Swings and roundabouts in transport spending

4 September, 2017

Everything in moderation. In the constantly-changing world of pop-health stories it is hard to know whether that axiom remains good health advice. But it certainly remains good advice in other areas.

Last week, several political parties announced their transport plans. And the differences are stark: billions of dollars more on roads (and a little bit more for public transport) versus billions of dollars
on public transport (and a little bit more for roads).

Is it credible that such wildly different approaches are compatible with what transport users want?
Could there be a better way of planning and delivering transport?

The situation was much the same in the late-2000s.

Governments set funding ranges in the Government Policy Statement with revenue coming from petrol taxes and road user charges. The chart below shows spending intentions on new and
improved state highways under the last Labour-led government and under recent National-led governments.

Interest 1


The story is similar for other activities such as road maintenance, walking and cycling and, particularly, for public transport:

Interest 2


It is simply not plausible that wild changes such as the 50% increase in state highway spending above (or similar-sized reduction if there is a change in Government this year) reflects actual changes in user demand.

The obvious explanation is that each government favours its constituency. Maybe we get lucky and the swings and, ahem, roundabouts average out over time to more or less be what users want.
But we must be concerned when so much of our expenditure is hand-picked by Ministers with an eye to cutting the sod or turning the ribbon while other, much higher-value, projects remain unfunded.

It is an issue that is heightened this election.

National is talking about funding some of its hand-selected projects through public-private partnerships. Normally paying off assets over their lifetime makes sense – beneficiaries of transport
infrastructure that is used tomorrow should be paid by those users and not entirely by today’s users. But these are not the best projects meaning that future users would be aggrieved by having to pay for projects designed to win over a small constituency during the month of September 2017.

Labour is talking about negotiating a 30-year transport plan with Auckland Council. Normally, long-term plans for long-term infrastructure make sense – infrastructure takes time to plan and deliver,
needs to look forward in time, and is hard to undo if we get it wrong. But, as with National’s proposals, whose interests will be enshrined in such a plan? Those at one peak in the political cycle.

There are, however, signs of reform. Parties across the political spectrum have adopted some policies which will help address problems of funding, financing and incentives around infrastructure
(including transport) and housing. These policies are similar to those advocated by The New Zealand Initiative.

It is time to build on that and address transport funding and incentive issues more broadly. Over the next year or so, The New Zealand Initiative will be looking at what impediments exist to a coherent, robust and transparent planning and funding system, and how to fix them.

Though this piece focusses on only one aspect, we hope it starts a conversation. We welcome feedback to further shape the scope of our work and, ultimately, to help design a system that is
more responsive to user, rather than political, need. Every mode in mode-eration.

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