Transcript generated automatically by AI and may contain errors.
Chapter 1: What is Labour's new transport policy proposal?
Hi, I'm Amanda Gillies and today on The Detail, Labour's first policy announcement in more than six months.
Capping public transport fares. That's Labour's $65 million a year election promise to New Zealanders when they go to the polls in just under five months' time. The party has pledged to cap public transport fares at $20 a week in Auckland, Wellington and Christchurch and at $10 a week for the rest of the country.
And at first blush, it seems the public is on board.
I think that would be awesome. That's what it should cost. That's pretty sweet. I think that's amazing. Yes, but where's the money coming from?
And that question, asked by a pundit on One News, has since been asked again and again. and again.
Critics are calling the policy just another taxpayer-funded free ride. National accusing Labour of trying to bribe New Zealanders with their own money.
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Chapter 2: How much will Labour's fare cap cost taxpayers?
National has described the policy as fanciful and predicts Labour would end up borrowing to fund it. OK, Labour's public transport freebie. It doesn't stack up. They're about a billion dollars out. And do you know what else is also a problem? Their maths.
There is no way this is going to cost $65 million a year and save 1.3 million public transport users an average of $1,200 a year, which is what they say is going to happen. $1,200 times 1.3 million users is $1.6 billion. They're either fibbing about the cost or they're fibbing about the benefit or both. Where is the money coming from?
We are going to fund this by ensuring that it comes from the National Land Transport Fund.
But here's the problem with that.
The problem is that the fund is essentially very much over-pledged, vastly over-pledged, and in the next few months we are probably going to see a bonfire of promised transport projects, which will be kicked out to the never-never, effectively cancelled, and eventually we're probably going to have to see fuel taxes rise as well. It is a very grim cocktail of broken promises and tax hikes.
MUSIC
That's New Zealand Herald political editor Thomas Cogland, and he's talking to me about the true costs, the benefits and the pitfalls of this policy, including the vital question, does the maths add up?
So Labour's modelled this using analysis that was done by Auckland Transport a little while ago about a proposed fare cap up there. They think it will cost $65 million a year, which a lot of people have thought is on the sunny side, but it might be sort of in the ballpark. The big problem is where that money is coming from. And it's coming from something called the National Land Transport Fund.
It is a fund that is full of the money that you pay when you fill up your car or you pay your road user charges or you get your vehicle registered. It's seven odd billion dollars a year spent from the fund. And the problem is that the fund... The fund is essentially very much over-pledged, vastly over-pledged. And about 10 years ago, the fund more or less paid for itself.
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Chapter 3: What are the criticisms of Labour's transport policy?
They don't even know what their numbers have done properly.
As fuel got expensive, politicians didn't raise fuel taxes enough. Fuel taxes are not increased with inflation, so they lose their relative value if they're not increased. If fuel taxes kept pace with inflation, they'd be about 20 cents a litre higher now than they are already. And there is just no chance that fuel taxes are going up 20 cents a litre any time soon.
Hell no.
Hell no. Yeah, I'd put good money on that not happening. And as our politics has become a bit more sort of fractious, I guess, politicians have pledged tens of billions, actually, in some cases, hundreds of billions of dollars worth of projects from this fund, which it lacks the money to pay for.
So by 2030, the fund is estimated to be spending $6 billion a year more than it will receive in revenue. It's actually difficult to overstate how vast that sum of money is.
It's about one Dunedin hospital every six months in money that the fund currently doesn't have and it will probably need to get that funding from the Crown which means that the money that the Crown would usually spend on building things like a new Dunedin hospital would have to go towards propping up this fund because it is so oversubscribed with new transport projects.
Of course that's probably not going to happen And in the next few months, we are probably going to see a bonfire of promised transport projects, which will be kicked out to the never-never, effectively cancelled. And eventually, we're probably going to have to see fuel taxes rise as well. It is a very grim cocktail of broken promises and tax hikes.
Wow, that is a hot mess, Thomas. So what is Labour saying when presented with this information? Then how are they responding to this? And does it mean that basically councils or ratepayers could ultimately end up paying for this capping?
There's good reason to believe that councils might be on the hook for something here if the policy is very successful and new services need to be put on. That's been left kind of unaddressed by Labour. And again, that might be a good problem to have because it might mean that there's less wear and tear on the road so councils can cut spending from road maintenance and put it on public transport.
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Chapter 4: How does Labour plan to fund the fare cap?
The rest was wishful thinking, I guess. So there's been a bit of a... Both sides are pointing the finger at each other really about the same issue, which is that there is this pot of money. It is very contested. It's shrinking as well because as cars become more fuel efficient, we actually pay less fuel tax. So the problem is actually coming.
We're not raising enough money on one hand and we're spending too much money on the other. And both sides are pointing the finger at each other and saying, well, you know, who broke this? And the answer is that they sort of both did.
But does it mean, though, that National, are they going to have to come out and say, we're not going to be building these roads? And will they maybe turn to maybe public transport and find that more attractive?
If you've been watching the news and following the breadcrumbs, you will have noticed, you know, Chris Bishop and the Transport Minister and Nicola Willis sort of talk about the challenges in transport. And the government has been talking about publishing what it calls a major transport projects pipeline, which is a list of what's coming and when it will be built. And that pipeline is late.
It hasn't materialised yet. And I think the people who are reading the kind of political tea leaves are assuming that it's sort of being redrawn in light of the fact that the fuel crisis has made the roads even more expensive. And the fuel crisis has also made the appetite for raising taxes to pay for them, it's diminished the appetite to raise taxes to pay to build those roads.
So the government is pretty clearly having a look at those roading projects. And I think it's probably fair to say that many of them will be perhaps not cancelled, but you might have a road project that was meant to begin in five years and they're now going to say, well, look, we'll begin this in 15, 20 years when the investment case is stronger.
And to be honest, if you're talking about that timeframe, you've effectively cancelled the road because anything could happen in 15 years. And so I think that's probably what's going to happen.
Now, Thomas lives in Wellington and takes public transport to work, joining the 130,000 other Kiwis who do the same. That number is from the 2023 census post-COVID. But really, is that enough people to sway an election?
That's a really interesting question and I'm looking forward to seeing whether it shifts the polls because obviously for 130,000 people they're going to do really, really well out of it.
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Chapter 5: What are the implications of the National Land Transport Fund?
But I wonder whether those 130,000 people who already catch public transport are probably maybe inclined to vote left of centre anyway when you look at where they live. Particularly the Wellington electorates have gone pretty left wing recently and some of those sort of southern and west Auckland electorates have been pretty labour-y for some time now.
So certainly where people who use public transport live at the moment suggests those voters are probably already heading towards Labour.
The question is whether, you know, if you're in part of the country, probably still in Wellington, Auckland or Christchurch, which has sort of good public transport connections, you're looking at your car thinking, gosh, at the moment, that is costing me an awful lot of money to fill up and get to work five days a week. And you see this policy and you think...
Gosh, you know, $20 a week would be all I'd pay to commute to work. And if that in your mind makes you think, I'm going to give this a go and tick the labour box, you can see how that would potentially work for people. But I think for the people we're talking about will be people who are still in relatively well-connected parts of Auckland, Wellington and Christchurch.
So you're sort of thinking... Maybe people on the Carpatie Coast in Wellington. Their trains to central Wellington cost a lot of money. Maybe people in the Hutt Valley in Wellington, their trains cost a lot of money. I'm talking about Wellington because that's where I live. But of course, you've got the city rail link opening up in Auckland.
So there will be parts of Auckland that will be very well connected to central Auckland now. So I think the city rail link is pretty good for the west and south of Auckland. I think there are some pretty good connections from Emery up north as well. There's the busway there.
So those parts of the country where you might find people who are thinking, gosh, maybe I will leave the car at home and give this a go.
You just touched on fuel prices. I mean, the war in Iran and the impact it's had on prices. I mean, is that working in Labour's favour to sort of maybe get more people on trains and buses and think, well, actually, you're giving me a deal here. I might give you a vote.
If you're going to do a policy like this, there has never been a better time to launch a policy like this in some ways. So, again, if you live in a city and you do have the option, the economy is telling you don't drive, leave your car at home. Fuel is very expensive and try something else out.
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