Story: Roads

Page 6. Centralised road funding

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Main Highways Act

The Main Highways Act, passed in 1922, came into effect in 1924. The Act created the Main Highways Board to control some 10,000 kilometres of main roads which were declared main highways. Initially the board shared construction costs of main highways 50–50 with local authorities, and subsidised maintenance and repairs by a third. Later it determined the rates of its contributions and those of local authorities at its own discretion.

The central government’s contribution was funded by taxes on petrol, tyres, car registrations, heavy traffic fees and mileage tax (today’s road user charges). Local authorities funded their contribution from rates and driver licence fees, which they collected at that time. In 1936 main highways became known as state highways, and were fully funded by the government.

Road building and upgrading

In the 1930s economic depression, the government used the unemployed to build roads. One major project started in 1933 was the Milford Road, to Milford Sound in Fiordland.

After the Second World War New Zealand roads were in a poor state. Construction had stopped and maintenance was deferred so that by the early 1950s the state of the roads was considered to be harming the economy. At the same time road surfaces were coming under greater pressure from bigger, heavier vehicles and more traffic. Amendments to the Public Works Act in 1947 and 1948 allowed certain highways to be declared motorways, restricted to motor traffic. The first stretch of motorway opened in 1950 in Wellington, running for 5 kilometres from Takapu Road to Johnsonville.

Another major focus of the early 1950s was to seal more roads. In 1954 the road from Wellington to Auckland was sealed in its entirety.

No cows allowed

 

In 1950 Wellington’s Evening Post explained to its readers what the new motorway was for: ‘It is a motorway for motors. Pedestrian may not enter it, nor cyclists; nor will wandering stock, nor the farmer’s milking herd, taking a short cut to the dairy, be tolerated.’1

 

National Roads Board

In 1954 the Main Highways Board was replaced by the National Roads Board (NRB), which had wider powers than the former body. It also acted as a central authority to advise and assist local authorities on their roads. The minister of works was the chairman of the NRB, and local authorities and road users were also represented. State highways were managed by the NRB, while the remaining public roads were managed by local councils. In 1959 a Roading Division was established in the Ministry of Works. The 1960s was the era of motorway construction, and this work absorbed an increasing share of state highways funding. The Roading Division was essentially the engineering and construction arm of the NRB and it carried out most of this work.

Organisational reform

The Ministry of Works and Development (formerly the Public Works Department 1870–1948 and Ministry of Works 1948–74) was abolished in 1988. It had carried out and overseen most main road construction in New Zealand for decades. Commercial activities were transferred to a government-owned company, the Works and Development Corporation. Road construction was contracted out through a competitive process. Further reforms saw road funding transferred initially into the Ministry of Transport and then into an independent Crown agency, Transit New Zealand, created in 1989.

In 1996 a separate funding body, Transfund New Zealand, was established to distribute funds to Transit New Zealand and local authorities. In 2004 Land Transport New Zealand was created through the merger of Transfund and the Land Transport Safety Authority. In 2008 Land Transport New Zealand joined with Transit to become the NZ Transport Agency.

Revenues were paid into a dedicated National Land Transport Fund. Revenue came from road user charges, motor vehicle registration and licence fees, and fuel excise duties.

Road builders’ dreams

 

In the 2000s road builders were still adamant that a road linking the Milford Road down the Hollyford Valley to Haast, a road from Glenorchy to the Milford Road and another linking Golden Bay with Karamea would bring economic benefits. The rugged terrain and opposition to building roads in national parks meant that the proposals were likely to remain nothing more.

 

The road network

In the early 2000s local and regional councils were responsible for managing, maintaining and developing local roads, while Transit New Zealand managed state highways. In August 2005 the state highway network consisted of 10,894.4 kilometres (5,972.5 kilometres in the North Island and 4,921.9 kilometres in the South Island) of major roads and motorways. State highways linked to 80,000 kilometres of local roads. Most motorists would not notice the difference when they drove from one to the other. The state highway network was worth $12.5 billion and carried 48% of all New Zealand's traffic. It included 170 kilometres of motorway.

State Highway 1 is the main road in New Zealand. It stretches the length of the North and South islands, from Cape Rēinga to Bluff.

Footnotes:
  1. Evening Post, 21 December 1950, p. 6. Back
How to cite this page:

Carl Walrond, 'Roads - Centralised road funding', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/roads/page-6 (accessed 13 December 2018)

Story by Carl Walrond, published 11 Mar 2010, updated 1 Mar 2016