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Roading—Funding of Local Roads

Tuesday 19 June 2007 Hansard source (external site)

Moroney2. SUE MORONEY (Labour) Link to this
to the Minister of Transport

What reports, if any, has she received about local roads and the way in which they are funded?

KingHon ANNETTE KING (Minister of Transport) Link to this

I have seen a report that states that local roads are paid for by local rates and therefore the burden falls very heavily on our farming communities. This inaccurate claim is found in the National Party’s rural issues discussion paper, recently published by National’s so-called “rural team”. This paper is riddled with inaccuracies, which indicates that the National Party either knows very little about rural issues or is deliberately misleading the public.

MoroneySue Moroney Link to this

Can the Minister explain exactly how local roads are funded?

KingHon ANNETTE KING Link to this

For the benefit of National Party members, who obviously do not know, local roads are funded in a partnership between local government and central government. Local government pays its contribution through rates and other funding sources such as developer levies. Central government, through Land Transport New Zealand, pays a financial assistance rate to local authorities. The rate is calculated on a needs basis, and for this reason rural authorities receive a higher assistance rate than urban and provincial centres. The base financial assistance rate for rural councils is 56 percent, while for urban councils it is 45 percent. In addition to the base rate for routine maintenance works, local authorities receive a 10 percent higher rate for new construction work, so rural areas receive 66 percent funding through central government. The major burden—I say to those opposite—falls not on the farming community but on the Government.

BrownPeter Brown Link to this

Why is it such a surprise to the Minister that National members do not understand how local roads are funded; they did not understand when they were in Government—why should they now?

WilsonMadam SPEAKER Link to this

There is no ministerial responsibility in that question. [ Interruption] It is very difficult to hear members.

BrownPeter Brown Link to this

I will not go over the opening of my question again, but noting that, will the Minister explain and tell the House precisely when the Government will honour its election Budget commitment that all tax taken on petrol will go into the roading account?

KingHon ANNETTE KING Link to this

In relation to the second part of the question, the Government is doing work on that right now, and announcements will be made in the very near future.

SmithHon Dr Nick Smith Link to this

That’s National policy!

KingHon ANNETTE KING Link to this

It is certainly not the National Party’s policy. I hear from interjections it is, but I need to tell National members they do not know that policy, either. In fact, the National Party said that it would put all petrol tax into the national road fund. That means it will be a billion dollars short, because we also put in diesel, road-user charges, and motor vehicle licensing. So we know National Party policy is actually to cut a billion dollars off roading in New Zealand.

PetersRt Hon Winston Peters Link to this

Could I ask the Minister whether she remembers that very visionary bill of 1994 from New Zealand First that sought to put all taxes and duties collected for roading into the roading account; and does she remember what happened when Mr Williamson the then Minister of Transport, and the National Party, all 12 years ago—it seems like a lifetime now—unanimously voted it down?

KingHon ANNETTE KING Link to this

No, I do not recall that, but I rely on the member’s word. I do know that the National Party has never had a commitment to transport; it has never had a commitment to roads; but in this discussion document that it is putting out around the rural communities, it is trying to pretend it is consulting on something that it has no intention of changing.

PetersRt Hon Winston Peters Link to this

I raise a point of order, Madam Speaker. I know what you have asked us to do in respect of noise at question time, but Mr Henare over there is either saluting his new leader or he is waving to somebody over here. But if he is suggesting that anybody over here will be gone, let me tell him that he was gone last time long before us, and next time he will be gone long before us, as well.

WilsonMadam SPEAKER Link to this

That is not a point of order, but I do remind members that they should be very careful with the gestures they make in this House.

MoroneySue Moroney Link to this

In the light of the Minister’s answers, what level of contribution is the Government making to local roads?

KingHon ANNETTE KING Link to this

Central government’s contribution to local roads has increased significantly since 1999. In fact, it is over double what it was then. Total Government investment in local roads has increased from $298 million to $612 million. [ Interruption] This is for local roads. I say to Mr Smith that we are not talking about the main highways. He constantly gets things wrong. It is for local roads, which are in the discussion document put out by the National Party. National does not know that we have doubled the amount of money we are putting into those roads. In fact, we have even ensured that a road like the Kapiti Western Link Road up the coast receives 90 percent of its construction cost based on funding that this Government gives. This Government has been committed to infrastructure in New Zealand, particularly roading and public transport infrastructure, and there is more to come from this Government.

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