance of the existing network. The graph below looks at the funding allocations for just the roading part of the GPS:
The USA has gone down the path of focusing too much on building new transport infrastructure and not enough on looking after what they’ve already got – and it’s a pretty ugly place to be. Skimping on maintenance might save you money in the short-term, but it’s going to hurt in the longer term: like not painting your house and then wondering why all the weatherboards are rotting.
The next place where the GPS is just plain dumb is in how it approaches public transport funding. At first glance, it seems as though the one good thing in the GPS is an increase in funding for PT services – and that is true, at first glance. However, pretty much all this “extra” money will be eaten up in a financial “merry go round” because KiwiRail are going to start charging higher track access fees for rail services in Auckland and Wellington, and Auckland is going to need to pay for its electric trains after all – with NZTA assistance. In fact, the assistance given to funding rail services in the GPS will actually decrease proportionally – as the government wants a funding assistance rate of only 50% rather than the current 60%. What all this means is that a heck of a lot more rates dollars will need to go into supporting the rail network in both Auckland and Wellington – despite the apparent increase in services funding. I’ve talked to a couple of people at Auckland Transport who actually expect to be cutting bus services over the next few years as a result of the GPS, not increasing them as might seem obvious at first glance. A graph of PT funding in the GPS is included below:
 If we set aside the PT services funding, because it’s really little more than a distraction designed to make the GPS seem more PT friendly than it actually is, we see the real impact of the GPS is on public transport infrastructure – which only gets $272 million spent on it over the next six years. It’s worthwhile to point out that, for some completely bizarre reason, rail funding is not included within the PT infrastructure net – so things are not necessarily as bad as they may first seem on this count. But PT infrastructure still funds some pretty important stuff. Here’s a selection of projects that this PT infrastructure fund helped make happen over the past few years:
 As you can see, a lot of these projects are pretty small but important aspects of improving our PT network. Things like integrated ticketing, ferry terminal upgrades, station improvements, design budgets for larger projects, real-time information signs and the like. Looking ahead, the PT elements of projects like the upgrade of Dominion Road, or AMETI, may have been funded out of the PT infrastructure budget – if it had not been slashed.
What all the projects above generally have in common is a contribution to making public transport more efficient, effective and attractive to users. You know, so that it doesn’t have to be so reliant upon massive subsidies forever. And this just highlights the second area where the GPS is just plain dumb: cutting back on PT infrastructure investment will mean a less effective system in the future that’s more reliant on long-term subsidies. So once again, for a little bit of short-term savings (really it’s chicken-feed compared to the amount being spent on new state highways) the GPS is setting up public transport to be less cost-effective in the future.
The third area of stupidity relates to the two sector classes that experience some of the harshest cutbacks: transport planning and maintenance of the funding allocation system. They’re the little things at the very bottom of the GPS funding tables that are easy to miss – but they are quite important to ensure cost-effectiveness throughout the transport funding system. A contributor on the Campaign for Better Transport forum made an excellent point about the cutbacks:
I find this funny however
The cost of both funding increases would be partly met by “reducing the funding available for some activities classes, such as, transport planning and management of the funding allocation system”.
“These reductions are important to encouraging greater value-for-money,” the Ministry of Transport said on its website.
So it seems by doing less planning and not managing the funding allocation system we get better “value-for-money”. Historic evidence however would suggest the opposite.
Indeed.
All up, as I said in my submission on the draft GPS there is a huge credibility gap between the high level objectives of the document – using transport investment in a cost-effective way to boost economic growth, and what the funding allocations actually are. But the stupidity of the GPS goes beyond this credibility gap: by freezing funding for maintaining our roads, by slashing funding for PT infrastructure improvements and planning/management, we’re actually likely to see the complete opposite of what the government supposedly wants from its transport investment. So really, it’s just an exceedingly dumb policy document – no matter how you look at it. (Even the NZ Council for Infrastructure Development seems to agree).
By admin, on July 27th, 2011 One thing that perpetually annoys me is when Steven Joyce rolls out the “we’re spending $1.6 billion on rail in Auckland so please stop complaining about all the money we’re spending on roads.” We see this line being trotted in in some of the Questions and Answers section to the Government Policy Statement:
It is also important to note that the majority of central government funding for public transport infrastructure is provided outside of the National Land Transport Fund and so not included in the GPS. Most of this funding is for metro rail. To date more than $2 billion in Crown appropriations has been agreed, of which $1.6 billion is for Auckland and $485 million for Wellington.
It is true that $1.6 billion is being (and has been) spent on upgrading Auckland’s rail network over the past few years (and over the next few years). The money is comprised of:
- $600 million for Project DART
- $500 million for the infrastructure side of rail electrification
- $500 million for new electric trains
So in total that is $1.6 billion. But there are two important questions to follow this up with: how much of that is being funded from central government and how much is being funded by this central government.
Looking first at Project DART, the rail project in Auckland that included double-tracking the Western Line, building Newmarket, New Lynn, Onehunga and Manukau stations – and other upgrades to the network. This $600 million project was actually funded in the 2006 budget – according to the Project DART website:
The 2006 Budget included funding of up to $600 million to fund these improvements and speed development of the Auckland rail network.
The project is the most significant redevelopment of the rail network in New Zealand since the 1980s.
So this passes the threshold for being funded by Central Government, but doesn’t pass the threshold of having been funded by this government.
Turning next to the infrastructure side of electrification – which includes stringing up the wires, raising a few bridges, putting up poles, building electrical sub-stations and so forth. According to the electrification webpage, funding for this was set aside in the 2007 budget:
In the 2007 Budget the Government announced its support for the electrification of Auckland’s rail network, and gave ONTRACK the funds to build the necessary infrastructure…
…Planning and concept development started immediately and physical work began in 2008.
We expect it will take about five years to electrify the Auckland network, and the Government has indicated that it wants the project completed by 2013.
So this is basically in the same situation as Project DART: yes, funded by Central Government outside the NLTF, but once again not funded by this government.
Finally, if we turn to funding for Auckland’s electric trains, it doesn’t even pass the very first base of being “outside the NLTF”. The very reason public transport services funding has actually increases in the Government Policy Statement is because this money will go into repaying the loan for the electric trains. Loaning $500 million to KiwiRail to pay for these trains, which Auckland Council and NZTA will need to repay, is quite different to actually giving the $500 million for the trains. So the trains aren’t being paid for outside the NLTF, they aren’t being paid for by Central Government – and obviously not by this government.
So really, I’m struggling to find a single cent that this government has set aside for passenger rail in Auckland.
By admin, on July 26th, 2011 I’m still digging through the details of the Government Policy Statement myself, but here’s a good interview on TVNZ 7′s News at 8 programme with Green Party transport spokesman Gareth Hughes (click the image or here for the video):
While it may seem like he said the word “balance” a heck of a lot of times, looking at the funding allocations in the GPS for various different parts of the transport sector, it really is the lack of balance that shines through:
 Even really basic stuff like maintaining state highways (funding frozen for the next 6 years) and building & looking after local roads (funding effectively frozen for the next 6 years) are getting screwed over in order to splurge more and more money on new state highways.
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