Foreword - Government Policy Statement

The government’s priority for its investment in land transport is to increase economic productivity and growth in New Zealand.  Quality land transport infrastructure and services are an essential part of a robust economy.  They enable people and businesses to access employment and markets throughout the country and link them to international markets through the nation’s ports and airports.  Investing in high quality infrastructure projects that support the efficient movement of freight and people is critical.

The Government Policy Statement on Land Transport Funding (GPS) is the main guiding document by which the government can ensure that the land transport funding system focuses on the priority of generating economic growth and productivity.  The GPS aligns investment in the land transport sector more closely with this priority.  Further, the GPS closely reflects the modal choices that are realistically available to New Zealanders.  Approximately 70 percent of all freight in New Zealand goes by road, and 84 percent of people go to work by car, truck or motorbike, so we need good roads to move freight and people.  The government supports some mode shift over time, especially in our major cities of Wellington, Auckland and Christchurch, but considers that this should not be accelerated to the point where the outcomes are economically inefficient.

Investing in economic growth and productivity is particularly important at this time, as the global economic downturn is impacting on New Zealand’s economy.   However, targeted investment in land transport, along with the government’s other initiatives to improve economic growth and productivity, will ensure that New Zealand is well placed to take advantage of improvements in the global economic situation.   Well-targeted investment will also provide jobs and inject money into communities, which will assist New Zealanders get through this difficult time.

In keeping with a focus on economic growth and productivity, the GPS signals the government’s expectation that funds within activity classes will be allocated in the most economically efficient way possible.  The government is committed to achieving value for money and there is considerable room for getting more from government expenditure on land transport investment.

A key component of the GPS that supports economic growth and productivity is to maintain investment in new and improved State highway infrastructure at 33 to 34 percent of the total fund over the ten-year horizon of the GPS.  Based on current forecasts this will provide approximately $10.7 billion over the next ten years for State highway activity.  The State highway network represents only 11.6 percent of the total road network, yet accounts for almost half of all kilometres driven each year by New Zealanders.  The network links New Zealand’s town and cities and provides access to key transport hubs such as ports and airports.  The heavy use of the State highway network highlights its importance for moving freight and people.

Investment in local roads and public transport services is also important to economic growth and productivity.  Quality local roads and public transport services are essential to maximise the efficiency of the transport network.  The GPS ensures that investment in these activities is maintained at a high level, with approximately $635 million for public transport services and $550 million for new and improved local roads being made available over the next three years. 

The GPS signals the government’s intention to fund capital investment in Wellington rail infrastructure directly through Crown funds rather than the National Land Transport Fund.  This will free up an extra $258 million over the next two years for State highway activity across New Zealand. The current arrangements for funding rail infrastructure are complicated and in order to be consistent with the principles underpinning hypothecation of road revenues, road users’ funds should be used for road activities and/or where road users benefit.  As road users benefit from reduced road congestion, public rail transport services will continue to receive funds through the National Land Transport Fund.  Over time this approach will reduce road related costs and contribute to the most efficient use of land transport funds.

The development of a National Infrastructure Plan is a key component of the government’s economic plan. The GPS and the resulting National Land Transport Programme will feed into the National Infrastructure Plan, which will signal possible additional funding options to further accelerate infrastructure investment.  The GPS also notes there are a number of Roads of National Significance in the vicinity of our five largest urban centres.  Further development of these will have national benefits to the roading network and to national economic development.

I am confident the GPS provides the right signals to ensure that the land transport network makes a positive contribution to New Zealand’s economic well-being and assists in achieving the priority of economic growth and productivity.  Through well targeted investment we can support New Zealanders during these difficult economic times and lay the foundation for a rapid recovery when the global economy grows again.

 
Hon Steven Joyce
Minister of Transport
May 2009


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