Opinion: Transport policy increasingly resembles a culture war, with Lycra-clad cycling enthusiasts pitted against V8-loving, gas-guzzling motorists. To put it another way, Kiwis are either champions of light rail or proponents of Roads of National Significance. There is no in-between, or at least that is how it seems.
I was hardly surprised then, when last week’s long-awaited draft Government Policy Statement on Land Transport was inundated with exaggerated rhetoric and hyperbole. Matt Lowrie, writing for the popular transport blog Greater Auckland, even suggested that Transport Minister Simeon Brown’s policy statement was “probably the most ideological, unbalanced and petty transport policy the country has seen”. Green Party transport spokeswoman Julie Anne Genter called it “extreme” and suggested on X (formerly Twitter) that it condemned kids to be driven everywhere.
Such is the tenor of the times.
However, amid the hysteria, I was surprised to find scant commentary on arguably the most significant message emanating from Brown’s flurry of transport announcements: the commitment to comprehensive road pricing. Far from a road to nowhere, as Cycling Action Network branded the draft policy, Brown’s intention to replace fuel tax with an electronic road user charge system by the end of the decade and progress congestion charging represents the most ambitious transport reform undertaken this millennium.
To understand why, it is necessary to have a clear grasp of the problem facing Waka Kotahi NZ Transport Agency, the Crown entity responsible for managing the land transport network. In its briefing to Brown last November, the Transport Agency noted the “current funding situation sees much of the planned future investment currently under or unfunded”. Over the next decade alone the Transport Agency says it will have to invest about twice as much as it expects to receive in revenue. This results in an estimated funding shortfall of $4 billion to $5 billion annually.
As the briefing note makes clear, the magnitude of this funding gap raises urgent concerns about the viability of the revenue model that helps pay for New Zealand’s roads, rail, public transport, and other essential transport services. In other words, the current set-up is simply unsustainable.
This is where road pricing comes into the picture.
Road pricing – a system where road users pay charges based on mileage, time of use, route, and vehicle type and weight – can encourage more efficient use of the transport network and alleviate congestion. Additionally, it can provide valuable insights into road user behaviour, enabling transport officials and politicians to make better-informed decisions regarding future investment.
There is nothing remarkable or novel about road pricing or tolls. Indeed, Adam Smith, the father of modern economics, observed in 1776 that it seemed “scarce possible to invent a more equitable way of maintaining” a road network. Transport economists have not conjured a better model since.
However, it is not just economic theory that supports road pricing. Countries as diverse as Austria, Singapore and Sweden have all implemented road pricing to great effect, and Iceland, in a world first, is exploring how to extend road pricing to cover all vehicles.
Though New Zealand’s Road User Charge system is more developed than comparable systems in Australia and the United Kingdom, we should follow in the footsteps of Iceland by including the entire fleet.
Currently, drivers of light diesel vehicles and heavy trucks pay a distance-based charge. The revenue generated from these charges contributes billions of dollars annually to the National Land Transport Fund, helping cover vehicle depreciation and general road maintenance costs. From April 1, owners of electric vehicles will also need to buy and display an RUC licence.
If New Zealand rolled out a universal Road User Charge system, it would help plug the aforementioned funding gap that is contributing to the poor state of our road network. It would also ensure critical road maintenance was covered by those who benefited from the asset.
Regrettably, the current set-up is becoming more, rather than less, detached from pricing signals. Fuel excise duties and motor vehicle registration fees are inadequate tools for accurately assessing the costs imposed on New Zealand’s roads by light vehicles like mine. And the long-term viability of this model is only expected to decline further as car manufacturers enhance fuel efficiency and as road users transition to electric vehicles.
A more sustainable funding system would have my car fitted with an electronic distance recorder. The transponder would capture information about my road use, and a digital payments system would send me a bill at the end of each month – much like we already pay for internet use or electricity. Companies such as EROAD have the technology ready to go.
Congestion charging in major cities such as Auckland and Wellington would also help. Indeed, it should be the top priority for the new Government, as it would do more than anything else to unblock New Zealand’s roads. By charging drivers a fee for entering a specific area or zone, congestion charging helps manage demand, thereby ensuring that more trips can be successfully completed at peak times. Better traffic management could also help reduce the need for costly investment to increase road capacity.
International experience, coupled with a paper mountain of reports into its application in New Zealand, shows that congestion charging works. The challenge for Brown will be building public support through an effective communications strategy. Road users must be certain the charge is aimed at reducing traffic, not gathering revenue. If implemented correctly, road users will be able to see the benefits of reduced congestion, leading to an uptick in public support. This is precisely what happened in Stockholm.
For too long, discussions about transport policy in New Zealand have been framed as a cultural battleground. Yet, considering the clear funding gap confronting the Transport Agency, it is high-time we insisted on a more rational transport debate. This means shifting to a universal road pricing system more responsive to user demand – the alternative is a debate shrouded in smoke and mirrors.
This opinion piece starts at the wrong place. The underlying issue is how do we provide mobility for everyone in a world of planetary resource overshoot.
Mobility means properly providing for rail, for cycling, for walking, for having a good range of activities, goods and services in local areas, etc. It is not the outdated focus on roads set out in this ‘blast from past’ Government Policy Statement on Land Transport.
As far the advocacy of the electronic tracking of road users all day, every day. Just dystopian.
Andrew I think you should look at this more closely. Congestion charging is about those who use congested arterials at peak times paying more. See my other post below below but it worked a treat in Stockholm where only a small disincentive for using the roads at peak times (of 2 Euros) was enough to reduce traffic by 20% – this doesn’t sound a lot but because congestion is not linear this completely eliminated congestion. And this fee, this congestion charge went from 70% disapproval rating to 70% approval as people saw how well it worked. As Wayne Brown says “The big saving isn’t the money you collect; it’s the roads you don’t have to build.” Think about that – its a means of not having to build more road capacity (or a least not being pressured into building more road capacity to ease congestion which we know due to induced demand is a proven failure)
And the dystopian thing of tracking vehicles with GPS could be replaced by using simple number plate recognition gantries at either ends of congested arterials as is currently done at the Puhoi tunnel and Wellington Airport.
Very helpful comment. Thank you.
How do we provide mobility for everyone in a world over resource overshoot’?
The answer is by having a bottomless pit of money Andrew. Which NZ very clearly does not have and therefore it starts with ‘must haves’ before we start thinking about ‘nice to haves’ per your suggestion every town and city be joined by railways. Nice in theory, impossible for a tiny little country of middle and falling per capita income to afford.
And if I may Andrew, your second paragraph of alternative ideas sounds very much like a 15 minute city. For a man who proclaims in paragraph three having GPS trackers in vehicles is ‘dystopian’ those are interesting suggestions. I am surprised that someone seemingly espousing freedom from observation by the ‘they’ would be promoting the very concept of a 15 minute city.
I am impressed with the flights of fancy you manage to dredge up from what I have written.
An enormous amount of common sense in here. So highly unlikely to be adopted.
I wouldn’t bank on it – vehicle tracking is the most obvious, fair, cost effective and transparent method to make those who use the roads most, pay the most. It just takes a government to be bold. the technology exists, we aren’t reinventing any wheels here.
And not sure why anyone would object – not if they use Google or Apple Maps already.
Just needs a government to put in place the appropriate checks and balances and get on with it.
Great article.
Would the technology be able to distinguish whether a car trip could have been reasonably made by public transport. If so, the corresponding fare could be included in the RUC and help fund the public transport sector.
A GPS based vehicle monitoring system could easily locate where any vehicle was in real time and charge accordingly for the likes of congestion charging per time of day or levy road tolls if applicable, omit RUC charging if the vehicle was off of public roads and the real time vehicle location data would be very valuable to authorities involved in aiding traffic congestion issues such as using this for traffic signal control.
Sure there will be pushback from those with privacy or civil liberty concerns but the economic gains should be enough to convince the current money driven government of the overall good of such a system. Adoption, or not, of such a system will be a test of Simeon’s strength and intelligence as a minister.
As the congestion charge is just for using congested arterials at peak times, these are almost by definition those roads for which there is a public transport option. And the revenue raised from congestion charging could and should be ring fenced to pay for providing attractive options for avoiding the congestion charge: protected cycle paths so people on bikes no longer fear for their lives every time they get on their bikes, more frequent public transport with longer hours, further reach better buses and trains…
Hear. Hear.
The author refers to a “cultural battleground” above. Excuse me for overreacting to yet another right winger quoting Adam Smith.
How about playing the ball not the man. This is an issue where all sides of the political spectrum should be united. Congestion charges where you pay extra for using arterials at peak times is a no brainer. See this fantastic little video of well it worked in Stockholm : https://www.youtube.com/watch?v=CX_Krxq5eUI&t=15s.
And Auckland Mayor Wayne Brown gets it: He just recently said “The big saving isn’t the money you collect; it’s the roads you don’t have to build.”
And what’s more if it is genuinely about costs imposed by particular vehicles then heavy vehicles need to pay a lot more. Presently they do pay more for greater axle weights but not enough to cover the road damage they do. And the rod damage vehicles do is proportional to the forth power of the axle weight – so just a little bit heavier means a heck of a lot more damage. And this is rarely acknowledged – it is for these heavy trucks that bridges have tube built or rebuilt extra strong, same with retaining walls and the road base itself. Currently for state highways and motorways this is 100% from Waka Kotahi but for all the local roads this is half subsidised by ratepayers (Local road maintenance and renewals are funded partly from Waka Kotahi and partly from the Local Bodies in a ration called the Funding Assistance Rate. Most urban centres are on a 51% WK, 49% local body FAR, sparely populated places like the West Coast have higher FAR)
For too long we have been subjected to economists pushing Adam Smith down our throats. It wasn’t a “playing the man” comment. It’s just how so many of our economists have got it wrong. However, so you can’t say I’m on my own here is a quote from Angus Deaton is the Dwight D. Eisenhower Professor of Economics and International Affairs, Emeritus, at the Princeton School of Public and International Affairs . He wrote:
“In contrast to economists from Adam Smith and Karl Marx through John Maynard Keynes, Friedrich Hayek, and even Milton Friedman, we have largely stopped thinking about ethics and about what constitutes human well-being. We are technocrats who focus on efficiency. We get little training about the ends of economics, on the meaning of well-being—welfare economics has long since vanished from the curriculum—or on what philosophers say about equality. When pressed, we usually fall back on an income-based utilitarianism. We often equate well-being with money or consumption, missing much of what matters to people. In current economic thinking, individuals matter much more than relationships between people in families or in communities.”
He wrote it far better than me. If you want to read his writing here’s a link:
https://www.imf.org/en/Publications/fandd/issues/2024/03/Symposium-Rethinking-Economics-Angus-Deaton?utm_source=substack&utm_medium=email
The opinion piece advocates electronic record keeping tracking for much more than congestion charging in Auckland and Wellington.
Again. Hear. Hear.
I wouldn’t bank on it – vehicle tracking is the most obvious, fair, cost effective and transparent method to make those who use the roads most, pay the most. It just takes a government to be bold. the technology exists, we aren’t reinventing any wheels here.
And not sure why anyone would object – not if they use Google or Apple Maps already.
Just needs a government to put in place the appropriate checks and balances and get on with it.
While a system of road pricing may have the desired effect on congestion , how does such a system allow for and ensure that there are also alternatives to using a private car? In the opinion piece I don’t see any reference to how such a system would provide for public transport, the possibility of light rail, and cycling?
Wayne Brown may be proving to be an ally in the fight for a future. “The big saving isn’t the money you collect; it’s the roads you don’t have to build.” Thanks, Peter (thanks Wayne).
“User demand”? Right now it seems the new government is trying to capitalize on a ‘desperate attempt to hold on to a dead past’ in terms of roads which might be a perverse use of the term “user demand”.
“Mobility” is a much more realistic description of transport. Thanks Andrew.
No wonder the new government has immediately brought Paula Bennett out of retirement as a new mayoral candidate.