National summary

How land transport is funded

The funding for the 2008/09 NLTP is at the level expected under previous arrangements, but will be provided in a different way. All fuel excise duty will now flow into the National Land Transport Fund, this is known as “full hypothecation”. In 2008/09 the Government is also adding additional funds so that funding is as previously expected for 2008/09.  R and C funding will still be allocated to activities in much the same way as it has been recently.

This section describes funding processes for 2008/09. This is a transition year between the provisions of the Land Transport Management Act 2003, and the mechanisms that will apply under the amended Act for 2009/10 onwards.

All land transport revenue from fuel excise duty, road user charges, motor vehicle registration and licensing fees, and revenues from Crown appropriations is paid into a Crown account known as the National Land Transport Fund.
The National Land Transport Fund is used to fund:

• The Road Policing Programme
• Collection of crown revenue
• With the balance of the fund available for allocation through the NLTP for:
  • Activities delivered by an approved organisation
  • State highway activities
  • Research
  • The NZ Transport Agency’s own activities

The NZTA also delivers additional services not funded through the NLTF on behalf of the Ministry of Transport. These services include:

• Super gold card public transport concessions
• Regional development funding
• Regulatory development and management services, which are funded from related fees and charges

The Minister has approved funding for the road policing programme, an activity class in the NLTP that is funded directly from the National Land Transport Fund, and a provision made for settlement of the current Police Wage round.
In 2008/09 receipts from State highway property operations and sales will be paid into the NLTF and be available for allocation through the NLTP.
The previous “revenue” and “SH construction” guarantees apply for 2008/09.

Three types of funding will be recorded:

• nationally distributed funds (N)
• regionally distributed funds (R), distributed to each region in proportion to its population
• Crown appropriation of funds (C), allocated to Auckland, Bay of plenty, Waikato, Wellington and Canterbury regions for specific purposes.

The flow of revenue from the National Land Transport Fund through the NLTP is shown in Figure 1.

Figure 1: Land Transport Funding 2008/09 (GST exclusive)

All items shown exclusive of GST at estimated cost in 2008/09, except State highway construcution is shown at  the guaranteed level of funding in 2006/07 terms

[GIF, 68 KB]

 

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Page updated: 30 June 2008