The Government isn’t planning any petrol excise or road user charge increases for three years from mid-2021.
Rate hikes have not been modelled in the Draft Government Policy Statement (GPS) on Land Transport 2021, published on Thursday.
The GPS, published every three years, set out the Government’s priorities for land transport and guides the way the NZ Transport Agency (NZTA) spends money from the National Land Transport Fund.
The Fund is mostly funded by fuel excise duty, road user charges and motor vehicle registration and licensing fees.
The petrol excise duty increased by 3.5 cents per litre in September 2018 and then again in July 2019, to 66 cents per litre. It is due to go up another 3.5 cents on July 1, 2020. Road user charges have increased by equivalent amounts.
Congestion charging not off the table for the future
There's no mention in the draft GPS of congestion charging being introduced.
However Transport Minister Phil Twyford isn’t ruling this out beyond the government's current term. National is openly supportive of congestion charging.
“We have no plans in this term of government to embark on congestion charging,” Twyford said.
“But officials are continuing to lay the groundwork by completing the work on congestion charging in Auckland. That’s been ongoing for the last couple of years.
“And officials are also doing work about what a future revenue system would look like. For example, when we have an electric vehicle fleet, we can no longer raise the revenue we need from fuel excise duty, and they’re looking at what the new options might be. For example, a GPS-based transport pricing system…
“It [congestion charging] is not off the table for the future. All countries around the world are looking at this issue right now. We’ve got to find ways to fund our transport systems and petrol taxes are not going to do it in the future.”
Asked whether the projected figures in the draft GPS could be taken as gospel, given the funding model might change during the three years from mid-2021, covered by the GPS, Twyford said: “If the funding model changes in the future, that would be a massive reform and a big change that would take quite a while to put in place.”
No major changes in expenditure targets or strategic direction
According to the draft GPS, the Fund’s target expenditure is expected to increase from $4.45 billion in the 2020/21 year to $4.50 billion in 2021/22:
Target expenditure is slightly higher than that projected in the current GPS:
The $6.8 billion of transport infrastructure funding (largely on roads) earmarked by the Government earlier in the year as a part of its NZ Upgrade Programme, is separate and additional.
In terms of the strategic direction set out in the draft GPS, it is similar to the existing one.
The key change, in the view of Greater Auckland transport blog administrator, Matt Lowrie, is a move to more clearly separate out the Government’s expectations for investment in public transport.
A reframing of “activity classes” will allow the NZTA to “separate regular investment to support continuous services, from investment in brand new infrastructure and services, and gives it the flexibility to deliver the most appropriate improvements as urban areas grow”.
Lowrie said this would provide more certainty of funding being directed to where it's intended to be invested.
Twyford said safety remains the top priority, as investment is made with the aim of reducing the number of deaths and serious injuries on the road by 40%.
In addition to this, the priorities are “better travel options”, “improving freight connections” and “climate change”.
Consultation on the draft GPS is open until April 27.