The government will drive improved performance across the transport system by focusing on three areas: economic growth and productivity, value for money, and road safety.
The government seeks to invest wisely in the areas of the transport system that will bring the greatest benefits to New Zealand. To drive the economy forward, the government has three key areas of focus across the transport system:
Economic growth and productivity
Transport has an important role to play in achieving the government’s overall goal for New Zealand. The transport system connects us both domestically and internationally. It links employees, employers and businesses together, and enables individuals to access services.
Transport is a critical part of the supply chain that delivers goods to both domestic and international markets, and meets the travel needs of our international tourists. Better transport infrastructure and services can lower costs and increase accessibility for businesses by expanding markets and improving access to suppliers. The quality of infrastructure, and how comprehensive the transport network is, will influence the role transport plays and its contribution to the functioning of a successful competitive economy.
Transport infrastructure will become an increasingly influential factor in urban areas as the population and urban density increases in New Zealand. But as our economy grows, so do freight tonne-kilometres, and at a faster rate (Figure 13).
We need to make sure that the arteries of our cities do not become clogged and that access to our key rail hubs, air and sea ports remain free moving, and that the corridors along our key supply chains also remain protected from congestion. In some cases, the government is taking a lead infrastructure approach to land transport investments, leading improvements in capacity ahead of them being required to encourage economic growth. In doing so, the government is being careful to respond to predicted incremental changes in transport demand and trends, rather than seeking wholesale mode shift for non-economic reasons. The latter would lead to a deadweight economic loss by encouraging inefficient transport choices.
The government will focus on ensuring the price of using different modes matches actual costs as much as possible to ensure that demand for different modes reflects the economically efficient choices of individual stakeholders. In the freight area, this means KiwiRail covering its own costs from its freight customers, and roading developments being paid for by road users through the fuel excise and road user charges system, rather than from general taxation.
However, maximising transport’s contribution to economic growth and productivity requires more than just central government investment in the transport system. Considered, clearly-signalled funding, planning and land-use decisions from central and local government will encourage the investment plans of private transport operators. This will support the integration of multiple modes, efficient supply chains, high-quality infrastructure, and a safe and effective transport sector.
The development of long-term plans, such as the Bay of Plenty SmartGrowth strategy, which was developed by the regional community, can be a good tool to send clear signals to the market. Auckland is currently developing its own spatial plan which will set out a 30 year vision for the region and, through a collaborative approach, address a range of issues including the existing and future land use pattern — residential, business, rural production, and industrial.
1The Eddington Transport Study, Main report, Sir Rod Eddington December 2006, page 3.
Value for money
It is essential that we get the best possible value from the $3 billion of taxpayers’ money that the government invests in the transport system each year through the National Land Transport Fund — or around $36 billion over the next 10 years. This also applies to investments that the government makes outside of that, for example, for metro rail infrastructure in Auckland and Wellington.
Improving performance and productivity right across the public service is a high priority for the government, including the transport sector. The government needs to be confident that the transport sector (central and local government in particular) is delivering the right infrastructure and services to the right level and for the best possible price. This includes providing integrated transport services that allow more seamless options for transport consumers. Achieving this requires a greater focus — not only on what infrastructure and services are provided — but also on how activities and projects are delivered, how assets are managed and the extent to which costs are minimised over time.
New Zealand has made substantial progress over the last 20 years, with the road toll having fallen from 729 in 1990 to 375 in 2010. The improvements since 1990 are even better than the bare numbers suggest, as they have been achieved over a time when the number of vehicle kilometres driven each year has grown. However, our road toll remains too high, and our young people (15–17 years) have the highest road death rate in the Organisation for Economic Co-operation and Development (OECD).
Road crashes carry a high cost — in terms of loss of life, serious injuries sustained, and impacts on families. Road crashes also have an economic impact. The total social cost of road crashes is estimated to be $3.7 billion per annum. Reducing the cost of road crashes is a key priority for the government.
Both the government and our communities are demanding a safer road transport system. The government released the Safer Journeys road safety strategy in 2010 and adopted a vision of ‘a safe road system that is increasingly free of serious injury and death’.
The safety of the road system is also important to our productivity and the daily operation of our businesses, through its impact on the movement of goods, and people, to and from as part of their employment.