Transport industry backs govt’s $20bn transport plan

In News8 MinutesBy NZ Trucking magazineMarch 8, 2024

The transport sector is welcoming the Government’s draft Government Policy Statement (GPS) on Land Transport, unveiled by Transport Minister Simeon Brown earlier this week.

The draft GPS outlines the Coalition Government’s plan to build and maintain a transport system, with around $7 billion invested over the next three years prioritising economic growth and productivity, increased maintenance and resilience, safety, and value for money.

Brown said the plan balances the need for investing in new projects, while ensuring Aotearoa New Zealand’s transport system is maintained to a high standard.

The plan re-introduces the previous National Government’s Roads of National Significance programme, with 15 projects outlined.

“The draft GPS also commits up to $2.3 billion for public transport services and $2.1 billion for public transport infrastructure over the next three years. Delivering reliable, effective, and efficient public transport is a priority, particularly in our main cities of Auckland and Wellington.”

“Increasing maintenance levels and improving resilience is critically important in achieving the Government’s overall objective of supporting economic growth and productivity,” said Brown.

“Potholes have become increasingly apparent on our roads in the past five years. To address this, we have established new State Highway and Local Road Pothole Prevention Activity Classes – these activity classes will direct between $3.1 billion and $4.8 billion to address potholes on state highways and local roads,” he said.

Brown said there will be a stronger focus on road policing and enforcement, investing in new and safe roading infrastructure, and targeting the leading contributors to fatal crashes.

“The Government will introduce workable legislation to enable roadside drug testing, review fines for traffic offences, and review the vehicle regulatory system to better manage the safety performance of the vehicle fleet.”

The Government will not be continuing with a blanket approach to speed limits. Instead, there will be a focused approach on improving road safety by building safer infrastructure, investing in safer drivers, and requiring safer vehicles.

“Investment in infrastructure to reverse recent speed limit reductions will be prioritised, where safe to do so. This includes the Waka Kotahi NZ Transport Agency increasing speed limits to 110km/h on roads engineered to that safety standard,” Brown said.

To balance the transport budget, the Government will increase Motor Vehicle Licencing Fee in 2025 and 2026 as well as increases to the Fuel Excise Duty and RUC in January 2027, 2028, and 2029.

“I expect the NZTA to consider different ways of funding and delivering major transport investments, ensuring they make efficient use of every dollar spent,” Brown said.

“This will likely include Public Private Partnerships (PPPs), increased use of tolling, ‘Build, Own, Operate, Transfer’ equity finance schemes, and value capture, to generate additional revenue and deliver infrastructure in a more efficient manner.

“Alongside the draft GPS, we are signalling several system reforms, including shifting to a 10-year National Land Transport Programme, progressing legislation on time of use charging, and moving the whole vehicle fleet to RUC.”

The draft GPS did not put a dollar figure on the new roads. NZ Transport Agency Waka Kotahi costings obtained by the Herald showed the roads could cost twice as much as National had budgeted for them during the election, leaving the party $24 billion short.

The road freight industry is welcoming the the draft GPS.

Ia Ara Aotearoa Transporting New Zealand has praised the plan’s focus on road repair and maintenance, building Roads of National Significance, and lifting growth and productivity.

“We’re pleased to see the Government following through on their election commitments to re-start the road building pipeline, focus on the dangerous and potholed condition of our streets and highways, and avoid road user charges and fuel excise increases in their first term,” said Interim CEO Dom Kalasih.

He said prioritising investments in roading activity classes is a necessity, given increasing pressure on the National Land Transport Fund.

“Over the past few years, our members were disappointed to see revenue from vehicle users diverted into unproductive investments in rail, coastal shipping and walking and cycling, while the condition of the roads continued to decline. It’s great to see Minister Brown committing to turning this around, despite challenging fiscal constraints.”

National Road Carriers Association said the plan is great news for the road sector and economy.

“This policy is geared towards getting the basics right. That means restoring the damaged road network so it is fit for purpose, continuing to look after it, and investing in the future roads we need to support a growing economy,” said CEO Justin Tighe-Umbers.

“A half billion dollar pothole prevention fund sends a strong signal that getting the basics right is critical. It needs to be well targeted and it’s pleasing it is ring-fenced so councils have to spend it on roading,” he said..

“Transport operators want to see the Government’s programme rolled out quickly so we can get fit-for-purpose roading. We’re looking forward to working with the Government to help get this underway.”

Meanwhile, the opposition has slammed the announcement.

The previous Labour government unveiled its own draft of the Transport GPS in August last year prior to the election, with then-minister David Parker revealing a spending proposal for $70b through to 203 – with $60b coming from the National Land Transport Fund (NLTF) paid through fuel and vehicle taxes, and $10b in Crown funding.

National campaigned on cancelling tax increases.

Labour leader Chris Hipkins said National’s decision to hike taxes in the second term was effectively a broken campaign promise by simply hiking taxes in a hypothetical second term.

“They’ve introduced a big hike through effectively a new tax through the increase to vehicle registration and they are proposing now to increase fuel tax by more than the previous Government proposing to increase it,” he said.

Green Party transport spokeswoman Julie Anne Genter said the plan was “extreme”.

“It’s doubling down on the failed approach of last century and it will lead to more emissions, more congestion and higher transport costs for all of New Zealand,” she said.

The plan marks a big pivot back towards roading and away from the former Government’s enthusiasm for public transport and cycling.

Consultation on the draft GPS for Land Transport closes on 2 April, with the final plan expected to be in place by 1 July.