My earlier post today was just a quick note to promote some discussion. I’ve also had the opportunity to have a bit of a think about what this might all mean. Here are a couple of key points made by commenters on the original thread:
Matt L pointed out that it’s potentially quite insightful that National have chosen to put such a senior minister in charge of transport. A lot of discussion had been around associate minister Nathan Guy getting the promotion, but that hasn’t happened. Does this suggest that National are a bit worried about transport being a potential weak point? I think that there’s some merit in this argument – that transport will be a challenging portfolio over the next few years as Auckland Council gets impatient over City Rail Link progress and lower petrol tax receipts make life more and more challenging.
Does choosing someone form the South Island, who very much seems quite separated from the Auckland situation, a slap in the face – as suggested by Patrick R? This is where I’m probably most worried about Brownlee – that he simply won’t be able to get his head around how different Auckland is to the rest of the country. I think that Joyce could have understood this matter, he perhaps just disagreed a bit on the medicine. I somewhat struggle to believe that Brownlee will even care much about Auckland needing something different to the rest of the country.
One thing that I have got worried about is in relation to that particular project known as the City Rail Link. Back in December last year, Brownlee was pretty keen to jump up and show that he disliked this project even more than Joyce did (2.15-2.25 of the video below, thanks to Matt L for finding it):
But regardless of this, I think it’s fair that we should give Brownlee a chance. Clearly he will continue with the main elements of National’s transport policy: the Roads of National Significance. Clearly he won’t decide to cut back Puhoi-Wellsford and chuck that money into the City Rail Link project. So we shouldn’t slam him for that, anymore than we would have done so to Steven Joyce.
So I’ll look for a few key signs over the next few months:
Where will things go on the additional four RoNS projects added into the mix in the Government Policy Statement earlier this year (Cambridge-Tirau, Hamilton-Tauranga, Hawkes Bay expressway & Christchurch SH1)? To what extent will solutions along these routes be guided by sensible analysis or to what extent will pre-determined solutions be “fitted” onto the routes like has happened with Puhoi-Wellsford?
What noises will Brownlee make about the City Rail Link project? Joyce has always left the door open a little bit, saying that he felt it was the most likely next rail project in Auckland and that it would be likely to happen at some stage. Will Brownlee be more positive towards it than this (actually trying to find some potential funding sources) or will he go more negative?
How might Brownlee approach the balance between central and local government role in transport? Will he be as dismissive of regional fuel taxes as Joyce has been? What will be his attitude towards Auckland Council looking at alternative funding options such as congestion charging?
If geotechnical problems between Warkworth and Wellsford turn out to be as bad as they sound, will he consider looking at abandoning that section of the “holiday highway”, or at least downgrading it to a large-scale safety upgrade of the route?
Finally, it’ll also be interesting to pontificate over the extent to which Joyce is still controlling things from behind the scenes.
One aspect of the government’s proposed changes to the Land Transport Management Act (LTMA) is the repeal of a provision which allows regional councils to introduce regional fuel taxes. Already the process to create a regional fuel tax seems quite complex, as the government was able to unilaterally cancel the Auckland scheme back in March 2009, delaying projects like electrification, Penlink and integrated ticketing – which had been banking on that money. However, it seems that transport minister Steven Joyce isn’t content with his power to remove schemes, he wants to also banish the ability of council to even propose them.
An article in today’s NZ Herald highlights that Joyce’s determination to rid the legislation of regional fuel taxes runs against advice from Treasury:
“Despite his perception of Treasury support for the overall purpose of the amendments, Mr Joyce acknowledged it would have preferred a more thorough legislative review…
…He said the Treasury had concerns about removing the existing legislation’s regional fuel tax provision without replacing it with an alternative funding mechanism.
Although the Treasury appreciated regional fuel taxes had some practical limitations, it believed retaining legislative provision for them “would send an important signal to the regions about being accountable for funding their transport decisions”.
But Mr Joyce said that would result in much higher prices and hand authority to local councils to spend Government taxation.”
I have somewhat struggled to understand why Joyce is so opposed to regional fuel taxes. They are obviously something that regional councils (including Auckland Council) would impose, so if they were wildly unpopular people could simply vote in a future local government election for people who proposed to get rid of the scheme. Furthermore, when the ARC implemented the old fuel tax scheme it went through a highly complex and detailed public consultation process – and was actually (and amazingly) quite popular!
I can only surmise that Joyce doesn’t like the ability of regional fuel taxes to give local councils more independence in how they fund transport projects and how they raise funds. Similar to his opposition to road pricing schemes, the only logical way to make sense out of how Joyce can both want local government to fund a greater proportion of public transport projects and simultaneously take away their ability to do so, is that actually he’s not particularly interested in seeing those PT projects proceed. Even if central government doesn’t have to pay for them.
I have noted in the past that I think central government has far too much power, compared to local government, when it comes to transport funding matters. People simply don’t vote, in national elections, on transport matters (I may be an exception to this rule) whereas they very much do have transport in the top of their mind when voting in local government election. A regional fuel tax would recognise the greater connection between local government and transport policy, giving them the ability to fund additional transport projects through a scheme that they take the political risk over.
Sure, regional fuel taxes have some issues in terms of whether particular petrol stations fall one side of the region’s border or the other, but I suspect the fuel tax would need to be set incredibly high for people to bother travelling many kilometres out of their way in order to avoid the tax. Furthermore, if all the regions took it up then the border issue would go away. In the USA there are a million different local taxes and they seem to survive.
So all up, removing the ability of local councils to put in place a regional fuel tax is an incredibly anti-democratic move whose only justification seems to be a desire to see transport decisions become even more centralised.
I discussed yesterday that early signs are not looking particularly great for public transport, as the government continues to plough ahead with its road-centric transport policies. Something else which is quite interesting is to start thinking about which MPs will be playing the crucial roles on transport matters in parliament.
Over the past three years Steven Joyce has been Minister of Transport, with Nathan Guy being his deputy for most of that time. Rumoursare abound that Joyce will take over being Minister of Economic Development. Whether that means he will give up any of his current roles (Minister of Communications, Transport and Tertiary Education) remains to be seen, but I’m guessing that he’ll probably keep transport. Being Minister of Transport must be about the best job in government, as you have your own revenue generating machine (being the National Land Transport Fund) which is automatically assigned to be spent on transport. You don’t need the OK from the finance minister to spend a bit more on this particular pet project, you don’t need to worry about having your budget eaten away by demands for tax cuts, the health budget or whatever. I also think that Joyce has become so personally involved in the transport portfolio over the past three years that he’s really struggle to let it go.
For Labour, Darren Hughes and then Shane Jones proved relatively ineffectual in scoring significant ‘hits’ on Joyce over the past three years. Jones managed to co-ordinate what was a pretty damn good transport policy in the end, but in parliament often seemed to leave it to Phil Twyford, David Shearer or Jacinda Ardern to ask the hard questions. Who ends up getting the transport portfolio is likely to depend on who leads the Labour party (I’m currently a fan of a Shearer/Parker team with Cunliffe as finance spokesperson, uniting all the factions). Phil Twyford’s excellent performance in the Te Atatu electorate (with a campaign based around the Northwest Busway), his in-depth knowledge of the Auckland Super City and his general interest in transport may make him a good candidate for the role. Auckland’s the most likely place where we’ll see transport being a political issue over the next three years – so it’d be good to have an Aucklander in the role.
For the Green Party, they are rather blessed with options to be their transport spokesperson. Gareth Hughes has done an excellent job since he came into parliament, often making Joyce struggle in parliament and also working really hard to build support for the Green Party’s transport policies around the country. That said, of course the Greens now have Julie-Anne Genter as an MP – someone with an extremely detailed knowledge of transport issues and from a transport planning background. I’m thinking it’s probably most likely that Gareth and Julie will share transport – with Julie slowly taking on more and more responsibility as she gains experience.
The next three years will be really critical in determining the country’s transport future. Since 2008 many of the transport projects being delivered (both roads and rail) were effectively being ‘finished off’ from what the previous government proposed. This will continue, to an extent, with rail electrification in particular being a number of years away from completion. However, the legacy of Labour’s last three years in power over transport will slowly drop away – and by 2014 it really will be the current government’s policies shaping our transport outcomes. While that’s a somewhat depressing thought, when I look at the prospective opposition transport spokespeople, I at least think we’ll have a better quality debate over transport matters in the next three years than we’ve had over the past three.
There was an interesting exchange in parliament yesterday about the Puhoi-Wellsford “holiday highway” – and in particular focusing on the issue of whether the Minister was confident the project still represents good value for money. Here’s the video:
Here’s the full discussion. I think of particular interest is the following:
DAVID SHEARER (Labour—Mt Albert) to the Minister of Transport: Is he satisfied that the Pūhoi to Wellsford road of national significance represents good value for money and has had its costs and benefits adequately assessed?
Hon STEVEN JOYCE (Minister of Transport) : In regard to the Pūhoi to Wellsford road it is too early to confirm exactly what the final cost-benefit ratio will be. The New Zealand Transport Agency remains in the design and investigation phase and this work is ongoing. The most recent published benefit-cost ratio is 1:1, including wider economic benefits, and this can be found on the New Zealand Transport Agency website. Given the nature of the ongoing work, the exact cost—the “c” of the “b-c”—will not be known until the design is complete, and the New Zealand Transport Agency will continue to update me as this work progresses.
It is somewhat strange that this project has been dedicated a significant amount of funding without a final cost-benefit analysis having been prepared. Imagine what the government would think of such a process for an Auckland rail project?
There’s some amusing debate over the phrase “holiday highway”, as it seems Steven Joyce is getting rather annoyed by how much that name has stuck – but I think of most consequence is that it would appear there remain significant uncertainties over the final cost of the project (particularly north of Warkworth). That could have some interesting effects on the project’s final cost-benefit ratio – particularly it it’s very much hovering around 1 at the moment (with wider economic benefits included).
Following on from yesterday, Labour MP Phil Twyford once again had a go at transport minister Steven Joyce in parliament today over the government’s transport priorities and their seeming misalignment with the priorities of the Auckland Council. It’s an interesting watch:
You can read the transcript here. If you listen/read carefully, there’s potentially a mention of this blog (along with AKT perhaps) in one of Joyce’s answers – even though the numbers referred to clearly come from this document, rather than from any blog.
A couple of of months ago I wondered whether transport can be made into an election issue. Traditionally national elections are fought over issues like the economy, unemployment, health, education, taxes, crime and so forth. In fact, pretty much everything except transport – aside from transport nerds such as myself I doubt too many people choose their vote based on transport policy. This is something of a problem as most transport funding comes from central government, yet most of the time people voting on transport matters do so in local government elections.
Of course this is not to say that transport can’t get wrapped into other issues that people do vote on. Like ‘sensible’ economic policies, like environmental concerns and so forth. The current transport ‘stoush’ between Auckland Council and Central Government over priorities – with the council making the City Rail Link its top priority, whereas the government is more interested in motorway building – potentially represents an opportunity to make transport an election issue, in terms of creating a “the government doesn’t care about Auckland” line of discussion.
Already, it seems that opposition parties are polling a lot better in Auckland than they are elsewhere in the country, suggesting that there may be some discontent out there about these issues (especially as Auckland is typically quite politically neutral overall). Here are the results of a recent poll for the whole country:
Labour’s support dropped among decided voters by almost two points to 31.5 per cent – its second lowest since 1999.
This follows a three-point drop the month before. Its lowest was in July 2008 when it polled at 30.8 per cent.
National remained steady on 52 per cent in the poll of 750 eligible voters – enough to secure it 65 seats in Parliament and govern without requiring support from other parties.
But compare this to Auckland:
Labour does get some good news amidst the pre-election gloom of the poll – it made up ground among Auckland respondents where it had 38.6 per cent support, a four-point lift.
The gain was at the expense of National, which dropped from 52 to 47 per cent in Auckland.
While the creation of the Auckland Council was, in my opinion, an undoubtedly good thing, it has annoyed a lot of people who were quite attached to their old councils. So perhaps it is something of a “last straw” for some that the government now seems dead against working with the council. To some extent that obviously overplays things, as National is still ahead of Labour in Auckland, though the gap between the two is far far less than in the rest of the country.
It seems that Labour might be waking up to this fact that, at the very least, they may be able to get a good result in Auckland. There are three key electorate seats they have a chance of winning back: Auckland Central, Maungakiekie and (perhaps least likely) Waitakere. So it was interesting to see a line of questioning from Labour in parliament today on this “Auckland versus Government” issue:
PHIL TWYFORD (Labour) to the Minister of Transport: Does he endorse the transport elements of the draft Auckland Plan; if not, why not?
Hon STEVEN JOYCE (Minister of Transport) : It is not appropriate for me to endorse or otherwise any aspect of the draft Auckland plan at this time. The Auckland spatial plan is the Auckland Council’s plan, and the council will be consulting the community on it. The Government strongly endorses the process, but its role is to provide input, not to formally endorse it. With regard to transport elements, the Government will continue to consider individual projects on their merits if the Government or its agencies are called on to provide funding assistance. In this context it is important to remember that central government is currently contributing over $1 billion a year towards Auckland’s transport needs.
Phil Twyford: Can he confirm the New ZealandHerald’s report that he and Ministers Hide, Smith, and Heatley, at their 26 August meeting with the Auckland mayor and Auckland Council, could not stop browbeating the councillors over the draft plan’s commitment to urban intensification in a way that was “intimidating and small town”?
Hon Tony Ryall: What’s wrong with small towns?
Hon STEVEN JOYCE: Yes, I do not know that we should be picking on small towns. I point out that that was a view of a prominent left-wing politician from Auckland, who might have a slight conflict of interest, and it was reported by a prominent left-wing columnist from Auckland, who might also have a certain interest in this matter: a certain Mr B Rudman.
Phil Twyford: Does he accept that the alternative to a compact city supported by a modern public transport system is an Auckland that sprawls endlessly and a traffic jam from the harbour bridge to Whangarei?
Hon STEVEN JOYCE: I do not know that I would want to make too many comments on the Auckland plan at this point, but I would say that we on this side of the House believe strongly in people having the right to determine where they live and the way in which they want to live. We think it is an important principle, provided, of course, that they meet the cost of those decisions. I think that is an important point to make. I understand that Mr Twyford might have a strong view that everybody should live on top of each other, but others might disagree.
Jacinda Ardern: Is the city rail link his No. 1 transport priority for Auckland?
Hon STEVEN JOYCE: No, it is not, actually. The current priorities for Auckland are many and varied. They include the Waterview project, which the Government is building currently, the Victoria Park Tunnel project, the electrification of the rail in Auckland, the Newmarket Viaduct, and a number of other very important investments in Auckland. Currently, the central business district rail link has a benefit-cost ratio of about 0.3, and I think that we can all say that it probably needs to have an improvement in that before any responsible Government would seek to invest in it.
Phil Twyford: Why did his Government go to the trouble of creating a unified Auckland when it is very clear that the Government is determined to undermine and block Auckland Council’s plan for a world-class transport system and a compact city?
Hon STEVEN JOYCE: The member is simply incorrect. It is an important project for a unified Auckland. I think it is a very important project, and Auckland Council is currently consulting on its new spatial plan, which is a very important part of the unified Auckland process. I think it is great that it is doing so and that people are getting the opportunity to comment.
It does seem rather ironic to bring all of Auckland’s councils together so they could stop bickering with each other and get on with things, only to have nothing happen because now it’s central government bickering with the new council.
I should be jumping for joy today over an editorial in the NZ Herald today that’s highly critical of Steven Joyce. But I’m just not quite sure about what it’s really trying to achieve by telling Joyce to “butt out” of the congestion charging issue.
Transport Minister Steven Joyce should button his lip if the Auckland Council resolves to finance an inner-city rail tunnel from sources other than taxation. Road tolls and congestion charges are perfectly proper local devices. Having given the city a single voice, national politicians should listen to it.
Mr Joyce is not alone in remaining sceptical of the cost-benefit merits of the $2.4 billion underground rail loop compared with other transport needs. But his responsibility is to national taxpayers. If the Auckland Council can convince its voting residents to pay the full cost of the project without calling on central funds, sceptics will have to reassess their view.
A charge is the best test of real demand. A recent Herald-DigiPoll survey tested Aucklanders’ enthusiasm for the inner-city rail loop against a Northern Motorway extension, Mr Joyce’s priority. More than half, 63.3 per cent, preferred the loop. If that enthusiasm survives when they face the financial obligation, they must be confident the railway would be well patronised and roads less congested.
Mayor Len Brown has yet to convince the council, let alone citizens, that the inner-city loop is worth financing in this way, but it is too early to be dismissing the idea as the minister did last week.
This sounds like a typical John Roughan editorial: trying in a bit of a sneaky, round-about kind of way, to say that Auckland should completely pay for the rail tunnel and being sceptical that Aucklanders really will support the project once it starts to hit home how it will be paid for.
However, he does make an important point in this paragraph:
New Zealand has long had a highly centralised system of government in which local government has been restricted to roles, powers and rate finance approved by Parliament. The creation of a single council for Auckland, which comprises a quarter of the country’s population and more than a quarter of its wealth, poses a challenge to the national apparatus.
Though the scepticism then returns:
Planners of the inner-city rail loop hope it will change the shape of Auckland again, stopping sprawl and concentrating population growth around public transport routes into a revitalised core.
Next they have to convince Aucklanders to pay for it. Road charging is a punitive way to pay for a railway but city road users might recognise it to be in their interest. It is brave of the mayor to propose it. He will need all his powers of persuasion. But having taken this step he can reasonably tell Mr Joyce to butt out.
The general consensus between Stu Donovan and myself (and most commenters it would seem) is that congestion charging shouldn’t be used as an additional revenue generator, but as a congestion management tool. But then I think we have plenty of money to build the City Rail Link: we just need to cut back on a couple of pointless Roads of National Significance (holiday highway and Transmission Gully for example) and we could easily fund the project, with a few hundred million to spare.
I have (rightfully I think) hassled Labour for not paying enough attention to transport in recent times, letting Steven Joyce get away with a lot of the poor transport decisions that he’s making. So it was good to see them put together a few challenging questions today:
(Zip past the first minute or so, which is just silly stuff). You can read the transcript here.
I guess if we analyse this, one thing that I found quite interesting was Joyce’s approach to the City Rail Link. Although he continues to believe Ministry of Transport officials who say the BCR of the project is 0.3 to 0.4 (despite the absurdity of many of MoT’s assumptions that lead to the low result), I wonder whether there’s some acceptance that the politics of continuing to stubbornly oppose the project are getting a bit dicey. It’s this answer which I find quite interesting:
Hon STEVEN JOYCE: I think the difficulty we are in with the central business district rail loop is that quite obviously the council has gone to that solution without looking at all the other options that are possible to improve public transport access in Auckland. I point out to the member that all the independent analysis by the Ministry of Transport and Treasury on the central business district rail loop says it will do very little to improve congestion. I am prepared to say that it is possible that the central business district rail link is the next project in Auckland, but, rather than bolting towards it without any consideration of the costs, as the Labour Party is doing, I think we have to ask some tough questions.
However, there’s still a lot of rubbish being spouted – particularly around the business case for the Puhoi-Wellsford “holiday highway” route. It was good to start to see some of that rubbish being pulled apart:
David Shearer: Given the Minister’s answer to written question No. 1515 that the calculation of the wider economic benefits on the holiday highway is not consistent with New Zealand Transport Agency’s own economic evaluation manual, has he asked for the business case to be re-evaluated; if not, why not?
Hon STEVEN JOYCE: What I can confirm for the member is that the two projects—the central business district rail loop and the Pūhoi to Wellsford road—have been measured using the same ruler and have been found to be very, very significantly—
Hon Shane Jones: Oh, rubbish.
Hon STEVEN JOYCE: Well, it happens to be true. I know it is sometimes difficult to face the truth when one is in the Labour Party, but it is actually true that it is over 1 versus 0.3 to 0.4.
There are many areas where I hope there are future followup questions. Exploring Joyce’s claim that this government’s spending $1.6 billion on rail projects in Auckland (which is rubbish) would be a great start.
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.
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