Petrol taxes will be raised by 12 cents per litre over the next three years under a proposal that sees a "record" boost for transport funding, Minister David Parker says.
It comes as Prime Minister Chris Hipkins reveals 14 "priority projects" as part of an updated plan that decides how tens of billions of transport funding will be spent.
Funding is proposed to increase to a "record" $20.8 billion over the next three years, but some of the funding will come from raising petrol taxes and road user charges.
"The significant increase in funding for land transport responds to demand across New Zealand to fix our cyclone-damaged roads, build new roads and improve public transport choices," Parker said.
"This Government agrees that this investment is essential — but it has to be paid for. Some of the additional funding needed will be raised by small increases in petrol taxes and road user charges."
The fuel excise duty was last raised in July 2020. It is currently around 70 cents per litre.
"The increase in the first year is proposed to be split into an initial two-cent increase, with another two cents six months later," the transport minister continued today.
"This is to be followed by a four-cent annual increase in 2025 and again in 2026 — a total increase of 12 cents over three years.
"A two cent per litre increase in petrol taxes, equates to a 44 cent per week increase in cost to the average motorist, or a 0.9% in the cost of petrol (including GST) at a petrol price of $2.50 per litre.
"The increases in petrol taxes and road user charges will raise the total revenue from petrol taxes and road user charges from $13.1 billion to $14.5 billion over three years, and will be dedicated to improving our transport network.
"These sources fund the core of our transport networks. Past governments have regularly increased these charges, and this will commence again."
The increases are consistent with the historical norm of semi-regular increases prior to 2020, according to the Government's new plan. It comes after the 25 cents per litre discount on petrol, introduced as a cost of living measure last year, was ended in June.
Consultation on the transport policy statement will close on September 15.
Hipkins said there would be a boost of $5 billion to transport funding over the next three years — partially funded by the change to petrol taxes.
"The funding — an increase of $5.3 billion, or 34%, on 2021-24 — is the highest by any Government," he said.
"Funding under the new draft Government Policy Statement on land transport 2024 will enable a major boost to road maintenance, along with key critical new roading and public transport projects that New Zealanders want and deserve.
"The draft GPS 2024 increases the investment range available to essential maintenance of state highways and local roads, including pothole repairs, by 41%."
Govt prioritises 14 'critical' transport projects
Fourteen "key strategic projects" have been identified by the Government as part of its overarching transport funding strategy, the prime minister also announced today.
"The Government views these 14 new routes as critical nation-building transport priorities for New Zealand over the coming decades," Hipkins said.
"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.
"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," he said.
It comes as transport shapes up to be a key election issue, with National having unveiled its $24 billion plan to build 13 major new roads and four public transport projects.
There are just over 40 days until the first votes are cast.
But Labour has labelled the party's plans as "a false promise" and "shoddy" because the numbers are supposedly out by billions. (Source: 1News)
Today's announcement is part of the Government's land transport policy statement, which sets out the levels of spending it wants to see in different sectors across the next three years — like in public transport, road maintenance, railways, or safety.
Then from the broad funding ranges, transport officials will go on to create a more detailed plan about which specific projects and regions get funding.
Transport Minister David Parker said today that the new plan "recognises that critical work on major existing and new roads cannot come at the expense of road maintenance, rail, public transport, walking and cycling pathways, or safety".
But he added that "much of New Zealand will continue to rely on resilient roading networks for the foreseeable future" and that "what’s right for public transport investment in our major cities can't easily be replicated elsewhere".
What are the 14 new 'priority projects'?
In Auckland, there's a focus on public transport and rail improvements alongside "resilience" upgrades to State Highway 1 from Warkworth.
Parker said there would be a focus on "accelerating" a grade-separated rail or busway in the northwest — alongside State Highway 16.
"A rapid public transport corridor from Auckland city centre to Brigham Creek in the city's northwest is included in the Strategic Investment Programme as it would support emissions reduction in this growing area," he said.
"Planning has already started to accelerate work on this corridor, which could include staging early delivery of stations from 2024 to 2027."
David Parker told Breakfast that "no single government" could finish the multiple projects involved. (Source: Breakfast)
Additionally, the Government wants work moved up on the Avondale to Onehunga rail link — a project that hadn't recently featured in transport plans, and building a third and fourth rail main line.
"From Auckland to Northland, a series of upgrades to State Highway 1 have been included as we believe these will strengthen links, save lives and provide greater network resilience to support a growing population, tourism and economic growth."
In Wellington, Parker said the Government would "kick-start" work on a second Mt Victoria tunnel, whilst pushing ahead with rapid transit upgrades.
"We're committed to kick-starting work on long-delayed transport solutions for the city including a second Mt. Victoria tunnel, upgrades to the Basin Reserve and Arras Tunnel, and mass rapid public transport," he said.
"Local authorities agree that the Government should take the lead on projects on the state highway network and we want to see work accelerated across these city-shaping projects.
"In the Central North Island, we've included upgrades to the Waikato Expressway, key investments for State Highway 29 near Tauranga, and four-laning the State Highway 2 Expressway between Napier and Hastings.
People are "really not right" to blame the current Labour government, David Parker said. (Source: Breakfast)
"In the South Island, we’re signalling that improvements to State Highway 1 north of Christchurch to improve safety and support economic growth and freight access, is of strategic importance to our transport plans
"This includes the Christchurch Northern Link, by upgrading State Highway 1 from the Waimakariri River to Ashley River and a new alignment around Woodend, and improved links across the Hakatere/Ashburton River, which could include a new second river crossing."
Other projects signalled for prioritisation include upgrades on State Highway 6, including the Hope Bypass project in Richmond and a shared path in Nelson on Rocks Road.
The full list and details of projects can be found on the Ministry of Transport's website.
SHARE ME