The Transport Agency is set to invest a record amount in public transport during the next three years.
The agency's board has outlined investment levels for five key areas in its $9 billion National Land Transport Programme for 2012 - 2015.
Public transport services will receive $830 million in the next three years, an increase of 33%.
Investment will be targeted at improving peak-time services and help to reduce congestion, with a particular focus on improving the reliability of rail services in Auckland and Wellington.
Some of the new money will go to paying higher track access charges to KiwiRail - the agency says this is about $20 million between the two jurisdictions.
Another portion will be spent on debt repayment, interest and capital from the purchase of new trains for Auckland.
The money available for renewal and maintenance of local roads and state highways will increase by about 2% to $2.7 billion.
"We think it's a good balance between maintaining what we've got, building new equipment and investing in public transport," says agency chief executive Geoff Dangerfield.
Mr Dangerfield admits the level of maintenance and renewal on some roads, such as those which carry low volumes of traffic, could fall as a result of the small maintenance funding increase, but says the agency aims to ensure critical roads are maintained to a good condition.
He says that by making changes, including moving to longer-term contracts, the agency could find efficiencies of up to 15% on the state highway network in the next three years.
Mr Dangerfield says the information has been provided to councils in order to give them the certainty they need to make decisions on regional and district council long-term plans.
Local Government New Zealand president Lawrence Yule says councils won't be able live with flat funding for road maintenance and renewal for very long.
"There's only so far that can go ... before councils start making decisions to drop the level of service and potentially to not maintain things at the level they previously did."
The Green Party says the Government should not allow the condition of any highway or local road to deteriorate.
Transport spokesperson Julie Anne Genter says there would be more money for local roads and highways if the Government was not building its roads of national significance.
She says public transport spending is coming off a low base and the increase is needed to keep pace with demand.
The remainder of the National Land Transport Programme will be signed off in September.