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Judith Tizard: Speech to Australian Bus Industry

Hon Judith Tizard: Speech to Bus Industry Confederation of Australia

Good afternoon and thank you for the invitation to speak today. I bring you the warm greetings of the Minister of Transport, Paul Swain.

I am delighted that the Australian Bus Industry Confederation has come to New Zealand for this year's annual conference.

This government recently started our second term of government. We have set ourselves the goal of returning New Zealand to the top half of the OECD.

We have established a Growth and Innovation Framework under which we are working to offer more opportunity and security and a better quality of life to all New Zealanders.

Our aim is to build and sustain solid levels of economic growth and to fund good public services and infrastructure in a sustainable way.

The New Zealand Transport Strategy, announced last year, is a good example of this approach, and I'll talk about that shortly.

Overview of transport in New Zealand

Firstly, I'd like to give you a brief overview of how passenger transport is planned, funded and delivered in New Zealand.

Passenger transport is delivered through a partnership of central, regional and local government and of private passenger transport companies.

Central government provides the policy framework for land transport, and provides land transport funding through a Crown agency, Transfund New Zealand.

Regional Government develops land transport strategies and passenger transport plans, and also provides funding for passenger transport.

Local Government is responsible for maintaining and developing the local road system, while a Crown agency, Transit New Zealand, is responsible for the State highway system. Together Transit and local authorities are responsible for roading infrastructure including bus lanes and bus stops.

Bus services are provided by private bus companies. Bus companies can plan and register fully commercial services, but must competitively tender to provide subsidised services, on contract to regional councils.

Passenger rail is provided by a private company, Tranz Rail. Tranz Rail has leased the rail corridors it operates from the Crown and receives financial assistance from Transfund and regional councils to operate passenger rail services.

There has been much talk of Public/Private Partnerships here in recent months, but the fact is that passenger transport has been operating as a public private partnership for many years, with each partner playing a critical role.

Patronage funding

When we took office in 1999, central government funding of passenger transport had been frozen for some years and patronage growth was uncertain.

Our first step to remedy this was to give a boost to passenger transport by introducing a new patronage funding system.

Under this system there is a base level of funding for existing services, and extra funding on the basis of the increase in passengers carried. The patronage funding level is set to reflect the overall benefits of passenger transport growth.

This new funding system provides strong incentives for operators and regional councils to work together to build patronage. And it has been working - patronage grew 6 per cent in 2000/01 and 8 per cent in 2001/02. As a result, recent media stories from Auckland are showing a new problem: current peak-hour bus services are too crowded.

Transfund has undertaken a review of patronage funding and will release a consultation document shortly. I will talk about that review a bit later.

Moving Forward funding and policy package

In February last year, we announced the Moving Forward package, which set the stage for future land transport policy. The key feature of the package was an extra $227 million in funding for transport to June 2003, on top of the $1.3 Billion already being spent each year. This extra funding was directed to our land transport priorities. The breakdown is as follows:

* $94 million for roading, especially for reducing congestion. * $30 million for regional development. * $30 million for alternatives to roading. * $36 million for passenger transport. * $34 million for road safety. * $3 million for walking and cycling

$85 million (excl GST) has been allocated to passenger transport for the 2002/03 year. That is almost double the level of funding allocated in 1999/2000 when we came to government.

The New Zealand Transport Strategy

Now to look forward. As I said, we have set ourselves the goal of returning New Zealand to the top half of the OECD. All of us here today will appreciate that transport has a huge role to play in achieving that goal. We can't commit to economic growth without committing to improving our transport infrastructure.

Last December, we released the New Zealand Transport Strategy, which outlines the government's strategic focus for transport. The New Zealand Transport Strategy will guide government decision-making on transport policy.

The strategy was informed by three years of discussion and consultation across the transport sector. It spells out the government's vision that "by 2010, New Zealand will have a transport system that is affordable, integrated, safe, responsive and sustainable".

The strategy has five objectives for transport: * 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.

The Strategy links what happens in the transport sector with our wider social, economic and environmental responsibilities. This is the first time a government in this country has looked at all modes of transport in an integrated way, and we are taking a long-term view.

We will implement the strategy through policy, rules, programmes and legislation now and in the next few years.


I want to talk about a word that is used more and more often in the context of infrastructure - and that is "sustainability".

A key objective of the New Zealand Transport Strategy is to ensure that we have a transport system that is working at maximum efficiency in terms of affordability; recognises health and safety impacts and environmental outcomes; and the way in which the transport system interacts with individual and community needs.

Each mode of transport has particular strengths and weaknesses. We want to manage the transport system in a way that fully uses the strengths of each mode, so that we maximise the sustainability of the whole transport system.

A focus for the next three years will be on the relationship between road and rail transport.

We've already made it clear that we want a viable railway system in this country, both for freight and passenger services.

We have also dedicated and increased funding for the Alternatives to Roading Output, which allows investment in modes such as rail and coastal barging. The criteria has been changed so that projects involving transport modes other than roading will no longer have to compete directly with roading projects for funding. This will mean greater flexibility in providing local communities with transport solutions that meet local needs.

The Ministry of Transport is leading a major study into the costs and charges of both our rail and road networks and their use, and will report to the government later this year.

We regard the Land Transport Costs and Charges Study as crucial to our long-term transport strategy, since it will give us a clear framework within which we can make decisions and set our future direction in land transport.

I look forward to receiving the Ministry's report.


Let me talk briefly about Safety. The New Zealand transport system has a good level of safety, but we can always do better. Last year we had a record low in road fatalities, 404, but this is still too high.

Late last year, we announced details of a $22 million package of road safety initiatives aimed at reducing the road toll, that comprises part of the Road Safety Strategy to 2010. It is also a step towards achieving our Strategy vision.

The initiatives comprised a mix of education, enforcement and engineering measures including: * extra funding to target rural drink driving, * a pilot to test potential changes to the graduated driver licensing system * and more money and a changed approach to Road Safety Advertising.

This Road Safety Strategy to 2010 sets the target of no more than 300 road fatalities a year by 2010 - a reduction of 35 per cent over the current road toll, which would put us alongside the world's best road safety regimes.

We are continuing to review and improve road investment and management and we have also begun to increase our investment in facilities for walking and cycling.

Access and mobility

An effective transport system is absolutely crucial to ensuring that every New Zealander has access to social and economic opportunities.

This is not just a matter of building new roads. We have to make sure that the transport system provides for all members of our communities, not just those who have access to cars.

Improving local networks for cycling and walking and ensuring that people with disabilities can access transport, social and economic opportunities in their local communities is something we are starting to work on.

Improving public transport both in urban and rural New Zealand is an important element of government policy.

Public Health

We are beginning to understand that transport systems have a significant impact on community health. Last April, the government released a report on the Health Impacts of Road Vehicle Emissions. That report introduced New Zealanders to the concept of the "invisible road toll" - that is, deaths from vehicle emissions.

It showed that we have a problem in this area that is on the scale of the more familiar and "visible" road toll.

I am aware that your organisation agreed to halve vehicle emission levels over the past two years under an agreement with the Federal Government, and I congratulate you on your work.

In New Zealand, we are also taking action in this area.

In July, we approved a new set of higher standards for fuel quality that will be introduced in stages by the beginning of 2006.

We are working on setting minimum emission standards for all road vehicles as they arrive in New Zealand.

And we are now working to see how we can improve the emissions performance of vehicles once they are in use in New Zealand. We are currently investigating a range of measures.

As an Associate Minister of Transport, I am leading the work in this area and I expect to make an announcement in the next couple of weeks about our work programme on vehicle emissions.

We will be seeking to develop measures that not merely improve local air quality, but also work to support the government's wider goals. These include the National Energy Efficiency and Conservation Strategy; and our commitment to the Kyoto Protocol on climate change.

The impact and management of transport noise is another issue that is high on our action plan for ensuring public health.

Patronage Funding Review

Passenger transport will be critical to achieving the vision of the New Zealand Transport Strategy. For example, passenger transport has a major role in improving access and mobility and ensuring environmental sustainability.

The Strategy will also influence how passenger transport is funded in the future. As I mentioned earlier, Transfund has undertaken a review of patronage funding and will shortly release a consultation document.

I understand Transfund's review will maintain passenger transport funding on a patronage basis, and will include features to ensure that the funding contributes to the government's wider transport policy objectives as set out in the New Zealand Transport Strategy.

I am advised that the funding review consultation document will be released later this month and that it will then be downloadable from Transfund's Web site at:

I'm sure Transfund would very much appreciate input from your organisation.

Trans-Tasman relationships

There is a lot we can learn from each other's experiences and knowledge.

During a recent visit to New Zealand by a group of American transit operators, which BCA was instrumental in arranging, they were impressed by our "results orientated" approach to public transport.

They were also impressed by the effectiveness of our relationship between the public and private sectors to achieve maximum results within our limits.

High-tech solutions are not necessarily the answer to the often-complicated problems of traffic congestion and transporting people as we found in Christchurch with the creation of the bus exchange.

You might also consider if aspects of the New Zealand experience, particularly the passenger transport patronage funding scheme, would be applicable to Australia.

The Land Transport Management Bill

Finally I'd like to take a few minutes to talk about the Land Transport Management Bill, which we introduced to Parliament in December.

This Bill is a key step in achieving the visions and objectives of the New Zealand Transport Strategy.

It proposes the biggest overhaul of land transport funding since the current system was introduced in the late 1980s.

The Bill has been referred to a select committee for consideration, and we expect it to be passed this year.

Under current law, Transfund allocates more than a Billion dollars of funding to land transport with the principal objective of achieving a safe and efficient roading system.

The primary objective of the Land Transport Management Bill is to achieve a more balanced funding system with a longer-term focus, in line with regional priorities. The focus of the system needed to be broadened from just roads.

The Bill, therefore, contains a strong statement of purpose based on the government's vision laid out in the NZTS.

The Bill changes the objectives of Transit and Transfund.

Transfund's objective will be to allocate resources to achieve an integrated, safe, responsive and sustainable land transport system.

Likewise, Transit's objective will be to operate the state highway system in a way that contributes to an integrated, safe, responsive and sustainable land transport system. The Bill also provides for the objectives of the NZTS to be brought to bear on funding decisions made by Transfund and on the way that Transit develops its Land Transport Programme.

The government's transport vision and objectives are already influencing the way that Transfund and Transit do business. The funding provisions of the Bill have been designed to support the new approach by allowing more flexibility in the way land transport is funded, including more flexibility to fund projects other than roads, such as rail and passenger transport and to promote walking and cycling. Funding must also follow the priorities identified by regional land transport strategies.

This is because the current system does not always allow local government to implement solutions to address land transport issues specific to their region. This Bill allows regional councils to fund, and both own and operate, passenger transport infrastructure and services, unless prohibited by an Order-in-Council. The Bill allows flexibility, but we have not abandoned the need to ensure that money invested in land transport is spent wisely. Expenditure needs to be cost effective, and this is implicit in the objectives of the transport agencies and the requirements laid out in the Bill.

While the Minister for Transport can't give directions about particular projects, we have sought to give the transport entities more guidance on priorities and on the amounts of funding to be put into particular activities.

We also want to encourage a longer-term focus to land transport planning. As a result, this Bill requires that organisations accessing funding from the National Land Transport Fund need to provide 10-year financial forecasts. Transfund, itself, will also need to provide a 10-year financial forecast, the first of which is expected this year.

The Bill also provides changes to the way New Zealanders participate in land transport decision-making. It stresses the need for options and alternatives to be considered at an early stage, and for interested parties to be involved in that process. The government has attempted to strike a balance between the views of communities affected by land transport projects and those of transport users.

Let's look at how it all fits together

It is our passionate view that very few policies or projects in transport can be dealt with in isolation from wider social, economic or environmental issues.

The links between these factors can be complex, but understanding them is the key to the development of a sustainable transport system.

Our strategic approach means that both local and government transport agencies will have to take a wider view of policies and projects before they are implemented.

We are already developing this approach in a number of areas:

* Transfund is developing new analytical systems to evaluate funding for projects. These new systems will take full account of the government's objectives.

* The Ministry of Transport is working with the Waitakere City Council to develop a sophisticated model to evaluate the impacts of land use decisions on the form and environmental structure of communities, as a means of assessing future development of transport networks.

* The Land Transport Costs and Charges Study will include assessments of the comparative costs of safety, environmental impacts and economic use of resources for both the road and rail networks, including passenger transport.

* The development work on vehicle emissions management, which I referred to earlier, will include an evaluation of the social consequences of various options to reduce vehicle emissions.

* The government's recent commitment to actively promote cycling and walking networks recognises that greater attention to these modes of transport can offer an inter-linked range of benefits through society. These benefits include improved social access; greater safety; improved environmental outcomes for short journeys; and improved personal health.


To conclude, we have set a new and exciting course towards a sustainable transport system, and passenger transport is, of course, a key element of that system.

New Zealand and Australia have much in common, and this conference gives us a valuable opportunity to meet, to share experience and ideas and discuss how to meet the challenges and opportunities of the future.

I wish you well for the remainder of this conference and look forward to hearing how your discussions go.

Thank you.

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