The Crown has agreed to provide a $2 billion loan to top up the pot of funding Waka Kotahi - NZ Transport Agency (NZTA) uses to grow and maintain the country’s transport network.
The loan will contribute towards the $24.3 billion to be invested in the 2021-24 National Land Transport Programme, unveiled on Tuesday.
The new programme is nearly 44% larger than the 2018-2021 programme.
The idea behind the National Land Transport Fund is that it’s largely funded by transport network users, and that the NZTA decides how funding is allocated independently of the Government.
So, the National Land Transport Fund is mostly funded by road user charges, fuel excise duties, vehicle registration fees, and local council rates.
However, the Government has in recent years provided additional funding to NZTA for specific projects, via the NZ Upgrade Programme and Provincial Growth Fund for example.
There’s been an acknowledgement for some time that the user-pays model the National Land Transport Fund is based on is insufficient to cover the cost of getting the country’s transport infrastructure up to scratch.
So now the Government is offering to lend NZTA $2 billion to use as it wishes for its National Land Transport Programme. The Crown will borrow the money to lend to NZTA, rather than it enabling NZTA to issue the debt itself.
NZTA said the terms of the loan are yet to be agreed. However, it assumed the facility will be available and fully utilised within the next three years, and that no debt repayments would be made in the next 10 years.
The bulk of the funding will go towards roading. Here’s a high-level breakdown of how the funding will be invested.
- Road, walking and cycling network operations and maintenance - $7.2 billion
- Local, regional and state highway road improvements - $6.6 billion
- Road to Zero safety improvements - $3 billion
- Public transport services - $2.6 billion
- Public transport infrastructure - $2.3 billion
- Rail improvements - $1.3 billion
- Walking and cycling improvements - $1 billion
- Miscellaneous (includes coastal shipping and long-term planning) - $450 million
For more on specific projects that will be funded, see a copy of the National Land Transport Programme.
Commentary from Transport Minister
Transport Minister Michael Wood said: “This NLTP marks a step-change with nearly $6 billion being invested in public transport and walking and cycling - a nearly 40% increase compared to the previous three years.
“To further reduce emissions and help freight move efficiently, the NLTP delivers $1.3 billion to implement the NZ Rail Plan and $30 million to support coastal shipping. There will be further announcements on how this will support moving freight along the blue highway in the future.
“Safety remains a top priority for this Government and we’ll be investing $2.9 billion in our road safety plan Road to Zero to help prevent tragedies. This will include making 17 high risk state highway corridors safer, with 51 intersection improvements, 25 new roundabouts, and 164kms of safety barriers.
“Almost $7 billion will be invested in local road and state highway maintenance, which will see around 7,000 lane kilometres of state highway and 18,000 lane kilometres of local roads renewed. The previous government flatlined road maintenance spending, so since coming into government, we have boosted it by nearly 50 per cent to help bring our roads back up to scratch.
“Our transport network is increasingly being impacted by severe weather events as a result of climate change, so on top of our road maintenance investments, a further $3.9 billion will be spent on road improvements that will help connect communities, ensure the reliable movement of freight and improve resilience across the country.
“This will see important projects like Te Ahu a Turanga Manawatū Tararua Highway and the Waikato Expressway completed.”