According to information from the Ministry of Transport, the changes to the LTMA will focus on the following:
Put in place a clearer, more straightforward, statutory purpose for the LTMA to drive better decision-making
significantly reduce the number of assessment criteria used throughout the LTMA
Rationalise national level strategic documents and clarify their relationships with lower level documents, to allow for clearer national guidance
Extend the role of the Regional Land Transport Programmes so they identify the outcomes, objectives and interventions proposed for at least 10 years, and remove the requirement to produce a separate Regional Land Transport Strategy
provide more flexible, less prescriptive consultation requirements
Enable Regional Transport Committees (RTCs) to be smaller and more focused by removing the requirement to have appointed members to represent various transport objectives. RTCs can still use external advisers if they wish but this will not be prescribed by the legislation
Create more flexibility in the LTMA to use borrowing to support land transport investment should future circumstances make this desirable
Improve the tolling and public private partnership (PPP) provisions in the LTMA to reduce barriers to their use
Repeal the provision for regional fuel taxes.
Since the Ministry of Transport put together its summary of the bill it seems some further changes have been made. These are largely around enabling NZTA to borrow a whole pile more money, as explained in more detail in one of the posts above. Essentially it looks like most of the changes are really bad, except perhaps for the inclusion of the PTOM public transport contracting system will is getting rolled into the LTMA, making the PTMA a redundant piece of legislation (and therefore it gets repealed).
Let’s now go through the bill in a bit more detail – from the explanatory statement:
This is the first rubbish part of the Bill. By removing the Regional Land Transport Strategy we effectively lose any long-term transport planning in New Zealand as these new Regional Land Transport Plans will be focused much more on which projects will get funded rather than setting a long-term vision. In Auckland perhaps this problem will not be so great because there’s the Auckland spatial plan, but nowhere in the legislation do we see reference to any RLTP having to give effect to the Auckland Plan. In terms of changes to the GPS, as no national land transport strategy has ever been prepared (presumably the Ministry of Transport couldn’t be bothered) perhaps there’s no huge change there, although I’m wary of the GPS getting even more power and influence as the last two have been so completely horrific.
Looking at the provisions of the Bill in a bit more detail on this issue of the GPS and the RLTP, it does seem as though the Bill attempts to require greater alignment of these regional plans with the government’s GPS – another example it would seem of ramming the government’s unpopular transport policies down the throats of the regions, whether they like it or not.
Moving along we see the changes to the structure of Regional Transport Committees, the people who will come up with these new Regional Land Transport Plans:
I don’t have so much of an issue with this change as some of the Regional Transport Committees got pretty unwieldy with having so many members. The real issue is that in Auckland it will be the unelected Board of Auckland Transport which acts as our RTC whereas throughout the rest of the country it will be the Regional Councils who co-ordinate this work. As I noted above, perhaps this isn’t a problem if there’s a link requiring the regional land transport plan for Auckland to give effect to the Auckland Plan, but as far as I can see there isn’t such a connection proposed.
Now things start to get really ugly:
The fact that NZTA currently have to fund their transport programme out of the money they take in through fuel taxes (give or take a bit) is a really really good check and balance on any government going insane with transport spending. It’s largely for this reason that we aren’t seeing projects like Puhoi-Wellsford or Transmission Gully kicking into action just yet: because the money is all going on the Waterview Connection, remaining sections of the Waikato Expressway and the Tauranga Eastern Link. Allow NZTA to borrow masses of cash and this check disappears. We could see all the RoNS (and whatever other projects the trucking lobby can dream up) shifting into construction activity all at the same time spending a simply vast amount of cash and then limiting our ability to do anything in the future because most of the transport budget will be going into repaying the vast amount of debt for these white elephant roads that are hardly being used.
And then things go a bit absurd:
As I explained in this recent post, there’s absolutely no need for the regional fuel tax provisions to be removed as the government already has the ability to say no to a scheme (or to even cancel a scheme already in place). Plus regional fuel taxes are pretty efficient ways of the regions raising additional money for transport. As my previous post noted this is all about power: the government doesn’t want local councils to have much say at all over what happens to transport and certainly doesn’t want them to have additional revenue sources which would reduce councils’ utter reliance upon central government for approving subsidies for each and every local project.
There are some changes to the procedures for toll roads which seem fairly minor and also the necessary legislative changes to enable the PTOM contracting system for public transport, which seems largely OK but with a few potential fish-hooks (that I should look at more in future posts). However the big issues are as outlined above:
The removal of long-term (30 year) transport strategies
No reference to giving effect to the Auckland spatial plan
More power to the Government Policy Statement (GPS)
The unelected board of Auckland Transport become our Regional Transport Committee, whereas everywhere else in the country it is the Regional Council
Enabling NZTA to borrow so they can complete the RoNS projects and curtail our ability to build more sensible projects in the future as money will largely be going on debt repayments
Repealing the ability to apply for a Regional Fuel Tax
There’s also a change to the purpose of the act, which narrows down the focus and removes references to things like sustainability, because who’d want a transport system that was actually sustainable?
Pretty much all of these changes will have a negative effect on trying to create a better, more balanced transport system. The changes centralise even more power over transport decisions, away from local councils and towards the government (even though people never vote on transport matters in national elections but very much often do in local elections). Plus they potentially stuff up the transport budget not just in the near future, but potentially for a very very long time to come if NZTA goes truly berserk in its borrowing (which I think the government will pressure it to do).
In short it’s an utterly rubbish piece of legislation. Something well worth opposing in a submission before October 25th (scroll down to the bottom and click “Make an Online Submission”).
A number of changes (most of them really bad) are proposed to the Land Transport Management Act, with the LTMA Amendment Bill open for submissions until October 26th before a select committee then hears the submissions and thinks about making changes to the Bill. One particularly bizarre change proposed is the removal of the ability for regions to apply to the Minister of Transport to have a regional fuel tax. If that sentence sounded a bit complicated and confusing, that’s because it is. Let’s outline the current situation in a bit more detail:
If a region feels that it needs to raise more revenue for transport projects in a different way to traditional rates, it can go through a public consultation process and then propose to apply a regional fuel tax. This tax would only apply within the boundaries of the particular region.
The Minister of Transport can then decide whether they agree with the region’s proposition. In 2008 Labour agreed to the Auckland Regional Council’s proposed regional fuel tax to pay for the electric trains (now being paid for out of nationwide fuel tax and Auckland’s rates).
At any time, the Minister of Transport can revoke the ability to place a regional fuel tax – just as was done in 2009 (leading to a delay of probably at least a year or two in the delivery of Auckland’s electric trains).
Now that’s the current situation. Seems a fairly reasonable process that still leaves quite a lot of power in the hands of Central Government. What the Bill currently before parliament to amend the LTMA will do is remove the ability for regions to even apply for putting in place a regional petrol tax. So even though the government already has the power to say “no” and already has the power to stop a scheme, for some bizarre reason they want to remove the ability for the regions to even propose such a scheme in the first place.
Looking through the explanatory statement of the Amendment Bill, the only reference to why this change is proposed is as follows:
This will avoid the likely costs of such a tax in a single region being spread across all regions within our nationwide fuel market, and will ensure that the additional costs of a refund system for non-transport fuel use are not imposed on productive areas of the economy.
Back in August a report was presented to the Council’s transport committee which basically concluded that there’s absolutely no merit in either of these criticisms of regional fuel taxes. Here are the key conclusions: I’ve never quite figured out why this government dislikes regional fuel taxes so much. Ultimately they are put in place by local councils and therefore it is the local council taking the political risk by imposing such a tax. Secondly, regional fuel taxes have always seemed to me like quite a fair and sensible way of providing councils with funding for transport infrastructure – as it’s typically road users who benefit from Council spending on transport and building roads out of rates is really just another way in which roads are subsidised.
I tend to think that the government dislikes regional fuel taxes so much because they give Councils a bit more autonomy when it comes to transport spending. The government realises that its transport policies are increasingly out of step with those of pretty much every local council in the country (particularly in the big cities) and it’s desperately trying to reduce the power and influence of the Councils so it can ram through its own agenda. At the end of the day that’s a pretty pathetic approach, regional fuel taxes should at least remain ‘on the table’ as a transport funding option and this part of the LTMA Amendment Bill should be deleted.
There are a few other parts of the Bill which deserve some mention and I’ll get onto those in the next few days.
Major amendments to the Land Transport Management Act – the primary piece of legislation that governs the management and funding of transport in New Zealand – have been introduced to parliament. There was a bit of discussion of the changes last year when they were first announced, as well as further discussion of changes to borrowing policy more recently, but we will watch the issue closely over the next few months as the bill winds its way through the process – to highlight areas where it really needs to change and why.
Here’s Labour transport spokesperson Phil Twyford’s opening speech in relation to the bill:
And Green MP Julie-Anne Genter’s:
Finally, supporting our goal here of political neutrality, here’s National’s David Bennett:
I’ll see if I can concentrate on digging through the details of this legislation over the next few days and weeks so that we can all understand its potential impact.
A media release by the Green Party today noted that upcoming changes to the Land Transport Management Act (the bill was tabled in parliament today by the sound of it) will allow NZTA to borrow much more money than they have previously been able to:
Having repeatedly insisted that there is no transport budget crisis, Gerry Brownlee is now seeking the power to borrow to build uneconomic motorways, Green Party transport spokesperson Julie Anne Genter said today.
Transport Minister Brownlee today tabled a Bill before the House that would give the New Zealand Transport Agency the power to borrow large amounts to fund projects, whereas previously it could only undertake limited cashflow borrowing. It also seeks to fund roading projects through Public-Private Partnerships (PPPs).
“National is clearly planning to borrow to pay for its uneconomic motorways,” said Ms Genter. “The cost of the National Government’s extravagant motorway building is blowing out. The cost of the Wellington Northern Corridor project alone has risen by $300 million in the past three years. “The Government has been facing a growing funding gap between stagnant road tax revenue due to declining road use and the rising costs of its uneconomic motorway programme.
“After cutting or freezing funding for everything but their new pet motorways, National is now turning to putting the cost on the nation’s credit card.
“The Government is seeking to borrow more and use PPPs as a form of backdoor borrowing. That means that uneconomic projects will go ahead, and New Zealanders will be shackled with the interest payments. That is reckless.
The Bill itself has this to say about the borrowing issue:
The Bill will also enable borrowing to be used by the New Zealand Transport Agency to fund future land transport projects, subject to the agreement of the Minister of Transport and the Minister of Finance. Currently, borrowing can only be used to manage the cash flow of the national land transport programme.
There’s always been an argument around why should NZTA have to pay for assets that will last for decades from the money they raise in the particular year of expenditure. This may be a valid point. But on the other hand I think these changes could be considered a further politicisation of the transport spending process and could lead to us ending up in a massive pile of debt due to the RoNS projects of dubious economic value. At least under the current/old system NZTA’s ability to waste money on the RoNS was limited by the amount of revenue they generate in any particular year.
What do you think? Should NZTA be allowed to borrow for capital expenditure or does this just open a giant can of worms?
Everyone knows that the price tag for a future harbour crossing is eye-watering. For a tunnel option (which really is the only option in my opinion) we’re looking at something north of $5 billion – which is significantly more expensive than any other project we’ve ever seriously considered (over twice the price of the City Rail Link, for example). Normal funding mechanisms won’t come close to paying for the additional crossing – so different options will need to be looked at. My suggestion is to simply not build another crossing, of course.
One funding option that seems to have found a bit of limelight in recent days is the suggestion that the crossing could be tolled – but not only the new crossing, also the existing harbour bridge. The NZ Herald reported on this yesterday:
The spectre of tolls on the Auckland Harbour Bridge to help to pay for a new traffic crossing has re-emerged in a council report, days before the election.
Auckland Council staff say, in a report prepared for a transport committee meeting tomorrow, that a proposed law change would allow an application for a toll on the existing bridge as well as a new harbour crossing to be considered by the Government.
Legislation prohibits tolling existing infrastructure unless it is near or integral to a proposed new road.
Neither can a new toll road be built unless a feasible alternative route is available to those who cannot or do not want to pay extra for trips.
Somewhat unsurprisingly North Shore politicians are jumping up and down, yelling and screaming:
The suggestion that tolls may be reintroduced to the existing bridge to raise money for a new harbour crossing expected to cost up to $5.3 billion within the next 20 years raised hackles yesterday among North Shore members of the Auckland Council.
Ann Hartley, a former Labour MP and Deputy Speaker of Parliament, said she could not understand why tolls were being contemplated for certain sections of Auckland’s transport network rather than more widespread and fairer revenue streams.
Fellow North Shore councillor George Wood said he did not see why Aucklanders should have to pay for a new harbour crossing when the Transport Agency was about to spend up to $3 billion on completing the western ring route, including the Waterview motorway.
But Steven Joyce says that this simply isn’t the case – and the “toll free alternative” (which obviously wouldn’t exist if both crossings were tolled) will remain in legislation:
But Transport Minister Steven Joyce said last night that proposed changes to the Land Transport Management Act would not alter the legal test of whether a toll could be charged for using an existing road.
He said the council was “completely wrong” to say legislative changes were needed to enable him to consider an application to impose tolls on the harbour bridge.
A Cabinet paper covering various other changes to transport legislation included an agreement to retain current tolling requirements, including that tolls could be charged on an existing road only if it was near and integral to a new road.
A toll-free alternative route must also still be available.
So what does the Council report actually say on the matter: The immediately adjacent road issue seems to have popped up a bit out of nowhere, as the Question and Answer section on the Ministry of Transport website about the LTMA changes seems fairly concrete about the requirement for a toll-free alternative route.
I’m not opposed to tolls in principle, just as I think that congestion charging is – in principle – a good idea. Tolling has a few issues though, including distorting traffic patterns away from the tolled route and towards the untolled one, unless there’s a pretty compelling reason to pay for the tolled route. This would make it difficult to only toll the new crossing, as you may struggle to attract enough traffic to the new crossing (away from the old harbour bridge) for the project to be worth it.
But in my opinion, that more calls into question the economics of the new crossing rather than making a case for tolling both the new and the existing routes. In the end, tolling arises as a necessity because the whole crossing project is something we really can’t afford – and perhaps we’re better off simply realising that and looking for cheaper alternatives.
Auckland’s poor transport outcomes over the years are probably the result of one over-riding factor: that while we vote on transport matters in local elections, local governments don’t have much money, central government holds the purse strings. Yet when it comes to national elections, we tend to have much bigger issues on our mind (taxes, health, crime, education, the economy etc.) than transport when casting our vote. Looking back into the past, we see many excellent transport schemes being floated by the local governments of the day, but ultimately they couldn’t find central government support – so all we got were motorways.
Transport is inherently seen as a local issue – and quite rightly so. The transport issues of Auckland are quite different to those in most parts of the rest of the country. When Aucklanders vote in local government elections, it would seem that they have transport matters quite high in their minds. John Banks lost the 2004 Auckland City mayoral election over pretty much a single issue: the Eastern Motorway. Ironically, he had also won the 2001 election on the basis of promising to fast-track a pile of motorways. Most obviously, it seems that Len Brown’s transport plans played a critical role in his election victory in October last year.
But the vast majority of transport funding comes from central government – because they control how all petrol taxes and road-user charges are spent. Through the Government Policy Statement, each Transport Minister of the day has an enormous say over which projects do and don’t happen. I doubt much of National’s vote at the last election came about because of their promises to throw $11 billion at building motorways over the next 10 years – in fact I can’t even remember hearing much about their transport plans before the election (aside from Maurice Williamson compulsively talking about tolling which eventually got him the sack as transport spokesperson).
This is an uneasy mismatch: the level of government that really gives a damn about transport and has been voted there because of their transport policies can’t do much because they don’t have the money; the level of government with all the money generally has transport policies developed largely insulated from public opinion. There seem to be two main ways of resolving this fundamental problem: either to give local government much more ability to make their transport decisions or to somehow make transport a bigger issue in national elections.
The Regional Fuel Tax enacted by the previous government, and cancelled by this one, is an example of the first option – as the regions take on the political risks for applying the tax, but then have another revenue stream to fund their transport priorities. The proposed changes to the Land Transport Management Act that will abolish the ability of any future regional fuel taxes to be enacted gives us a pretty strong signal about what the government thinks of the possibility of providing local government with greater autonomy to make its own transport decisions.
The other option is to somehow make transport an election issue. While I will probably end up choosing my party vote based on the quality of transport policies – I think it’s a pretty big call to expect many more people beyond transport nerds to do the same. Quite simply, there are bigger issues out there – something that even I can accept. Of course that doesn’t mean opposition parties shouldn’t have better transport policies (not like it’s difficult), but rather that they need to ‘tie in’ the messages of their transport policies to broader matters.
The Green Party has traditionally been quite good at this. They link transport policies into concerns about the environment and into concern about the profligate wasted spending on the various RoNS projects, and the contribution of that to our massive deficit. Labour seem to have struggled with this – and to an extent continue to do so. While they may have good transport ideas, they tend to both not say anything about them and also struggle to connect it in with their broader messages. Providing more transport choices when petrol prices area rising should be a core Labour “cost of living” issue. Similarly, constructing ‘lead infrastructure’ such as the City Rail Link to encourage broad economic benefits and support their environmental concerns.
One huge opportunity that I think both Labour and the Greens have is to play on an issue I’ve discussed recently: that of central government really not understanding Auckland when it comes to transport (and perhaps urban development) matters. It is interesting to note that while National consistently polls around 20% ahead of Labour, last year Auckland elected Len Brown (Labour Party member) as mayor; or that while Auckland Central has a National MP, Mike Lee managed to easily win his seat on the Council in the Waitemata Ward (which is arguably slightly more right-leaning than Auckland Central as it includes Parnell).
Even without trying, it seems that Labour are polling much higher in Auckland than in the rest of the country – at least according to this recent poll:
The gap between the two main parties is now 15.1 percentage points, down from 20.7 points in last month’s poll just after the Budget.
Labour’s support rose 2.4 points to 36.1 per cent and National’s fell by 3.2 to 51.2 per cent of decided voters…
…A breakdown of the party vote suggests Labour’s support has improved among Auckland voters and younger voters compared to the Herald-DigiPoll survey.
Support for Labour in Auckland at 40.5 per cent is higher than its overall party-vote support.
And its support in the 18 to 39 age group is at 42.3 per cent, again a lot higher than its overall party-vote total.
I do think that a “Vote for Auckland, Vote for Labour” style campaign could be quite productive. The formation of Auckland Council was largely designed to avoid the age old problem of nothing happening because all the old councils were too busy fighting each other. Yet now we find ourselves in a situation where there’s still a big fight going on about what should happen in Auckland – but now we are seeing Auckland Council on one side and central government on the other. In effect, we potentially have the same problem – and it appears reasonably unlikely that the ‘step-change’ investment that Auckland requires will eventuate as long as the big difference in opinion over Auckland’s vision for the city and the government’s vision remains.
Not only could Labour sell themselves as the party that will “work with, not against” Auckland Council, they could also play off the very real situation that it seems the government really doesn’t understand Auckland as a big city has very different needs to the rest of the country. In its spatial plan vision the government still sees Auckland as an overgrown town, rather than a real city. In its transport vision you could argue the same thing – more motorways works for smaller areas, so they think the same thing can endlessly work in Auckland. Traditionally I’m not sure the extent to which Labour has “got Auckland” either, but they seem to have a number of younger MPs coming through who seems a bit more ‘urban’ in their outlook and think of Auckland being a big city as a good thing, not a bad thing.
Overall, I think the trick to making transport an election issue is through associating it with bigger picture issues. How transport policy links to “smarter spending”, “being on Auckland’s side” or “giving choices at petrol prices rise” will be the key issue. I’m yet to see much evidence from Labour that they’ll be able to meet this challenge, though they still have a bit of time up their sleeves to do so.
The government has today announced some pretty big changes are being proposed to the Land Transport Management Act (LTMA). This is a pretty vital piece of legislation, forming the legislative framework around which most of the country’s transport plans, policies, rules and guidelines are created. The proposed changes to the legislation appear to seek to simplify things quite a lot – and I can definitely see value in that (currently we have a huge number of plans: a GPS, NZTS, RLTS, RLTP, NLTP and probably others as well). However, some of the changes are pretty scary in terms of their potential impact.
The Ministry of Transport has a useful summary of the proposed changes on this page (more detail is available on this page) and outlined below:
Put in place a clearer, more straightforward, statutory purpose for the LTMA to drive better decision-making
Significantly reduce the number of assessment criteria used throughout the LTMA
Rationalise national level strategic documents and clarify their relationships with lower level documents, to allow for clearer national guidance
Extend the role of the Regional Land Transport Programmes so they identify the outcomes, objectives and interventions proposed for at least 10 years, and remove the requirement to produce a separate Regional Land Transport Strategy provide more flexible, less prescriptive consultation requirements
Enable Regional Transport Committees (RTCs) to be smaller and more focused by removing the requirement to have appointed members to represent various transport objectives. RTCs can still use external advisers if they wish but this will not be prescribed by the legislation
Create more flexibility in the LTMA to use borrowing to support land transport investment should future circumstances make this desirable
Improve the tolling and public private partnership (PPP) provisions in the LTMA to reduce barriers to their use
Repeal the provision for regional fuel taxes.
There’s always a tricky balance between making a system too complex, which potentially the current transport framework is, and leaning too far the other way towards a system that could end up with giant holes in it. It’s a bit too early to tell whether the legislative changes swing too far the other way, but there are a few issues which I have some pretty big concerns about.
Perhaps the most obvious concern relates to the balance between regional and national influence over transport decisions. Obviously this is a huge issue in Auckland at the moment, with Auckland Council having a very different viewpoint from the government on transport priorities. Legislative change that gives the government even more power to ignore the transport wishes of Auckland would be a giant step in the wrong direction. It will be interesting to see what the details of the legislation say on this matter – I’m suspicious that Steven Joyce is using this as a way of getting around the Council.
Fitting into this concern, to some extent, is another concern I have about the removal of the Regional Land Transport Strategy as an important document in the formulation of transport policy. While past RLTS’s did often seem to involve a lot of waffling and very little action, the most recent one did list major transport projects over a 30 year timeframe and discussed how they could be sequenced and potentially funded. Having a 10 year Regional Land Transport Programme as the only regionally-based transport policy/strategy seems inadequate to me: many of our larger transport projects clearly need to be assessed, discussed and sequenced over a longer period than 10 years. Yet again I’m suspicious that this change has occurred simply because the government disliked the most recent RLTS, because (horror of horrors) it proposed to spend around the same amount of money on roads as public transport over the next 30 years.
It’s also concerning to note that the preparation of this extended 10 year RLTP will be done by the Board of Auckland Transport, rather than involve elected councillors (as will happen everywhere else in the country). In the new Super City set-up, it was to be the responsibility of Auckland Council, and not Auckland Transport, to prepare the RLTS – reflecting the need for the wide-ranging strategy to have political buy-in. While the Auckland Spatial Plan will obviously serve this purpose to some extent, the proposed change will clearly take a bit more power away from the Council to influence transport decisions in Auckland.
The other changes, such as making it easier for toll roads to be established, enabling the borrowing of funds for transport projects (where the NLTF cannot cover their cost) and repealing the regional fuel tax provisions, are a mixed bag. I have nothing against toll roads – and I’d actually prefer to see tolls cover the cost of many of the new roads being proposed, freeing up funding for a more balanced approach to transport. But I am suspicious of the other changes: enabling borrowing for state highway projects seems like a pretty ugly path to go down: not enough money in the NLTF for the various roads of national significance? Right, let’s just borrow more money to build these pet projects. Finally, it does seem bizarre that the government dislikes regional fuel taxes so much (after all, the regions need to wear the political cost of applying such a tax) – presumably the problem is that such taxes give the regions more power over deciding what their transport priorities are.
Overall, while the desire to improve the simplicity of the transport policy framework is laudable, the details of the proposed changes to the LTMA seem to me as though they’re more based around a continued centralisation of power with the government over the transport decision-making process. In particular, the changes seem to be an attempt to stymie the ability of regions such as Auckland to have more say over their transport priorities. It does seem as though this is perhaps Steven Joyce’s revenge against Auckland for having such different transport priorities to that of central government. He’s going to do everything he can to legislate away Auckland’s ability to implement its vision.
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