Whose money is it anyway?

Will peak oil and global warming completely change the priorities for transport investment?

Without the revenue from the petrol tax how should transport be funded?

Have your say.

One reason for setting up this blog is to celebrate 80 years of petrol tax funding for developing the nation's roads and highways.

Another reason is to remind our elected leaders that the petrol tax was introduced at the request of the Main Highways Board, it wasn't a politicians bright idea. The petrol tax was introduced on the principal that the user shall pay for the development of modern roads, and for the benefit of the Main Highways Board not the government.

Further more, the revenue from the petrol tax only passes through the Consolidated Account because in 1927 the Main Highways Board did not have the ability to pay refunds on petrol used for non-road purposes. That is no longer the case today. Land Transport New Zealand does have the ability to process these refunds so there is no practical reason for this money passing through the Consolidated Account. The only reason for perpetuating this system is so that politicians can refer to road users contribution to the Land Transport Fund as "central government" funding.

Finally, this blog will raise the important questions of what condition our land transport systems are really in, how much we really should be spending on land transprt, and whether the petrol tax even comes close to meeting these costs.

When the petrol tax was introduced on 1 October 1927 it increased the price of petrol from $1.60 per litre to $2.05, adjusted for inflation.

Roading revenue is appropriated to the Land Transport Fund by the sole authority of s9(1) of the Land Transport Management Act 2003.  But then the Minister of Finance includes the same money his budget. That would be fine if he pointed out that the money is in the budget only because he has a statutory obligation to include it.

But he is actually seeking the vote of Parliament to appropriate these funds. So will the money appropriated by the budget legislation be paid to Land Transport New Zealand in addition to the money appropriated by s9(1) of the Land Transport Management Act 2003?

Yeah, right... This is just padding the budget to make it look like the government is actually doing something useful.  Unfortunately this is a long standing tradition of Ministers of Finance so I guess the AA and the RTF wont be successfully sueing to get the Crown to actually pay the money it has just appropriated to the Land Transport Fund.

Or there again, judges can sometimes do the unexpected so maybe they would demand that the Crown pay all of the money that has ever been appropriated by Finance Ministers in their budgets.

Now that would solve the Land Transport funding crisis and solve the problem of what to do with Mr Cullen's surpluses.