LTMB rejects need for an efficient road system

Media Release

Monday 13 October 2003

Land Transport Management Bill rejects need for an efficient road system

The Land Transport Management Bill will anger businesses which depend on efficient road transport, if it is passed in its present form, Road Transport Forum Chief Executive Officer Tony Friedlander says.

“The Government openly admits New Zealand is under-investing in its roads. The resulting poor quality, congested and unsafe roads are imposing significant costs on businesses across the country. Yet the Bill deliberately makes things worse. Not content to already take three quarters of all petrol tax for general expenditure the Government is making it clear it intends to take even more road user money to subsidise rail, coastal shipping, passenger transport, TrackCo, cycling and walking and further reduce the amount available for roads.

“That is inexcusable stupidity. If Government wants to spend more on those programmes the money should come out of general taxation, not from desperately needed roading funds.”

Mr Friedlander says the Forum along with other concerned road user and business organisations had refrained from publicly criticising the Bill when it was introduced and had instead put forward constructive proposals to remedy its defects. “For example we proposed that the legislation limit the amount of road-user provided funds able to be taken from Transfund’s roading budget to be spent on non-roading projects. This is a sensible proposal which would allow Government to guarantee that a reasonable share of petrol tax and RUC revenue paid to Transfund would be invested in roads. We also proposed that one of the purposes of the Bill should be to achieve an efficient land transport system, which is basic common sense if the Government genuinely wants to lift New Zealand’s per capita income.

“But these suggestions and others have been completely ignored by the Government even though the organisations which made these submissions to the Select Committee represent the interests of hundreds of thousands of businesses across New Zealand.

“New Zealanders need better roads. This should be the priority when investing road-user provided funds. It is disgraceful that the Government is putting a Bill through Parliament deliberately designed to increase the extent to which they can fleece road users and waste money simply to buy the support of the Greens. All New Zealanders, and the productive sector in particular, will pay the cost.

“The Government talks about the need to spend more money on roads, but this Bill shows they have a completely different agenda and little or no concern for the impact their transport policies will have on the business community. They are placing their own political wheeling and dealing ahead of the good of the country and that is a disgrace,” Mr Friedlander said.

Land Transport Management Bill
Briefing Note

o New Zealand spends less on its roading network than most comparable countries

o The Government admits it is underinvesting in roads

o Transfund is the national road funding agency. All its revenue comes from road users through petrol taxes ,road user charges and vehicle registration. Although it is increasingly being required to fund non-roading uses, it receives no income from general taxation

o This year Transfund will get $263 million more in revenue from road users than it did four years ago. The annual road construction budget has increased by only $20 million over the same period.

o Three quarters of the money paid by road users in petrol tax will not be spent on the roading network. Out of the 54.49 cents per litre taken in tax, less than 14 cents will go into roading this year.

o For every 50 litres of petrol purchased the Government takes $27.75 in taxes. Just $6.95 of that will be spent on roads

o The amount of Transfunds’s budget being spent on non-roading projects has more than doubled in the past three years less than 4.4% to over 11%

o Non-roading expenditure is now more than double the level of funding for local road construction

o Government the authority to take even more road user money to fund public transport and rail subsidies, pay for rail maintenance for TrackCo and to fund coastal shipping

o Meanwhile Government is talking about imposing additional regional petrol taxes on road users to help fund the roading shortfall.

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