Twyford PhilLAND TRANSPORT MANAGEMENT (REGIONAL FUEL TAX) AMENDMENT BILLFirst ReadingHon PHIL TWYFORD (Minister of Transport): I move That the Land Transport Management (Regional Fuel Tax) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by Monday 21 May 2018 and that the committee have authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there's been a sitting of the House and on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 191 193 and 194(1)(b) and (c).I'm pleased to present this bill to the House this evening. The bill allows regions to apply for a regional fuel tax. The bill is the first step in tackling New Zealand's infrastructure crisis and Auckland Council is the first council to apply for a regional fuel tax. Auckland's congestion crisis is plaguing the city. Auckland is basically grinding to a halt before our eyes. A recent report published last year and work done by the New Zealand Institute of Economic Research (NZIER) the economics consultancy estimated that Auckland was losing $1.3 billion a year in lost productivity because of congestion on the roading network. Aucklanders understand that fixing the congestion will cost money. This bill is a down payment on our Government's commitment to building a modern transport system for our country's biggest city and backing it with funding. Congestion is a handbrake on the New Zealand economy. Recently I was in Kūmeu in the Helensville electorate at a meeting held by the Kūmeu-Huapai Residents & Ratepayers Association. During the meeting I spoke to a local resident who owns a concrete supply business. He told me that he's only able to do two deliveries per truck per day in Auckland due to the congestion on the roads. It's impossible for him to get across town at any time of the day and not only does this mean that he incurs ongoing costs paying staff to sit in traffic but his company has to keep twice as many trucks on the road as it otherwise would need to do. Congestion is a handbrake on his business.Stories like this are not new. Logistics companies like Mainfreight couriers such as PBT Couriers or New Zealand Post can tell you that the crisis of congestion on Auckland roads costs their business every single day. That's why the Employers and Manufacturers Association Auckland International Airport Infrastructure New Zealand Ports of Auckland and the National Road Carriers association commissioned NZIER to carry out the report that I mentioned earlier. It found that if Auckland traffic could move on average between 50 kilometres to 56 kilometres an hour during weekdays it would benefit the Auckland economy by nearly $3.5 million a day. The city's real GDP would increase by between $488 million and $842 million. We cannot afford to continue the waste and the drag on the country's productivity caused by the failure to invest properly in Auckland's transport system.The bill enables a council to seek funding for specific transport-related capital projects. The Government has indicated that at this stage only Auckland will be able to apply for the regional fuel tax. Aucklanders know we've got a crisis on the roads they know it's going to cost money to fix it and they are up for paying their fair share if we are to tackle this problem. This bill provides the opportunity for this to happen and happen now.The first aspect of the bill that I want to mention is that the regional fuel tax must be applied for. This is enabling legislation; it creates the opportunity for a council—in this case Auckland—to apply for the ability to levy the regional fuel tax in its territory. This is important. The regional fuel tax must be used to fund capital projects. It cannot be used to pay for business-as-usual and operating expenditure. It is only to fund projects that will transform an area—in this case Auckland—and ease congestion.In 2016 Auckland Council agreed to an indicative package called the Auckland Transport Alignment Project (ATAP) and to give credit to the former Government they finally after five years of going to war with Auckland Council on transport after five years of Steven Joyce delaying the City Rail Link unnecessarily—finally the National Government sat down and negotiated a 30-year transport plan with Auckland Council. That is ATAP the Auckland Transport Alignment Project.However what was not agreed in that plan or could not be agreed was how the indicative package would be funded. The National Government left a $5.9 billion fiscal hole—that's a real fiscal hole not one that's made up for electoral purposes; a real fiscal hole. They talked about having a transport plan for Auckland and left nearly $6 billion unfunded. Auckland Council said We can't plug that gap on our own it's not possible." Auckland Council is already up against its statutory debt limits.Brett Hudson: They could have reduced their spending. That would have helped.Hon PHIL TWYFORD: I'll come to that. They're already up against their statutory debt limits. They do not have the headroom on their balance sheet to borrow $6 billion to plug the fiscal hole that National left. So that is why our Government comes to this Parliament with a bill to make a first down payment on plugging the funding gap in the Auckland Transport Alignment Project.Auckland Council will consult on funding the package of the first decade of projects identified by a refresh of the Auckland Transport Alignment Project that's currently under way and I hope within a month we'll be able to brief not only the Parliament but the public on a new set of priorities for the first 10 years of Auckland's transport plan. It's anticipated that the funds generated by the regional fuel tax will go to support the 10-year programme of investments under ATAP. The bill enables Auckland Council to levy a regional fuel tax of up to 10c a year. This will provide funding between $150 million and $170 million a year for urgently needed infrastructure. That amounts to a $1.5 billion to $1.7 billion contribution by Aucklanders through this regional fuel tax to the modernisation of the Auckland transport system that is so desperately needed.The problems of Auckland cannot be entirely solved by Wellington. Auckland needs to step up and actively work with central government to set the priorities and to take ownership and it's only fair if extra revenue sources are going to be generated from Auckland that Aucklanders have the ability to have a say on the setting of those priorities. This is why the bill does not specify individual projects to be funded. Auckland Council after consulting with its regional land transport committee will prepare a proposal that identifies projects to be funded and then will engage in a public engagement process intended to result in a high-quality proposal that's been worked through and tested from a range of perspectives. It's critical from our point of view that Auckland Council builds public support and brings the community on board through this process.The bill enables a tax that will apply to petrol and diesel but for no more than 10 years. The period of time gives Auckland the funding certainty that it needs to plan and deliver major projects but it requires the council to go back to its citizens and to Ministers if it wants to go beyond 10 years.I want to say that there are a number of people including the National Party's transport spokesperson who say that this tax is not needed because Auckland Council should just become more efficient and cut its costs. That is laughable. To think that Auckland Council can cut costs in order to fund a $6 billion fiscal hole left by the former Government is ridiculous.One of the big challenges that our country faces is helping our high-growth cities particularly Auckland to grow. Without much greater investment in transport we'll never reduce the crippling costs of congestion. We cannot invest at the level that's needed if we are to rely on this year's tax take through the National Land Transport Fund; there just simply isn't enough money in the fund. We need to lift our level of ambition and invest in transport infrastructure to get ahead of the growth and to do that we need to find new sources of revenue from Auckland to support this investment. Enabling Auckland Council to levy this regional fuel tax is a down payment on that challenge by this Government. This bill is a vital first step to resolving the transport crisis on Auckland's roads. Thank you."