High stakes in transport gamble

Transport is the life blood of an economy. The arteries and capillaries that take products and people where they want to go carry significant costs and it is vital to the country’s economic health that we choose the most efficient forms of transport available. The new Government’s first strategic plan on land transport, a 10-year draft policy statement issued on Tuesday, contains some worrying changes.

The previous Government’s policy had economic growth and productivity at the top of its priorities. This one places safety and “access” at the top. Economic considerations have been relegated to one of the purposes of “access”. And the Government states many other purposes, among them reducing greenhouse gas emissions and supporting a shift in urban transport from cars to “more efficient, low cost modes such as walking, cycling and public transport”.

To that end, it plans to tax motor fuel more heavily, nationally by 9-12 cents a litre on top of the 10c regional petrol tax Aucklanders will pay. Road and fuel taxes go into a fund from which finance is allocated around the country by the NZ Transport Agency. The Government plans to direct the agency to reduce funding for state highways by 11 per cent and increase the allocation to public transport by 46 per cent.

It wants $4 billion to be allocated over the next 10 years for “rapid transit” by which it means light rail, especially in Auckland. No mention is made of funding for the city rail link beyond the initial phase now under construction. Perhaps its full cost and financing arrangements will be clearer in a later policy statement after a review of railways nationwide. But if Auckland’s underground rail link is to be funded from the $4b for rapid transit, it is unlikely to leave much for light rail anywhere.

Labour hopes to start building light rail from the Auckland CBD all the way to the airport and envisages similar tram routes to the central suburbs and West Auckland over the next decade, ultimately even to the North Shore. But the draft policy statement does not appear to contemplate the possibility that rapid changes in automobile technology might well enable personal transport to remain the preferred mode of the future.

If computer-driven electric vehicles become universally available on call, transporting people and goods door to door, light rail in the streets could turn out to be an under-used, expensive waste.

Planners will say they need to work with the technology now available rather than a crystal ball but they should also work with people’s demonstrated preferences. To try to change people’s preferences by spending heavily on public transport, and taxing their private transport fuel more heavily, presents the country with a considerable economic risk. The Government is putting additional taxes on the economy to fund a gamble that city dwellers can be enticed to abandon cars for the pleasures of walking, cycling, waiting for a bus or catching a tram. If the gamble proves to be wrong, the more heavily taxed economy will carry a lasting liability.