MP backs royalties for roads

17:00, Jul 28 2014

Taranaki's roading upgrades should be paid for by royalties from the oil and gas industry, Labour MP Andrew Little says.

He was backing New Plymouth Mayor Andrew Judd who yesterday accused the Government of giving Taranaki roads only the crumbs left over from funding budgets.

Little said Judd had the right to be concerned about the lack of investment in regional roads and state highways in Taranaki.

"And it's time oil and gas royalties came back to the region that generates them to help pay for infrastructure," he said.

Little said Labour was looking at Australia's "royalties for the regions" policy which sees a proportion of mineral royalties going back into its local community.

"In Western Australia, the figure they have used is 25 per cent of the royalty."


But a 5 per cent royalty for Taranaki would be justified, Little said.

Little said the Government collected about $500 million annually in royalties from the oil and gas industry.

A 5 per cent royalty would equate to about $25m for Taranaki a year, Little said.

"If we had an extra $25m a year, you could do a long-term programme to upgrade something like Stage Highway 3 and make some real difference to the whole road rather than bits and pieces."

Little said the proposal was "actively debated" among the Labour caucus and he was confident it would be looked upon "very favourably".

"I think returning a proportion, even a small proportion of the royalties, back to the region means we get some benefits here," he said.

However, New Plymouth MP Jonathan Young said royalties for regions had been "bandied about for some time".

"If we were to pay a regional royalty, it takes away the revenue for the Government to spend in other regions. Regional royalties mean there is less for schools and hospitals in other regions."

Young said he was surprised to hear Little promoting it because "regional exclusivity" was contrary to Labour's core values.

Taranaki enjoyed the many benefits from the "generosity of the oil and gas sector", ranging from the Todd Aquatic Centre, Taranaki Rugby sponsorship by Tag Oil, and the Air Ambulance by Greymouth Petroleum, Young said. "The Len Lye Centre wouldn't be able to progress without Todd Energy's contribution."

Prime Minister John Key announced a roading policy package worth $212m which would be implemented should National be re-elected.

Funded through asset sales, the package included between $10m-$15m for the Normanby overpass upgrade and up to $25m for work to be completed at Mt Messenger and the Awakino Gorge.

Asked if this meant there would be more asset sales to fund the package, Young said that was not the case at all. "It's $212m but as well as that there's a $90m a year of contestable funding available for regions only so they can bid for that money.

"Secondly, in the next three years, the National policy statement for the long-term transport plan has over a billion dollars earmarked for regional investments over four years."

Taranaki Daily News