Auckland’s consensus building group ruled out many options for meeting the region’s transport funding shortfall before finally settling on the 2 it offered on Monday. The report will go to the Auckland Council meeting on Thursday 25 July without a recommendation, but with preferences highlighted.
The group, established by mayor Len Brown last October, drew members from across the spectrum, from business advocates to community support groups, to arrive at a consensus on what would work & would be fair.
It ruled out debt mechanisms which would themselves need funding. It allowed for some increase in public transport charging, but not so that would be self-defeating by discouraging the transfer of commuters from their cars.
And it ruled out a long line of potential funding methods which couldn’t be seen as directly related to transport funding, or would be difficult or too expensive to manage. Although the Government runs lotteries, the consensus building group found a moral issue with the council doing that for infrastructure, aside from the debatable return & lack of a link to the funding purpose.
There was some ballyhoo about a proposal to charge motorists coming off a motorway instead of as they enter it. The reference group looked for practical solutions. As a comparison, the Northern Gateway toll is imposed by a licence plate-reader midway between the newest section of State Highway 1 north between Orewa & Puhoi, but towards the end of the motorway journey out of Auckland.
The other mechanism was a pricing cordon around the inner city, where the greatest congestion occurs, and possibly a second cordon. The natural line for this would be around Greenlane & Balmoral Rds, through St Lukes to Western Springs and through Orakei to Tamaki Drive. You would pay to cross it but there could be concessions for multiple journeys and pricing changes for certain time periods.
The group proposed a fuel tax – but not an exclusively Auckland one. Aside from the jibe from other regions that they’d be paying for Auckland’s woes if the tax was imposed nationally, there was also the suggestion that some regions were starting to see this as a solution for their own infrastructure demands.
The 2 options in the final report are:
- Larger increases to rates & fuel taxes, tolls to fund major roads, further Government contributions and small fare increases for public transport users
- Road pricing, supplemented by smaller increases to rates & fuel taxes, plus the Government & public transport contributions.
Mr Milne was surprised at the level of support for road pricing – 78% of the 1320 responses to its call for feedback were in favour.
A key to the preferred options is that they combine raising large sums of money with inducements to change behaviour. As an example, the reference group said in its report: “Our assessment showed that carefully priced cordon charges can result in the significant diversion of vehicle trips onto public transport and improved peak-period traffic flow on key parts of the network. Accessibility to the city centre increases, with positive implications for productivity. Notably, the rate of decline in morning peak-hour travel times reduces relative t the impact achieved from other funding sources. The high administrative & transaction costs are contained relative to other types of road pricing schemes.”
Among responses to the final report from members of the reference group, Council of Trade Unions representative Robert Reid said an increase in the top income tax rate remained the unions’ preferred option as the least regressive form of taxation.
“The more funds from central government, the lower the financial impact on Auckland’s poorest citizens,” he said.
Mr Reid also confirmed rejection of public-private partnerships: “To bring forward the building of some of the most needed transport infrastructure projects, Auckland Council & the Government may have to take out loans. However, the interest rates on such loans are at an all-time low and only a fraction of the interest payments that would have to be made within a PPP funding structure.”
Council for Infrastructure Development chief executive Stephen Selwood commended road pricing for improving traffic flows as well as raising revenue, and road pricing on existing roads, not just on new ones.
“Network or cordon tolls are more efficient than tolls on new roads because they enable more effective pricing across the road system. Having tolls just on new roads can distort traffic flows. It’s also unfair because some communities have to pay tolls for their roads while others have their roads built & maintained by everybody else through taxes.
“Fuel excise & road user charges are user pays and very cheap to collect. But these charges have almost no effect on when & how people travel, and are thus less economically efficient than road pricing.
“Furthermore, improving fuel efficiency is reducing the amount of tax many commuters pay/km driven, particularly for users with the option to purchase newer vehicles. Fuel excise increases are therefore required just to keep inflows to the national fund constant, but these higher levies are going to be disproportionately met by those drivers with older vehicles, making the tax regressive and raising further questions of equity.”
Attribution: Reference group report & briefing.