Minister of Transport, Immigration, Workplace Relations and Safety

“You are the people who day in and day out do the work to get the goods moving around our country, which is so important for our economy and for our communities,” was how Minister Wood kicked off his address.

He expressed his enjoyment in working with a sector with a practical and direct approach, saying that although the industry and the government might not always see eye to eye, understanding each other made working together easier.

Covid-19 was cited as the reason the government’s focus had largely been week to week/day to day for the past couple of years. But Minister Wood said it could now refocus and consider the strategic challenges existing in the freight sector, noting that the weekend of the summit (30/31 July) was when the country’s borders were again open.

He said the government’s commitment lay in a safer, cleaner, more efficient and resilient transport sector. The pandemic, the global fuel crisis, the decarbonisation of the economy and the transport sector itself were huge challenges, and the key to overcoming them lay in working together.

Fuel

Minister Wood said supply-chain constraints and the war in Ukraine were the roots of the fuel-pricing issues. “That’s why in March this year, we did move decisively to do what we could as government through the 36% reduction across all legislated rates of road-user charges.”

He acknowledged that the government didn’t remove all of the impacts, but it did help, saying concessions would remain until 31 He said pressures were persisting longer than the government had hoped and, to date, the cost of the concession to the government was $1 billion. He stressed the National Land Transport Fund (NLTF) budgets had not been impacted and that the government had underwritten the shortfall.

Resilience

“One of the things that surprised me somewhat when I came into this role is that New Zealand doesn’t have an integrated freight and supply chain strategy.” Minister Wood said that although the transport sector was adaptable and pragmatic, Covid-19 had demonstrated there was work to do in terms of resilience, with the flow of freight at times “dicey” during the height of the crisis.

The Ministry of Transport has been leading work on addressing that, he said, and it was important there was a coherent strategy across all modes, linked by clear workforce, infrastructure and decarbonisation strategies. He pointed out that if the government and industry worked together, the government, local authority, and the private sector could be guided on investment as we move forward.

Issues

“We launched the issues paper for the freight supply-chain paper earlier this year and we’ve had strong feedback from your sector and other parts of the freight sector. That feedback is now closed. I think we had 83 substantial submissions.”

He said the next stage would be analysing and developing a draft supply-chain strategy for release later this year, intending to finalise in early 2023.

The key issues are:

• Need to develop a resilient workforce

• Need to decarbonise

• Need to make sure the supply chain is well integrated.

Minister Wood acknowledged road freight would continue to carry the lion’s share of the freight task, but the supply chain would be more robust if all modes were optimised. Recent investments in shipping and hubs such as Ruakura and Bunnythorpe were all about allowing modes to better integrate. “We see an important role for government in getting that co-ordination working well.

“The government recognises that one of the biggest strategic – and I would say moral – challenges we face is the need to take action on climate change. This isn’t a future problem,” he said, citing unprecedented, repeated, extreme weather events both here and overseas. “Our heavy-vehicle fleet does have an important role to play here, making up about 3.5% of our total transport fleet. But it currently contributes about 25% of total road transport emissions, and that percentage is forecast to increase as the light-vehicle fleet electrifies in the coming years.”

He continued that although roads carried 92.8% of freight volumes, there were real opportunities – cleaner air, reduced reliance on foreign fuel and improved efficiency. He congratulated the sector on its proactive stance during the consultation phase of the ERP (Emissions Reduction Plan) in May 2022, voluntarily increasing the freight emissions reduction target from 30% by 2035 to 35%. “I encourage everyone to be thinking creatively; to be getting on board.

“Government has a role to play as well. In Budget 2022, recognising the challenge in freight decarbonisation, we allocated $20 million from the climate emergency response fund to set up and accelerate responses to the challenges and opportunities in freight transport.” He said the money would go to set up a dedicated unit to address the freight decarbonising issues, and to funding via EECA (Energy, Efficiency and Conservation Authority) for specific low- emissions projects.

Minister Wood acknowledged the sector’s interest in pursuing Euro-6 emissions and said he was working with officials on that, as well as an appropriate incentive regime for low-emissions heavy vehicles.

Infrastructure and maintenance

“We also know ongoing investment in a safe and efficient infrastructure network is enormously important for the sector. Road safety is of paramount importance to our government as well, and it’s reflected in our Road to Zero strategy.”

He continued, saying that no one could be satisfied with current road toll and injury statistics, and safe roads were a key part of Road to Zero, which also included provision for safer speeds and drivers. He said the government was investing $10 billion in the next decade through Road to Zero to ensure progress in the key areas, including investment in safe roads and road maintenance. He said there were 24,000 lane kilometres in the state highway network, up by 10% since 2009/10.

“Our government is committed to investing in high-quality and well- thought-through roading projects that increase resilience and safety across network,” he said, citing Penlink, Takatimu North Link, Manawatu/Tararua and the Mt Messenger bypass as examples, as well as the $1.5 billion invested in the Otaki to North of Levin project.

He did recognise maintenance was an important subject for the sector. On current and impending improvements and maintenance, he cited SH5 Rotorua, SH2 Waihi to Omokoroa, and the Omokoroa Interchange projects, as well as continued targeting of additional median barriers, passing lanes and corner correction across the network. He blamed the previous government for contributing to the current infrastructure and maintenance deficit, saying project completion and looking after the network was essential to meet safety outcomes and the needs of future population growth.

He said the government had increased spending on road maintenance by 46% since coming to office, and the inherited $4.8 billion GPS (Government Policy Statement) on land transport over three years had been increased to $7 billion over the current three- year period.

He acknowledged there was more to do and said the cost of maintaining a kilometre of state highway had increased by 30% in the past three to four years.

“It’s a combination of labour and material costs, but it’s also the increased safety and environmental standards we all expect these days.”

Careers

“The final area I want to talk about is the need to build up a sustainable career pipeline for the sector. I know that across all of your companies, you’ll be feeling this pressure at the moment, getting enough skilled drivers to be able to do the job and meet the needs you have.”

The minister said the government recognised a driver’s licence was a basic requirement for New Zealanders to access work and get into the sector. Currently, many young New Zealanders, especially Maori, Pacifica and those in remote rural locations, had trouble accessing a driver’s licence. He said in Budget 2022, the government allocated $80 million to get an additional 64,000 into the driver’s licencing system via clinics and testing programmes in schools, marae and mobile units in the communities.

He said he wanted to see a clearer pipeline of people into the industry, working with the industry on targeted measures that promoted road transport as a good career option, one that was safe, well remunerated, and attractive.

He noted that immigration had a role but effort had to go into the domestic labour force. New immigration settings would ensure appropriate pathways for critical- need skillets such as mechanics and auto electricians – two roles the sector indicated were vital. These appeared on the new green list, which is a fast track to residency.

“I reaffirm our government’s commitment to you, working with you, for a freight sector that’s safe, efficient, resilient, and that meets the needs of all New Zealanders.”