The political battle over Labour's transport policy
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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.
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. So you would spend the National Land Transport Fund on some public transport subsidies. You'd spend it on giving money to councils to help maintain the roads, your local street. If there's a pothole, some of your fuel tax money goes to filling that in. You'd spend some of the money on building a new highway. So our big new highways are paid for by our fuel taxes and road user charges and the like. And about 10 years ago, what we spent from the fund, or actually when it was sort of set up, it was set up at the very end of the Clark government, all the way back then and in the early years of the key government, it paid for itself. The money that you pay in fuel taxes paid for the spending.
In the 2020s, we have gotten rather ahead of ourselves in our politics and our politicians on both sides of the House have pledged vastly more spending from the fund than the fund has the ability to raise.
Here we go again. What's the easiest thing to do when you're the Labour Party? Get out the money hose and spray it around a bit and hope for the best. But we're talking about only 1% of the overall National Land Transport budget here.
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Chapters
5 chapters
1
What is Labour's new transport policy proposal?
0:06–1:01
2
How much will Labour's fare cap cost taxpayers?
1:01–4:08
3
What are the criticisms of Labour's transport policy?
4:08–7:27
4
How does Labour plan to fund the fare cap?
7:27–9:39
5
What are the implications of the National Land Transport Fund?
9:39–22:20