On 6 March 2024, the New Zealand Minister of Transport released the draft Government Policy Statement on land transport (‘GPS’). The draft GPS outlines investment strategy over the next 10 years by directing $7 billion annually from revenue and the National Land Transport Fund (‘NLTF’).
What does the GPS set out?
The draft GPS outlines strategies shaping specific outcomes from direct government funding and the NLTF, including how to allocate and raise funds. The GPS also establishes expectations for the New Zealand Transport Agency in executing investments, such as state highway maintenance and road policing.
Investment and infrastructure as a top priority
The draft GPS acknowledges New Zealand’s infrastructure deficit within the transport sector, citing affordability of construction and maintenance, challenges of property acquisition and current financing models as key drivers. Responding to this, the draft GPS proposes reform in delivering a new framework for infrastructure. Examples of the proposed reform include:
- Legislation enabling fast-tracked consent approvals for major infrastructure projects; and
- Amendment to the Land Transport Management Act to ensure that future Government Policy Statements on land transport incorporate a 10-year investment strategy.
Strategic Priorities of the GPS
Four strategic priorities underpin the draft GPS, these include:
- Economic Growth: Efficient transport infrastructure investment will boost long-term economic prospects. Specific emphasis is provided to re-introducing the Roads of National Significance Programme.
- Increased Maintenance and Resilience: Enhancing proactive maintenance measures ensures reliability, specifically in the wake of significant challenges (e.g., Christchurch and Kaikōura Earthquake rebuilds)
- Safety: Funding is directed to policing/enforcement due to rising fatal crashes involving drugs and alcohol.
- Value for Money: The GPS will invest over $20 billion, with an increased infrastructure focus rather than previous focuses on traffic management.
How does the GPS address funding?
The draft GPS outlines two main funding sources – Revenue and the NLTF.
- Revenue: Certain land transport infrastructure will be fully funded by central government, whilst others receive co-funding from local funding sources (i.e., rates and contributions).
- NLTF: Funding for the NLTF for 2024/25-2027/28 will primarily come from:
- fuel excise duty, road user charges and motor vehicle registration and licensing fees; and
- direct Crown funding in the form of grants and loans.
KWM advises clients on all aspects of the transport sector, including the development and operation of infrastructure referenced in the draft GPS.
We will continue to monitor developments to the GPS and keep you updated with further developments.
