The setting up of Transfund New Zealand in 1996 was intended to ensure that land transport funding would be determined entirely on a rational economic basis, without the board and entity granting and auditing funding, also benefiting from the funding decisions that it would make. This leaflet was intended to explain how Transfund would operate.
The introduction explains basically how the system would work. The establishment of Transfund also included creation of a fully hypothecated National Roads Fund, which received all revenue from Road User Charges and Motor Vehicle Registration fees, and at the time, part of Fuel Excise Duty (in 2008 all of Fuel Excise Duty). The clear objective was to separate funding from delivery of road and passenger transport services.
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| Introduction and Operational Environment A key element of the reforms was establishment of the National Roads Fund to provide security of revenue to pay for maintenance and make commitments for new capital works. Before the establishment of Transfund, the annual National Land Transport Programme was only guaranteed 97% of the previous year's funding, and would have to convince the Ministers of Transport and Finance of the need for any additional budget (with revenue from road users not being statutorily hypothecated). A key benefit being that as demand increased (due to increased VKT or fuel consumption), that revenue would flow directly to Transfund, meaning there was a broad proxy between road maintenance and revenue to fund it. Transfund's core responsibilities were listed as follows:
The board composition of five members included two from Transit New Zealand (a provision later removed, because of concern it would perpetuate conflicts of interest), one from local government, one from road users and one for the "public interest". Another key change was that the National Roading Programme no longer required Ministerial approval. Output classes were defined as:
Project Evaluation is described as projects having potential to reduce accidents, travel times and vehicle operating costs. Costs are measured both in financial terms and any disruptive social and environmental consequences. It noted that over the next two years the funding threshold would drop from 5 to 4.5 and then 4:1 under Benefit/Cost Ratios, reflecting the Government's belief in greater efficiency with additional spending (and also reflecting how growth in revenue was expected to enable more spending on land transport). Alternatives to Roading was a specific provision designed to make explicit the funding of projects or activities that generate benefits to road users through alternative modes. Examples include subsidising rail or sea based transport to relieve roads that are vulnerable to damage or which cannot handle larger trucks. Passenger transport subsidies that reduce congestion or defer the need for additional road capacity were also to be justified under this category. The key limitation was that very few projects would meet a BCR of 4:1 under this category, besides the continued subsidies for existing passenger transport services. The Review and Audit function was designed to ensure projects were managed cost effectively and met standards set by Transfund, it also included safety auditing of projects. Transfund was subsequently merged with the Land Transport Safety Authority in 2004 to form Land Transport New Zealand. It was subsequently merged with Transit New Zealand in 2008 to form the New Zealand Transport Agency, also known as Waka Kotahi. |
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Core responsibilities |
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| Structure and National office divisions |
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| National Roading Programme and Project Evaluation |
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| Alternatives to roading, review and audit |
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