Resources

The land transport funding system

The funding sources for New Zealand's transport infrastructure and services funded through the NLTP are:

• funds from the National Land Transport Fund (NLTF)
• funds managed on behalf of the Ministry of Transport
• funds from approved organisations (the local share¹)
• funds from supplementary sources.

¹ The local share is the portion of the total cost of an activity that is provided by an approved organisation.

The NLTF

Revenue for the NLTF comes from a number of sources including:

• fuel excise duty
• road user charges
• motor vehicle registration and licensing fees
• Crown appropriations to the NLTF.

Fuel excise duty, road user charges and motor vehicle registration and licensing fees are defined in the LTMA as land transport revenue and are paid into the NLTF for land transport purposes only. In addition, the government sometimes makes Crown appropriations into the NLTF, such as the stimulus package appropriation.

The NLTF is used to fund:

• activities delivered by approved organisations
• state highway activities
• the Road Policing Programme
• NZTA-managed activities, such as sector training and research
• the NZTA's own activities (other than state highway activities), such as transport planning and managing the funding allocation system.

Funds managed on behalf of the Ministry of Transport

The NZTA also allocates funds to three activities through the NLTP, on behalf of the Ministry of Transport, that are not funded from the NLTF.

They are:

• regional development funds: funding that meets specific regions' specific needs, where a lack of investment is limiting regional development
• SuperGold Card funding: funding that provides for concession fares for SuperGold Card holders on public transport services
• the 'Canterbury Transport Project' - a collaborative transport planning partnership initiative between all Canterbury local authorities and the NZTA.

These activities, while included in the programme, are not subject to the LTMA. However, they are managed in a similar way to other NLTP activities to simplify the fund-allocation process.

Funds from approved organisations - the local share

Land transport activities managed or delivered on a regional basis by approved organisations are part-funded from the NLTF according to the relevant funding assistance rate². The local share may come from rates or other sources, such as developer contributions, borrowing and investments.

² The funding assistance rate is the percentage of the total cost of an approved activity that the NZTA pays.

Supplementary funding sources

Supplementary funding sources for transport activities can include:

• development and financial contributions from land developers, recognising ognising the benefits to their developments arising from transport infrastructure improvements
• betterment³ contributions from landowners who benefit from road improvements
• other contributions from approved organisations, community groups or other entities, such as funding from the Accident Compensation Corporation (ACC)
• funds generated from road tolls for new land transport infrastructure.

³ 'Betterment' is the increased value of land arising from improved access.

Organisations funded through the NLTP

The NZTA provides funding to:

• local authorities (comprising city and district councils) and unitary authorities⁴, to:
  • fund jointly the maintenance, renewal and improvement of local roads and passenger transport infrastructure
  • implement initiatives that improve the operation of current transport networks and services, by addressing transport demand, user behaviour and mode share through activities such as community programmes.
• The NZTA provides an average of 50 percent financial assistance for maintenance programmes and more for improvement projects, with the local share from rates and other local authority revenue providing the balance
• regional councils, unitary authorities and the Auckland Regional Transport Authority (ARTA) to provide passenger transport services, undertake transport demand management and coordinate activities to transfer freight from road to rail and coastal shipping. The NZTA's financial assistance for these activities can vary
• local authorities in Northland and Tairawhiti (Gisborne and Wairoa) to fund regional development roading. The NZTA fully funds this activity outside the NLTF
• the Department of Conservation and the Waitangi Trust to fund some roads under their control, such as access to the West Coast glaciers, or access to the Treaty Grounds
• itself to fund New Zealand's state highway system, including state highway maintenance, renewal and improvements, the promotion of walking and cycling, and passenger transportrelated state highway projects. This is generally 100 percent funded by the NZTA, although local government, toll and developer contributions may also contribute to project funding
• itself for nationally delivered and managed activities, such as sector training and research, education and management of the funding allocation system.

Increasingly, funding for land transport initiatives from traditional sources, such as petrol excise duty and road user chargers, is being supplemented by new sources, such as borrowing supported by tolling, and local contributions.

⁴A unitary authority is a local authority that undertakes the additional functions of a regional council.

Figure 2: Funding for the NLTP

Last updated: 6 October 2009