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Address to the Automobile Association

Friday, 02 April 2004 Speech Notes

Address to the Automobile Association annual conference

Thank you for the invitation to speak today.

This is a very welcome opportunity to talk with you in my recently acquired role as Minister of Transport.

There are two key issues that I would like to take the opportunity to discuss.

First, the special transport package announced in December last year and finalised this week.

Then the "Road Safety to 2010" strategy and the three Es – engineering, education and enforcement.

We called the December transport package " Investing for Growth", because building world-class infrastructure is a key element of the government’s growth and innovation framework.

Our growing economy and population requires increased investment in infrastructure if we are to return this country's living standards to the top half of the OECD rankings.

Today I want to talk specifically about the thinking behind this government's transport strategy and legislation, and future funding issues affecting land transport.

The New Zealand Transport Strategy was released by my predecessor, Paul Swain, in December 2002. He spoke to you about it at your last annual conference, but let me quickly go over some of its key features again, because it is a strategy of lasting importance.

The strategy has five main objectives:

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 also defines our vision for the future – that “by 2010, New Zealand will have an affordable, integrated, safe, responsive and sustainable transport system”.

As you heard last year, the "integrated" part of that vision is very important to this Government. We are determined that our thinking should consistently embrace all modes of transport.

The long-term sustainability of the transport sector will require the reorientation of transport policy and individual and business transport decisions over time.

We will need to reduce the negative impacts of the transport system on land, air, water, communities and ecosystems; make more efficient use of its resources; reduce its use of non-renewable resources; and shift over time to greater use of renewables.

We are beginning to make some progress, but it is a long road ahead. The legislation articulating the Transport Strategy is the new Land Transport Management Act, which is an important milestone in the evolution of transport policy in New Zealand.

It represents a new era for the planning, funding, and operation of New Zealand’s land transport infrastructure and services

It establishes a new funding framework, by removing much of the inflexibility and prescription of the previous Transit New Zealand Act.

By incorporating the Transport Strategy vision into the purpose and objectives of Transfund and Transit, the legislation broadens the focus of the land transport system beyond roads.

Roads are important, and take about 80% of the transport budget. But we cannot, to quote my predecessor, motorway our way out of all our problems.

This often only shifts the congestion a few kilometres further down the road. Congestion will only be improved with a balanced approach involving all transport modes.

Measures to make better use of our roads, public transport and rail are all part of the solution.

The Moving Forward package announced in February 2002 gave a major boost of $227 million in funding for all modes of land transport, including $94 million for roads.

The latest announcements in this area were made in December last year, as part of the Investing for Growth Package, with final details of funding and governance confirmed earlier this week.

This package will provide an additional $2.97 billion investment in land transport over the next ten years. It strikes a balance between the need for a “catch-up” for Auckland and the need for the rest of the country to further develop its own regional infrastructure.

While New Zealand as a whole will benefit from the momentum created by Auckland’s growth, New Zealand’s regional transport networks must also be upgraded because of the demands of a growing economy. Of the new funding about $1.62 billion will be invested in Auckland and about $1.35 billion in other regions over the next decade.

In December Cabinet and the Auckland local authorities agreed that the priorities for the additional funding for Auckland would be transport demand management; public transport, including rail, buses and ferries; and key strategic roads.

These priorities will be further refined before legislation is passed. Auckland local authorities have also agreed to review the Regional Land Transport Strategy by the end of 2005.

This combined work will ensure that the agreed priorities deliver benefits across the government's strategic objectives and support the integration of transport and land use. Funding outside Auckland will be used for improvements to passenger transport, demand management and worthwhile urban and rural roading improvements, including walking and cycling facilities.

To pay for all this, petrol excise will be increased by 5 cents a litre and there will be an equivalent increase in road user charges for diesel and heavy vehicles from April 2005.

This will raise approximately $207 million a year, dedicated to the National Land Transport Fund for spending on land transport.

Some 35% of this revenue will be allocated to Auckland and 65% will be allocated regionally, roughly on a population basis, for the next 10 years.

This means every region will be receiving extra land transport funding broadly proportionate to its population from the increased charges.

Petrol excise duty and road user charges on diesel and heavy vehicles will also be indexed to inflation from April 2006. This will raise an estimated $20 million of extra funding in the first year, again all dedicated to land transport.

At expected average rates of inflation, each annual increase will be well under half a cent per litre.

Besides helping to put transport funding on a more secure footing, this means that the proportion of the total excise duty going to land transport will continue to grow while the proportion going to general funding will continue to fall.

Spending pressures will arise in the future as the costs of building roads increase and new technologies make vehicles more fuel efficient, reducing the excise revenue from each kilometre driven.

Excise duty on LPG and CNG will not be increased or inflation indexed, in recognition of the government’s interest in promoting the use of these less environmentally damaging fuels.

For Auckland the Government will also be contributing a specific funding allocation averaging $90 million a year over 10 years.

Given Auckland’s current transport planning problems, there have been widespread calls for a more streamlined decision-making process, focussed on results.

We are therefore establishing the Auckland Regional Transport Authority, or ARTA, which will have the responsibility for achieving an integrated, safe, responsive and sustainable land transport system for Auckland.

ARTA Board members will be appointed by the local authorities and the Auckland Regional Council and will be responsible to the ARC, an organisation that is in turn accountable directly to Auckland voters.

There is yet more policy development to be done, including on the issue of infrastructure bonds and on the feasibility and desirability of pricing existing roads in Auckland, including parking levies.

I intend to introduce legislation soon to give effect to the governance changes, and I am sure the AA will be scrutinising that.

Now to road safety the three Es. You will be aware of the co-ordinated approach being taken to road safety through the National Road Safety Committee.

The NRSC comprises the Ministry of Transport, the Land Transport Safety Authority, the Police, Transfund, Transit, the Accident Compensation Corporation and Local Government New Zealand.

Between them they take responsibility for road safety engineering, education and enforcement, or the three Es for short.

I am aware of the AA’s position on road safety and that you believe that the focus of attention needs to start shifting more clearly towards engineering.

My predecessor announced a $47 million package for minor safety works in October last year, on top of $400 million that is spent annually on the safety components of road engineering.

Education and enforcement together cost around half of this amount each year, so road safety engineering is no poor relation.

However, there is always more that can and should be done and the NRSC is looking at this.

It was clear from the public reaction to some of the proposals discussed last year that many New Zealanders are still resistant to road safety measures targeting the average motorist on speed and drink driving issues.

The AA seems to believe that the message on speeding and drink driving has got through.

I would say it is getting through: there has been a major decrease in the number of deaths and injuries on New Zealand’s roads over the last 15 years.

However, it is also true that our road toll has started rising again. We hoped, for a short while, that this might be a statistical aberration – but the figures for this year are shaping up to be even worse than they were last year.

Even when adjusted for the major increase in the numbers of cars on the road and number of vehicle kilometres travelled, the rate of fatal and injury accidents is again on the rise. This concerns me greatly.

A review of the Road Safety to 2010 strategy is due by June 2005 and I will be asking the Ministry of Transport to put together the terms of reference for this shortly.

Clearly we cannot simply rely on doing the same things that have worked before. Advertising and enforcement that has succeeded in the past cannot be relied on to deliver results when dealing with the more complex society and higher traffic volumes that we now face.

As in so many areas, there is a constant need for innovation in road safety. I welcome the AA's involvement in these issues through the National Road Safety Advisory Committee.

Finally, a few remarks on a Bill I will be introducing soon to the House, the Land Transport Amendment Bill 2004.

This implements some decisions in the December package on targeting serious and repeat drink drivers and those who drive at excessive speed.

The Bill will improve the safety and security of road users by making the enforcement, operation and administration of land transport safety law more efficient and effective. It will also have a positive impact on commercial transport operators.

We have identified a number of areas where the legislative framework setting out the responsibilities of road users, traffic offences and penalties and the driver licensing system needs improvement. The Bill gets tough on the most serious traffic offenders by reducing the speed and alcohol thresholds for immediate driver licence suspension, and increasing the range of penalties for repeat drink-driving, including immediate vehicle impoundment.

It also requires a wider group of repeat drink-drivers to attend a drug and alcohol assessment centre in order to help rehabilitate more drivers whose offending is rooted in a drinking problem.

There will be more changes ahead, and I look forward to engaging with your organisation on them. I welcome your involvement and your commitment to representing the views of your members.

Thank you for your attention.


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