This week Treasury has warned that both FED and RUC will need to be increased in order to manage pressures on the National Land Transport Fund (NLTF), and the need to service the $2 billion Waka Kotahi loan. On Wednesday, I spoke to Mike Hosking on Newstalk ZB about what this means (click here to listen to the full interview). In a nutshell, I said New Zealand needs to recognise the contribution a functioning road network makes to our economy, and the road funding model needs to reflect this.
The NLTF is under enormous pressure, with years of underinvestment in maintenance, and the cyclone damage running up massive bills. The core problem is the current user-pays funding model is no longer fit-for-purpose, especially when we take into account with the strong push from authorities to reduce the number of road users which is exacerbating the revenue shortfall from FED and RUC.
The first response should never be to just turn on the tap and increase road user charges, which is what Treasury seem to be saying – all goods travel by road to get to consumers, so society as a whole needs to invest. Under the transport plan process in the GPS, the Government needs to step back and seriously scrutinise our spending and fix the funding model.
NRC is asking Government to first, spend only what is essential, and second, fix the funding model. At the risk of preaching to the choir, we need to be asking: what can we afford as a country? And then if the costs are out of reach, we need to ask what are we taking off the shopping list to pay for it? The non-negotiable has to be to deliver a functional roading network, because it is a core economic enabler for the economy and society, 93% of goods are delivered by road. When our roads are broken, the whole country pays. Once the table stakes are there to prioritise roading, then all the other things Government want the NLTP to provide should go through a rigorous contestable process reviewed to determine what gets funding.
NRC is going to be advocating hard for members on this issue because if we don’t, transport operators are going to have no option but to increase costs to customers, and these costs in turn impact the price of everyday essential items New Zealanders are already struggling to afford.
CEO | National Road Carriers Assn
DDI: +64 9 636 2951 | E: email@example.com | www.natroad.co.nz
‘Supporting those who choose to make a living in the Road Transport Industry’ since 1936’