Central Government's influence in Auckland transport

Tom Bennett, Partner | Tuesday 15 February 2005

The Local Government (Auckland) Amendment Act 2004 created the Auckland Regional Transport Authority (ARTA), a statutory entity with regional responsibility for planning, funding and developing an integrated, safe, responsive and sustainable Auckland regional land transport system.

At present, ARTA's principal funding sources are the Auckland Regional Council (ARC) and Land Transport New Zealand.  Land Transport New Zealand was created on 1 December 2004 under the Land Transport Management Amendment Act 2004 and replaces Transfund New Zealand (and the Land Transport Safety Authority).

Although the ARC is a significant funding source for ARTA (and is likely to be the major funder of its administration costs), the Amendment Act creates an incongruence between the ARC and Land Transport New Zealand regarding their respective abilities to manage risk and specify services from ARTA.

The Amendment Act sets out certain constraints on the ARC's ability to specify "activities" for ARTA. These constraints relate to, essentially, the preparation of the Auckland land transport programme, the provision of ARC funding for activities and the content of the Auckland regional land transport strategy (RLTS).

ARTA's land transport programme is envisaged by the legislation to be ARTA's key planning document.  In particular, the land transport programme is the basis for central Government funding of the Auckland land transport system (including local roads, but not State highways) through Land Transport New Zealand.

When preparing its land transport programme, ARTA is not under an absolute and unqualified obligation to implement the RLTS.  Rather, section 12(6) of the Land Transport Management Act 2004 now provides that ARTA "must give effect to" the matters in the Auckland RLTS "unless it is required to do otherwise by operational considerations that affect the sequencing and timing of activities, the funding available to it, or its statutory functions or powers".

Section 36 of the Amendment Act also restricts the ARC from including in the content of the RLTS:

• reference to activities or their prioritisation;
  
  
• any matters other than those specified in relation to section 175(2) of the Land Transport Act 1998 (a section specifying matters which all regional land transport strategies must take into account); and
  
  
• a regional passenger transport plan.

In addition, section 9(3) of the Amendment Act prohibits the ARC from giving any direction to ARTA in relation to its land transport programme. Rather, ARTA is to exercise its judgement independently and in accordance with its statutory obligations when determining whether to include a particular activity in its land transport programme.

Finally, section 34(4) allows the ARC to specify "activity classes", but not "activities", for which funds may be used when providing funding to ARTA.

In contrast, no such constraints exist in relation to funding to ARTA from Land Transport New Zealand. As a result, Land Transport New Zealand may specify, or exclude specific, activities as part of its funding package for ARTA without constraint under the Amendment Act.

This different treatment of ARTA's principal funding agencies seems to lead to two conclusions. First, central Government is not prepared to accept the risks relating to planning and service delivery by ARTA which the ARC has been required to accept in its role as the local authority that is politically and financially responsible for ARTA. Secondly, the Government has left open its ability to influence Auckland’s land transport programme through Land Transport New Zealand.  Greater central Government involvement was flagged in the Government Transport Sector Review in June 2004.  That Review stated that:

"Transfund [Land Transport New Zealand] needs to strengthen its regional presence and influence.  The Ministry needs an ability to engage effectively with regional stakeholders and to leverage regional resources to give effect to [New Zealand Transport Strategy] outcomes.  The Ministry needs to lead and co-ordinate sector engagement with local government and other stakeholders, and its policy needs to reflect local concerns.  The Ministry also needs to influence local and regional government and other stakeholders towards NZTS outcomes at a strategic level."

In addition, that Review also recommended that the Land Transport Management Act be amended to (among other things):

• "make it clear that the policy relating to the funding of activities… and activity classes within the [national land transport programme] is the responsibility of the Minister."
  
  
• "ensure that the changes proposed above do not affect the statutory independence of the board that makes individual land transport funding decisions…".

The land transport legislation resulting from this Review – the Land Transport Amendment Act 2004 and the Land Transport Management Amendment Act 2004 – were enacted on 30 November 2004.  An important issue now for Auckland is the extent to which central Government will seek to drive the development of Auckland’s land transport system through this new structure.

Tom Bennett is a partner at Bell Gully, specialising in local government, land transport, construction and commercial law.

First published in Local Government magazine, February 2005.