Auckland City Rail Link: the case for govt funding

Last weekend, the Labour Party brought the Auckland public transport debate into the general election – where it belongs. While Len Brown was voted Auckland mayor on the back of a strong public transport vision, the centralisation of transport funds in New Zealand means that the buck still ultimately stops in Wellington for big transport projects. For this reason, I’ve always considered it a strange anomaly that transport is considered a big local body issue but is largely ignored come general election time, especially given the huge amounts of public money spent by central government on transport projects.

This brings us nicely to Labour’s announcement to fund half of the proposed $2.4 billion Auckland City Rail Link (CRL). This post won’t go into too much depth on the project’s merits and costs (maybe a future post) – rather, it’s intended as a think piece on whether or not central government should be providing any funding for the project. The post will discuss the following points of debate on Labour’s announcement:

• Should road users be funding public transport projects through the National Land Transport Fund?
• Should New Zealand’s taxpayers be providing such a vast sum for what is an Auckland project?
• Should we be diverting funds from a regionally-significant road to an Auckland public transport project?
• Can the country afford a $1.2 billion rail project?

Should road users be funding public transport projects through the National Land Transport Fund?

Labour’s proposes to pay the $1.2 billion cost of funding the Auckland CRL by re-allocating $1.7 billion from the National Land Transport Fund (petrol taxes, road user charges) from the proposed Puhoi-to-Wellsford ‘Holiday Highway’ to the Auckland CRL. Transport Minister Steven Joyce’s main argument against this funding plan was that it is inequitable to use the taxes paid by road users and spend them on a public transport project. In other words, Joyce believes that roads are the only projects that directly benefit road users.

This line of argument ignores the decongestion benefits associated with public transport. While the government claims only 1,400 cars would be removed from Auckland’s roads by 2040 as a result of the CRL, other projects indicate otherwise. The Northern Busway on the North Shore for instance has allowed total person trips over the Harbour Bridge to increase while removing 8,000 cars from the Northern Motorway every morning. Obviously, the removal of 8,000 cars has significant benefits for that motorway’s road users. In my view, it is therefore possible to justify using petrol taxes to fund public transport projects. Indeed, a 2006 NZTA study indicates each peak-time Auckland rail commute has a $17 decongestion benefit to the road user – if that isn’t benefitting drivers, I don’t know what is.

Should New Zealand’s taxpayers be providing such a vast sum for what is an Auckland project?

JAFA-bashing never gets old. Every time Auckland goes with its begging bowl down to Wellington for projects like the CRL, you hear the cacophony from south of the Bombays – “the rest of New Zealand shouldn’t be subsidising Auckland”. I’d hate to break it to the rest of New Zealand, but you don’t subsidise Auckland – Auckland subsides you. Our great city accounts for over a third of New Zealand’s tax revenue (and I’m sure a bigger proportion of the National Land Transport Fund given our rate of car ownership!), so it’s only right we get our fair share of the transport budget, especially given the chronic underinvestment in public transport that has plagued Auckland throughout the latter half of the 20th century. Oh, and for every Wellingtonian bleating about how you deserve more of the funding, answer me this: who paid for your fully electrified rail network? I think you’ll find that it wasn’t Wellington City Council. The long and short of it is that ratepayers can’t pick up the tab for a project of this size on their own. Just isn’t cricket really.

Should we be diverting funds from a regionally-significant road to an Auckland public transport project?

Steven Joyce likes to say that State Highway 1 between Puhoi and Wellsford carries more people than the whole Auckland rail network. What he doesn’t tell you is that his Auckland rail patronage information dates from 2006 and that rail patronage has since doubled. The truth about the so-called ‘Holiday Highway’ is that it’s an unnecessary waste of $1.7 billion when you consider that the transport and safety benefits can be achieved for as little as $320 million by simply modifying the existing road to bypass Warkworth and straighten out the crash-prone spots. National likes to portray itself as a responsible, fiscally conservative party. Spending $1.7 billion on a brand spanking new gold-plated highway when $320 million will do the exact same job doesn’t exactly come across as financially prudent, does it? The good news is that you can have your cake and eat it too – Labour’s plan includes the $320M SH1 improvements along with the $1.2B CRL contribution.

Can the country afford a $1.2 billion contribution to Auckland rail right now?

Another thing Steven Joyce likes to say is that we can’t afford the CRL right now because it’s so damn expensive. He isn’t wrong on the expensive part – $1.2 billion is bloody expensive. But so are a lot of the roading projects he’s pushing – the Roads of National Significance programme (of which the ‘Holiday Highway’ is one) costs around $17 billion. Labour argues that it’s a simple matter of reallocating some of the National Land Transport Fund allocations in a smarter, more efficient way.

Joyce rejects this argument. He reckons that Labour would have to borrow because the $1.7 billion allocation for the ‘Holiday Highway’ is only scheduled to kick in for 2015 when construction begins. Immediate funding of the CRL would in the meantime incur a $500+ million government debt as it would have to wait until 2015 for the allocated funding to kick in. Labour Transport spokesman Shane Jones disagrees, arguing that timing is of little significance with the National Land Transport Fund – if the money is allocated, then it can be brought forward, he reckons.

As Jones says, timing doesn’t count for much with transport funding allocation. Why, it was only a couple
of months ago that Steven Joyce was taking credit for $1.6 billion of funding for Auckland rail, despite those funds being allocated in the 2006 and 2007 budgets – back when Aunty Helen was in the hot seat.

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About Liam W

Urbanist, transport nerd, general curmudgeon.

Posted on November 1, 2011, in New Zealand Politics. Bookmark the permalink. 3 Comments.

  1. “Len Brown was voted Auckland mayor on the back of a strong public transport vision”

    Can’t say I agree with that… Len Brown was voted in because people didn’t want John Banks.

    The other question I have is where does Labour’s $320 million for SH1 come from? I would suggest debt – the one thing New Zealanders don’t need right now.

    All-in-all though, an excellent post, as usual.

    • Don’t make me bang on about mandates again…it gets old. You can’t tell me the people of Auckland don’t want better public transport. Nuff said.

      The $320 million for SH1 – do the maths – the original Holiday Highway is $1.7 billion. They’re cancelling that, putting $1.2 billion into the CRL, leaving $500 million left over – $320M of that is used on the SH1 upgrade. You even get a bit left over.

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