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Investing For Growth - Fact Sheets
"Investing for Growth" - Auckland Transport Package
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In December 2003, the Government announced additional funding for Auckland transport of $1.62 million over 10 years on the condition that Auckland accepted changes to the way Auckland transport was governed and funded.
In February 2004, Auckland local authorities advised the Government that in general they accepted the package, with different councils seeking different variations to some aspects of it. The exception was Franklin District Council who could not endorse the package until they had more information about how they would be affected, given that Franklin’s territorial authority area extends into both the Waikato and Auckland Regions.
In general, the Government is therefore confirming the proposals it announced in December 2003, with some exceptions as noted below in light of further consideration and the responses of Auckland local authorities.
It should be noted that the additional Crown contribution of $1.62 billion over 10 years does not imply any reduction in the obligation on the Auckland region to contribute its fair share of additional investment in transport, and ratepayers in other regions should not be disadvantaged by comparison.
Role of the Auckland Regional Council
In future, the Auckland Regional Council (ARC) will have overall responsibility for strategy, planning and delivery of transport in Auckland (other than state highways and rail tracks).
In future, ARC’s land transport service delivery activities, including passenger transport, will be undertaken through Auckland Regional Transport Authority (ARTA) and Auckland Regional Holdings (ARH) – new statutory council-controlled organisations that will be accountable to ARC. ARC’s focus in respect of transport will therefore shift away from delivery of services, and towards strategy, governance of ARTA and ARH, and the monitoring of their performance.
Auckland Regional Transport Authority
Subject to the passage of the Bill, ARTA will be established on 1 July 2004. Its statutory objective will be to plan, fund and develop regional land transport in a way that contributes to an integrated, safe, responsive and sustainable land transport system for the Auckland region. It will operate within the statutory framework provided by the Land Transport Management Act and the Local Government Act.
ARTA’s statutory functions will include:
ARTA will have other statutory functions that include producing a passenger transport service plan for the Region under the Transport Services Licensing Act, registration of passenger transport services, operating and dispersing funds from a land transport disbursement account (called the Auckland Regional Land Transport Fund), co-funding local roads with territorial authorities and carrying out research, education and training as defined in the LTMA.
ARTA Board Appointments Panel
The ARC shall convene an Appointments Panel from time to time as necessary to appoint new board members. The Appointments Panel shall comprise one representative of each territorial authority of the Auckland region for which ARTA has responsibilities (chosen by each territorial authority), an equal number of representatives chosen by the Auckland Regional Council, and the Chair of the ARC, who will be the chair of the panel.
The appointment of each director of ARTA will require a minimum of 10 of the votes cast by Appointments Panel members, rather than a simple majority. This is to ensure that there is a broad consensus regarding appointments to the ARTA board, recognising the critical role of this new agency.
In making appointments, the ARTA Board Appointments Panel shall:
Local authority elected members, council staff or anyone with a direct financial interest in any activity of ARTA will be precluded from appointment as a director of ARTA.
Operation of ARTA
ARTA's Regional Land Transport Programme will be required to “give effect to" the Auckland Regional Land Transport Strategy subject to available funding and operational constraints. This requirement will come into force once the current review of the Regional Land Transport Strategy has been completed.
ARTA will take an integrated view across all transport modes. ARTA’s Regional Land Transport Programme will include a statement of land transport priorities, including state highways and the rail network, for the Auckland region. This statement of priorities may include comment on Transit’s Land Transport Programme in respect of the Auckland region (and equivalent for rail when TrackCo is established). ARTA will be required to consult publicly on this statement of priorities, so that the public can see clearly how ARTA envisages giving effect to the Regional Land Transport Strategy.
Similarly, Transit’s Land Transport Programme will include a statement of Transit’s land transport priorities (including all relevant local activities or TrackCo activities) for the Auckland Region, and this may include comment on ARTA’s Regional Land Transport Programme.
Transfund will take ARTA’s and Transit’s statements of priorities into account in reaching its funding decisions. For the avoidance of doubt, Transfund and Transit retain their final accountability in respect of state highways.
ARTA will receive income from existing sources including ARC and Transfund, and potentially other sources in future. The challenge for ARTA will be to make better use of funding from existing sources to improve transport outcomes. ARC will provide funding to ARTA for projects or activities within ARTA’s Regional Land Transport Programme, but the ARC will not be able to direct ARTA in respect of specific projects or activities.
In consultation with Auckland local authorities, the Government intends to appoint an ‘Establishment Chair’ to oversee the establishment of ARTA until the Appointments Panel appoints the first ARTA board. The role of the Establishment Chair will be to oversee the establishment of the new organisation in order to bring it expeditiously to a point where the Board and staff, once appointed, can begin to function effectively in their roles. The Establishment Chair will not make significant policy or governance decisions that are typically a matter for the board (e.g. approval of Statement of Intent, appointment of a Chief Executive, etc.)
If the Appointments Panel has not appointed the first board by 30 August 2004, the Government will appoint the first ARTA board instead to ensure that ARTA can begin functioning as soon as reasonably possible.
ARTA will progressively assume responsibilities over a two year period, with implementation of a Regional Land Transport Programme which includes territorial land transport activities indicatively commencing on 1 July 2006.
Auckland Regional Holdings
Subject to the passage of the Bill, ARH will also be established on 1 July 2004. Its statutory objective will be to own and manage regional assets in a prudent manner for the benefit of the Auckland region. Initially the key assets to be managed will be the investments currently owned by Infrastructure Auckland, including Ports of Auckland. ARH’s key functions will be to manage those investments in the interests of the region, and to provide funding to ARC.
ARC will be able to apply revenue received from ARH for both capital and operating expenditure. ARC will be required to expend a minimum of 85% of the funds received from ARH for transport and stormwater purposes. This restriction in the use of ARH funds will be reviewed in 2008.
Ports of Auckland
The provisions of the Port Companies Act 1988 limiting the number of councillors and council employees who may be appointed as directors of port companies will apply to Ports of Auckland Limited (POAL). The appointment of those directors will be the responsibility of ARH. The sale of any shareholding in POAL by ARH will require the approval of the ARC. Before providing that approval, the ARC will be required to undertake public consultation.
Ownership of Transport Assets
Officials will continue discussions with ARC and ARTNL's shareholders to explore how ARTNL's assets and functions should best be managed into the future to get the best possible transport outcomes for the region, including options for bringing some or all of these within the ARC/ARH/ARTA umbrella. Should this not be resolved before legislation is passed, there will be an arrangement (e.g. Memorandum of Understanding) between ARTNL and ARTA aimed at achieving a co-operation between the two entities so that ARTNL's plans and activities are consistent with ARTA's land transport programme.
Further work will be undertaken on the wider question of where the ownership and management of publicly-owned regional passenger transport assets other than the rail network (e.g. bus shelters, real-time bus information system, etc.) should reside.
Infrastructure Auckland will be disestablished with effect from 1 July 2004 and its assets and liabilities will be transferred to ARH on 1 July 2004. The exception is contracts or other obligations relating to stormwater grants, which will transfer to ARC, and transport grants, which will transfer to ARTA.
Employees of Infrastructure Auckland will, as much as possible, be offered suitable positions in ARC, ARH or ARTA, and will not, therefore, be entitled to any redundancy payment.
Franklin District Council
Officials will discuss with Franklin District Council, Waikato Regional Council, ARC and Transfund a range of options for the future funding and provision of transport services for Franklin, with a view to a preferred option feeding into the Bill during the Select Committee process.
Chris Mackenzie, Office of the Deputy Prime Minister, ph 04 471 9935
Michael Parker, Office of the Minister of Transport, ph 04 471 9316
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The Government and the Auckland councils all agree that the Auckland Regional Policy Statement and regional and district plans (Auckland’s planning documents) need better integration of landuse and transport development. The Auckland Regional Growth Strategy and the Auckland Regional Land Transport Strategy are more recent regional agreements (prepared under the Local Government Act 1974 and the Land Transport Act 1998 respectively). These strategies contain direction for style, location and intensity of development but lack weight and have uncertain standing in the critical arena of RMA consents and decision making.
The Auckland region’s key planning document is the Auckland Regional Policy Statement, prepared in the early 1990s and approved in 1999. Regional policy statements set out the guiding policy for a region which cities and districts must not be inconsistent with when developing their district plans. Councils use regional policy statements, and district and regional plans to assess proposals for development.
Why is it needed?
Stronger policy direction in the Regional Policy Statement will mean that proposals for land use intensification or transport projects that are consistent with that direction are more likely to be approved under the RMA (or declined when they are inconsistent).
The Government is requiring that the Auckland councils update their planning documents to align them with the strategic priorities of the Regional Growth Strategy and the Regional Land Transport strategy.
The Government has directed the eight Auckland councils to prepare changes to their planning documents and to notify the proposed changes for public submissions in early 2005. The process will be coordinated to achieve greater consistency in planning across the councils by the requirement that the councils appoint a joint hearings panel, which will hear submissions and make recommendations on the proposed changes to councils. Councils will retain full autonomy over the planning and decision making process. The Government will not determine the content of changes to the Regional Policy Statement and regional and district plans.
There will be no amendments to the RMA to achieve the changes to Auckland’s planning documents. The main difference from the normal process is that councils will be required to appoint a joint hearings panel to hear public submissions on all the proposed changes to Auckland’s planning documents. Under the RMA, councils can choose to do this, but in this case the Government is requiring them to do so through the Local Government (Auckland) Bill.
Outcomes and achievements
The integration of transport and landuse policies will reinforce the metropolitan urban and rural objectives of the regional policy statement, and the development of a competitive and efficient economy and a high quality of life, underpinned by a quality environment and amenity. The changes will pave the way for implementing Government’s increased funding package for improved roading, public transport, walking and cycling.
In the long term the effect of the changes should be to help reduce traffic congestion, noise, air and stormwater pollution, and contribute to a greater quality of life for Aucklanders.
It is anticipated that the changes to Auckland’s planning documents could be in place by 2007.
Karl Ferguson, Ministry for the Environment, ph 04 917 7490
David Carew, Ministry for the Environment, ph 04 917 7452
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Since coming into office, the government has gone some way to addressing these issues and we are continuing this progress. One of the priorities of the Moving Forward package in 2002 was on congestion in Auckland and its implications for economic development.
Moving Forward announced a new integrated and sustainable approach to transport based around five objectives. The JOG (Joint Officials Group) report on Auckland applied this framework to assess options for improving Auckland’s transport
The resulting Investing for Growth package, announced in December 2003, continues to address the priority issues of congestion and safety, through measures such as developing passenger transport, walking, cycling, transport demand management and strategic roading. It also provides an explicit focus on improving access to economic and social opportunities around New Zealand and the environmental performance of our transport system.
The increased funding will come from an increase in Road User Charges (RUC) and petrol excise to be implemented in April 2005. Those increases will provide around $720 million over 10 years for Auckland and around $1346 million over 10 years for the rest of New Zealand, allocated roughly on a population basis by region.
The package also included a further $900 million of Crown funding over 10 years to address the specific transport problems facing Auckland. These problems have arisen due to unprecedented growth in the region. That extra funding will be allocated to improving public transport (particularly rail), transport demand management measures (such as teleworking, advanced traffic management systems and travel plans) and key strategic roading projects.
All of the additional funds will be dedicated to land transport and be allocated under the National Land Transport Programme administered by Transfund New Zealand.
Since the December 2003 announcement, further work has been undertaken on the details of the Investing for Growth package. The introduction of the Local Government (Auckland) Bill today represents a key part of this detail. Further detailed announcements include:
Indexation of Petrol and Road User Charges
Indexation (i.e. increases on the basis of the Consumer Prices Index) will apply to that portion of petrol excise and excise equivalent duty used to fund land transport and for RUC for vehicles 6 tonnes and under. Road Users Charges (RUC) for vehicles above 6 tonnes will not be affected at this stage, however their rates will continue to be reviewed annually to ensure an equitable charging system is maintained across all vehicle classes. Indexation will also not apply to LPG and CNG excise, and no excise duty will be imposed on methanol and ethanol at this time.
All revenue generated from indexation will go to land transport and be allocated nationally through the National Land Transport Fund. Legislation will be introduced in the next 12 months to implement indexation.
Improvements to Road User Charges enforcement will proceed before indexation is implemented. These changes will take effect before 1 April 2006.
Sustainability of Local Government Revenue
In light of the current funding and governance proposals, the government will be considering issues around the long-term sustainability of Auckland territorial and regional government revenue sources. Further decisions may be made once this work is completed and considered by Cabinet.
Further investigation of road pricing options
The government has decided to investigate the feasibility and desirability of road pricing on existing roads in Auckland, including an option for parking levies. This work will cover technical evaluation, costs, demand management potential, revenue potential, social economic and environmental impact assessment, mitigation proposals and legislative implications.
The purpose of this work is to inform government decisions on whether it is worthwhile to proceed further with road pricing on existing roads and/or parking levies in Auckland. It will, however, be necessary to ensure that any potential Auckland initiatives are consistent with wider national initiatives.
The government will be working with the Auckland region on this work. The government will be committing resources to ensure that this work is progressed as a matter of priority. Officials are to report back to Cabinet in 2005.
Michael Parker, Office of the Minister of Transport, 04 471 9316
Last updated: 04/07/2006