In May 2014, the NZ Transport Agency Board agreed that the minimum funding assistance rate would be 52%, one percentage point below the national co-investment rate of 53%. At the time this was considered sufficient 'headroom' to enable councils who needed it to receive an enhanced funding assistance rate.
Subsequently the Board has decided to reduce the minimum funding assistance rate by one percentage point to 51% which will enable a larger group of approved organisations to receive an enhanced FAR, spreading the impacts of the transition to the new FAR regime more evenly.
Some approved organisations may have made commitments in the 2015/16 financial year on the basis that their minimum normal FAR would be 52%. To recognise those councils who may have made such commitments, the lowest rate that they will receive for this period is 52%.
Funding assistance rates are part of a co-investment system that recognises there are both national and local benefits from investing in the land transport network. To ensure that both partners adopt a co-investment approach, it is important that councils continue to have 'skin in the game', so we have set the maximum FAR at 75%.
Councils' actual funding assistance rates for the 2015–18 NLTP are set out in
Attachment 1 [PDF, 175 KB] of the NZ Transport Agency board paper 31 October 2014.
3. Transition
The transition period for the new funding assistance rates system is nine years, or three NLTP investment periods. However, many approved organisations are likely to complete the transition to their normal funding assistance rate sooner.
For the 2015–18 NLTP, councils' normal funding assistance rate will decrease by no more than one percentage point per year.
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