Budget Deficits Could Put Spotlight On Transport
September 9th, 2008
The sudden deterioration in the Govt’s financial position from surplus to multi billion dollar deficit will test the Govt’s resolve to maintain its spending programme and the previously announced 10 year transport budget is sure to come under scrutiny. Furthermore, with the election looming and the prospect of a change in Govt and National likely to cut spending more so than Labour, this raises the prospect of what might be cut and by how much.
Back To The Future. Under Labour any spending cuts are likely to be minor and it is unlikely public transport funding will be cut given its stated commitment to boost public transport use and cut emissions. However, with National the situation could be quite different with any cuts likely to target areas which the party has traditionally not been well disposed to and this means public transport funding could be a target. Under the last National Govt, public transport use fell to its lowest levels in probably 70 years as it phased in an ideologically driven policy of extreme deregulation with resulting fragmentation of service providers and reduced quality standards which confused and alienated users. It will be interesting to see if National might be tempted to go down the same path in an attempt to cut public transport funding.
Revenue Uncertain. Complicating the funding situation is the prospect of tighter economic conditions adversely affecting the amount of money likely to be raised through regional fuel taxes. It could well be projected revenue targets may not be met if car use continues to fall depending on what happens to fuel prices and whether or not people perceive any fuel price drops to be a longer term trend. Whatever happens over the next few months, it is likely transport sector funding will face more uncertain times.
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