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Land Transport Management Bill - 2nd reading

Hon Paul Swain Speech
Land Transport Management Bill - 2nd reading

Mr Speaker

I move that the Land Transport Management Bill be read a second time.

I would like to thank the members of the Transport and Industrial Relations Select Committee for the excellent work they have done on this Bill.

The Committee has listened very carefully to the many considered submissions that it received.

The Bill has been improved as a result.

I would like to offer a special word of thanks to Helen Duncan, who chaired the Select Committee for the most part but had to step aside towards the end of the Committee's consideration for health reasons.

Thanks also to Hon. Roger Sowry who had to step in at short notice to complete the process.

The Land Transport Management Bill broadens the focus of land transport funding, encourages more long-term planning, and allows for greater funding flexibility.

It reflects a multi-modal approach. It is an important step in implementing the New Zealand Transport Strategy.

I was heartened with the support that the principles underpinning the Bill received from submitters.

However, many submitters sought changes to improve the implementation of the Bill.

Some thought that the decision-making framework set out in the Bill was too complex, while others were concerned about consultation.

Many submitters also called for more funding tools to be made available in addition to the Bill's tolling and public private partnership provisions, and others argued that these provisions were too restrictive.

The Select Committee has addressed these issues.

Decision making framework

The Bill integrates the New Zealand Transport Strategy into land transport funding and management decision-making processes.

The Bill's purpose reflects the New Zealand Transport Strategy's vision, as do the objectives of Transit New Zealand and Transfund New Zealand.

The Strategy's objectives are used as important criteria for decision-makers to take into account.

Decision-makers need to make decisions after carefully considering and balancing each of the Strategy's objectives.

The Committee has worked hard to ensure that the decision making criteria throughout the Bill have been made as consistent as possible whether it is Transfund approving funding for a bus way or the Minister making a decision on a tolling scheme.

Overlaps and duplications have been addressed.

Some submitters argued strong that efficiency should be included in the Bill as an explicit decision making criterion.

The Committee has recommended that this be done. In my view, efficiency is implicit in the concept of sustainability, which is ingrained in the Bill's purpose and elsewhere.

Nonetheless, I believe there is value in stating this explicitly.

The Committee has recommended that it become one of Transfund's criteria for approving funding.

This is a critical decision making point in the Bill.

Transfund, of course, is responsible for allocating some $1.2 billion of land transport funding.

The Committee has also recommended explicitly linking the key documents in the Bill with the Bill's purpose.

These documents include land transport programmes prepared by Transit and local government, the annual national land transport programme prepared by Transfund, and regional land transport strategies prepared by regional councils.

This approach strengthens the relationship of these documents to the Bill's strategic framework.

Land transport programmes and the national land transport programme are also to be combined with 10-year financial forecasts.

This ensures that these programmes have a long-term view.

Regional planning

The Committee has also recommended that the strategic nature of regional land transport strategies be emphasised by requiring that these strategies identify the transport outcomes sought by the regions and the strategic options for obtaining those outcomes.

To underpin these changes, the membership of the committees that prepare these strategies is also to change.

Regional land transport committees will now need to consist of interests that reflect the objectives of the New Zealand Transport Strategy, as well as representatives of local government, Transfund and the Land Transport Safety Authority.

The regional land transport committees must also take into account the views of network providers like Transit.

Regional land transport strategies will also need to contain a traffic demand management strategy.

Traffic demand management is becoming an increasingly important way of dealing with the pressure on our roading infrastructure.

It is simply not possible to build our way out of congestion.

Traffic demand management measures can range from better integration of traffic management systems to travel blending, which incorporates the use of more than one mode within a single journey.

Regional councils

The Bill allows regional councils to own public transport infrastructure and services.

The Committee has suggested deleting the complicated approval process set out in the Bill and, instead, utilise the provisions of the Local Government Act 2002.

This is a good proposal. Ministerial instructions

A number of submissions raised concerns about a new power for the Minister to give instructions in relation to funding priorities.

This was set out in clause 14 of the Bill as introduced.

The Committee has recommended that this power be deleted and, instead, rely on the Minister's powers to issue general directions on government policy set out in schedule 1 of the Bill.

The power to issue directions was carried over from the existing Act.

Such directions must be published in the Gazette and presented to the House.

The Minister cannot give directions on individual projects.


There were concerns expressed that the Bill's consultation requirements were too onerous.

The Bill, as introduced, provided for consultation on land transport programmes, 10-year financial forecasts, and for tolling and concession agreements.

It should be remembered that the existing Transit New Zealand Act provides for consultation on land transport programmes with many groups.

The recommendation to combine programmes with 10-year financial forecasts means that a whole layer of consultation has been removed.

There was also some inconsistency between the lists of groups that should be consulted and the Committee has recommended changes to address this issue.

The Committee has also recommended a closer link between the new Local Government Act 2002 and the Land Transport Management Bill.

Local authorities, which are responsible for some 80% of the land transport system, must consult under that Act's provisions.

The principles, and processes under that Act, have been brought into the Bill to give greater clarity about who should be consulted, and how they should be consulted.

In addition, it has been made clear that local government does not need to consult under the provisions of the Bill if they have already consulted on their long term Council Community Plan.

Further, the tolling and concession agreements provisions provide that consultation is not required if there has already be consultation under the Bill or any other enactment on the proposal to toll or enter into a concession agreement.

Tolling and concession agreements

The Bill, as introduced, puts in place a generic framework for approving tolling schemes and concession agreements.

Tolling schemes require approval by Order in Council while concession agreements require Ministerial approval.

At present, toll arrangements require specific legislation.

Many submitters supported the government's move to make these tools available as an alternative way of funding roading projects.

While some argued for strong conditions for such schemes, many felt that the provisions were too restrictive.

When dealing with roads, which are so critical to communities, a balance needs to be found between the need for public control and private sector investment.

A major issue that concerned many in local government and the private sector was the requirement for approval at a very late stage in the process.

There was concern that this would discourage investment because there would be an unwillingness to invest in developing projects if there was no certainty that approval would come.

The Committee has arrived at a very pragmatic solution.

Early, conditional approval can now be given after the Minister has considered core criteria such as whether the project would contribute to the purpose of the Bill, and the outcome of any public consultation.

Conditional approval can then be issued.

This means approval can come before tenders are issued and the successful tender can know with certainty what preconditions they need to meet before beginning tolling or entering into a concession agreement.


The Committee has ensured that the decision-making criteria for tolling and concession agreements are as consistent as possible.

There are, however, some unique features of such arrangements that need to be considered.

The Bill as introduced made it clear that tolling could only be used for new roads.

Existing roads could only be included if there was an engineering reason for them to be included.

Many submitters argued that tolling should be possible on existing roads and some went so far as to say that widespread tolling should be allowed such as the cordon toiling scheme in place in London or, even, that there should be regional petrol taxes.

However, the Committee, quite sensibly, concluded that allowing such schemes would go well beyond the policy of the Bill as introduced.

The government has some sympathy for the argument that there should be more funding tools made available.

However, the issues such mechanisms raise need to be carefully thought through.

To this end, the government is working with the Auckland region to investigate such approaches and would look to include any new mechanisms in future legislation, if required.

The Committee has, nonetheless, recommended that there be some additional flexibility to include existing roads where the existing road is physically or operationally integral to the new road.

The toll revenue, though, must still be used for the new road.

The Committee has also made it clear that emergency vehicles should be exempted from tolls.

Concession agreements

There was also concern that that the Bill was too inflexible in how it treated risk allocation between the parties.

For example, the public sector was precluded from compensating the private sector if traffic forecasts were not met.

Such issues are normally matters for commercial negotiation between the parties.

This restriction has been removed.

The Committee has also recommended that leasing be allowed for concession agreements.

The Bill as introduced allowed only licence agreements.

Leasing is a more familiar instrument for investors so this change will give them greater certainty.

The successful Melbourne City Link project uses leasing.

Some submitters argued that the proposed term of 35 years should be extended.

The Committee was satisfied that a term of this length was suitable for most purposes.

It has, however, recommended that the term can be extended for 10 years if there are exceptional circumstances two thirds of the way through the concession agreement's term.

In summary, the changes recommended to these particular provisions strike a good balance between the interests of the public and those who might invest in new roads.

Finally, I would like to thank the Committee again for the good work it has done. The Bill is much better as the result of that work.

Mr Speaker, I move that the Land Transport Management Bill be read a second time.


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