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National package for land transport, growth and development finalised

Media Release, 30 March 2004

Minister of Transport - Hon Pete Hodgson

The government has confirmed an additional $2.97 billion investment in land transport over the next ten years, with a particular emphasis on Auckland.

Auckland will receive $1.62 billion, while other regions will collectively receive $1.35 billion in extra investment to address decades of under-funding of land transport infrastructure and services around the country.

This investment is as a result of the Investing for Growth – a transport package for New Zealand – announced by the government in December 2003.

"New Zealand as a whole will benefit from the investment to ease congestion and enhance access, mobility, economic development and sustainability in Auckland," says Transport Minister Pete Hodgson. "Land transport outside Auckland will also be substantially upgraded."

"I am delighted that Auckland local authorities have agreed to make significant improvements to transport governance. Auckland’s transport infrastructure and services will be improved considerably as a result. All Aucklanders will benefit from the funding package."

In December Cabinet and the Auckland local authorities agreed that the priorities for the additional funding for Auckland would be:
  • Transport demand management;
  • Public transport (including rail, buses and ferries); and
  • Key strategic roads.

"These priorities will be further refined before the enactment of the Local Government (Auckland) Bill," Mr Hodgson said. "In addition, Auckland local authorities have agreed to review the Regional Land Transport Strategy by the end of 2005. This combined work will ensure that the agreed priorities deliver benefits across the government's strategic objectives and support the integration of transport and land use."

Funding outside Auckland will be used for improvements to passenger transport, demand management and worthwhile urban and rural roading improvements, including walking and cycling facilities.

The national funding package includes:
  • Petrol excise will be increased by 5 cents a litre and an equivalent increase in road user charges (RUC) for diesel and heavy vehicles five tonnes and under, from April 2005. This will raise approximately $207 million a year to be dedicated to the National Land Transport Fund for spending on land transport.
  • 35% of this revenue will be allocated to Auckland and 65% will be allocated regionally, roughly on a population basis, for the next 10 years. This means every region will be receiving extra land transport funding broadly proportionate to its population from the increased charges.
  • Petrol excise duty and RUC on diesel and heavy vehicles of 6 tonnes or less will be indexed to inflation from April 2006. This will raise approximately $20 million of extra funding in the first year (assuming inflation of approximately 2%), all of which will be dedicated to land transport, through the National Land Transport Fund.
  • Excise duty on LPG and CNG will not be increased or inflation indexed, in recognition of the government’s interest in promoting the use of these more environmentally friendly fuels.
  • The Government will also be contributing a specific funding allocation for Auckland transport of an average $90 million a year over 10 years, on top of existing transport funding.
  • Further work is also to be done on the feasibility and desirability of pricing existing roads in Auckland, including parking levies, taking into account the social, economic and environmental impacts.
  • Central Government and Auckland will continue to work together on implementation.

Both the Greens and the United Future Party have agreed to support the package and the introduction of the required legislation.

"A more sustainable and effective transport system is vital to Auckland’s quality of life and success as a centre of business and innovation excellence, and to New Zealand reaching the top half of the OECD rankings. Other transport deficits, though less acute than Auckland, will also be addressed. With this package the government is moving New Zealand and Auckland toward these goals," concluded Mr Hodgson.

All figures exclude GST.

Contact: Graeme Speden, press secretary, phone: 04 471 9707 / 021 270 9055, e-mail:

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Last updated: 13/05/2005