Hon Pete Hodgson
Monday 18 July 2005 Speech Notes

Speech to 2005 Bus & Coach, Marine Transport Assoc, Rental Vehicle Assoc Conference

Monday 18 July 2005 3:30pm, Napier War Memorial Centre

Good afternoon. Thank you for inviting me back again this year – there's lots to update you on and new challenges to talk about.

Firstly, an update on transport funding. Last year I came to Conference having just announced the biggest ever ten year transport spending package - $18.7 billion. But since I was last here the government has been injecting more funding into the land transport sector. The new ten year figure now exceeds $22 billion. Since coming to office, this government has increased transport spending by 80 per cent.

Because it is election year I thought I would allow myself one, startling, political comparison. It is to do with Auckland. During the nineties around about nothing happened in Auckland. Today land transport infrastructure investment is proceeding almost as fast as it can. One measure is to look at the value of significant projects that were underway or recently completed on the day we came to office. It totalled $130 million. In 2004/05, applying precisely the same criterion, the figure is a little over $1.3 billion. A ten-fold increase. My political opponents, all of whom happened to vote against the petrol tax changes responsible for much of this increase, might like to reflect on that.

This unprecedented level of activity demonstrates clearly just who caused the infrastructure deficit and just who is fixing it.

Completing the strategic roading network, improving safety and reducing congestion are necessary. But roading investment, alone, simply won't deliver a workable result. Investment in passenger transport and shipping infrastructure and services is of pivotal importance.

That's why more money than ever before is being invested across all modes.

Many of you, as passenger transport operators will, I hope, be seeing the benefits of this approach. Ferry patronage in Auckland is up and work is continuing apace on the $180 million North Shore Busway in the region that, by 2011 will be capable of carrying 100 buses per hour carrying over 3000 passengers.

Elsewhere in the country the return to public transport, especially buses continues. As services improve, that pattern will continue. Certainly the funding is growing. When we came to office the passenger transport budget was $41.44 million. This year it is $240 million, that's getting on for a six-fold increase under this government.

The reason for this startling figure is that we know public transport is a vital component of a sensible transport future. Our opponents have never understood that, except at an intellectual level, which is why a six fold increase was needed in the first place.

On another matter, the Land Transport Amendment Act has now been passed. It outlaws those with convictions for the worst violent and sexual offences from holding Passenger endorsements and cracks down further on the worst speeders and drink drivers.

It also includes new penalties for fare dodgers; a standard $150 penalty for those that 'do a runner' while the Courts can impose a maximum penalty of $500.

Officials are also now working on a rule to allow vehicle hire companies to recover the cost of fines incurred while vehicles are rented out against the credit cards of hirers should they so wish. I expect officials to have worked proposals up ready for consultation with the sector from October.

Now onto a challenge we all face.

It is peak oil. When I first started including this in my speeches, it was something few people had heard of and fewer still understood. Peak oil is a term that refers to when the supply of oil no longer continues to grow. Supply peaks. The big debate is 'when will this occur' and the range of viewpoints is substantial. However, it will be this century and more likely the first half than the second.

This does not mean the end of oil. Instead it is the end of the era of cheap oil to power vehicles. It will put into sharp focus who is prepared to pay what for that that is available.

I would forgive some of you, who have watched the price of diesel at the pump march on towards being double what it was a year or so ago, thinking peak oil is already upon us. It is not. We are still in the era of relatively cheap oil right now. I pick diesel as it is not subject to fuel excise duty, therefore, oil price rises are more transparent at the pump.

One way to look at the challenge dearer oil represents is to remember what it is that we use oil in our transport system for. It is to afford us mobility. Our challenge is to keep the mobility yet reduce our dependency on oil for it.

There are many ways we can go about doing this. More efficient vehicles is an obvious starter. Perhaps these will be hybrids or super efficient diesels or Euro-3 diesels, and, looking to the future, fuel cell powered vehicles. We do already of course refurbish trolley buses and make LPG/electric hybrid buses here in New Zealand.

One prominent bus operator is already using a fuel technology to get more kilometres per litre by the use of an additive.

Revenue from the carbon tax is going to be recycled back into the economy, especially through faster depreciation regimes.

Therefore, when you invest in a new vehicle, and I trust one that would be more energy efficient than any it replaced, you will be able to write it down much faster.

We have also announced a special grants package for energy intensive small and medium sized enterprises, including transport operators.

The Bus and Coach Association, and John Collyns in particular, are playing a leading role in developing a couple of applications for bus and coach operators. I thank you for your leadership and vision.

Both look promising. Both look as though they may well be able to deliver savings to operators that may more than offset the carbon tax. Neither is yet developed enough to be given the green light, but I know officials and John are working hard to bring one or both of them to fruition.

The first involves driver training. Work done by EECA has already shown the average car driver were to adapt their driving style for efficiency they could reduce fuel consumption considerably.

The second is looking at the introduction of biofuels. It is time to make a start on this issue. We already have a feedstock for biodiesel, even though the level of substitution will inevitably be modest for the first few years.

Neither the challenge of rising oil prices or climate change will simply go away if we attempt to ignore them, or if we think that doing nothing about them is a credible response.

Our challenge is to prepare our economy and businesses to meet these challenges. This government is committed to meeting these challenges and to continuing to invest record sums in our transport system.

Together we can create a world class transport system in which all modes flourish. I'm obliged for the support of your organisations in helping achieve that.

Enjoy your conference.

ENDS

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