Media release 24 April 2003

Road user and business groups take concerns to PM

Road user and business groups have written to the Prime Minister and acting Prime Minister Michael Cullen with their concerns about the future of New Zealand's roads.

They say the Land Transport Management Bill, currently before Parliament, could result in New Zealand's roads degrading to 'third world' quality because of under-funding. If passed, the Bill would divert more petrol tax and road user funds away from roading purposes, leading to a funding crisis for roads.

The NZ Automobile Association, Business NZ, Federated Farmers of New Zealand Inc., NZ Forest Owners' Association, Meat Industry Association, Road Transport Forum NZ, Pavement and Bitumen Contractors' Association, Canterbury Employers' Chamber of Commerce, Canterbury Manufacturers' Association, EMA Northern, EMA Central, Otago-Southland Employers' Association, Grocery Marketers Association, and the NZ Taxi Federation say they are seeking assurance that the Government is aware of and will respond to their concerns.

ENDS

Attached: Letter to Prime Minister Rt Hon Helen Clark

22 April 2003

Rt Hon Helen Clark

Prime Minister

Parliament Buildings

WELLINGTON

LAND TRANSPORT MANAGEMENT BILL

Dear Ms Clark

The undersigned road user and business groups wish to express to you our deep concern with the Government’s Land Transport Management Bill.

This Bill will not address the serious historic under-funding of land transport infrastructure. On the contrary, the clear Green influence that permeates this Bill is not consistent with the Government’s goal of improving New Zealanders’ living standards to the top half of the OECD – a goal that the undersigned groups support.

As well as making individual submissions and engaging in the current Select Committee process we have met with the Minister of Transport and written to him with what we see as workable and constructive solutions to the Bill’s shortcomings. While we acknowledge that the Transport and Industrial Relations Committee is continuing to hear submissions on the Bill, we are seeking your assurance that the Government is aware of our concerns and will respond to our representations.

Our groups have common concerns that also are shared by a number of other organisations, including many in the local government sector. These are the:

• removal of ‘efficiency’ as a purpose;

• additional and duplicative layers of consultation;

• restrictive conditions for private sector investment;

• relaxation of requirements for competitive tendering;

• increased powers for Ministerial direction; and

• long-term under-funding of roading infrastructure, where at less than 1% of GDP, New Zealand spends considerably less than comparable countries (e.g. Australia: 2.3%). This has resulted in very large funding gaps not just in Auckland, but also many other regions, with serious implications for economic growth, road safety, and people’s mobility.

In our letter to Mr Swain we made the following suggestions to improve the Bill:

• Economic efficiency should be written back into the Bill as a key purpose.

• For each National Land Transport Fund (NLTF) output category, a logical cost allocation process should be used to determine the amount each group pays to the benefits received.

• The existing consultative arrangements for land transport infrastructure should be streamlined rather than expanded upon.

• To maximise the benefits from expenditure on transport infrastructure, the existing Competitive Pricing Procedure provisions should be restored.

• Provisions for tolling and concession arrangements should be amended to enable the most flexible arrangements possible. For example:

• Toll revenue should only be spent on improving roading infrastructure – i.e., not to fund other non-roading purposes;

• The PPP term should not be limited to 35 years;

• Build Own Operate and Toll (BOOT) schemes should be permitted;

• Government should not contract itself out of any liability for changing the rules resulting in traffic volumes falling below forecast – i.e., compensation arrangements should be explicitly agreed;

• Additional layers of consultation are not necessary – existing RMA provisions are already causing difficulties and further local government consultation processes have recently been added; and

• Projects should not have to meet all strategic priorities simultaneously – the way the Bill is currently worded means that this is unlikely to ever be possible in practice.

There is no debate that there is a very large 10-year national funding gap, and that in many regions much needed investment in new roads is being deferred beyond the next decade. Over time, this gap will worsen, further exposing the ‘patching’ feature of current funding. The gap will be made even worse if the Land Transport Management Bill is passed in its present form as its provisions will increase the calls on the NLTF, increase costs and lengthen delays.

As well as ensuring that existing funding is spent in the most effective way, future levels and sources of funding must be addressed as a matter of urgency. Our organisations wish to work with the Government in a constructive manner to find workable and sustainable solutions – both in the short term, as this Bill is being considered, and in the longer term.

We would welcome the opportunity to meet with you to discuss these issues further.

Yours sincerely

George Fairbairn Simon Carlaw
Director Public Affairs Chief Executive
NZ Automobile Association Business NZ
Charlie Pedersen Rob McLagan
Vice President Chief Executive
Federated Farmers of NZ NZ Forest Owners’ Association
Brian Lynch Chris Olsen
Chief Executive Chief Executive
Meat Industry Association Pavement & Bitumen Contractors’
Association
Tony Friedlander
Chief Executive
NZ Road Transport Forum
Other organisations endorsing this letter include:
Canterbury Employers’ Chamber of Commerce
Canterbury Manufacturers’ Association
Employers’ and Manufacturers’ Association (Northern)
Employers’ and Manufacturers’ Association (Central)
Grocery Marketers’ Association
New Zealand Taxi Federation
Otago-Southland Employers’ Association

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