Government will increase fuel tax to top-up transport fund

The New Zealand Government has today announced that it will commit an extra $5.3 billion towards its transport fund that will be paid for with a higher fuel tax.

Prime Minister Chris Hipkins says that the additional funding, as outlined in the draft 2024 Government Policy Statement (GPS), is the highest ever committed by any government before it, enabling it to boost road maintenance and support new roading and public transport projects.

Thanks to the top-up, transport funding will increase to a record total of $20.8 billion between 2024 and 2027.

When broken down, $5.4 billion will go towards road maintenance, $3.8 billion to road improvements, $3.6 billion to public transport, $1.5 billion to safety programmes, $1.2 billion to upgrade and maintain the rail network, and $500m on walking and cycling improvements.

The Government plans to cover the extra cost by upping the price of petrol taxes and road user charges. That means fuel prices will be increased by 12 cents over the next three years, with the Government expected to receive $14.5 billion in total revenue from the rise.

Cabinet also agreed that it would inject $1.5 billion of capital and $900 million of operating funding into the National Land Transport Fund (NLTF).

“This funding targets spending where it’s needed most: reducing congestion and emissions, boosting productivity and improving the resilience of our transport network,” says Hipkins.

Transport Minister David Parker also chimed in, saying: “The draft GPS 2024 increases the investment range available to essential maintenance of state highways and local roads, including pothole repairs, by 41 per cent to between $5.4 and $8.1 billion over 2024 to 27.

“This additional investment will greatly strengthen the resilience of our roading network.”

New ‘nation-building’ transport programme

At least some of the aforementioned funding will go towards the Government’s new ‘nation-building’ transport programme which will oversee the development of 14 new routes that have been deemed “critical” to the country, as part of its next ten-year National Land Transport Plan.

The routes include:

• Warkworth to Whangārei – State Highway 1; Te Hana to Brynderwyns, Warkworth to Wellsford and Whangārei to Brynderwyns
• Auckland Northwest Rapid Transit
• Auckland’s third and fourth rail line expansion
• Avondale to Onehunga rail link
• Level crossing upgrade and removal – Auckland and Wellington
• Cambridge to Piarere – State Highway 1
• Tauranga to Tauriko – State Highway 29
• Wellington CBD to Airport – second Mount Victoria Tunnel and upgrades to Basin Reserve/Arras Tunnel
• Wellington CBD to Island Bay – Mass Rapid Transit
• Napier to Hastings – four-laning State Highway 2
• Nelson (Rocks Road) shared path – State Highway 6
• Richmond – Hope Bypass – State Highway 6
• Christchurch Northern Link – State Highway 1
• Ashburton Bridge – State Highway 1

“These routes include a balanced mix of public transport and roads, which require work as a priority to reduce congestion, manage emissions, improve safety, grow the economy and open up areas for housing,” says Hipkins.

“Our comprehensive transport plan will strengthen our nation’s infrastructure and provide certainty to the construction industry that this Government will invest to close New Zealand’s infrastructure deficit.”