I’m mindful we remain apolitical, but Transporting New Zealand does play an important role in keeping members well-informed when they consider exercising their right to vote in the General Election.

Our road funding model is predominantly based on user-pays; the duties collected from fuel and RUC are ring-fenced and invested in accordance with the National Land Transport Plan (NLTP). The amount of funding collected that way is important because we have certainty that it will be invested into the land transport system.

Initially, the plan had been to increase FED in three stages across 2027-29, and RUC would also increase by the equivalent amount. That would mean that by 2030, FED and RUC collected would be 31% more than 2026.

If Labour govern next, they’ve committed to not increasing FED through their entire three-year term. Whereas our current Coalition government is deferring increases until 2028 and will phase in further increases differently than earlier planned – implementing biannual increases of 5c/L until January 2030, and by 5c/L annually thereafter. The Coalition will top up the loss to the National Land Transport Fund – $1.476 billion - through the $450 million fuel response contingency fund established in Budget 2026, and the rest, in all likelihood, through further borrowing.

The National Infrastructure Plan released earlier this year by the Infrastructure Commission makes the point that our future prosperity depends upon our infrastructure, and that we’re up against formidable challenges. Much of what we’ve built in past decades is wearing out, including our roading. 

The report includes a sobering graph which demonstrates the large gap between expected roading revenue and expenditure.

Arguably, the intended expenditure is overly ambitious. We don’t need gold-plated roads. Even if every project was reviewed, reprioritised and spending trimmed back, the reality is that the gap between what we’re collecting and what we’re planning to spend is simply too large. A significant funding shortfall remains and this has to change.

That leaves us with two fundamental concerns.

First, revenue is not keeping pace with costs. 

The revenue collected through FED and RUC is struggling to keep up with rising construction and maintenance costs. Between 2021 and 2025, repair and maintenance costs increased by around 36% on a per-kilometre basis. While there may be opportunities to improve efficiency and better manage spending, the reality is that costs are expected to continue rising. That means our purchasing power will erode over time, and fewer improvements and less maintenance will be delivered for every dollar collected.

Second, we are increasingly reliant on funding sources outside the NLTF. Government loans and Crown grants are already being used to bridge the gap between revenue and planned expenditure, and that’s not sustainable. The current NLTP already demonstrates this risk, with several projects unable to proceed because funding is unavailable.  In the absence of strong funding commitments, NLTPs risk being little more than a wish list.

Nothing any party has said gives us confidence that in the short-to-medium term there will be the level of funding available to deliver what’s been promised.  And as other commentators have pointed out, these announcements coming so soon after the widely celebrated multi-partisan agreement on the National Infrastructure Plan only adds to our disappointment. 

Our Election Platform which we launched last month calls for a stable pipeline of transport investment to support economic growth, among a range of other important appeals. The best way of securing stable funding is to collect money via user-pays mechanisms like FED and RUC to reduce the risk of relying on loans and grants which, as we’ve seen with the current NLTP, may not eventuate.  

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