New Electric Rail Travels From Onehunga To Britomart

PoliticsApril 4, 2018

This plan signals a major gear shift for transport in New Zealand

Guest writer
New Electric Rail Travels From Onehunga To Britomart

The new government yesterday announced its blueprint for an overhaul of transport funding in New Zealand. Matt Lowrie of Greater Auckland delivers his verdict. 

I couldn’t help but think of Joe Biden’s phrase “Don’t tell me what you value, show me your budget, and I’ll tell you what you value” following the release yesterday of the GPS – the government’s draft Government Policy Statement on Land Transport for 2018-28.

At Greater Auckland we’ve been pretty impressed with the language and understanding of transport and urban issues Phil Twyford, the transport minister, has shown since September’s election. So we’ve been keenly waiting to see how that would translate into funding. With the release of their first GPS we’re even more impressed.

As the name implies, the GPS sets out the government’s transport policies and spending on transport and does so over a 10-year horizon. It breaks transport spending down in to specific activity areas and sets a funding range for them. Those funding ranges are then used by the NZTA and regional councils to come up with more specific plans for how that money will be spent. Those plans also have to be consistent with and give effect to the GPS. Here’s how they all tie together:

We had expressed concern before about how the previous government had focused most of the previous transport policy statements, including their draft for 2018-28, towards a handful of big roading projects. Spending on State Highways had over those three terms increased to around 55% of the transport budget. One big immediate takeaway from this version is that it’s a much more balanced policy. This is being delivered primarily through an increased focus in road safety, public transport and active modes.

The GPS sets four strategic priorities for our transport system, two key and two supporting ones. Safety and Value for Money were in the previous National GPS but Access and the Environment are new. These priorities are shown below.

The focus on safety and access are welcome, and the supporting text is positive. The details in the access category are particularly interesting. Here’s their summary of it, showing that it’s a quite wide ranging and visionary view on how transport works in New Zealand.

Access in GPS 2018:

  • has a new focus that prioritises improving New Zealander’s access to opportunities and markets. The increased focus includes:
    • urban centres
    • regional development that supports thriving regions, for example through the Provincial Growth Fund
    • nationally important freight and tourism connections are safe, efficient, resilient and minimise greenhouse gas emissions
    • a continued focus on resilience of the land transport system, but places greater focus on resilience to climate change impacts.
  • The increased focus on urban centres is to ensure that transport and land use planning reduces the need to travel by private motor vehicle by:
    • transport and land use planning that improves access by reducing the need to travel long distances to access opportunities like employment, education and recreation
    • supporting a mode shift for trips in urban centres from single occupant private vehicles to more efficient, low cost modes like walking, cycling and public transport.

Funding

As great as much of the text of the document is, as mentioned at the start of this post, it’s the budget that proves the intentions, and the numbers look good. The government expects to spend around $4bn on transport in the coming financial year, rising to $4.6bn by 2023/24. The breakdown is shown below.

Spending is split into 12 different activity classes with the two new ones, Rapid Transit and Transitional Rail. Each activity area is set an upper and lower limit and it’s up to the NZTA to come up with the ultimate spending within that range so that it ultimately all matches the expenditure above. The classes are shown below with how they say the upper funding limit has changed compared to the 2015-18 GPS.

  • Public transport – 46% increase
    • This will support an expansion in public transport networks.
    • This will support an increase in operating subsidies for public transport and some public transport capital improvements
  • Rapid Transit – New activity class
    • Allowing $4 billion over 10 years to establish rapid transit investment with an initial focus on Auckland. Note: While funding ranges show a decrease in rapid transit investment, in later years the intention is to continue with more investment.
  • Local road improvements – 42% increase
    • To support local road improvements and upgrades.
  • Regional improvements – 96% increase
    • To support investment in regional projects that improve safety, resilience and access for people and goods. How the NLTF interacts with the Provincial Growth Fund will be a key determinant of the activity class funding expenditure levels.
  • State highway improvements – 11% decrease
    • This decrease rebalances investment across the transport portfolio. The proposed activity class level will allow for currently committed projects to be completed and will enable the delivery of more safety improvements.
  • Road policing – 14% increase
    • To enable the NZ Police to maintain an effective road policing service.
  • Road safety and demand management – 81% increase
    • To continue road safety promotion, alcohol interlocks, and to include demand management measures that promote public transport and walking and cycling.
  • State highway maintenance – 18% increase
    • This activity class was capped over the last GPS period. It is now proposed to allow for an increase in the level of renewals of state highway pavement surfaces given additional heavy vehicle traffic and severe weather.
  • Local road maintenance – 22% increase
    • This activity class was capped over the last GPS period. It is proposed to allow an increase to cover the increased maintenance cost of additional heavy traffic and severe weather. However, it is also proposed to allow footpath maintenance to be funded from the NLTF. This is a scope change that reflects the Government’s desire to support the use of active modes.
  • Investment management – 31% increase
    • This increase will support additional transport planning of NZ Transport Agency and local government given the changes to transport priorities.
  • Transitional rail – New activity class
    • This activity class will support rail priority transport options for users and benefit congestion in our urban centres until a wider review of rail funding is concluded.
  • Walking and cycling improvements – 248% increase
    • To support an expansion in walking and cycling infrastructure.

There’s a lot to like here. Almost every area sees a potential increase in funding with the exception of State Highways, and even then the decrease isn’t that much. It’s also great we’re seeing dedicated funds for Rapid Transit. Both National and Labour agree that Auckland needs a rapid transit network and so it makes sense to dedicate funding towards delivering that.

The graph below boils down the activity classes to six key descriptions and shows how the funding ranges have changed over the various GPS’. This includes the first GPS by Labour in 2008 that was subsequently rewritten by National, like the new government have now done here. What is most noticeable is how much more funding is available for PT projects once you combine the PT, Rapid Transit and Transitional Rail classes.

Likely the biggest concern with the GPS is the announcement that fuel and excise taxes across the country will increase by 3 to 4 cents per litre for each of the next three years. While no one likes paying more taxes, it is worth noting that under the last government, fuel taxes increases by similar amounts quite a few times. In addition, ministers were keen to point out yesterday that increases of 10-20 cents per litre over that time frame would have been needed to fund motorway building even if National were still in government.

More Reading

    Overall the draft GPS is fantastic and the excellent text is backed up with the funding to support it. We’re entering into a brave new world.

    An earlier version of this post appeared at Greater Auckland

    This section is made possible by Simplicity, New Zealand’s fastest growing KiwiSaver scheme. As a nonprofit, Simplicity only charges members what it costs to invest their money. It already has more than 12,500 plus members who, together, are saving more than $3.8 million annually in fees. This year, New Zealanders will pay more than $525 million in KiwiSaver fees. Why pay more than you need to? It takes two minutes to switch. Grab your IRD # and driver’s licence. It really is that simple.

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    Lyttelton Port workers demonstrating at the Christchurch City Council during their strike (Photo: Radio NZ/ Alex Harmer)
    Lyttelton Port workers demonstrating at the Christchurch City Council during their strike (Photo: Radio NZ/ Alex Harmer)

    PoliticsMarch 31, 2018

    Workers are missing out on their share of growth, and they’re mad as hell

    Staff Writer
    Lyttelton Port workers demonstrating at the Christchurch City Council during their strike (Photo: Radio NZ/ Alex Harmer)
    Lyttelton Port workers demonstrating at the Christchurch City Council during their strike (Photo: Radio NZ/ Alex Harmer)

    New Zealand’s workers are underpaid and, increasingly, they aren’t willing to put up with it. Alex Braae looks at the recent surge in industrial disputes and strikes in New Zealand.

    Nurses. Train and bus drivers. Port workers. Silver Fern Farms workers. Supermarket distribution workers. Fast food workers. Disability support workers. Fletcher Building workers. In the last year, all of these groups have either threatened to go on strike, or walked off the job altogether. Later this year, they may be joined by teachers.

    It has long been acknowledged that New Zealand wages and salaries are low, relative to other OECD countries. And it appears that workers, particularly organised workers, have had enough.

    Unionist Morgan Godfery said while he doesn’t believe there are more strikes than usual happening at the moment, “union members who are striking are being more assertive”. Nurses recently rejected a pay rise offer of 2%, plus a $1050 lump sum, in what is likely to be the most high profile industrial action of the year.

    Nurses say they have two reasons to reject the offer,. They say they aren’t paid enough, and that hospitals are understaffed. It’s fair to assume better pay for a difficult job would in time solve the understaffing problem too. Freya Head, both a working nurse and a member of the union’s negotiating team, says this current dispute has been a decade in the making.

    “We wanted to believe things were going to get better, and it just hasn’t. It’s not sustainable any more,” said Head. “What we do is very specialised. We need doctors, DHBs and the government to understand that, rather than getting young and inexperienced nurses in and having them burned out in five years.”

    Freya Head also said the feeling towards collective action among nurses had dramatically shifted. She said it was an overwhelming vote against the deal, and more pertinently, union meetings now had high turnout. As she put it, “we’re all standing together. You can’t strike with 30% on board.”

    Union membership in New Zealand is still slowly declining – at last count (2016) Statistics New Zealand had the share of employed labour force who are union members at 15.2%. But Unions Wellington coordinator Ben Peterson believes if groups like nurses are successful in using the threat of a strike to get a better deal, it could inspire others.

    “Strikes being in the national discourse at the moment might actually drive them to happen. At the moment its been more talk than reality, but I think after decades of underfunding and wage stagnation, it could drive people to being open to taking action.”

    Kim Campbell from the Employers and Manufacturers Association argues that strikes are a risk for unions, because while he says strikes have a rightful place, “you can annoy the public, and lose sympathy for your cause.”

    Kim Campbell said the current industrial actions are “issue specific,” and are getting more strident after bubbling away for a few years. He says employers need to consider taking a more conciliatory approach to demands from workers. 

    “There’s one thing for sure. If workers, unionised or not, see record profits being made, and they don’t see their wages moving up, they get grumpy. It’s a natural dynamic that has always been there.”

    “Our view as employer advocates, is that you don’t want to kill the goose that lays the golden egg. Even if you have a desire to pay more, but not the ability because you’re no longer competitive, it becomes a problem for everyone.”

    The new government has made both moves and noises in favour of unions. Labour has resurrected a bill that would strengthen protections for Labour hire workers, they’re starting a programme of bumping up the minimum wage, have made changes to the 90 day trial law, and are looking to strengthen collective bargaining. Finance Minister Grant Robertson has also made non-committal expressions of support for nurses and teachers getting a pay rise, though earlier this week Jacinda Ardern refused to take an explicit position on whether nurses are underpaid.

    Kim Campbell said his organisation wouldn’t advocate for those positions, but employers would simply have to accept some of them.

    “We’re not going to sit there and say no to everything, but certainly we’re sounding a cautionary note on the whole lot together, because New Zealand could become uncompetitive again.”

    Regardless, after many years of stagnant wages despite the so-called ‘rockstar economy,’ demands for a better share are likely to grow louder. And if well-organised groups manage to get big wins in their disputes, other workers might once again see unions as their best chance for success.

    This section is made possible by Simplicity, New Zealand’s fastest growing KiwiSaver scheme. As a nonprofit, Simplicity only charges members what it costs to invest their money. It already has more than 12,500 plus members who, together, are saving more than $3.8 million annually in fees. This year, New Zealanders will pay more than $525 million in KiwiSaver fees. Why pay more than you need to? It takes two minutes to switch. Grab your IRD # and driver’s licence. It really is that simple.

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