The Government’s Transport Vision – An Overview

Speech Notes: Paul Swain

Minister for Transport Paul Swain outlines the Government's vision for transport in his address to the Road Transport Forum's annual conference in Nelson.

Good morning. This is the first time I have been able to address a key part of the road transport industry as a whole and I would like to thank you for the opportunity. I have already had a very frank discussion with Tony Friedlander and look forward to continuing that dialogue. I have also received a briefing on the Road Transport Forum, your industry and your objectives.

Today I would like to give you an overview of the government’s vision for transport and a brief summary of the priority projects that are underway. The majority of these priority projects focus on land transport.

I would also like to acknowledge the contribution made by my predecessor Mark Gosche in doing a lot of the groundwork for the upcoming transport initiatives. I am dedicated to implementing many of those initiatives and intend to be proactive and get things done.

An indication of the Government’ s focus on transport is the two Associate Ministers of Transport, Judith Tizard and Harry Duynhoven, that will assist me. Their respective roles will be announced shortly.

Ensuring that transport assists economic growth is crucial to the success of the Growth and Innovation Strategy released by government earlier this year. This government has set itself the goal of lifting New Zealand back into the top half of the OECD and transport will have a huge role to play in achieving that. However it’s important that this growth be sustainable. Growth at any cost is not the answer, and we must ensure that the decisions we make today do not impose costs on, or reduce opportunities for, the future.

The provision of quality and on-time transport services is vital to economic growth and international competitiveness. Road freight is a significant part of the transport sector and will make a large contribution to achieving these goals.

The RTF provides a forum where much of the road freight industry and the government can discuss the ways in which this contribution can be further realised. The innovation and improvements that are often driven by the industry are to be encouraged. I look forward to maintaining a continuing dialogue with the RTF.

New Zealand Transport Strategy

A priority for me is finalising and releasing the New Zealand Transport Strategy. This important document will outline the government’s strategic focus for transport in New Zealand.

The transport strategy takes a very broad perspective in looking at transport and its contribution to New Zealand’s future. It draws together the results of a wide range of consultation and discussion that has taken place over the past three years across the transport sector, including Road Safety 2010 and the development of the Land Transport Management Bill. It also includes policy from other areas including Growing an Innovative New Zealand and the National Energy Efficiency and Conservation strategy.

The strategy represents a fundamental change in thinking and is the first time all the modes of transport will be looked at as a whole and in an integrated way.

This strategy will provide direction and strategic leadership across all modes of transport. For the first time ever, it will link what happens in the transport sector with our wider social, economic and environmental goals.

We have already announced our vision that, “by 2010, New Zealand will have an affordable, integrated, safe, responsive and sustainable transport system”. The strategy’s objectives are to assist economic development, safety and personal security, to improve access and mobility, protect and promote public health, and ensure environmental sustainability.

The RTF, along with representatives of key transport sector and user communities, received a copy of the draft strategy in June for review. I would like to thank you for the feedback you provided.

Feedback has been generally supportive of the strategy. But I am aware that the RTF had some reservations about the draft strategy and we are currently working through those reservations and a number of other issues raised during the review process.

We are also in the process of seeking input from our partners and associates in government.

I intend to release the strategy before Christmas.

Land Transport Funding & Infrastructure

We have already made a series of important and pragmatic decisions that build on the ideas set out in the NZTS vision.

The Moving Forward package, announced in February, signaled a move towards a more integrated and strategic approach to investing in and operating our publicly funded transport systems.

This package added $227 million to the $1,281 million already allocated to land transport to 30 June 2003 (including GST). The bulk of the increase, $94 million, was allocated directly to roading. This is in addition to the existing $973 million.

The revenue was raised by increasing petrol excise tax and road user charges for light vehicles. Our priorities for this investment include reducing traffic congestion, regional development and safety.

Reducing congestion will provide major benefits to the road freight industry, particularly in Auckland, where congestion is estimated to cost New Zealand around $1 billion each year.

Regional development was identified as a priority in response to the increasing pressure on existing infrastructure from economic growth – the so-called “wall of wood”. Without additional and targeted investment, the local roads in regions that will be soon harvesting large quantities of timber are not expected to cope with the increased heavy vehicle traffic.

Road Safety

Road safety is another area in which the government is keen to see progress over the coming 10 years. While we are making steady gains in this area, New Zealand’s road toll is still too high. The results of consultation on proposals for road safety to the year 2010, as well as work on the New Zealand Transport Strategy - under which a road safety strategy would sit - has helped inform further development of a Road Safety Strategy to 2010. We’ll be making an announcement on the strategy in the next couple of weeks. The Land Transport Safety Authority is leading the work on this issue and also those issues associated with truck safety, such as reducing the roll rate of trucks. You will be hearing more about this during the conference.

I would just like to say that I am keen to continue to investigate solutions which can meet both our needs and expectations, as we did with reducing the number of trucks that roll by enabling them to carry longer loads at a shorter height.

While roading will continue to be of key importance, the Moving Forward package is also intended to enable a more balanced approach to funding different types of projects.

I intend to introduce into Parliament, before the end of the year, new legislation that will change the investment system to be more inclusive of all forms of land transport and more responsive to national and local priorities. This will represent the biggest change to the way land transport projects are funded since the current system was introduced in the late 1980s. These changes are necessary to ensure we can achieve our priorities and the NZTS vision.

Under this legislation, the Land Transport Management Bill, Transfund New Zealand will be able to fund a wider range of public organisations involved in providing land transport. To enhance a long term and strategic focus, Transfund – and organisations approved to get funding from Transfund, including Transit – will be required to prepare 10-year financial forecasts. These will provide greater certainty for transport investment.

However, even with the extra funding, we recognise that there will be projects that are unable to be funded in the short term, yet will bring benefits to communities and road users. Tolling and partnerships with the private sector have been identified as mechanisms that can allow a number of these projects to go ahead. The proposed legislation will also provide a framework for a generic tolling regime. This will reduce the time and cost for public road controlling authorities seeking to develop roading infrastructure on a tolled basis. It will also prevent the need to introduce a separate piece of legislation for each tolling project as is currently the case.

There will be conditions on which roading projects can be tolled to ensure that motorists have a choice of routes.

Either in conjunction with tolling, or drawing on public funds, public-private partnerships are another mechanism by which the cost of constructing roading infrastructure can be spread over time and some projects can be brought forward.

The proposed legislation will also make it easier to implement these alternative approaches to funding while, at the same time, recognising that such projects must be pursued as part of an integrated and strategic approach.

e-RUC

As part of the Moving Forward package, in February the government announced it would investigate modernising the road user charges system. As you know, this system collects revenue for roading costs from owners of diesel vehicles, based on the vehicle weight and the distance travelled.

When road user charges (RUC) were introduced in 1977, it was considered radical compared with systems used elsewhere. However, new technologies are being introduced, or investigated, in other countries, which offer opportunities to lower compliance costs, increase efficiency and be more user-friendly. As the Minister for Information Technology I’m keen on taking advantage of the latest technology.

The government has therefore asked the Ministry of Transport to develop a functional design, and a business case, for the electronic collection of road user charges. This will inform future policy decisions regarding the possible adoption of such a system.

Electronic collection and management of data using Global Positioning Satellite (GPS) equipment for example, has the potential to reduce the time it takes to operate the system. Drivers would no longer have to get refunds for their usage of “off roads” which will reduce compliance costs and stress levels. Being able to pay RUC as you use the road, rather than in lump sums, has the potential to enable truck owners to spread the cost of RUC and improve cash flow management.

People would be given the choice of using the existing or electronic system. I believe this electronic system will be a significant improvement for your industry and reduce your compliance and operating costs. The Ministry will be working with the RTF as this project progresses.

Rail Transport

Some of you may have looked a bit askance at the government’s approach to rail. However rail will not push all trucks off the road. Having said that, I believe that rail has an important part to play in New Zealand’s transport system, especially in relation to long haul freight.

The government is currently developing a national rail policy to ensure that the rail system is able to play an appropriate role in providing affordable, integrated, safe, responsive and sustainable transport solutions. It is also considering how to address the provision of quality commuter rail services in Auckland and Wellington.

The Ministry is currently working on a Rail Safety Bill, which will cover four key areas: safety systems; assurance for safe rail operations; incident reporting and enforcement powers. This legislation is planned to be introduced before Christmas.

Surface Transport Costs and Charges Projects

As far as we can tell, trucks are currently paying their fair share of the cost of providing roads. This is why we didn’t raise road user charges for heavy trucks in February when we increased road user charges for light trucks. As our knowledge of these costs improves, we need to keep on updating our planning models and feeding this data into our analysis of costs and charges.

With our broader focus on developing and updating an integrated transport system, we need to understand the costs, charges and benefits for all forms of land transport – not just cars and trucks.

This issue was initially addressed in the mid 1990s with a number of studies on land transport, collectively known as the Land Transport Pricing Study. This study was not completed, and further work on the costs and benefits of land transport has continued, particularly in the areas of environment and public health.

This government wants to continue the work started by the pricing study, and to expand its scope to include rail. Consequently, the Ministry of Transport has commissioned a detailed investigation into the socio-economic and environmental benefits, costs and charges associated with the road and rail system across New Zealand.

A key question in developing strategic transport policy is to what extent the transport system should eventually take responsibility for all the costs that it imposes. We want to understand the cost structures of land transport systems more clearly, so that the consequences of future policy decisions can be better appreciated.

This is a key piece of research and the level of cooperation that has been received has been remarkable. Thank you to those who have been contributing to this study.

The main report from this study is expected to be completed early next year. It will be a valuable tool to assist the government in making decisions on the way that road and rail systems should be priced and regulated. I look forward to receiving this report and will read it with care. Emissions

A report on the health impacts of vehicle emissions was released in March this year and estimates that 399 people aged 30 and over die prematurely each year from vehicle emissions. This is comparable to the "visible" road toll but has, until know, been unrecognised. This is a real problem for all concerned and, if we want to continue to promote New Zealand as a clean green tourist destination, we need to do something about it. We have already worked on improving fuel specification so that you will be able to purchase and operate trucks that are more energy efficient and cleaner. We are also looking at a range of other measures, including tuning and testing mechanisms. Companies that are running modern vehicles and keep them well maintained have nothing to fear from these measures.

Transport Accident Investigation Review

The Ministry of Transport is currently reviewing how transport accidents are investigated. The current focus is on the aviation industry but will also cover the maritime and rail industries. It does not include reviewing how road accidents are investigated. I expect to receive the first draft of this review at the end of the month.

Conclusion

It is a busy time ahead for transport and I look forward to the challenges it brings. The RTF is a key stakeholder in the land transport sector. I have already had a positive and productive initial meeting with Tony Friedlander, and I look forward to continuing the dialogue in order to develop workable solutions to New Zealand’s transport issues.

Thank you again for inviting me here to speak with you. I would like to welcome the 450 or more delegates and their partners to this conference. Welcome. I now declare this conference open.

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