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New FARs for better transport outcomes

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The NZ Transport Agency has finalised Funding Assistance Rates (FARs) for transport investments made by local authorities and other approved organisations, following an extensive review.

FAR

The Funding Assistance Rates Review has been underway for almost two years, including extensive engagement with local authorities and the wider transport sector, looking at ways to simplify funding arrangements and provide better value to all users of the land transport system.
The Transport Agency Board has now made a number of key decisions to implement changes recommended by the review.

The funding assistance rates system identifies how the costs of delivering transport activities are shared between central government through the National Land Transport Fund (NLTF) and local government (primarily through local body rates). Funding assistance rates are not subsidies, but part of a co-investment system which recognises that there are both national and local benefits from investing in the land transport network. Funding assistance for transport activities is provided to local government (and other approved organisations) through the National Land Transport Programme (NLTP), which is updated every three years.

Transport Agency Chief Executive Geoff Dangerfield says the changes to funding assistance rates, being introduced from next year with the 2015/18 NLTP, will update and streamline the system to ensure that funding for local transport programmes is directed where and when it is most needed.

“The FAR system is a fundamental part of the country’s transport investment framework which had not undergone a robust review for over 30 years. The current system is complicated, with many different rates applying to different activities in different areas, and it doesn’t provide the consistency or the long-term certainty that councils or the Transport Agency need to ensure that New Zealanders are getting the most from our combined investment in the transport systems that they rely on to get to work, travel and do business every day. The changes which are being made as a result of the review will ensure that the system is fairer and more effective in directing funding to the areas and to the activities where the transport network as a whole may suffer if local authorities can’t afford to deliver or maintain what is needed in their areas.”

Under the new FAR system each approved organisation will receive a single funding assistance rate for all of their transport activities, with the exception of emergency works and other exceptional circumstances. Currently a single council may have to navigate through more than a dozen different rates of funding assistance to provide different transport activities.

Further details on all the decisions made by the NZ Transport Agency Board are available at www.nzta.govt.nz/far(external link).

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