By John McDonald (CityWatch NZ Editor and 2024 Hamilton East Ward By-election Candidate)
Before they were voted out in 2023, the Labour government was planning to introduce congestion charges (or “road pricing”) after the election. As part of the National-ACT coalition agreement, the parties agreed to “Work with Auckland Council to implement time of use road charging to reduce congestion and improve travel time reliability”.
As expected, a bill is now before parliament which is designed to legalise congestion charges and time-of-use charges. This will effectively allow councils to turn existing roads into toll roads, with a more complicated (or “variable”) charging system.
The Ministry of Transport did a reasonably good job at summarising the arguments for and against the changes when briefing the ministers.
“The arguments against increased use of local variable charges include:
a. charges are regressive and inequitable and would fall disproportionately on low- income groups and the disabled. As such, the public transport system needs to be a credible alternative to cars before charging occurs.
b. increasing charges for those experiencing the most congestion would be unfair as they have already paid for these roads.
c. government tracking of movements is totalitarian and a risk to personal freedom and privacy.
d. the net benefits are marginal with considerable risk that actual costs will exceed the benefits.
The arguments for increased use of local variable charges include:
a. to be effective transport revenue tools need to reflect the costs that users impose on society.
b. pricing signals are needed as the existing average charge-based system is poor at identifying the true value at time.
c. it is unfair that users are not paying charges that reflect the actual costs of their network use.”
Cabinet Business Committee: Minute of Decision, Land Transport Revenue Action Plan: Time of Use Charging, 8 July 2024
The current version of the bill is open for public feedback via the select committee until 27 April 2025. I recommend that people let the government know if they have concerns or opposition to these charges.
In this commentary, I will critically review the Land Transport Management (Time of Use Charging) Amendment Bill’s whole General Policy Statement (The Bill’s GPS, 2024). At the end of this article, I include some quotes from the Cabinet meeting document which outlines the larger and longer-term agenda at work behind this bill.
“General policy statement
New Zealand’s largest cities face significant traffic congestion compared to cities with similar population densities. This congestion hampers access to work, education, health services, and social activities while increasing costs for businesses, which in turn impacts economic productivity and quality of life.”
The Bill’s GPS, 2024
It is true that some cities, such as Auckland, have serious congestion problems.
How much of those problems are due to geography and many decades of inadequate urban planning?
Are there suitable and viable options for people to avoid congestion in those cities?
“Time of use charging is proposed as a solution to improve traffic flow and optimise the use of the road network. By charging motorists for using specific parts of the network at certain times, the system encourages behaviour changes, such as altering travel times, routes, destinations, or modes of transport.”
The Bill’s GPS, 2024
The proposed system will be more complicated than toll roads and be inherently manipulative.
Is it the primary role of local government to change your behaviour through incentives and punishments, or should they be instead focusing on providing services to the public?
Is it healthy to have your regular drive to work become a behavioural psychology experiment?
Is getting stuck in Auckland rush hour traffic not already punishment enough?
For these schemes to achieve their stated aims, will those extra charges be enough extra punishment to stop enough people travelling on the roads?
Even if those extra charges work to reduce congestion, is that a good thing for society?
Do the ends justify the means?
“A small reduction in vehicles on congested routes can significantly improve traffic flow, enhancing overall network productivity and delivering greater economic benefits (The Congestion Question, Technical Report, Ministry of Transport, 2020).”
The Bill’s GPS, 2024
I have previously commented on the ‘clear roads ahead for the trucks’ theme in the Coalition government’s Land Transport General Policy Statement.
Will these network productivity gains, which benefit trucking companies, be achieved through pricing large numbers of regular people off the roads?
“The Bill establishes a framework for implementing time of use charging schemes in New Zealand. It enables local authorities to identify areas of problematic congestion, propose indicative scheme areas, and outline potential charging zones. Other local authorities within the region may opt into the scheme before it is formally approved by the Minister.
A scheme board will be responsible for developing and operating the scheme, with the New Zealand Transport Agency (NZTA) chairing the board and holding a casting vote in cases of disagreement.”
The Bill’s GPS, 2024
This sounds like the creations of another layer of bureaucracy which is unlikely to be directly accountable in a democratic manner. This also looks like it will be creating more of those easy boardroom ‘jobs for the boys’ (…and girls…and non-binary individuals).
“Proposed schemes require public consultation and an impact assessment before they can be submitted to the Minister of Transport. The Minister, in consultation with the Minister of Finance, will assess whether the proposal meets statutory criteria. If the criteria are satisfied, the Minister may recommend that Cabinet authorise the scheme via an Order in Council.”
The Bill’s GPS, 2024
The approval of each scheme will be a decision by the executive council, it will not be voted on by Parliament or put to a referendum. It will basically be an executive order.
“This order will define the scheme area, maximum charges, and how the maximum charge will be raised over time. Once a scheme is operational, charges within approved areas may be adjusted by a notice issued by NZTA and registered as a land transport record with 28 days’ notice.”
The Bill’s GPS, 2024
At least they are honest in this document that the charges will be increasing over time. Expanding scheme areas is also typical of these schemes in other countries. The government has designed this bill to enable future expansion of the schemes, potentially being expanded nationwide.
“Changes to charging areas within a scheme area require public consultation before a notice and land transport record changing them can be issued by NZTA. Revenues collected from these schemes will be reinvested in land transport activities within the scheme region, guided by a framework that ensures alignment with the investment principles of a scheme.”
The Bill’s GPS, 2024
It is good that a public consultation requirement is included in the bill and that any excess revenues should be spent on land transport infrastructure. However, these schemes can have large operating costs, setup costs, and monitoring cost which will have first priority for consuming the revenue being collected (as specifically stated in Section 65S of the current bill).
“The Bill also amends the Land Transport Management Act 2003 to establish statutory roles and responsibilities for the scheme board, NZTA, the Secretary for Transport, and the Minister of Transport. It provides processes for establishing, varying, and managing time of use charging schemes. Scheme boards are required to set measurable traffic flow targets and report annually on performance, including progress against those targets.
The Minister of Transport may make direct adjustments to charges, appoint a scheme commissioner to oversee a failing scheme, or terminate schemes that fail to meet their objectives.”
The Bill’s GPS, 2024
It is probably wise that they are putting processes in place from the outset to deal with failing schemes. Most New Zealand cities are different from the European and Asian cities where such schemes are well-established.
“Additional provisions address privacy, data security, and exemptions for emergency vehicles. The NZTA is expected to provide non-statutory guidance to streamline scheme design and operation, supporting consistent implementation across regions.
Economic assessments of potential schemes suggest varied cost-benefit outcomes depending on the scope of the scheme. For example, studies of Auckland congestion pricing indicate returns ranging from $0.70 to $1.80 per dollar spent (Congestion Question, Cost benefit analysis, 2019).”
The Bill’s GPS, 2024
That looks like a marginal return on investment. At least they are honest about that. Further details are found in the Ministry of Transport’s Regulatory Impact Statement.
“Cost benefit analysis of a selection of Auckland congestion charging schemes suggests that returns ranging from $1.70 per $1 spent (central cordon) through $1.80 per $1 spent (Strategic Corridors) and $0.70 per $1 (Regional Network) could be anticipated in 2019 dollars”
Cabinet Business Committee: Minute of Decision, Land Transport Revenue Action Plan: Time of Use Charging, 8 July 2024
“Potential risks, such as impacts on small businesses within inner-city zones, will be assessed through public consultation to ensure informed decision making and mitigation of adverse effects. Past reviews have identified no substantial income losses for other groups, and the Bill’s requirements for impact assessments and public engagement will support equitable implementation.”
The Bill’s GPS, 2024
Some quality studies and modelling of the other economic, social, and cultural impacts of these schemes should be undertaken. I doubt that it will only be the inner-city small businesses facing negative impacts from the introduction of congestion charges. Deterring people from making car trips will have a wide range of consequences in a society. Imposing additional costs to the lives of individuals will also have a range of negative impacts.
Studies from Sweden indicate that those on higher incomes (who are driving a company car) are more likely to receive a net benefit from congestion charge schemes. In contrast, people on lower incomes will be often be made worse off by the schemes and suffer a net loss (especially those without a company and without an employer who will cover the extra charges as a business expense).
“…distribution of costs and benefits of a charging system depends on the design of the system, including for instance exemptions and discounts. This is demonstrated by the Swedish congestion charging systems, where the congestion charge for private trips is included in the
“taxable benefit value” of company cars. To avoid this, most employers also pay the congestion charges for company cars for private trips. This implies negative effects on equity, since most company car users belong to the highest income segment.”
The Gothenburg congestion charges: cost–benefit analysis and distribution effects, Jens West and Maria Börjesson, Transport, 2020
“The framework proposed in this Bill reflects findings from the Congestion Question study, which evaluated congestion pricing options in Auckland (Inquiry into congestion pricing in Auckland, Report of the Transport and Infrastructure Committee, 2021).”
The Bill’s GPS, 2024
This is the same The Congestion Question study that proposes an incremental or staged approach, where a smaller initial scheme will expand over the years to engulf more of Auckland City. This is part of the slippery slope which I have covered in a previous opinion piece.
“The study underscores the need for well-informed public engagement and robust impact assessments to ensure the schemes are both effective and equitable.”
The Bill’s GPS, 2024
That is another mention of “equitable”, which is often postmodernist coded-language for identity politics and the related discriminatory treatment of different identity groups. England’s Oxfordshire County Council had a consultation conducted in 2022 for their experimental “traffic filtering” scheme and that survey provides examples of how identity politics intersects with travel restrictions.
“Oxfordshire County Council is proposing to install six traffic filters as a trial under an experimental traffic regulation order (ETRO) within the Oxford city ring road. The filters are designed to reduce traffic congestion, make bus journeys quicker and more reliable, make cycling and walking to work more attractive, and improve air quality.
When they are operating, private cars will not be allowed through without a permit. All other vehicles including buses, coaches, taxis, vans, mopeds, motorbikes and HGVs will be allowed at all times. Residents in Oxford and some areas just outside the city will be able to apply for a permit allowing them to drive through the traffic filters on up to 100 days per year.”
Traffic filters: pre-ETRO survey, DSJ Research Group, 2022
Rather than asking direct questions such as ‘Do you support traffic filtering in Oxford City?’ or ‘Do you agree that council should operate a rationing system for private vehicle travel?’, the Oxfordshire survey instead asked these sorts of questions…
Traffic filters: pre-ETRO survey, DSJ Research Group, 2022, Page 37
“I don’t understand this question at all. All people have, for example, age, so this is in effect asking about the impact on everyone. If you mean a particular age group, say so – i.e. I think this might negatively impact people who have young children or families as transport to extra-curricular activities/lessons is often difficult and time consuming and there are often no direct bus routes. Most of these categories appear to be entirely orthogonal to traffic filters.”
““Everyone will be disadvantaged regardless of race, religion, or sexual orientation. Well
done, you’ve ruined Oxford for everyone.”“I fail to see how the filters can affect anyone of the groups listed above, except those within
the age, disability or pregnancy and maternity groups.”Selected verbatim survey responses which were critical of the survey, Traffic filters: pre-ETRO survey, DSJ Research Group, 2022, Page 41
On one hand, the above survey results are reassuring. There is enough common sense left in wider society for the majority of those surveyed think that restricting private vehicle travel will negatively impact the elderly, the disabled, and pregnant women.
On the other hand, it is troubling that the survey designers felt the need to ask that question in that way …and they would probably struggle to define the word “woman”.
Back in the New Zealand context, The Congestion Question report hints at the establishment of a ethnicity-based discrimination system in the future which could involve a combination of number plate recognition cameras, charges, fines, special privileges, and selective enforcement.
“The question is whether the negative impact of restricting Mana Whenua access can be offset by the potential improvement in access by restricting others’ movement.”
“The Mana Whenua assessment notes that there are three mitigation options that could be developed:…
…2. discounts or waivers for Mana Whenua members or holders of cultural obligations”
The Congestion Question, Technical Report, Ministry of Transport, July 2020
I definitely see the injustice of the state arbitrarily deciding to construct cordons around the lands of your ancestors and then starting to charge your people entry fees for road access. However, opposition to this type of state overreach should be a unifying issue as all of our rights are under threat. The ‘divide & conquer’ tactics of identity politics needs to be resisted and people should avoid being lured into accepting such schemes based on the state promising some special privileges to certain groups.
In the current bill, only emergency vehicles can get exemptions to the proposed congestion charges. However, some sort of voucher system or future government’s amendments could be used to enable discriminatory treatment for different identity groups.
“Time of use charging represents a critical step toward improving New Zealand’s transport system by addressing congestion and enhancing network productivity.”
The Bill’s GPS, 2024
Is it a critical step towards improving New Zealand’s transport system…or is it a critical step towards building that totalitarian system to monitor and restrict the movements of people, all while collecting revenue for overseas corporate interests?
The corporations supplying and operating congestion charging schemes stand to collect a considerable about income. Installation costs and 1st year operating costs for Stockholm’s congestion charging system are reported at an estimated €200 million, with IBM getting that contract. Annual operating costs for the congestion charging schemes have been reported in the vicinity of €10-22 million for Stockholm’s system and over £60 million for London’s scheme (when it was run by a corporation called Capita, before IBM won the contract). At one stage, New York was looking at getting a $500 million grant to fund its proposed congestion charge scheme.
The Cabinet document indicates that the initial scheme will likely be in Auckland and use ANPR cameras and/or RFID checkpoints. However, the proposed legislation is deliberately leaving the door open to expand the schemes in the future and creating a nationwide, GPS-tracking scheme similar to the one promoted by this New Zealand Initiative report (summarised here).
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Other important quotes from the Cabinet meeting document
The bill seems primarily aimed at enabling Auckland Council to set up a scheme on some of Auckland’s most congested roads. What we can expect from the initial scheme will be select roads/areas in Auckland City with ANPR cameras installed for monitoring entry and exit points, with the camera system supporting the issuing of charges and fines. However, the bill has been crafted with a longer-term view to enabling the larger agenda of a nationwide tracking system using in-vehicle devices (likely GPS or similar technology) and dynamic time-of-use charging. This longer-term plan will effectively turn all public roads into toll roads in an effort to replace the current road-user charging (RUC) system. The following quotes from the Cabinet meeting and the Ministry of Transport outline this larger agenda.
“25 While in-vehicle global positioning and cellular technology (GNSS) already exists that could facilitate time of use charging, its adoption is likely to take some time in view of public concerns about vehicle tracking. All overseas jurisdictions with congestion charging currently use road-side infrastructure (such as gantries on multi-lane roads and poles on two lane roads) in combination with automatic number plate recognition or in-vehicle transponders detected using short-range radio technology (RFID).
26 I expect that initial schemes will not utilise GNSS technology, but over time there will be opportunities to explore more sophisticated approaches to collection and operation, consistent with the direction of the revenue work programme and fleetwide transition to road user charges. When this happens, local variable charging schemes, such as time of use charging and tolling, will be incorporated into national variable charging using technology likely to be adopted as we modernise the road user charging system.
27 I propose that the legislation we progress is technology-agnostic to accommodate ongoing technological developments… However, it will still be important that scheme design captures economies of scale in data collection and billing, which should be integral to the framework.”
Cabinet Business Committee: Minute of Decision, Land Transport Revenue Action Plan: Time of Use Charging, 8 July 2024
“We also need local time of use charges that can transition smoothly into any national variable charging we introduce through the RUC system”
“NZTA will lead the development of a single technological system to enable time of use charging which can be utilised across New Zealand, with the costs of this system being the first priority for any revenues raised from the scheme ”
“The net revenues from charging will vary depending on the nature of the charging design. For example, options identified in 2018 for the Auckland Congestion Question work were assessed as generating between $21 million and $261 million annually in gross revenues, with annual operating costs of $10m to $267m. In addition, scheme revenues would need to cover capital costs of between $46m to $580m, and renewal costs of $14m to $174m.
While these figures are no longer current, they illustrate the potential for wide variation in scheme costs and net revenues depending on the charging design in the scheme.”
Cabinet Business Committee: Minute of Decision, Land Transport Revenue Action Plan: Time of Use Charging, 8 July 2024
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Further reading on this issue:
What Has Been Happening with Number Plate Recognition Cameras in Manchester, UK?
RNZ articles on congestion charging and time-of-use charging (July-August 2024)
New Zealand Initiative Report: Driving Change – How road pricing can improve our roads
