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Auckland Council gives green light to 11.5c fuel tax to hit motorists on July 1

31 May 2018

Auckland Council’s controversial 11.5 cents a litre fuel tax has been approved by councillors at a budget meeting today.

Councillors voted 13-7 to approve the extra cost for motorists today.

Legislation allowing the tax is expected to be passed in Parliament to allow the tax to come into effect on July 1.

Auckland drivers face paying 25c a litre more in the next three years as the Government also proposes boosting fuel taxes in 3c to 4c annual hikes.

Motorists filling up with 91 unleaded this morning were able to get a best price of $2.03 a litre at the Gull Wiri self-service station in South Auckland, but more typically paid between $2.07 and $2.19 a litre, according to the Gaspy app.

A handful of service stations charged $2.20 or more a litre and the two Z stations near Auckland Airport posted the most expensive prices at $2.29 a litre.

Those wanting premium 95 unleaded had to dip a little deeper into their wallets, facing prices ranging from $2.14 to $2.41 a litre.

Mayor Phil Goff said the tax was critical to help pay for projects to improve transport after years and years of under investment.

“We cannot allow our city to gridlock and that is what we are heading toward,” he said.

Goff said the tax would raise $1.5 billion over 10 years but Government subsidies and development contributions would increase that to $4.3b.

To raise that money through rates would require a 13 per cent to 14 per cent rise.

The regional fuel tax was the fastest, cheapest and best way to raise spending to tackle traffic congestion, said the mayor.

Without the extra money, Goff said, the city would grind to a halt.

Manurewa-Papakura councillor Daniel Newman, the only councillor to advocate for higher rates as the way forward, said the tax would lead to a redistribution of wealth from some of the poorest people to those who have the greatest wealth and choice.

“I don’t think that is fair,” he said.

Councillor Chris Darby said the tax would lead to significant benefits across the city, as well as social and economic benefits.

“This regional fuel tax allows us to shift gears in Auckland in a way we have not seen before: out of planning and into delivery,” he said.

National MP Jami-Lee Ross said Aucklanders would not forgive Auckland Council and the Labour Government’s decisions to impose fuel taxes.

“They certainly won’t forget it every time it costs them more to fill up their cars.”

Ross said consultation had identified that 51 per cent of Aucklanders opposed the regional fuel tax.

“This new tax is not needed. If Auckland Council simply followed through on Mayor Goff’s promise to find between 3-6 per cent of savings in the council’s budget they could easily find the money that the fuel tax would raise,” he said.

“Instead, Auckland Council has been given the ‘tax and spend’ keys by Transport Minister Phil Twyford and hard-working New Zealanders will be paying the cost.”

How councillors voted
For
Mayor Phil Goff
Deputy Mayor Bill Cashmore
Ross Clow
Josephine Bartley
Cathy Casey
Linda Cooper
Chris Darby
Alf Filipaina
Chris Fletcher
Richard Hills
Penny Hulse
Wayne Walker
John Watson

Against
Efeso Collins
Mike Lee
Daniel Newman
Greg Sayers
Desley Simson
Sharon Stewart
John Walker

READ MORE:
• Barry Soper: The hypocrisy of the Govt’s petrol tax position
• Aucklanders to have say on regional petrol tax before knowing how it will be spent
• Ken Shirley: Fuel tax poorly thought out solution to transport costs

The Auckland fuel tax always looked doomed, just not quite this quickly

New Zealand had a regional fuel tax during the early 1990s, but it was abandoned as the impact spread across the country.

SIMON MAUDE/STUFF
New Zealand had a regional fuel tax during the early 1990s, but it was abandoned as the impact spread across the country.
OPINION: When the Government signalled plans to introduce a special fuel tax in Auckland, transport officials warned Transport Minister Phil Twyford that such a measure had been tried before and failed. At least twice.

For all the good intention – that motorists benefiting from major transport projects pay their share – there is little that can be done to prevent the impact of the tax increase spreading across the country.

Proving exactly who is paying what when it comes to excise tax on petrol is hard, because the giant tax bill is paid in bulk.

But there are signs that rather than spilling over when the tax comes into force, that the sharp price increase in recent weeks could be price spreading in anticipation of the price increase.

Prices are rising strongly in areas where competition is limited in comparison to Auckland, where the increase has been much more muted.

When Twyford introduced legislation to enable the new tax, which is supposed to add 11.5 cents a litre to the price of petrol in Auckland but nowhere else, the average petrol station in Auckland was charging about 4c a litre less than in Christchurch.

By last week, as prices hit the highest of all time in areas subject to the “national” fuel price, the average difference between Auckland and Christchurch, was more like 16c.

Transport Minister Phil Twyford was warned that regional fuel taxes had been tried and failed before and is now refusing ...

MONIQUE FORD/STUFF
Transport Minister Phil Twyford was warned that regional fuel taxes had been tried and failed before and is now refusing to discuss signs that the impact may already be being felt by motorists elsewhere.
 According to information from Gaspy, a mobile app which monitors prices based on observations of thousands of drivers, the growth in the gap between Auckland and Wellington has also surged since late March.

In rough terms, the degree of price increases in many areas has grown by the scale of the impending Auckland regional fuel tax.

So come July 1, if prices in Auckland do actually increase by 11.5c, can it really be said that Aucklanders are the ones paying the regional fuel tax?

Or, as the Ministry of Transport warned could happen (and has happened before), has the impact of the Auckland regional fuel tax actually been spread across the country?

It appears the fuel companies are doing something akin to front running the increase. A sharp price increase is coming to a highly competitive area and prices in areas where there is less competition than Auckland are quickly drifting higher ahead of the move.

Z Energy, which has consistently fronted up to comment when its rivals have refused, denies prices are rising in anticipation of the fuel tax.

A spokeswoman said the price gap between the cheapest and most expensive stations tended to grow sharply during times of rising crude prices, and then narrow when oil prices stabilised.

Gaspy, which crowd sources petrol prices from around the country, has noticed a conspicuous widening in the gap between Auckland prices and other parts of the country, especially Christchurch. Z Energy says the price gap is typical of periods when crude prices rise strongly.

Perhaps this is the case, but if so it would simply highlight how different areas are much less competitive than others.

The Z Energy spokeswoman also declined to give assurances that the gap would narrow as crude oil prices stabilised. Come July 1, the company would add the Auckland regional fuel tax to stations across New Zealand’s largest city, but then it would be a case of market forces at play.

A spokeswoman for BP said the recent changes in its national pricing “are a function of the rising crude/falling [New Zealand dollar] environment we are currently operating in, together with competitive factors playing a part, rather than a response to the proposed introduction of the regional fuel tax.”

If the regional fuel tax were legislated, BP “will apply the Auckland regional fuel tax from 1 July within the identified boundaries” the company said.

Larry Green, co-founder of Gaspy, said the price gap between Auckland and other areas was growing at such speed it was “impossibly unlikely” that it was not related to the impending price increase.

“The more they [the petrol companies] spread it over time, the less it looks like an anomaly”.

This has all happened before, suggesting Governments never learn.

During the early 1990s, New Zealand had a regional fuel tax, but it was abandoned as the impact spread across New Zealand.

The Government passed legislation for another regional tax in 2008, but never introduced it because of fears of price spreading.

We know this because it is contained in a very clear warning to Twyford about what could happen to his increase.

“If price spreading was to occur the larger companies have the ability to spread the cost of the tax to all fuel sales made across their network. For example, fuel companies could charge approximately three cent tax nationally across their network to cover a 10 cents per litre regional fuel tax required in for each litre of fuel sold in Auckland.”

To give Phil Twyford credit, it is not as if he is prone to simply accepting what government officials tell him.

When he didn’t like what Treasury said about how much of an impact KiwiBuild would have on the housing market, Twyford accused “kids at Treasury” of being “disconnected from reality”.

Whether or not he accepts that the regional fuel tax will have integrity is hard to know.

Apart from a vague promise to increase monitoring of prices to assess whether price-spreading occurs, Twyford is refusing to comment, saying there is nothing he can add.

But given how stark the warnings were, the regional fuel tax simply looks dishonest. The Government should admit it will not work, replace the regional tax with a smaller nationwide one and drop the charade.

 – Stuff

Govt are repackaging National transport projects – MP

The National Party says the government has simply adopted its vision for transport in Auckland.

An Auckland Transport train passes by Mt Eden prison
An Auckland Transport train passes by Mt Eden prison Photo: RNZ / Diego Opatowski

The government launched its rejigged $28 billion Auckland Transport Alignment Project that will fund roads, rail, bus lanes and cycleways across the city over the next 10 years and is aimed at easing Auckland’s infamous congestion.

At the launch, Auckland Mayor Phil Goff made it clear the city must deal with its traffic problem.

“We have congestion, we are facing gridlock, it is costing us huge frustration and it is costing the country, not just Auckland, the country one to two billion dollars a year,” Mr Goff said.

Transport Minister Phil Twyford said the Auckland fuel tax and public private partnerships will help fund the projects and deliver a congestion-free rapid transit network.

“All over the world cities are retrofitting car-dependent urban areas with modern rapid transit systems.

“In Australia alone, there are light rail systems currently being built in the Gold Coast, in Canberra, in Newcastle, in Sydney and in Melbourne.

“Dozens and dozens of cities around the world are doing this because they recognise that cities of any scale cannot be either liveable or economically prosperous without modern rapid transit systems.”

National’s transport spokesperson Jami-Lee Ross said many of the projects are awfully familiar.

“I think the best part of it is that they’ve recognised that many of the projects the National Party were putting in place were well worth doing – they’ve agreed to do what effectively Simon Bridges announced in August last year,” Mr Ross said.

“So Phil Twyford’s adopting many of the projects that we were progressing – the key difference is, we wouldn’t have taxed the country more to subsidise those trams down Dominion Road.”

Mr Ross said some motorists will be hit hard by the new funding mechanisms.

“The worst part about this is that we’re seeing from Labour they’re happy to put up more taxes on the whole country – when it comes to the Penlink area, they want Rodney people to pay a regional fuel tax, increased national fuel taxes and they want to put the toll on top for Penlink.

“So, those people are being whacked three times for that particular road … but that’s the Labour Party for you.”

Act’s David Seymour said the government could have been more ambitious.

He said there needs to be extensive public private partnerships and electronic road pricing to complete the motorway network.

“We’re talking a second Harbour Crossing, we’re talking an underground tunnel to complete the Eastern Motorway without disturbing existing suburbs.

“Those are the kinds of radical developments that are required, so good on the government for what they’ve done but it’s simply not proportional to the crisis, it’s like setting a capuchin monkey on a gorilla,” Mr Seymour told RNZ.

Simon Wilson: Auckland’s port has to shift but where will it go?

The port has to move but there’s nowhere for it to go. That’s the problem facing Auckland as it inches towards a decision on the long-term future of its container port, the car imports, the cruise ships and the land they all currently take up on the edge of the sparkling Waitemata harbour.

It’s an unsolvable problem that has to be solved. We need a port and we need it to stay highly functional. And the land it sits on now is both publicly owned and the most valuable real estate in the country – we have the chance to create something very special there.

On Tuesday this week the Herald published a proposal by the architectural firm Archimedia for transforming the land. New beaches, a lagoon, a “volcano”, a Maori cultural centre, hospitality, apartments and offices all featured.

The proposal excited a lot of interest among our readers. The prospect of swimming and other calm-water recreation so close to the city has been especially popular. So have the big new parklands and the 8.2km of boardwalks and other public walkways/cycleways offered by the proposal.

We’ve also heard concerns. Some ask why commercial development will be allowed on the site. Others want to know where the port will go.

The value of commercial activity is clear enough. Apartments to house 8000 people will help provide population density, giving life to the precinct. The land would be made leasehold, not freehold, and commercial developments will pay for public amenities.

Will that mean a new wall of buildings to block the views? The answer depends entirely on the final designs and the consenting process. It doesn’t have to be a problem.

The question of where the port will go is far from settled. But whether it has to shift has already been resolved. It’s worth remembering how that happened.

In 2015 then-mayor Len Brown set up a Port Future Study with a Consensus Working Group. The Chamber of Commerce and the Employers and Manufacturers Association were involved, along with Generation Zero and Urban Auckland, Ngati Whatua and the Tamaki Alliance, property developers, resource management experts, shipping, freight and logistics companies, and Ports of Auckland Ltd itself. It was a high-powered, diverse and very representative group.

A year later, in July 2016, they reached a remarkable consensus. The group agreed:

•The existing port is not big enough for the freight and cruise demands it will face in 25 to 40 years. (The port handles close to one million containers a year now; that’s expected to rise by a further million every 20 years.)

•Rail and road links out of the port will reach capacity within the same period, if not earlier.

•Over the next 20 or so years the port will require extra capacity on its existing site, “prior to a new port being established”.

•Economic, environmental, cultural and social factors are all critical in deciding the future of the port and of the port land.

•It is in Auckland’s best interests to keep all the existing functions of the port. So, for example, the city would lose out if car imports were shifted to Northport, near Whangarei.

•Other North Island ports will lack the long-term capacity to take over entirely from the Auckland port.

•Taking all this into account, there is “sufficient probability” that a new port for freight will be required. Planning should proceed on that basis.

•Berths for cruise ships should be retained in the city centre.

A long list of 28 site options was identified, including Northport and Tauranga. That was narrowed to eight and then finally to two: the Firth of Thames and the Manukau Harbour.

The hope was that all these conclusions would become the foundation for debate and planning about the future of the port.

Since then, the Government has changed and the coalition agreement between Labour and New Zealand First commits them to a ports future study of their own. The details of that are soon to be announced.

NZ First campaigned in the election for the car import business to be relocated to Northport, and other functions to be dispersed to the regions too. However, Infrastructure Minister Shane Jones told the Herald this week that the chief executive of Ports of Auckland and others had been briefing him and what they said had “taken my fancy”.

Shifting the port is not an easy proposition, Jones said, and he understood that much better now.

Why the Firth of Thames or Manukau Harbour? The first part of the answer is that the most important site is not either of those, or the current Waitemata site. It’s Wiri.

That’s where Ports of Auckland has its the inland port, where much of the freight is taken for sorting and dispatch. Wiri is the fast-growing heart of freight logistics in the upper North Island.

The Manukau Harbour is a very short hop, across largely open land, to Wiri. The Firth of Thames would also be relatively easy to connect to Wiri, with a dedicated road and rail corridor through the Hunua Ranges. Both options would allow freight capacity to grow without the transport links disrupting commuter traffic.

A port in the Firth of Thames would be on a new island connected by a causeway. There are many breeding grounds for birds in the area but, surprisingly, around the world port activity has not been disruptive to bird breeding.

A port in the Manukau would require extensive dredging, and shipping would be subject to the wilder conditions of the west coast and the Manukau Harbour entrance.

There are many other environmental, cultural and social issues to be considered. The cost of shifting the port was identified by the Port Future Study as being $5 billion, although there are other analysts who dispute this.

Meanwhile, this week the Auckland Council received an officials’ report on Ports of Auckland’s own 30-year plan. It includes the complete demolition of Marsden Wharf, a building for handling car imports, a hotel and a further extension of Bledisloe Wharf into the harbour.

That extension was to be 40m, but Ports of Auckland has scaled it back to 13m.

Mayor Phil Goff said he didn’t know if the hotel was a good idea or not, but noted that Ports of Auckland didn’t need a decision on it for five to 10 years. He also said he was “frankly uncomfortable even with the 13m extension” but was not going to oppose it.

Lindsay Mackie and Sean Park of Archimedia presented their plan at the same meeting. Goff was enthusiastic, calling it “a great design” and “a great first step”.

Planning committee chair Chris Darby was also keen. He called it “extremely stimulating” and said it was a reminder to council not to let Ports of Auckland do anything that would compromise the longer-term potential of the site.

He was particularly worried about that Ports of Auckland proposal for a hotel.

Goff’s main message to councillors, in regard to both the Ports of Auckland plan and the Archimedia plan, was that they needed a bigger picture. “Look at South Bank in Brisbane,” he told his colleagues. “It used to be a decrepit port area. Look at Darling Harbour in Sydney. We could do the same in Auckland.”

He reminded councillors that Ports of Auckland, as part of the Port Future Study, had accepted it would outgrow its site. “They knew that in 30 years they’d be out of there,” he said, adding that this was “confirmed in a workshop” the council held a couple of weeks ago.

He didn’t think either Northport or Tauranga would provide a solution for Auckland. He said it was a “no brainer” to support the Government as it considered its options for guaranteeing supply chains in the upper North Island. It was also a “no brainer” for Auckland “to protect our interests and our dividends”.

“It’s our port, not the Government’s port,” he said.

The mayor, and in all likelihood Auckland Council with him, want to shift the port but not by way of losing the car importing or any other functions. There’s a battle with the Government brewing on that one.

As for the Archimedia plan, it’s not a blueprint. Lindsay Mackie calls it a conversation starter.

Archimedia has left it to the economics and environmentalists and politicians and others to worry away about when and where to shift the port. But while that happens, it wants to inject some imaginative thinking into the debate about the current site.

It wants to lift the debate above the short-term distractions of new hotels and 13m reclamations and focus instead on big-picture planning and long-term opportunities.

It has challenged Auckland to think about what we would really like to see on our downtown waterfront.

The Soap Box: Govt are hypocritical over petrol tax

By Barry Soper

 

Prime Minister Jacinda Ardern and Energy Minister Megan Woods are running the risk of coming across as hyopocrites. (Photo / NZ Herald)
Prime Minister Jacinda Ardern and Energy Minister Megan Woods are running the risk of coming across as hyopocrites. (Photo / NZ Herald)

Cabinet’s energiser battery Megan Woods seems to dart from one crisis to the next.

Whether it’s sorting out and sacking those associated with issues still to be cleared up in her home town of Christchurch to bringing the big oil companies to heel over petrol pricing, this diminutive do-gooder always appears to be in distress.

At least on the surface, it seems she’s well suited for the energy portfolio and regenerating her home turf.

But putting the British Petroleum oil company boss on her Beehive mat would appear to be something over an over-reaction and runs the risk of this Government again sending the wrong signals to business.

Her frenzy was triggered by a media story of a BP pricing manager sending an email increasing the price of petrol at three southern North Island sites because a fourth in the same region was suffering from falling sales. It was a tactic, the manager explained, that had worked before.

It worked because competitor Z saw the prices it could get away with and increased theirs too. So everyone was making more money which is generally why a company’s in business for.

Waving the big stick at the oil companies may appease the long suffering motorists who pay wildly varying prices for exactly the same product, depending on which part of the country they live in. That’s where the explanation’s needed.

But while they’re at it, the Government itself could indulge in a bit of navel gazing and explain to motorists why they’re paying almost half the cost of petrol at the pump into their coffers, an excise tax that’s set to grow under Labour by between nine and 12 cents a litre over the next three years.

It would seem somewhat hypocritical for the Beehive then to bash the oil companies when they’re in the business of reaping the benefit of petrol sales themselves. Goodness know what they’d do if we all went electric!

At least the excise on petrol now goes into the National Land Transport Fund for investment back into the system. That wasn’t always the case.

Petrol landing in this country costs about 60 cents a litre with the oil company margins around 50 cents. And of course we’ll be importing more of it with future oil exploration recently banned by the Beehive.

The motorists’ champion the Automobile Association have argued for yonks that the 15 percent GST take shouldn’t apply to petrol with the solid argument that, when it’s applied to the 70 cents a litre excise portion of what we pay at the pump, it’s nothing more than a tax on a tax. It’s plain and simple double dipping.

So Megan Woods’ fist pumping would seem to be more about putting on the style for the motorist rather than substance.

Fuel tax poorly thought out solution to transport costs – Ken Shirley

By Ken Shirley

It is such a blunt and impractical tool that it is an indefensible piece of policymaking no matter which way you cut it.News that Auckland Central MP Nikki Kaye is seeking an exemption for Waiheke and Great Barrier Island residents from Auckland Council’s regional fuel tax further highlights how bad the policy is.

In many ways it would be grossly unfair to motorists on Waiheke and Great Barrier if they had to pay the tax considering their cars rarely leave the islands. However, the Waiheke and Great Barrier situation is just one of many complex workarounds that must be written into the legislation if the tax is to be anywhere near fair when implemented in under three months’ time.

The Road Transport Forum, which represents the New Zealand road transport industry, has consistently opposed the concept of a regional fuel tax, not because it doesn’t suit trucking operators, but because fundamentally it is just bad policy.

The fuel tax is a poorly thought-out solution to the issue of how Auckland funds some of the costs of its much-needed transport infrastructure. It is such a blunt and impractical tool that it is an indefensible piece of policymaking no matter which way you cut it.

Not only will the regional fuel tax be notoriously inefficient and economically regressive, but it will take up a lot of resources to administer and by necessity be full of loopholes and exemptions that will inevitably affect its integrity and compliance.

Will motorists who fill up in Auckland but then use that fuel to travel outside Auckland be able to access an exemption to the tax? Alternatively, what about those who purchase outside Auckland but use the fuel inside Auckland?

The whole policy is an administrative minefield that I cannot see being implemented fairly or consistently.

The most likely and practical outcome is that the fuel companies will look to spread the cost of the tax around the country to even-out the impact it has on the retail fuel market. Apart from carrying out costly and time-consuming investigations there is little the Government could do to prevent this.

The reality for the trucking industry is that the regional fuel tax and corresponding increase in road-user charges cannot be absorbed by transport operators already operating on wafer-thin margins.

This means there will be no alternative but for transporters to pass the tax on, which will increase the overall cost of transporting freight around the country and ultimately hit consumers in the back pocket.

The perverse outcome of all of this is that the private motorist, who doesn’t have the ability to pass on the tax, will end up being stung twice — firstly on the fuel they use and secondly on the products they buy at the supermarket.

Surely, a far smarter solution to funding the city’s new transport infrastructure could come from a combination of asset realignment, such as a partial sell-down of the Ports of Auckland in the short-term and the institution of a modern variable congestion charging scheme in the medium- to long-term.

Unfortunately, the political will does not exist for these more practical solutions and despite the obvious policy problems, it seems inevitable Auckland’s regional fuel tax will be in place come July 1.

– Ken Shirley, chief executive, Road Transport Forum NZ

Mike Lee: Trams to the airport is deluded folly

By Mike Lee

Light rail from the CBD to the airport risks being a costly failure.

Historian Barbara Tuchman’s acclaimed March of Folly — from Troy to Vietnam published in 1985 was about “the pervasive presence, through the ages, of failure, mismanagement and delusion in government — contrary to its own self interest”.

I think about Tuchman whenever the question of rail to Auckland Airport comes up. There could be no more graphic example of Tuchman’s thesis than the decision to rule out the possibility of trains servicing our airport.

Since NZTA and Auckland Transport took this foolish decision in mid 2016, mayor Phil Goff and now the Labour-led Government (cheered on by the Greens but not NZ First which favours heavy rail) have fallen into lockstep.

Auckland Airport is of critical economic importance to Auckland and to New Zealand — it is the premier gateway to the country. Despite hundreds of millions of dollars spent on road construction in recent years, congestion on the route to the city is already near where it was 10 years ago, chronic at peak times, periodically at gridlock. With airport passenger movements currently 19 million per year and predicted to increase to 40 million by 2040, this chronic congestion can only become worse — with dire consequences.

It need not be so. Following on from work initiated by the former Auckland Regional Council, in September 2011, a multi-agency study involving Auckland Council, Auckland Transport, NZTA, KiwiRail, Auckland International Airport Ltd, and GHD consultants, after examining light rail (trams), busway and heavy rail (electric train) options, concluded that a heavy rail loop from Onehunga 10km to the airport and 6.8km from Puhinui on the main trunk line would be the “most economically efficient” solution — providing a fast, single-seat journey from airport to downtown Auckland, including the future CRL stations; and in some cases with cross-platform transfers, all points on the rail network including Newmarket, Henderson, Glen Innes, Pukekohe, and ultimately Hamilton.

In 2012, this recommendation, after wide public consultation, became a commitment in the Council’s Auckland Plan: “route protect a dedicated rail connection in the first decade (2011-2020); construct in the second decade (2021-2030)” — (after the City Rail Link).

However these carefully laid plans were overturned by AT bureaucrats (none of whom had any experience with light rail) claiming a tram travelling from the CBD to the airport via Dominion Rd despite stopping at 20 tram stops and numerous intersections while keeping to a 50km/h speed limit would get to the airport within one minute of an electric train travelling up to 110km/h.

In late 2016 following the election of Phil Goff, the favoured Onehunga-Mangere rail corridor was deliberately blocked by AT when it demolished the Neilson St overbridge south of the Onehunga train station, placing the road across the rail corridor.

Melbourne is one major Australian city that does not yet have airport rail but it does have the most highly developed, sophisticated light rail system in the world. Unlike Auckland however, the Victorian Government is NOT planning on light rail for Melbourne Airport but heavy rail. This on the grounds that trains provide a faster, more predictable journey time and can carry a lot more people and luggage than street-running trams.

This week Australian Prime Minister Malcolm Turnbull announced a A$5 billion ($5.4b) Federal government contribution to building four dedicated heavy rail routes between Melbourne Airport and the CBD.

It would seem then there is a yawning gap opening up between the views of Aucklanders and our own political class. To most Aucklanders I speak to the idea of trams to the airport remains something of a joke — and now not so funny given the cost of $4b just for an airport and Westgate tram line. Aucklanders are being told they will have to pay for this not only in their rates but also in an extra fuel tax. Extraordinarily, on the advice of tyro transport ministers Phil Twyford and Julie Anne Genter this tax is to be imposed for a project that has no business case.

Light rail (trams) to the airport will be slower to build, provide a slower journey, serve a more restricted catchment and cost far more than extending the existing rail network. Why isn’t the Government capitalising on the huge strategic investment going into the City Rail Link?

Tuchman’s made up some rules on how government policy decisions qualify as a “March of Folly”. First the policy must be contrary to self-interest, (check); secondly a feasible alternative policy must be available (check); and finally the policy must be that of a group (not an individual insane ruler) (check).

The feasible alternative of connecting Auckland Airport to the electrified main trunk line at Puhinui has been costed by one recent study at around $750m. This rail corridor must be protected urgently before this option too is sabotaged.

There certainly is a role for light rail in Auckland as we max out bus capacity on our inner city routes — but light rail will be a hugely expensive failure as a rapid transit airport solution.

Mike Lee is an Auckland Councillor. He is a former director of Auckland Transport (2010-16) and a former chair of Auckland Regional Council (2004-10).

$28 billion funding package for Auckland roading and public transport projects unveiled

A $28 billion transport programme has been unveiled for Auckland in what’s been described by the Government and Auckland Mayor Phil Goff as the country’s largest ever civil construction programme.

Its backers say the work will help create a 21st century transport network for the city.

“Together, we will invest $28 billion over the next decade to unlock Auckland’s potential. We will be building vital projects including light rail, Penlink and Mill Rd, heavy rail and bus upgrades, safety improvements, and more dedicated cycle lanes,” said Transport Minister Phil Twyford.

The investments are made possible by a $4.4b funding boost resulting from the Auckland regional fuel tax (RFT), increased revenue from the National Land Transport Fund, and a new funding mechanism, Crown Infrastructure Partners, Twyford and Goff said at Newmarket railway station.

Earlier today, the Herald reported the Government will fund two major new roading projects in Auckland.

One is Penlink, in the north, providing a new connection between the Whangaparaoa Peninsula and the Northern Motorway. Motorists will pay a toll to use the road – a measure National has criticised as a “triple whammy” for motorists.

The other project is Mill Rd in the south, improving the connection from Manukau through Takanini to Drury.

Both roads have been favoured projects of the former National-led Government. But until today they did not feature among the key elements of the Labour-led Government’s transport strategy for the city.

Projects in the joint Government-Auckland transport programme, known as Auckland Transport Alignment Project (ATAP), include:

• Committed projects like the City Rail Link and Northern Motorway improvements.
• Light rail, or modern trams.
• Eastern busway (Panmure-Botany).
• Airport-Puhinui State Highway upgrade, including a high quality public transport link to an upgraded Puhinui railway station.
• Bus priority programme, to more rapidly grow Auckland’s bus lane network and support faster, more reliable and more efficient bus services.
• Albany-Silverdale bus improvements.
• Lower cost East West Link to address key freight issues in the area.
• Papakura-Drury motorway widening.
• First phase of the Mill Rd corridor.
• Penlink road (motorists will pay a toll to help fund this).
• Walking and cycling programme to expand the network and complete key connections, such as Sky Path.
• Significant programme of safety improvements.
• New transport infrastructure to enable greenfield growth
• Network optimisation and technology programme to make the best use of our existing network.
• Rail network improvements including electrification to Pukekohe, additional trains and other track upgrades.

“This plan is funded to deliver the projects we are committed to,” Twyford said.

“The previous ATAP report, released by former Transport Minister Simon Bridges in August 2017, had a $5.9 billion funding gap. National had no plan to fix that fiscal hole, which would have meant the projects they promised couldn’t have been delivered.

“This $28 billion plan will help ease the awful congestion that has been caused by a decade of under-investment. We will create a congestion-free rapid transit network and boost other alternatives to driving to help free up the roads, enable growth, and improve safety for drivers and others.”

Goff said: “ATAP balances the need to deal with Auckland’s immediate and pressing transport needs, as well as being transformational for the future.

“ATAP reflects the need for efficient roading for green and brownfield housing development, new transport corridors and major arterial routes. But as Auckland grows we need to move from a focus on roading to a more balanced approach that promotes public transport and active transport networks.

“Auckland has to contribute its share and the regional fuel tax allows us to do that. The more than $4 billion expenditure it unlocks is critically important to progressing a better transport system for Auckland.

“To raise the same sum from rates would result in a total rate increase of over 13 per cent this year. Alternatively, to do nothing would see Auckland become increasingly gridlocked.

“New forms of revenue such as an RFT to invest in our transport network and light rail to supplement buses, ferries and heavy rail are critical for an efficient and effective Auckland transport system. Auckland’s growth means additional investment in these areas is vital for us to tackle congestion problems,” Goff said.

“ATAP represents a significant increase in investment in our transport network, but we still need to find innovative ways to fund further development such as PPPs [public-private partnerships], special purpose vehicles or infrastructure bonds.”

ATAP includes $1.8b in funding for light rail. A work programme is under way to leverage sources of investment capital outside of ATAP for light rail, and an announcement will be made soon.

Under ATAP, Auckland is expected to receive 38 per cent of the National Land Transport Fund over the next decade, proportionate with the region’s growing share of New Zealand’s population.

However, Goff says that this “still falls short of Auckland’s projected 55 per cent share of the country’s population growth over the next decade”.

Read more, including the Auckland Transport Alignment Project documment and the video announcement from Phil Goff and Phil Twyford here.

Twyford says there is a “great deal of interest” in investing in New Zealand’s transport infrastructure

Minister of Transport Phil Twyford has sent a clear message to would-be investors in New Zealand’s transport infrastructure – “the Government is open for business.”

He is sending Associate Transport Minister Shane Jones on a fact-finding mission to Australia tomorrow to investigate the best ways investors can work with the Government on public-private partnerships (PPP).

“The message from our Government is we’re open for business,” Twyford said after addressing a business and local Government summit on the “changing direction in transport for New Zealand.”

Twyford says it is likely projects, such as Auckland’s light rail and rapid transit, will be funded in collaboration with the private sector through PPPs.

He says it’s too early to put a figure on how much the Government is expecting private capital providers to stump up with but says it’s likely to be on “multiple billion-dollar projects.”

Twyford says there has been a “great deal of interest” from parties looking at getting involved in a PPP with the Government.

“We’re very happy to work with private capital to make these big investments.”

The Government has previously indicated it would be looking at PPPs as a way to meet some of its investment expectations but, at the moment, the process for investors is too complex.

This is the reason Jones is heading off to Australia tomorrow.

“We need to configure ourselves better within the state so there is less static when either foreign or domestic investors approach the state to play a role in our infrastructure turbocharging,” Jones says.

 

But PPPs would require more debt from the Government.

Twyford says there are options when it comes to new revenue streams to help pay for this – for example, through land value capture and infrastructure bonds.

But the projects would be long-term and, according to Twyford, it would be “nuts to try and pay for it out of next year’s road user charges or a petrol tax.”

“We should be spreading that debt over multiple generations who are going to benefit from the infrastructure.”

But taking on more debt would be problematic.

As it stands, some of New Zealand’s council’s – including Auckland’s – are close to their debt limits and the Government has committed to reducing net core Crown debt levels to 20% of GDP by 2021/22.

But Twyford says there is a way the Government could take on more debt to fund the PPPs without abandoning its debt target and pushing councils over its limit.

“We intend to build on some of the work that was done by the previous Government in establishing Crown infrastructure partners as a special purpose vehicle.

“It’s a balance sheet that’s not council or Governments – it’s a public purpose hybrid if you like.”

He says through this, a lot of capital could be borrowed to pay for the infrastructure needs the country is facing.

Hamilton to Auckland transport corridor ‘near top of list’

Waikato's transport corridor to Auckland is a priority for the Labour-led government.

NZTA
Waikato’s transport corridor to Auckland is a priority for the Labour-led government.
 Transport Minister Phil Twyford has called mayors from Waikato and Auckland to the Beehive to discuss the commuter rail plan, in the most concrete sign yet of central government support for an Auckland Hamilton link.

Hamilton City, Waikato District and Waikato Regional councils will meet with New Zealand Transport Agency bosses, Waikato-Tainui, Auckland Council and KiwiRail for a 2-hour hui at Twyford’s Beehive office on February 26, said Hamilton-based Labour List MP Jamie Strange.

“It will be with Minister Phil Twyford particularly, as minister for housing and transport, and Nanaia Mahuta,” Strange said.

Transport Minister Phil Twyford is meeting with key players in the Hamilton to Auckland transport equation.

BRADEN FASTIER/STUFF
Transport Minister Phil Twyford is meeting with key players in the Hamilton to Auckland transport equation.
“The Minister is keen for investment in our region around transport particularly rail but roading and housing as well.”

Waikato Regional Council included commuter rail in its draft long term plan in January. Hamilton City Council has already made investment in a park and ride site and want 75 per cent of funding, for the proposed interim service, to come from central government.

Hamilton City Mayor Andrew King is confident the commuter rail initiative will go through.

TOM LEE/STUFF
Hamilton City Mayor Andrew King is confident the commuter rail initiative will go through.
The meeting will look at integrating light and heavy rail with roads and housing to capitalise on Hamilton and Waikato’s growth.

The transport corridor between the cities offers huge untapped potential, Strange said, and will be an important location for the government’s KiwiBuild programme which aims to roll out 100,000 new homes in 10-years with half of them in Auckland.

Collective work done with Waikato councils – the Waikato Plan and the Future Proof document – have mapped a path for central government to follow.

Waikato Regional Council chairman Alan Livingston says work around transport in Waikato is dovetailing nicely.

STUFF
Waikato Regional Council chairman Alan Livingston says work around transport in Waikato is dovetailing nicely.

“There is a strong sense of unity in our region among councils. This certainly building on what’s been done there.”

The Labour-led government is prioritising rail between Hamilton and Auckland. In a list of rail projects government is looking at, the Hamilton to Auckland corridor is “near the top of the list”, he said.

Hamilton Mayor Andrew King said things are moving in the right direction.

The Rail Opportunity Network spokeswoman Susan Trodden is surprised by the speed the government is moving.

KELLY HODEL/STUFF
The Rail Opportunity Network spokeswoman Susan Trodden is surprised by the speed the government is moving.
“I’m confident we will get there,” King said. “It’s something central government wants and Hamilton City Council is working very closely with neighbouring Waikato District and Waikato Regional councils and between us all, I think we are all aligned.”

Waikato Regional Council chairman Alan Livingston said the transport corridor is a strategic look at opportunities that could open up for the region.

“Everything is dove tailing nicely, Livingston said. “Central government is looking for support and direction and it’s working, from a timing perspective, ideally.”

Spokeswoman for rail advocate group The Rail Opportunity Network Susan Trodden is not surprised by the meeting but is moving faster than anticipated.

“Government are really wanting to make it happen this year, as promised, and now it’s been built into the 10-year plan for the regional council, and Hamilton City Council are committing time and money and space, there is the opportunity to step forward,” Trodden said.

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