Transport funding has become an incoherent mess. In August, the Ministry of Transport released the Draft Government Policy Statement on land transport funding. Submissions closed on Friday.
An incoming government should take the opportunity to re-think the entire approach. Fortunately, shelved reforms from the late 1990s provide an excellent starting point for a better system.
Under reasonable principles for managing roading, road users cover the costs of the roads – whether through road-user charges, fuel excise duties, or tolls.
Out of those collected charges, paying for road maintenance should come first. If road users could enjoy a better experience by reduced congestion, subsidise public transport that sufficiently contributes to reducing that congestion. Or, even better, use congestion charging.
Any money left over could fund capital improvements like passing lanes and new highways. Otherwise, if road users wanted more, they would have to be willing to pay more to cover the cost. Betterment levies for properties serviced by new roads could also be part of the mix.
