The New Zealand Transport Agency (NZTA) is facing a shortfall of $160 million, it has been reported.

The government agency says it will be hit with a six per cent annual increase for maintenance, operations and renewal of state highway expenditure during the next three years without any corresponding increase in budget, Radio New Zealand (RNZ) reports.

Despite a shortfall totalling $160 million, the agency says it will not allow the quality of roads to drop.

Network operations group manager Colin Crampton is adamant savings can be achieved through effective use of resources.

However, Labour transport spokesperson Phil Twyford told RNZ the government is wasting billions of dollars on building low-value motorway projects.

Greens' transport spokesperson Julie Anne Genter says the government has mismanaged the transport budget by putting a large part of the money on a few motorway projects.