Swain Speech: NZ AA annual conference speech

Thank you for inviting me here to your annual conference, which is especially important this year as it is the centenary of the formation of the first motorists club in New Zealand. The AA makes an invaluable contribution to the transport sector and I am sure as we enter the next hundred years it will continue to do so.

First, I’d like to acknowledge AA president, Graeme Nind, director of public affairs George Fairbairn and vice-president Noel Vaughan. Also welcome to the visitors from Australia, including Tony Stacey, the President of the Australian Automobile Association (from Tasmania) and other representatives from Queensland, New South Wales, Victoria and South Australia.

In the latest AA Directions magazine your chief executive Brian Gibbons makes three 100th birthday wishes.

The three wishes are to see roading infrastructure progress, to bring a greater commitment to making road safety a priority and that the freedom the car has brought to our society be maintained.

I am no genie. But I think I can show, by talking to you about the New Zealand Transport Strategy, the funding of land transport projects and the Road Safety Strategy to 2010, how the government is doing its utmost to make the AA’s wishes become reality.

New Zealand Transport Strategy

The New Zealand Transport Strategy (NZTS) is a very important document, which now guides government decision-making on transport. It defines the government’s vision for the future of transport in New Zealand: “By 2010, New Zealand will have an affordable, integrated, safe, responsive and sustainable transport system”

One of the key points in the strategy is integration. This means transport policy will help create an efficient and integrated mix of transport modes. Transport stakeholders will need to work together to achieve this goal. Transport policy will also need to ensure the efficient use of existing and new public infrastructure and investment.

The NZTS focuses on five main objectives to find the most effective transport solutions across all modes. The five objectives aim:

to assist economic development; to assist safety and personal security; to improve access and mobility; to protect and promote public health and; to ensure environmental sustainability. Over the past 100 years, the car has emerged as the dominant means of transport. It will continue to be so for the foreseeable future. Most transport journeys are undertaken by car. The car has brought a high degree of flexibility to our lives and increased opportunities for us all. Overwhelmingly, government investment in the transport sector is concentrated in roading, and this focus will continue.

However, as vehicle use has continued to grow, funding has lagged behind. For this reason the strategy takes a multi-modal approach to our transport sector. If we can promote all modes – rail, sea, air and road – by offering travellers more choice we will take the pressure off our roading network. This is one of the goals of the strategy.

The AA predominantly represents the views of motorists. But the fact is that motorists are pedestrians too, as are their children. Many motorists also ride bicycles. That is why, for example, the government is currently working on a walking and cycling strategy and we have set aside $3 million a year for walking and cycling projects.

The Transport Strategy also recognises the importance of an efficient and viable rail network, which will ease the pressure on the roading network. The government has put considerable funding into encouraging rail passenger transport in Auckland and acknowledges the importance of rail as a means of carrying freight and passengers.

The patronage funding scheme, introduced in 1999, has been very successful in increasing the use of public transport in the three major centres. This led to a 6% increase in passenger transport use in the three main centres in 2000/01 and a further 8% increase in 2001/02. Public transport must be encouraged. The government realises the need to take a balanced approach to achieve the best transport outcomes.

The Strategy also recognises that an efficient transport infrastructure is vital to achieving economic growth. That is why the government allocated $30 million to regional transport development. Late last year I requested that Transfund 100% fund transport projects in Northland and Tairawhiti, from this funding, to transport the imminent wall of wood to the ports. As a by-product, some of this funding will benefit rural road users generally.

I note that, following the Strategy’s release, the AA commended the government for developing a 10 year strategy for transport, but said that it wanted to see more consideration given to increasing government expenditure in the transport portfolio.

And so, appropriately, it is to funding issues that I now turn.

Funding

As the debate about land transport funding continues the fact is that the government has significantly increased investment in the transport sector.

For instance total land transport expenditure funding has increased from $866 million in 1998/99 to an allocated $1.1 billion in 2002/03. The National Land Transport Fund invests almost $1.6 billion in national land transport and safety funding. Regional and territorial authorities invest a further $400 million, mainly funded from rates.

In February 2002 the government increased petrol tax by 4.7 cents (incl GST) a litre. This measure, along with changes to road user charges, boosted land transport funding by $227million. Of this money $94 million went to roading projects, $34 million was spent on road safety, $30 million on regional development roading assistance, $30 million on alternatives to roading (mainly rail), $36 million on public transport assistance and $3 million on walking and cycling. You will all be aware that, for the first time ever, Transit has released a 10-year draft state highway programme.

The release has highlighted the problem that demand for more roading projects will always outstrip our ability to pay. In addition, as car engines become more efficient there is a reduction in the petrol tax collected, which compounds the funding problem. This is why the government is considering alternative funding options such as public private partnerships, tolling, as well as proposals from regions for regional funding solutions”.

Much attention has been paid to the amount of funding allocated to roading projects in Auckland in the draft. Let me be plain. Fixing Auckland’s problems will benefit all New Zealanders not just Aucklanders. Auckland’s transport problems are on a scale that affects everyone in New Zealand. It is estimated that Auckland’s traffic problems cost the New Zealand economy around $1 billion a year.

Release of the draft caused considerable debate - especially in regional New Zealand. The debate has been useful.

First, the release of the draft programme has given Local Regional Land Transport Committees the opportunity to discuss the importance of various roading projects to their local communities, and the rankings accorded them. Such debate, vigorous though it may be, is to be welcomed, given the government’s determination to encourage more community and local government input into land transport decision-making.

Second, the release has brought into sharp focus the fact that, despite recent government increases in land transport funding, demand for road funding will always outstrip supply.

Clearly, we cannot fund every project on everybody’s list. Regions need to be realistic about this fact. We also have to face the fact that there is not an unlimited pool of money to build more roads and we must use the funds in the areas of greatest need.

Road spending is about balancing local needs and national priorities. Achieving such a balance is not easy. But it is essential.

Transit is consulting with regions over its draft programme. Regional priorities, where they can be matched with national ones, need to play a part in programme determination. I am certain we will see some changes to the funding programme being made, before final announcements are made in July.

Soon, I will be altering the government’s Performance Agreements with Transfund and Transit, to ensure that roading programmes and projects reflect the objectives of the NZ Transport Strategy. It will also ensure that future funding decisions, whilst recognising congestion in Auckland, take account of other priorities, such as economic development and safety. Alternative Funding Options

Long-term all future governments will face some difficulties in funding transport infrastructure from present revenue streams.

As motor vehicles become more efficient there is a reduction in the amount of petrol tax collected. For example, the projection of fuel excise revenue from 1995-1996 shows that if there had been no increase a 15% rise in traffic would only have produced a 3% increase in revenue. There are also heavy demands on funding from local authorities for major investments to be made in their roading networks.

The government’s first response to the funding options debate has been the Land Transport Management Bill.

The Bill allows for tolling on new roading projects, whether built by Transit New Zealand, local authorities or as Public/Private Partnerships. This offers the potential to accelerate a number of major projects.

PPPs will help New Zealand tackle its shortage of transport infrastructure, which could hold back economic growth if not addressed. They are also useful as a means of spreading costs when a number of high cost projects come on stream at one time.

The bill places a number of conditions on PPPs including:

Partnership arrangements are limited to 35 years or less.

Land transport infrastructure remains in public ownership.

The project has a high degree of support from affected communities.

The final proposal needs ministerial approval.

PPPs will usually, but not always, involve tolls. The bill provides a generic framework for tolling projects, which until now have required a separate piece of legislation for each project.

There are number of criteria for toll roads including:

Toll roads must be new roads. An alternative route must be available.

The tolling scheme must be consistent with government and regional transport strategies.

The local community and road users must be consulted.

The final proposal needs ministerial approval.

Because they require high traffic volumes, there are unlikely to be a large number of tolling projects in New Zealand. Tolls may be collected electronically so the bill contains privacy protection provisions.

I agree that there are some concerns about the criteria, which are currently being addressed by the Parliamentary Select Committee.

I’m looking at a number of issues outside the bill to address the funding gaps.

Regional petrol taxes have been tried before in New Zealand but there were problems because the oil companies tended to average prices across the country, with those outside the tax area carrying much of the cost.

Despite this I have asked the Ministry of Transport to look again at this option.

Transit New Zealand and the local authorities have the power to borrow for infrastructure investment. To date, this has only been used in a few local authorities. We need to consider whether it is now appropriate to borrow for future infrastructure. It may be that such borrowing would need to be serviced by a funding stream from tolling.

Some local authorities have also stated their support for congestion pricing in New Zealand cities. This is a highly controversial subject, but one that communities may need to address if we are to properly manage our expensive urban transport system.

The AA has consistently argued that more of the money collected from road users should be spent on roads. I respect your position. However I hope you respect the government’s position. Such funding would need to be met from spending cuts or tax increases to make up the shortfall. Neither option is palatable.

You are no doubt aware that various funding options have been raised in submissions on the Land Transport Management Bill. No doubt the select committee will be considering these options closely.

Funding future transport needs is challenging. The government is putting more money into funding land transport projects. But we all need to think creatively and come up with innovative ways to fund transport projects. The contribution of the AA to this debate is important to the government.

Road Safety Strategy to 2010

Road safety is important to this government.

I have noted from the AA’s Spring 2002 “Advocate” publication, that a survey of your members showed that road safety should be given the highest priority by government.

The AA was updated on the Road Safety Strategy to 2010 at the annual conference last year. A consultation document on Road Safety Strategy 2010 was released in 2000, to build on the success of National Road Safety plan, which is aimed at maintaining road safety achievements of the 1990s. The final Road Safety Strategy to 2010 will be released shortly.

The good news is that New Zealand is making excellent progress in tackling the road toll. Last year’s toll of 404 road deaths was the lowest since 1963.

This is despite an almost tripling of our vehicle fleet and a huge increase in the number of kilometres travelled over that period.

We have set ourselves the goal of no more than 300 fatalities and 4,500 hospitalisations by the year 2010, with an interim step of no more than 400 fatalities and 5870 hospitalisations by 2004.

Last September the government announced a NZ$22 million package of road safety initiatives as part of the first steps in the Road Safety Strategy to 2010.

The package comprises a mix of education, enforcement and engineering measures aimed at lowering the road toll including:

New funding for the police to target rural drink driving, Auckland motorways and heavy vehicle safety.

Additional funding for road safety advertising.

A Novice Driver Pilot, to test potential changes to the graduated driver licensing system for novice drivers.

Additional funding for the existing Community Road Safety Programme, including a Safe Routes programme to provide support for projects, which give safe access to the road network for pedestrians and cyclists.

An expanded Road Sense Ata Haere programme for primary and intermediate schools, which integrates road safety education into the every-day curriculum.

New funding to give road controlling authorities and their engineering consultants desktop access to the LTSA’s Crash Analysis System.

A new voluntary Safety Management Systems (SMS) regime for road controlling authorities to ensure they design safety into new roading projects.

New funding for an Annual Travel Survey.

Achievement targets will be monitored to inform the development of policies and initiatives for the remainder of the strategy period. Progress is being monitored throughout the first year and will be reviewed in July 2003. There will be a full evaluation in 2005 and every two years thereafter. The mix of measures may change as the effectiveness of the various initiatives becomes apparent.

The reduction in the road toll to date is strongly linked to the full rollout of the Highway Patrol and greater productivity in road policing.

We are on track to achieving our 2010 safety goals, however, we must not ‘rest on our laurels’. We need to maintain and build upon our current achievement record.

Alcohol and excessive or inappropriate speed remain the two most significant factors contributing to road deaths and injuries in New Zealand. For year-ended June 2002, alcohol was a contributing factor in 27% of fatal crashes and 13% of injury crashes. These crashes resulted in 122 deaths and 1978 reported injuries - 484 serious and 1494 minor.

Excessive speed (travelling too fast for conditions) is the main contributor to 32% of fatal crashes and 15% of injury crashes. These crashes resulted in 142 deaths and 2334 reported injuries - 527 serious and 1807 minor for the year-ended June 2002.

Complacency is the enemy so it is important that we consider initiatives that can assist us in achieving our road safety goal. We are considering measures aimed at recidivists such as the use of alcohol interlocks on vehicles, expanding the use of vehicle impoundment as a penalty for drink-driving and other sanctions aimed at repeat offenders.

I’m also advised that lowering the legal Blood Alcohol Content (BAC) limit and the introduction of demerit points for speed camera offences could have an important impact on reducing road deaths and injuries.

Alcohol limits should form part of a balanced programme of sanctions put together to tackle all aspects of the alcohol and driving problem, in conjunction with appropriate enforcement and public education, including advertising, community-based initiatives and programmes within the education system itself. Such a programme should be aimed at reducing all types of offending with the emphasis on 'hard-core' recidivists in the first instance.

All of these initiatives are currently being considered by the LTSA at my request.

At some stage I’ll be taking some proposals to Cabinet and I can assure you that the AA will be actively consulted on the development of those proposals.

Other issues

A number of Land Transport Rules are currently under development. The Road User Rule, closed for consultation on 18 March.

This rule covers a number of policy areas affecting the behaviour of all road users, including pedestrians and cyclists as well as vehicles. The main topic areas include:

Considering the give-way rules – this proposes reverting back to the old priority rule at intersections and ‘t-junctions’ and does away with the current ‘give way to the right and those turning from the right’.

Changing heavy vehicle limit speeds – allowing a greater number of heavy vehicles to travel at 90kms instead of 80kms.

There are some issues for driver licensing that are being considered, including, for older drivers, locality based conditional licences and removing aged based testing (ie. do not have to sit a test every year when turn 80).

Conclusion

I have talked at length about the funding of roading infrastucture and road safety – the first two wishes on the AA’s wish list.

The third wish was that the freedom the car has brought to our society be maintained. This has never been in doubt.

Over the last century cars have revolutionised the way we live, giving ordinary people the freedom of movement only dreamed about in previous centuries.

Cars get us to work during the week and to the beach or the mountains during the weekend. They take us to the hospital when we are sick and enable us to drop off the kids at sport or music.

On the flip side increased use of cars causes a number of problems. Road safety issues, funding pressures and the impact of the environment are some of the more obvious.

We cannot motorway our way out of all our transport problems. Nevertheless over the next 10 years Transit will spend $1.76 billion budget for construction and maintenance of the state highway network.

Solving our transport problems is not a question of one mode of transport or the other but rather how we can get the best mix to suit our needs.

In conclusion let me return to Brian Gibbon’s editorial. I hope you can see that the government is doing its best to deliver on his three wishes.

We value the AA’s contribution, we congratulate you on your 100th birthday and we look forward to working closely with you in the future.

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