Time of Use charging progresses – but will it actually lead anywhere?

On Tuesday the long awaited Land Transport Management (Time of Use Charging) Amendment Bill passed its first reading in parliament and now heads off to select committee for public submissions. This is the legislation that enables Time of Use charging schemes – what’s typically known as congestion pricing – to be developed and implemented. With only Te Pati Māori opposing the Bill, the widespread support for it across parliament reflects its long history of development – stretching right back to the very first ATAP in 2016 that really hammered home we can’t build our way out of congestion.

Chris Bishop’s press release focused heavily on the scale of the congestion challenge – particularly in Auckland. This drew on some recent work the Council has done to quantify the “cost of congestion” – which is now seemingly up to $2.6 billion per year.

A Bill to reduce travel times, increase efficiency, and help boost economic growth and productivity on our busiest roads has passed its first reading in Parliament today, Transport Minister Chris Bishop says. 

“Being stuck in traffic is a waste of time and money. In any given peak hour traffic jam there are people stressed about running late for work, parents trying to get the kids to school on time, couriers and truckies getting frustrated as their runs get further and further behind time, and tradies losing money because they can’t get to as many jobs on time,” Mr Bishop says.

“Congestion is a tax on time and productivity, and New Zealanders are very over having to pay it.

“A report released by Auckland Council today shows that by 2026, traffic congestion will cost Auckland $2.6 billion per year, and that Aucklanders already sit in traffic for 29 million hours per year, which averages out to 17 lost and wasted hours per Aucklander. 

“Frankly, no-one running a business or juggling work and family can afford to lose 17 hours of potentially productive time. 

“Modelling shows that successful time of use charging – charging motorists to travel on certain roads at peak times – will encourage people to change the time or mode of travel, and could reduce congestion by up to 8-12 per cent at peak times.

“Successive governments and a select committee inquiry in 2021 have all agreed that time of use charging is something we need to do to reduce congestion. This Government is getting on with it.

“The Land Transport Management (Time of Use Charging) Amendment Bill will enable the NZ Transport Agency (NZTA) and local authorities to develop charging schemes for our most congested roads.  

“The Bill requires NZTA to lead the design of schemes in partnership with local councils to ensure motorists benefit from the design of the schemes across their region’s roading network. 

“By enabling local solutions within a nationally consistent framework, we are tackling network productivity head-on while enhancing economic productivity and quality of life for all New Zealanders.

“The legislation is not about raising revenue but maximising the efficiency of the roading network. Any revenue that is collected will first be used to pay for the scheme’s costs and then reinvested to improve transport in the region. 

While the widespread cross-party support for this Bill bodes well for this becoming a reality, at the same time it seems like Auckland Council and Auckland Transport have some really massive concerns about some of its details – to the extent that unless major changes are made it’s pretty hard to see the Council being interested in moving ahead with a scheme. These concerns were spelled out really clearly in a Council workshop on the issue last week, which was released in the attachments to today’s Transport, Resilience and Infrastructure Committee.

Council/AT identified four main areas that their submission on the Bill will focus on – with their support for pricing being subject to changes in these areas being made:

The first area – Governance – highlights the highly centralised and seemingly very complex decision-making process that will be used to establish and run a pricing scheme. Somewhat unsurprisingly the Council has some pretty major concerns with this:

The Council workshop presentation also highlights how messy and complex the process for deciding how to spend the money raised from congestion pricing will be. Quite bizarrely, instead of using existing processes like the Regional Land Transport Plan to work through the priorities for spending this money, a whole complex parallel process will be used.

The next issue the council has is around exemptions, where the legislation takes an extremely limited approach by basically saying the only vehicles exempt are emergency vehicles. This potentially leads to bizarre situations where public transport needs to pay the charge, adding to the cost of providing these services – even though one of the main purposes of the legislation is to encourage more people to use public transport so road space gets freed up. There are also potentially messy and unfair situations without exemptions for people with disabilities etc.

All the issues are pulled together in the final slide – although it seems that the submission will go to the April committee meeting, rather than the March one.

In my view these are some pretty fundamental issues with the legislation as it’s currently drafted. While the government is used to ignoring the Council’s view on a lot of things, when it comes to this issue, unless they make some pretty fundamental changes they will be faced with a situation where the Council simply refuses to progress a scheme.

So for all the positive words in parliament on Tuesday, there’s a big risk that nothing actually happens with pricing.

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