A major call by the Government for roading this week: planned hikes to fuel excise duty and road user charges now won’t be happening until 2028.  It might be good news for road user pockets, but what does it mean for the state of our roads?

In theory, little change. That’s because Ministers have also agreed to top up the National Land Transport Fund to cover the lost revenue, at an expected cost of $1.476 billion over the forecast period. That commitment is the most important part of the announcement, because it means maintenance and pavement replacements will continue as planned.

But we can’t keep kicking the can down the road. Just like we need a 30-year plan for road building, we also need a stable user-pays platform for paying for them.

I’ve said it many times, our roads are the lifeblood of connectivity for our regions. They carry our food, our exports and imports, and of course ourselves. Look after them, and they give back many times over. Let them run down however, and you are not saving money, you are quietly adding to the cost of living for every New Zealander.

The evidence here is stronger than most people realise. Allen and Arkolakis, in the Review of Economic Studies, put the average annual return on the United States highway network at 108 per cent. On the best links it exceeds 400 per cent, and they are precise about where those links sit: the greatest gains are “in the densest areas of economic activity and at choke-points in the network.”

We have our own choke-points. State Highway 3 connects the energy and food basket of Taranaki to the Waikato, Auckland and the ports beyond. It has closed more than 15 times in the past year, sending trucks on 350 kilometre detours every time and costing the economy millions. Regional economic highways like that need their resilience investment now – we can’t wait for the revenue increases to land in 2028.

Deferred maintenance carries a cost of its own. Overseas reviews of road maintenance found that delaying a repair three years costs six times the preventive fix; five years, 18 times. Closer to home, the Infrastructure Commission reports we renewed our state highways at just 37 per cent of the rate they depreciated between 2012 and 2022. We have been consuming the asset for a decade.

None of this is an argument for spending more on everything. NRC supports the Government being judicious about which roads we genuinely need and can afford, and exploring creative ways to fund them such as public-private partnerships. Our first election call was to spend smarter for a better network, not simply to spend more.

But be clear about what road investment is. It is an investment in keeping the cost of living down, in the exporters who earn our living, and in productivity.

We also need to remember the longer these increases are held back, the sharper the correction will be when it finally comes. Trucking runs on razor-thin margins and tight cashflow. When the road user charges catch-up lands, it must be staggered — our members cannot absorb a price shock dressed up as a return to normal.

Let’s do the next generation a favour and get back to maintaining and paying for our roads when we need them, and not kicking that can down the road yet again.

Justin