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Annette King: Speech On Sea Change

Annette King: Speech On Sea Change

Thank you for coming here tonight for the launch of the very aptly-named Sea Change, a draft strategy designed to transform coastal shipping services in New Zealand.

For too long, coastal shipping has been the poor cousin of the New Zealand transport sector. In my days as a young person growing up on the West Coast and when I first came to the North Island, coastal shipping was an integral part of the New Zealand transport system.

Coasters such as the Holmdale and Holmglen were part of the everyday landscape. But with the advent of containerisation, the road and rail ferries and of course bigger and better road transport, these ghosts of the coast quietly disappeared.

As we are approaching the Christmas season, perhaps I can paraphrase Charles Dickens and his immortal A Christmas Carol. Sea Change is not about exorcising or resurrecting the ghosts of the past. It's about the spirit of coastal shipping 'yet to come'. It's about now, and it's about the future.

It's about creating a contemporary context for coastal shipping services that enables them to play an important role in the overall carriage of domestic freight. We live in a changing world where success is the reward for those who can adapt with the changing times. It's time to think differently about coastal shipping and revitalise its role in modern transport.

When I became the Minister of Transport, I quickly identified coastal shipping as one of my top priorities. I saw it as a link to other modes of transport, particularly road and rail, a link that was not being utilised to its full potential.

I soon found I had some strong allies in this view, and I want to acknowledge the enthusiastic support of Transport Safety Minister Harry Duynhoven and New Zealand First Deputy Leader Peter Brown. I'm pleased that both of them are here this evening. I also want to acknowledge the enthusiasm of Jeanette Fitzsimons and Sue Bradford of the Green Party for coastal shipping.

I also want to acknowledge the New Zealand Shipping Federation. If I can be excused a nautical pun, it was a watershed event the day Rod Grout and his Federation colleagues came into my office to hand me their Roadways to Waterways document. Their enthusiasm was contagious.

Together with other groups in the maritime transport sector, the federation has made a valuable contribution to this draft strategy. I want to thank all those people from the shipping sector, maritime unions, freight industry, ports companies, and, of course, transport officials, who have worked so hard and willingly to help produce Sea Change.

Sea Change is not about revitalising coastal shipping at the expense of other transport modes. It's about building an integrated transport system that meets both present and especially, future needs.

There are many factors driving the need for reforms in the carriage of domestic freight, but by far the most compelling is the simple fact that in the next 10 years there will be double the amount of freight to move around New Zealand than there is today.

The consequences and implications of this fact alone will have huge 'trickle-down' effects for New Zealand.
Alongside the projected growth in freight, there is the need to address the issue of climate change. This is now one of the top agenda items for world leaders, as we saw for example at the APEC Leaders Summit in Sydney.

This Government has taken a leadership role in dealing with climate change and greenhouse gas emissions. The need to address climate change, at the same time as advancing long-term environmental sustainability, is now central to our economic transformation agenda.

New Zealand's transport sector is currently highly dependent on fossil fuels. It is a significant source of greenhouse gas emissions, and you will have noted that the Government's recently-announced package of polices to address climate change includes a goal of halving the per capita emissions from the sector by 2040.

The recent announcement of a domestic emissions trading scheme will see all domestic transport modes affected by a price on carbon, and I believe this represents a great opportunity for the shipping industry. The scheme will further enhance the efficiency of transporting goods by sea freight compared to other freight modes.

There's a limit to the capacity of our roading network and significant volumes of 'new' traffic on our roads will lead to greater congestion, and this in turn will impact negatively on the freight industry.
I think we all recognise that shipping is our major carrier of international cargo, and it is a fact that 99.5 percent of our exports and 99.4 percent of our imports go by sea.

The nature of shipping operations is changing. International shipping companies are increasing the size of their ships and reducing the number of ports they call at. This 'hub and spoke' network affects New Zealand, and will continue to do so more in the future. Without a strong coastal shipping sector, there will be even more pressure on the road and rail networks than we have been predicting.

As I said, at present New Zealand's coastal shipping network is small. Eight New Zealand companies operate thirteen ships, of which five carry cargo across the Cook Strait. These local ships carry about 85 percent of what coastal cargo there is, with the balance carried by international ships.

Having said that, coastal shipping already accounts for about 15 percent of inter-regional freight, measured in tonne-kilometres which shows you how much even a relatively small ship can carry compared with road or rail.

In essence, we know there is going to be more freight to move in the future, that international shipping is moving to the 'hub and spoke' system, and that because coastal ships can carry large volumes of freight, it is in the country's interest that this occurs.
As I said, at present about 15 percent of New Zealand's domestic freight is moved by sea.

In Japan, where the geography is similar to ours, coastal shipping has more than twice that market share.
But Europe is perhaps the example we should aspire to. Within the next 10 years, the amount of freight carried by water will overtake that carried by road. Of course, there are large rivers and canals, but this change is due strongly to affirmative action on the part of the European Union.

Sea Change is a proposal for a visionary, solutions-focused strategy that is both aspirational and practical. It introduces the concept of co-modality --- making the best use of all of the transport modes without fear or favour --- to meet the government's transport objectives.

Sea Change is about the government providing leadership and creating the environment for business to prosper. It's about kick-starting proposals that are sustainable and have economic benefits. It is also about harnessing the energies of the people involved in the sector, removing barriers to their ability to make things happen.

If we are to be aspirational and show leadership, we have to be bold and set high standards. To that end Sea Change contains a target that by the year 2040 at least 30 percent of all inter-regional domestic freight will be carried by coastal shipping services.
That doesn't mean that the Government will be unfairly supporting coastal shipping to the detriment of the road or rail freight industries.

It will mean that in a rapidly expanding freight market, the Government will help freight users to make a choice of transport modes. It will be encouraging them to choose the mode or combination of modes based on their own commercial best interest, and also on the best interests of New Zealand in terms of sustainability.

As I said a moment ago, Sea Change is not just aspirational. It is also a practical plan for action. To this end the Government intends taking four steps to help transform domestic freight services.
The first of these is to create a visible 'focal point' for this sector. It will be called a 'Maritime Liaison Unit' or MLU, and will be similar to other organisations in Europe and the United States.

A second step will be to increase the level of information about coastal shipping. The MLU will be based in the Transport Ministry and its role will be to promote awareness of coastal shipping to stakeholders, including shippers of freight. It will not be a large unit, but it will act as an 'information hub' to help ensure that interested people in industry and government understand the role that coastal shipping can play in developing a sustainable and integrated transport network.

The role of the MLU will be to provide a focus on information needs rather than an 'advocacy' role. It will also help the sector to better understand the processes of government.

This leads me to a third key step resulting from Sea Change --- to make it easier for the coastal shipping sector to access government funds. There are now perceived barriers to that happening, and the MLU will need to help shipping interests apply for financial assistance.

However, changes will be needed to transport funding and planning processes to ensure that proposed coastal shipping activities, which have the potential to provide tangible benefits, can be considered for financial assistance. All the proposals will need to have a robust base and to demonstrate their capability to sustain themselves when government support ceases.
The fourth step relates to the workforce.

If domestic sea freight is to play a greater role in the New Zealand transport sector, it will need a larger skilled workforce. This is a major challenge, with seafarers in demand worldwide, and with more than one third of workers in coastal shipping here over 60.

A key workstream in Sea Change is a collaborative effort by government agencies and the sector to encourage young people into seafaring, to improve training and to ensure that the qualifications framework reflects the real needs both of the sector and of individuals. We can have all the strategies in the world, but without the right people to do the work, we can achieve nothing.

This is a busy time for the maritime sector. My colleague Harry Duynhoven is also releasing today draft discussion documents concerning port and harbour safety, and whether New Zealand should accede to four international conventions and protocols regarding the marine environment. I encourage you all to review these documents and provide comment on them to the Ministry of Transport.

Sea Change marks the beginning of a new future for domestic sea freight in New Zealand, and the start of a new partnership between the Government, the coastal shipping industry and all other transport modes. The strategy's development shows how well various parts of the domestic sea freight sector can work together and with the Government toward common economic and environmental goals.

The 2040 target we have set for coastal shipping is ambitious and challenging, but if we are not bold, we will not achieve our potential. I firmly believe there is no shortage of boldness in this room.
Normally on Guy Fawke's Night we look out at Wellington Harbour to watch the fireworks.

On this Guy Fawke's Night we can look out at the harbour and see a bright new future instead. Thank you very much for joining me this evening.


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