Transport- Infrastructure
Transport infrastructure and services are a vital component of ensuring the international competitiveness of the agricultural sector and New Zealand as a whole. An efficient transport system is essential to enable the agricultural sector to shift its produce to further processing centres and on to ports for export. It is also important for sourcing competitively priced inputs of production.
Roading
New Zealand's roads are divided into two broad categories, State Highways and the local roading network (those roads that are not State Highways). State Highways are 100 percent funded by central government, through petrol tax, road user charges (RUC) and vehicle registration and licensing fees. Funding for local roads comes both from central government, through a funding assistance rate (FAR) to councils and through local government rates. On average the contribution is roughly 50:50 but it varies by council.
After serious underinvestment through the 1990s into the 2000s, since around 2005 there has been a substantial increase in funding for transport infrastructure. This increase has been welcomed by the Federation but we have been concerned that funding has not necessarily been spent on the most efficient projects or modes of transport. Federated Farmers believes that efficiency, value for money and the network principle should drive infrastructure spending.
Federated Farmers supports reforms to RUC to reduce compliance and administrative costs and to reduce evasion. A diesel tax, as proposed by some to replace RUC, is inappropriate as diesel is heavily used by farmers off-road and a new tax would require a refund system which could be very costly and cumbersome.
Rates and Roads
Local authority rates are based on the value of property and are paid directly only by the owners of the asset. As such they bear no relationship to the use of the roading network.Federated Farmers believes that at least some of the increased revenue from the 2007 decision to hypothecate road user revenue should have been allocated to councils through a higher FAR to help fund the maintenance of their local roads, reducing the burden on ratepayers and improving efficiency and equity.
With regard to funding local authority roads, the Government needs to take a network approach and recognise that rural roads have an economic value, particularly when considering the huge value of exports generated from rural New Zealand. Councils' FAR rates should be increased but we are concerned many rural councils' FAR rates are being reduced, putting upward pressure on rates and which may result in deteriorating rural roads.
Other Modes
Coastal shipping and rail have important roles to play in the transport system, particularly for the carriage of bulk goods over long distances. However, their role will always be limited and road freight will remain the mode which is the quickest, cheapest, and most convenient for most freight tasks. This is particularly the case in many rural areas where neither rail nor coastal shipping is available, cost effective or convenient. Government efforts to support rail or coastal shipping should bear this in mind and not use road users' funds to subsidise these modes or otherwise seek to push freight off roads onto other modes.
Federated Farmers wants
- Efficiency to be the primary determinant for transport funding decisions
- The Road User Charges system to be reformed to reduce compliance costs,
administration costs, and evasion
- No diesel tax, either nationally or regionally
- Roading costs to be allocated so road charges are effi cient and equitable
- Government to recognise that rural roads have a strong economic value and are an integral part of a national network
- A significant reduction in the reliance of local authority rates to fund the maintenance of local roads by way of a higher funding assistance rate to councils
- Rail and coastal shipping to operate commercially without subsidies from road users' funds.
Spokesperson
Federated Farmers Transport spokesperson is national board member Ian MacKenzie, you can conact him at imackenzie@fedfarm.org.nz.
