7. JEANETTE FITZSIMONS (Co-Leader—Green) Link to this
to the Minister of Finance
Does he agree with officials’ advice to the Cabinet economic development committee that “Singling out the activity class of State Highway construction for Crown guarantee would signal a preference for funding State highways over all other forms of transport.”; and that “This may be perceived as being inconsistent with … the LTMA [Land Transport Management Act 2003] or integration of the transport sector”?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
No and yes, but only in so far as almost anything is capable of having misconceptions about it.
Jeanette Fitzsimons Link to this
How can Land Transport New Zealand comply with the requirements of the Act—to contribute to an integrated and sustainable transport system—when he has pre-empted its statutory power to balance funding across roads, public transport, walking and cycling, and safety programmes; and is not the organisation just a rubber stamp for his road-building programme?
Hon Dr MICHAEL CULLEN Link to this
No; no for a very simple reason. Land Transport New Zealand still produces the plan. What we did in the Budget was to provide a funding guarantee for the State highway part of it, because that was the residual under previous funding arrangements, and a revenue guarantee for the rest of the plan.
Charles ChauvelHow does the rate of increase in the Government’s investment in State highways in Auckland compare with the rate of increase in investment in public transport in Auckland?
Hon Dr MICHAEL CULLEN Link to this
Since coming to office we have nearly quadrupled the investment in State highways in Auckland, but over the same time we have increased spending on public transport in Auckland by over 12 times.
Jeanette Fitzsimons Link to this
How can he say that Land Transport New Zealand still produces the land transport programme of funding, when under the new arrangements Transit’s 5-year business plan must be the base for Land Transport New Zealand’s programme, and when last year he announced the funding for a whole group of State highways, before Land Transport New Zealand had published its programme?
Hon Dr MICHAEL CULLEN Link to this
The projects referred to were all taken off the existing Transit list. This enabled us to guarantee that the projects would proceed within the time frame, whereas otherwise there was a very high risk, as we had already experienced that year, of projects coming on and off the road transport construction programme. That leads to huge uncertainty around planning even public transport.
JEANETTE FITZSIMONS Link to this
Would not a transport programme that was aimed at carbon neutrality and sustainability consider the overwhelming evidence and prioritise less carbon-intensive modes such as public transport, cycling, walking, and travel-demand management, rather than the biggest road-building binge in New Zealand’s history?
Hon Dr MICHAEL CULLEN Link to this
That is one reason why spending on public transport in Auckland has grown over twelvefold, and on State highways by fourfold, over the period. Secondly, the vast range of service users require to use roads—plumbers, electricians, and painters—are not going to travel by train or by bus to get from one place to another within Auckland. Thirdly, large numbers of people do not have ready access, yet, to sufficient modes of public transport. At the end of 2005 we dedicated an additional $600 million to rail construction in Auckland. Last week we announced that this is going to lead to the reopening of the Onehunga line and the construction of the Newmarket Railway Station. Perhaps the Greens could have taken some credit for that, instead of simply moaning about something else not happening.
Jeanette Fitzsimons Link to this
Are there any other Government activities that have similar open cheque-book funding guarantees when costs escalate, and if we do not do it for hospitals, schools, and State houses when their costs go up, why does he think we should do it just for roads?
Hon Dr MICHAEL CULLEN Link to this
We do it for large areas of Government spending. We have a tertiary education system that has a demand-driven funding model, until that changes next year. The spending on benefits and on New Zealand superannuation is demand driven, with statutory adjustments to that spending on the basis of the consumer price index and, in the case of New Zealand superannuation, wage-related matters. There are other large areas where that happens within Government spending. The difference with roading is that the way the plan worked was that a set amount came in, which itself was not set, because if road usage fell off or oil prices went up, the revenue went down. As a consequence of that, as public transport was the first cab off the rank in terms of allocation of money, roading became a residual on a variable item. No other area of major spending in government that requires long-term planning has that kind of characteristic around it.