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GPS 2021: No fuel tax bumps proposed in Government's $54 billion 10-year transport policy

Paul Blair, Infrastructure NZ chief executive, spoke to The AM Show. Credits: Video – The AM Show; Image – Newshub. There is no intention to increase petrol tax or road user charges in the Government’s draft £54 billion 10-year transport plan, officially called the Government Policy Statement (GPS) on land transport (GPS 2021). 

Transport Minister Phil Twyford said the Government is not proposing fuel tax bumps because “good progress” has been made “addressing the infrastructure deficit the last Government left behind” with revenue from GPS 2018.  What that means is the fuel excise tax bump of 3.5 cents per litre that will happen this year will be the last time it goes up while the current Government is in power. From next year on, the amount of tax you pay at the pump will remain the same. 

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“We’ve made great progress addressing the infrastructure deficit that we inherited when we took office through the revenue that’s been generated over the last three years,” Twyford said.

“We’re in a position to now commit £48 billion in transport infrastructure and subsidising transport services like buses in our cities, for example, alongside the £6.8 billion committed through NZ Upgrade Programme – so that’s a record £54 billion that we’re committing.”  The GPS is how the Government guides the New Zealand Transport Agency (NZTA) how to invest more than £4.5 billion a year raised through the National Land Transport Fund (NLTF), which itself is funded through taxes and road user charges. 

GPS 2021: No fuel tax bumps proposed in Government's £54 billion 10-year transport policy
Photo credit: Supplied

Four strategic priorities have been outlined for the NZTA out to 2031 – safety, better travel options, climate change and improving freight connections – along with four investment expectations to be funded through the NLTF.  “Given how both rail and coastal shipping help take pressure off our roads and produce less emissions, we are looking to fund both in GPS 2021,” Twyford said. 

Auckland Transport Alignment Project (ATAP)

The Government expects the NZTA to invest £16.3 billion from the NLTF into the ATAP from now until 2028.

The project is estimated to cost £28 billion, but it’s a joint venture with Auckland Council, which would pick up the rest of the tab.  Auckland already got a £3.48 billion transport infrastructure injection as part of the New Zealand Upgrade Programme, taking a majority of the £6.8 billion allocated for transport infrastructure. 

Let’s Get Wellington Moving (LGWM)

Wellington is next, with the Government expecting the NZTA to invest £3.8 billion in the package to improve walking, cycling, public transport and liveability in Wellington – but that money would stretch from 2021 up until 2042.  Announced in May 2019, LGWM is a joint initiative between Wellington City Council, Greater Wellington Regional Council and the NZTA, and is estimated to cost a total £6.4 billion. 

Earlier this month, it was announced that business casework had started on two of the largest projects in LGWM: highway projects to unlock the Basin Reserve and provide an extra Mt Victoria tunnel, as well as a mass rapid transit route. 

Road to Zero

The NZTA is expected to invest £10 billion over the next decade in the Government’s road safety plan Road to Zero, roughly based on Sweden’s Vision Zero approach, which aims to achieve no fatalities or serious injuries involving road traffic.  It follows the Government’s announcement in 2018 to spend £1.4 billion on road safety improvements, such as projects to improve median and side barriers, rumble strips and shoulder widening.  “Safety remains our Government’s top priority and we’re planning to invest £10 billion in our strategy to reduce the number of deaths and serious injuries on the road by 40 percent,” Twyford said. 

“In the first three years alone, Road to Zero will invest nearly £3 billion in safety infrastructure like median barriers, safety campaigns and road policing.”

New Zealand Rail Plan

A plan to modernise New Zealand’s transit systems in the largest cities and enable increasing volumes of freight to be moved off the roads and onto rail is expected to get £1.2 billion over the next decade.  Rail has already been given recent financial boosts – £1.1 billion as part of the New Zealand Upgrade Programme announced in December 2019, as well as £1 billion in Budget 2019.  A whopping £8 billion was allocated for infrastructure across New Zealand as part of that £12 billion upgrade package, and that’s on top of the £12 billion COVID-19 economic stimulus package announced earlier this week.  

The Government is now seeking feedback from local government, the transport sector, community groups and the wider public on the draft GPS 2021.

To read the draft GPS 2021 and give your feedback click here.  

Engagement on the draft GPS closes 27 April 2020.

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