Investing for growth - a transport package for NZ

The government today announced a $297 million annual investment in new transport initiatives. Prime Minister Helen Clark said the package represents a significant investment in land transport for Auckland and will provide additional funding for regions throughout New Zealand.

Funding for the new investment will come from:

• a 5 cent increase in the fuel excise levy, and an equivalent rise in road user charges for light diesel vehicles, raising an estimated $207 million per year for expenditure throughout New Zealand.
• a specific funding allocation of on average $90 million per year over ten years for Auckland's specific needs.
• future revenue from tolls and borrowing.

"Building world-class infrastructure is a key element of the government's growth and innovation framework. This is an important investment in New Zealand's economic infrastructure. Our growing economy and population requires an increased investment in transport infrastructure.

"When today's announced increase in the fuel excise levy takes effect in April 2005, all the increased revenue will be directed to transport initiatives around all regions in New Zealand.

"Auckland, with around one third of New Zealand's population, will receive 35 per cent of that revenue. The rest will be allocated elsewhere throughout New Zealand on a population basis. So every region will get an increase in funding for land transport initiatives.

"An important part of the package specifically addresses the unique problems in Auckland which have resulted from ongoing population and economic growth, historical underinvestment, and the constraints on transport of an isthmus and harbour.

"The specific funding allocation to address Auckland's problems will mean that Auckland will stop being a drain on the national land transport funds. There is also potential for borrowing and tolling.

"The Auckland funding package is conditional on Auckland local bodies agreeing to a new governance structure to manage Auckland's land transport needs.

"That structure involves a single body responsible for Auckland transport, under the auspices of the Auckland Regional Council. The new body, the Auckland Regional Transport Authority, will be accountable to the ARC for delivering a sustainable transport system which is consistent with Auckland's strategic transport plans.

"Another body also accountable to the ARC, Auckland Regional Holdings, will manage the assets of Infrastructure Auckland.

"Discussion on the precise detail and implementation of the new transport authority will continue with Auckland's local bodies."

Helen Clark said all the extra funding, including in Auckland, will have to go through existing regional and national land transport spending processes. This means money will go to the most appropriate projects, whether they be road, public transport or transport demand management, but the decision to allocate the new tax revenue on a population basis will mean that all regions will be guaranteed extra investment.