The New Zealand government announces a $20 billion transport budget for the next three years

The New Zealand government has announced a $20 billion transport budget over the next three years, with the aim of improving road maintenance, public transport and cycling infrastructure. However, this budget will see an increase in fuel taxes, the first hike since 2020. Over a period of three years, fuel taxes will increase by 12 cents per litre, with a gradual increase of 2 cents in the first half of the year. The year and another 2 cents in the second half, followed by an increase of 4 cents in subsequent years. This will bring national taxes on Lead 91 petrol, including the Auckland regional fuel tax, to around 90 pence per litre, or around $1 in Auckland.

Additional funds raised by the fuel tax increase will go towards various road development projects including State Highway 1 from Cambridge to Pierre, Wellington city center and airport and the Christchurch Northern Link. The funds will also be used for four-lane projects on State Highway 2 from Napier to Hastings, the Hope Bypass on State Highway 6 and Tauranga to Taurico on State Highway 29.

The transport budget includes significant increases in public transport subsidies and improvements to walking and cycling. Subsidies for public transport will increase by 50% compared to the previous budget period (2021-2024), while investment in walking and cycling improvements will increase by 79%, albeit starting from a relatively low base.

Additionally, following the success of the Northern Busway, the budget also includes funding to upgrade the Auckland North West Bus Expressway.

The government plan, known as the Draft Government Policy Statement (GPS) for Land Transport, serves as a road map to guide the allocation of funds in various aspects of the transport system. This document will be used by independent transport agency Waka Kotahi to develop a National Land Transport Plan (NLTP) which sets out specific expenditure allocations.

Key features of the plan include greater focus on road maintenance and operations, strategic investment in public transport, keeping public transport fares low through subsidies and improving road safety. In addition, GPS provides local councils with an indication of the share of funding for transport, allowing them to plan and implement local projects.

While the plan has won praise for its emphasis on maintaining and investing in public transit and active transportation systems, the opposition National has expressed its desire to scrap the plan and start over if it wins the next election.

GPS also recognizes the need for funding for interregional public transit and allocates $105 million annually for this purpose. In addition, the plan for the future funding and development of Auckland’s light rail announces that cost estimates, implementation plans and specific routes will be released after the plan is adopted.

Funding for the $20.8 billion package, which includes an additional $6.3 billion, will come from a variety of sources, including existing revenue, fuel tax increases, Crown grants and emissions trading scheme revenue and proceeds from speed cameras. Waka Kotahi will take over state highway projects under the Wellington Moving Transport Plan, leaving other aspects to local councils.

In general, the Government’s transport budget aims to improve transport infrastructure, improve connectivity and promote sustainable transport patterns across New Zealand.