NLTP - National Land Transport Programme

National summary | June 2007

Land Transport Funding

Crown funding for transport, that is allocated and disbursed by Land Transport NZ from the National Land Transport Account, is provided from the National Land Transport Fund. The funding comprises; fuel excise duty, road user charges, motor vehicle registration and licensing fees, and revenues from Crown appropriations. The funds are available for allocation once the costs of revenue collection, road policing operations and Land Transport NZ’s operations are deducted.

Each year the Minister of Transport approves the maximum amount that Land Transport NZ can spend on its own operations, and on the research education and training programme. The Minister also approves the funding for the road policing programme, an activity in the NLTP that is funded directly from the National Land Transport Fund.

Any third party revenue received by Land Transport NZ is also available for expenditure within the NLTP.

Payments to Transit are reduced by the amount of the third party revenue Transit receives. In practice, this means that payments to Transit are reduced by over $30 million each year, the amount of the third party revenue Transit receives from its property operations and sales.

Three types of funding are distributed:

• nationally distributed funds (N)
• regionally distributed funds (R), distributed to each region in proportion to its population
• Crown appropriation of funds (C), allocated to the Auckland, Bay of Plenty, Waikato and Wellington regions for specific purposes

Currently, Land Transport NZ administers the collection of Crown revenue used to fund land transport. The costs of this are offset by contract payments from the National Land Transport Fund. These and the other business operations of Land Transport NZ not directly associated with its NLTP roles are self funding, with both the costs and revenues passing through the National Land Transport Account.

The flow of revenue from the National Land Transport Fund through the National Land Transport Account to fund activities within the NLTP is shown in Figure 1.

Funding and revenue confidence

The government has established a mechanism whereby it will ‘top up’ fuel excise duty, road user charges and motor vehicle registration revenues into the National Land Transport Fund to the level expected in March 2006, if necessary, or reduce other payments into the National Land Transport Fund when these revenues are higher than expected. The agreed revenue levels apply over the period 2007/08 – 2010/11. We anticipate that the government will consider updating and extending these guarantees in 2008.

The government has also set up a mechanism over the same period whereby funding for the state highway improvement programme is adjusted to retain its purchasing power irrespective of changes to the cost of inputs.

In May 2007, the government announced that it will consider full hypothecation of petrol tax as revenue into the National Land Transport Fund, and shifting the NLTP to a three-year funding cycle.

Figure 1: Land transport funding 2007/08 (GST exclusive) [d]

All items shown exclusive of GST at estimated cost in 2007/08, except state highway construction is shown at the guaranteed level of funding in 2006/07 terms.

National funding allocation process

To ensure funding decisions take into account the New Zealand Transport Strategy, the LTMA and other requirements placed on approved organisations, Land Transport NZ follows a six-step allocation process, outlined below.

The funding allocation process is described in Land Transport NZ’s Programme and funding manual.

Stage 1: formulation

Land Transport NZ encourages approved organisations and other funding applicants to discuss and seek funding for proposals that contribute to the purpose of the LTMA. Organisations are encouraged to follow a process of proposal development and consultation that is consistent with the objectives of both the approved organisation and Land Transport NZ.

Stage 2: assessment

Approved organisations and other funding applicants are required to assess their proposals in terms of the LTMA, using a process that considers relevant requirements as specified in the LTMA. Land Transport NZ reviews the assessment and assigns a profile to each proposal covering the seriousness and urgency of the issue or problem addressed, the effectiveness of the proposal in dealing with the issue and the requirements of the LTMA, the efficiency of the proposal and confidence in the proposal delivery and effectiveness.

Stage 3: prioritisation

The profiles are used to assist prioritisation with regards to the provisional allocation of funds to each activity class and the prioritisation processes applying to certain activity classes.

Stage 4: programming

Programming is the final step in forming the NLTP. It involves balancing the priority order of proposals with estimated revenue and proposed activity class allocation. It requires considering the programme as a whole to ensure it meets the requirements of the LTMA by being balanced across activity classes and ensuring integration between major transport projects and services.

Stage 5: approval of funding of activities

Before approving funding of an activity or activity class, Land Transport NZ verifies the assessments made in stage 2 and ensures requirements of the LTMA are being met. NZ Police activities funded in Land Transport NZ’s Land Transport Programme are approved by the Minister of Transport.

Stage 6: monitoring and review

Land Transport NZ monitors the implementation of the NLTP by assisting, advising and coordinating approved organisations in developing methods to monitor the effectiveness of the overall programme at the strategic ‘outcome’ level, the condition of the transport system and the effectiveness of individual activities and packages within the NLTP. Through this process, approved organisations develop more effective land transport programmes.

The NZ Police activities funded by Land Transport NZ’s Land Transport Programme are monitored by the Ministry of Transport on behalf of the Minister of Transport.

Land Transport Programme online

The NLTP is administered using a web-based application called Land Transport Programme online (LTP online). Approved organisations submit their land transport programmes using this application. LTP online is also used by approved organisations to report and check on the status of activities and programmes, and update activity information. Approved organisations are also able to review whether an activity has been included in the NLTP and whether it has been approved for funding.

Page created: 26 June 2007