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Transporting NZ to the top half of the OECD

Paul Swain Speech: Transporting NZ to the top half of the OECD


Thank you for providing me with my first opportunity to speak to a union conference since becoming Minister of Transport.

Transport plays a key role in all our lives and in New Zealand’s economic and social development.

Each year, central government invests more than $1.6 billion in land transport and households spend some 16% of their total expenditure on transport services. Tens of thousands of New Zealanders, including of course, many of your members, are employed in transport services.

Today, I want to talk to you in your roles as first, representatives of working people and second, as representatives of workers in the transport sector.

Labour and Working People

All of you here who experienced the last National government know that their approach to the union movement can be summed up in two words – destroy it!

Labour’s approach is different. Unlike National, we do not see unions, or working people, as a roadblock to economic prosperity, or as a barrier to the governments objective of returning New Zealand to the top half of the OECD. Rather, we see unions and employers as partners on the road to achieving this objective.

Labour believes that New Zealand works best when New Zealanders work together. Labour also believes that economic growth goes hand in hand with social and environmental progress. We learnt from the previous government, and from the 1980s, that trying to achieve economic growth for its own sake whilst ignoring growing social inequality is simply a recipe for social division, increasing inequality and the fragmentation of national identity. That is not a road down which this government is prepared to travel.

Since taking office in 1999, and with assistance from our coalition partners and supporters, Labour has achieved a great deal for working people.

Labour has raised the minimum wage every year since becoming government. We have restored fairness and the role of unions as workers’ representatives, to industrial relations with the Employment Relations Act. We have introduced paid parental leave. We ended National’s cruel and appalling market rents for state house tenants, a policy fashioned to inflict nothing but poverty, poor health and misery upon some of New Zealand’s most vulnerable and low paid people.

Under Labour, changes to occupational safety and health laws mean a much more effective service, better protection for workers and more involvement for them and unions in ensuring a healthy and safe working environment.

Accident insurance and compensation, a subject of considerable importance to those who work in your sector, given the often-hazardous nature of their work, is now back under government ownership. Not surprisingly, that change has coincided with a return of fairness to the scheme. Lump sum payments have returned, and a Code of Claimants Rights has been introduced.

Our opponents, when we made all these changes, predicted that the economy would nosedive, unemployment would rise and businesses would flee New Zealand. Nothing of the sort has occurred. Indeed unemployment, now at 4.9%, is at its lowest level in fifteen years!

Nowhere is the difference between National and Labour’s economic and social goals better illustrated than in our respective approach to those in need of new work qualifications.

Recently, National’s economic spokesperson made a complete twit of himself by suggesting that the unemployed should be required to queue up at post offices, to receive daily “odd jobs” from local authorities.

Contrast that with Labour’s Modern Apprenticeship scheme. These schemes are now available in 25 industries. The scheme is offering new hope, and the vital skills New Zealand needs, to many young people. Almost 4,300 people have gone through this scheme –with more to come over the next three years.

There you have it.

National clearly believe we can enter the top ranks of the OECD by assigning more and more of our potential workforce to pick up litter in parks or paint park benches!

By contrast, Labour thinks we can do it by training our workforce with the skills to take their place in the modern economy. I don’t think it takes much to work out which approach will result in higher economic growth and social progress.

Taking an integrated approach to transport

Now, I want to talk to you about the role of the transport sector in achieving Labour’s economic and social objectives and about some key issues facing the maritime, aviation and rail sectors.

The New Zealand Transport Strategy, which I released last year, is a very important document as it now guides all government decision-making on transport. It defines the government’s vision for the future of transport in New Zealand: By 2010, we will have an affordable, integrated, safe, responsive, and sustainable transport system.

Developed in consultation with my political colleagues and key stakeholders, such as the CTU, one of the key points of the strategy is integration. This means creating an efficient mix of transport modes – such as road, rail, sea and air, to provide a sustainable transport system, designed to promote both economic growth and social progress.

The Transport Strategy focuses on five main objectives to develop the most effective transport solutions across the modes. These involve:

Assisting economic development Assisting safety and personal security Improving access and mobility, Protecting and promoting public health Ensuring environmental sustainability.

The Strategy envisages a more integrated approach to future transport funding and policy. Passenger and freight movements will take place across a variety of modes, including land, sea, air and rail. Land transport will obviously continue to be the main delivery mode for passengers and freight. However, today, I would like to focus on transport issues pertaining to shipping, aviation and rail. These are all areas of vital interest to your members.

Shipping industry

While there is no longer any public shipping in New Zealand, the maritime sector is a vital part of New Zealand’s transport system and economy.

It was the introduction of cargo ships with freezers that made our fortune. And, despite the increase in flights to and from New Zealand, we are still dependent on the shipping industry. Over 90 per cent of imports and exports, by volume, go through our ports.

It is 20 years since we signed the CER agreement with Australia and in that time we have effectively doubled our trans-Tasman trade. Australia is our most important economic partner – taking 18 per cent of our exports and providing 22 per cent of our imports in 2001. Compare that with 1960 when Australia took only 4 per cent of our exports. Now New Zealand is the eighth largest investor in Australia with the creation of Fonterra and the Australian re-regulation of its dairy industry. We are also now able to travel freely between both countries and work in either – which presents all of us with more employment opportunities.

The New Zealand shipping industry has changed greatly over the past 15 years.

A defining moment was the sale of the Shipping Corporation of New Zealand in 1989. This saw the end of New Zealand’s venture into the cutthroat world of international shipping.

In the years since 1989 private sector New Zealand shipping operators have gradually faded from the international shipping trades.

The trans-Tasman trade, once a bastion of New Zealand operated shipping with as many as 16 ships trading in the mid 1990s, is now served entirely by foreign operators.

Many of you here will be all too familiar with much of the pain associated with the above process.

It did result in job losses. But, on the other side, it also lowered freight costs - to the benefit of New Zealand industries trading with Australia under CER and those who work in them.

Coastal shipping

Things have been different on the coast, where the number of New Zealand-operated ships had remained steady since 1990 – at around 20 ships. In fact, by 2002 the number had increased to 23.

This has been despite the last National government changing the law on cabotage.

I know that the maritime unions and some shipping companies strongly support the reintroduction of cabotage.

This is a perfectly understandable position. While it appears that the domestic shipping industry can compete in the current environment, and is even finding opportunities for growth in some areas, the industry has raised the issue of marginal pricing by foreign owners on the coastal trade.

The industry says this has pricing implications for the viability of the New Zealand shipping industry. I have asked the industry to provide further information on these concerns so that my officials can investigate further.

Having said that I am informed that only 7 per cent of New Zealand coastal cargo is picked up by foreign ships. If cabotage policy were to be re-considered, the implications for coastal freight rates would be a real issue, as competition has kept coastal freight rates under control, and any return to former freight rates could have real consequences for exporters and the regional economies.

In arriving at any conclusion on the future treatment of cabotage it would therefore be necessary to answer the question: will this be in the best collective interests of the country?

That cabotage is a vexed issue is evident from the Shipping Industry Review’s inability to reach agreement on the issue in its December 2000 report on a Future for New Zealand Shipping.

One approach that the Review did recommend was possible special assistance or tax treatment for shipping as a long-term strategy for ensuring shipping industry viability.

Though there is no doubt that the challenge for shipping is to find a way to secure long-term viability, I can say that selective assistance favouring one industry over another is not the way to achieve it.

All that aside, I would like to make it clear that the review merits a formal response. I expect to be in a position to do so by May.

Maritime security

The new security climate after September 11 has had big repercussions for shipping and ports, which lagged far behind aviation in security awareness. On 12 December 2002, the International Maritime Organisation (IMO) reached agreement on an international ship and port facility security code to reduce the risk of shipping becoming a target of international terrorism. The code will take effect on 1 July 2004.

It is important that New Zealand adopt these requirements, both to protect against future terrorist activity and to ensure that our trading interests are not harmed by worries over the safety of New Zealand ports or the security status of goods exported from this country.

Another important reason for supporting the IMO security measures is to reduce the risks of unilateral and bilateral measures being used as non-tariff barriers.

Work is under way on the drafting of legislation to implement the IMO measures in New Zealand. There will of course be costs, and for New Zealand, these will mostly fall on ports and port users.

Clearly we need to do everything possible to keep costs within reason and ensure that they don’t have unintended effects on port viability, the interests of workers in the ports sector and on exporters and importers.

The rapid growth in maritime security activities will at the same time increase the need for people to carry out the work. It will also create new opportunities outside the transport industry for organisations that develop and provide security equipment and services.

The implications of maritime security of course go well beyond costs, and some aspects of the IMO security measures have obvious implications for port workers – indeed for anyone going into a port area. This is particularly so where the new measures can involve screening, searches, identification requirements or security surveillance of people and vehicles entering a port facility.

Privacy concerns, the reasonableness of restrictions on movement around port facilities and possible effects on working conditions will need to be considered in implementing the new measures.

I am aware that some ports are seeking to introduce heightened security measures in response to immediate security concerns, and that there are questions as to the relationship between such measures and any nation-wide initiatives that might follow. The government’s view is that it stands to reason that everyone involved and affected by the new security regime must be in the loop when it comes to looking at how the new measures are actually put into practice.

That is why we will be working together closely with all key players – port operators, ship operators and the workforce. In the interim, I would hope that the CTU and individual port employers, as well as local unions, would be able to work cooperatively on such a vital issue.

There will be ample opportunities for everyone involved to tease out the issues over the next few months – especially as the 1 July 2004 deadline means that the ground work can’t all wait until after legislation is in place if we want to be up and running in time. Success will rely on all players being heard and being able to make a contribution to the process.

The international scene has changed profoundly in the past two years in a way that has affected aviation and shipping. Aviation was the first to feel the effects.

Aviation Issues

I am not going to engage in a discussion on the Air New Zealand Qantas strategic alliance other than to say that the government has given the proposal a conditional “yes” – that it is in the national interest. One of the issues that was taken into account was the view of the EPMU that the alliance would provide more job opportunities for engineers and related trades. The matter is now with the regulatory authorities on both sides of the Tasman and we all await the mid-year decision with anticipation. Aviation Security

Since the terrorist attacks of September 11, we have been operating in a new world order. The start of the war in Iraq just over a week ago highlighted the fact that security is a real issue for all of us, including New Zealand. However, despite the decrease in airline traffic overseas, more and more people are flying into New Zealand. Last month we experienced a five per cent increase from in visitors from last year. In 2002, we had over 3.3 billion passenger arrivals – our highest yet despite the terrorist attacks the year before.

And with that many people coming through our airports, there is an even greater need for ensuring the safety and security of passengers and their baggage. As a player on the world stage, we also have international obligations to meet in terms of our security standards.

The fact of the matter is, we either comply with international standards, or we no longer have international ships and planes arriving in this country. And that is something we cannot afford as tourism alone brings in over $13 billion annually. Since 2001, the Aviation Security Service – responsible for screening departing passengers and their baggage for dangerous items, securing our airports and searching international aircraft – has doubled in size. It now employs over 400 staff when, in February 2001, it employed 187. This is a booming industry and presents many opportunities for potential employees.

Work place safety – aviation

Improving the safety of the workplace for employees is another key consideration of this government.

Those of you in the aviation industry will be happy to know that we are introducing legislation this year, which will give airline staff and Police greater powers in handling unruly passengers, which is also in keeping with our international obligations.

While I don’t want to name names … Courtney Love … there have been a number of high profile incidents of unruly passenger behaviour on board aircraft. These incidents range from anti-social behaviour during the flight to tampering with smoke alarms. At the moment, we are unable to prosecute these people, as they are not in what is currently defined as “New Zealand jurisdiction”. I propose changing the legislation so that passengers who are being offensive on a New Zealand aircraft anywhere in the world, or on a foreign plane that next lands in New Zealand, can be prosecuted.

And, I also propose speeding up the infringement process so that short term visitors to our shores can no longer skip the country before getting or paying their fines.

I’m also pleased to note that, from 5 May this year, aircraft workers will be covered under the Health and Safety in Employment Act. This redresses the gap in health and safety coverage of aircrew since the HSE Act was passed in 1992. Keeping the aircraft and passengers safe is one way of ensuring crew safety but now aircraft operators will need to consider if there is anything else they need to do to protect their crew.

Work place safety – rail

When this government came to power, it set up the Wilson Inquiry into rail safety. The Wilson Report identified some big gaps in the safety conditions experienced by Tranz Rail employees. It also identified a number of legislative shortcomings, and made important recommendations about Tranz Rail’s operational practices. Implementing these recommendations, in particular with regard to shunting practices, is on going.

The Railways Bill has been drafted to bring rail safety conditions into the 21st century. I plan on improving our safety regime so that we don’t experience the same awful problems as the United Kingdom has recently.

I want people to have confidence in their safety whether they are railway workers or passengers. The old model in which a government owns, operates and regulates the railways no longer exists. The Bill recognises this and is written to manage a number of industry players. The important thing in a fragmented sector is to ensure that safety remains paramount.

Among other things, the Bill allows for the Minister of Transport to make rules on a wide variety of topics. Included in this, is the authority to make rules relating to driving hours for locomotive engineers. While no rules will come into force with the Bill, they can be considered, for priority if necessary, as part of the Land Transport Rules Programme.

The Bill will be available for introduction to the House soon, and the CTU will have the opportunity to make a submission on this and other bills during the Select Committee process. The CTU has already been consulted in the policy formation process. Another significant development in light of the Wilson Report is that the Health and Safety in Employment Act will, from 5 May, apply fully in respect of rail service operators.

This will come about through the repeal of section 6H of the Transport Licensing Act, which, as most of you here would know, deemed an operator to be in compliance with the Health and Safety in Employment Act if the operator had an approved safety system.

This simple step rightly brings the treatment of all rail workers into line with workers in all other sectors, as it also does for aviation and maritime workers.

The way ahead

I recently attended the Australian Transport Minister’s conference. There, the New South Wales Transport Minister raised the idea of a cyber-university for transport workers. This could provide up-skilling for all workers in the sector. New Zealand workers could take advantage of this opportunity. I have asked officials to follow this up with their Australian counterparts.

In maritime security New ZeaIand officials are working with their Australian counterparts to ensure standardisation. Unions on both sides of the Tasman should be involved in this work. I would be interested in hearing from you on this matter.

I want to finish by making a few brief points on the future of transport systems and services.

To assist New Zealand to be internationally competitive, the transport sector must continue to integrate supply and distribution networks, and introduce new technologies.

Just as the freezer ship in the late 19th century reduced the tyranny of distance so can electronic communication technologies do the same in the 21st century. We are already making good progress. People no longer talk about freight forwarding – the buzzword is now logistics.

As the Minister for Information Technology and Transport I have a keen interest in making sure New Zealand makes the most of opportunities presented by new technology to give us an edge over our competitors.

Further our isolation, mainly seen as a disadvantage prior to September 11, can also have positive spin-offs in terms of safety and security.

The transport sector has been systematically deregulated since 1983. This has not delivered all the expected results. While economic efficiency was increased, many of the broader links between transport and other issues such as regional development, urban form and social cohesion were ignored. The negative social and environmental impacts of transport have also been overlooked.

A thriving and sustainable transport sector along with a strong union movement is essential to promote the economic, social and environmental goals we have set ourselves.

I am sure you will be working with us to accomplish them over the next few years.

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