Council unimpressed with NZTA subsidy review

Friday 26 April 2013

Land transport activities, such as a local road maintenance programme, that are carried out by councils currently receive a funding “subsidy” from the National Land Transport Fund. The amount they receive is determined by the relevant funding assistance rate (FAR), and it is the approach that is used in setting these rates that the New Zealand Transport Agency (NZTA) is currently reviewing.

The Hurunui District Council believes that there is no convincing evidence or reason to review and change the current system of funding assistance.

The Hurunui district has high kilometres of roading network (infrastructure), low vehicle kilometres travelled (low volume) and low population compared to other road controlling authorities (districts).

Eight approaches have been put forward for consideration, and the Council consider that these approaches would be difficult to apply and would lead to inappropriate application, dissent and dissatisfaction.

“The current system, with fine tuning over its thirty plus year life, has stood the test of time” said Mayor Winton Dalley. “Using the funding assistance rate to re-cut the proverbial National Land Transport Fund ‘cake’, will only create winners and losers. Each road in our district has a purpose and needs to be built and maintained to appropriate standards to ensure they can continue to contribute to the local/regional/national economy and to support essential social and community fabric.”

The original principles of setting the funding assistance rate applied to ‘need’ (as it relates to size of approved road maintenance programme) and ‘affordability’ (as it relates to ability of the district to pay the local financial share of the total road maintenance programme cost, i.e. to match fund NZTA’s financial subsidy). The Hurunui District Council believe that these over-arching principles still apply today and they should remain.

“The principles of need and affordability should come first. All roads in our network should be maintained in an appropriate manner to enable them to contribute individually and collectively towards a critical national roading network.” said Mayor Dalley. “Our submission to NZTA asks them to keep with the existing funding assistance rate approach. As we believe there is no significant current problem why are they wasting money and time even considering this?”

A working group was appointed in March to formulate the Council’s submission. The Working Group members were Crs Vince Daly, Ross Little, Dick Davidson, Mayor Winton Dalley and the Roading and Utilities Manager, David Edge.

The Council approved the submission at its meeting on April 24.