Monday 21 August 2023

Transport GPS

The draft Transport Government Policy Statement is out for consultation.

That statement lays out the government's intentions around transport. 

One thing that stood out was the number of times it talks about an imperative to reduce Vehicle Kilometers Travelled. 

Now reduced VKT could well be an outcome of rising carbon prices, but it should hardly be an objective for the agency charged with building and maintaining roads - acting on behalf of drivers. 

I'd hope an incoming better government would get rid of that. NZTA ought to be responding to their best guesses at transport demand as carbon prices rise, not throttling private vehicle use.

But another thing stood out. 

When the government set the petrol excise holiday, the Taxpayers Union wanted it to be permanent on basis of that some money gets spent from the National Land Transport Fund on non-road stuff. But the Crown also throws money into the roads from outside the NLTF and it looked like it was roughly a wash. At least at the time.

Here's what it'll look like over the coming decade.

I'll class state highway maintenance, local road maintenance, state highway improvements, local road improvements, and safety, as all being basically stuff that benefits road users who pay road user charges into NLTF, whether through RUC or through Fuel Excise Duty. Count investment management in there too, just to be safe.

Inter-regional public transport, coastal shipping (?!?), walking and cycling improvements, public transport infrastructure and public transport services aren't generally things that benefit road users directly. There's a second-best case for funding public transport options out of charges on road users in the absence of congestion charges. Basically, every driver is probably willing to pay a little bit to reduce the number of other drivers on the road.

And you can make the same second-best case for widened roads for cycleways, or for new off-road cycleways. I'd be willing to pay something, at the margin, for a widening of Onslow Road so that there could be an uphill cycleway. Cars and busses get stuck behind very slow-moving cyclists on the uphill section and it isn't safe to pass around the curves. Willingness to pay to not have to deal with that: more than zero.   

The Crown puts about $2 billion of general tax revenue into roads. It would be a lot cleaner if it didn't do that, and if roads were funded by road users. But the government also siphons money out of the NLTF for non-road stuff. If that siphoning is around $2b, then it's a wash and possibly not that big a deal. 

But it looks like between $4.7 and $8.7 billion siphons out from the NLTF into public transport, rail, walking & cycling, coastal shipping, and inter-regional public transport. 

Siphoning from NLTF into public transport alone is larger than the entire NLTF spend on local road maintenance and improvements. 

Does it seem likely that drivers get that much greater benefit from NLTF spend on public transport as compared to local road maintenance and improvement? If you surveyed drivers and said, "For every dollar of your fuel excise that goes into maintaining local roads, how much do you think should go to public transport to help reduce congestion?", do you think they'd be likely to say $1.27? Or $0.50? 

The proposal has about $1.27 going from NLTF into public transport for every dollar going from NLTF into local road maintenance and improvements. 

The case for this kind of public transit subsidy has always been second-best, based around the failure to implement congestion charging.

When I search the NTP for the term 'congestion', I see mention of public transport and active travel as ways of mitigating congestion, policies that reduce the need to travel long distance. Congestion charging seems absent from the document - apart from a brief line in Figure 4 noting potential for demand-side measures like supporting mode shift or road pricing to reduce congestion at peak times. 

If congestion charging is implemented, there's far less case for using RUC/FED to subsidise public transport. But the forecast range goes out to 2033/34 and there's only increases in spend on public transport services over that horizon.

Are they expecting that congestion charging won't happen over the next decade? Or are they saying that economic second-best stuff was never what was really driving cross-subsidisation of public transport?

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