This page contains questions and answers on the Land Transport Management Amendment Act 2013.
What legislation has the Land Transport Management Amendment Act changed?
The Land Transport Management Amendment Act (the Amendment Act) has amended the Land Transport Management Act 2003 (the Act). It has also repealed the Public Transport Management Act 2008 and incorporated its relevant provisions into the Land Transport Management Act.
When will the changes take effect?
The Land Transport Management Amendment Bill had its third reading in Parliament on 4 June 2013, and received Royal assent on 12 June 2013.
The majority of the Amendment Act’s provisions came into force on 13 June 2013.
Some regional councils have already started to implement the elements of the Public Transport Operating Model which did not require legislative change.
Who was consulted on the provisions in the Amendment Act?
The Ministry of Transport discussed changes to the Land Transport Management Act with stakeholders, including Local Government New Zealand, the Automobile Association of New Zealand and the Road Transport Forum. The Ministry also had informal discussions with regional councils in Auckland, Wellington, Waikato, Bay of Plenty and Canterbury.
The Public Transport Operating Model was developed jointly by a group of key stakeholders (including government, regional councils and the Bus and Coach Association) involved in the delivery of public transport services, employing a partnership approach from the start.
Planning and Funding
Amendments have been made to the Act’s planning and funding framework to make it more straightforward, less prescriptive, and to reduce compliance costs and simplify processes.
The changes enable central government to have a greater ability to guide the sector, and allow regions more flexibility in how to approach their transport planning responsibilities.
The changes also enable the NZ Transport Agency to get better value for money and lower compliance costs when allocating transport funding. This will assist the government to achieve its goal for transport to contribute to New Zealand’s economic productivity.
The changes to how some activities, related to the protection of land transport revenue, are funded will ensure these costs are covered in a way that is fairer and more transparent. These changes will help to protect land transport revenue and maintain the overall integrity of the system.
What is the new purpose of the Act and why was it changed?
The Act’s purpose has been changed. The long list of economic, social, cultural and environmental considerations has been removed from the purpose in order to focus on the effectiveness and efficiency of public expenditure in advancing socio-economic outcomes. The revised purpose is:
“to contribute to an effective, efficient and safe land transport system in the public interest”
The new purpose is simpler, clearer and easier to understand and interpret. It will reduce compliance costs and simplify processes through the reduction in the criteria needed to be considered in decision-making.
How and why has the Act’s decision-making framework been changed?
The Act previously contained a long list of decision-making criteria. These were primarily articulated through the Act’s purpose and five transport objectives, and were designed to influence the content of national and regional planning documents and the types of activities funded and delivered. However, repetition, inconsistency and ambiguity in the application of the Act’s decision-making criteria created uncertainty and encouraged bureaucracy.
The Act’s original decision-making criteria have been replaced to focus decision making on effectiveness, efficiency and safety, as illustrated in the table below.
|Original decision-making criteria||New decision-making criteria|
What changes have been made to national and regional transport planning frameworks and what will these changes achieve?
The five former national and regional transport planning documents have been combined into three main documents.
At a national level:
- the Government Policy Statement on Land Transport will set out central government’s outcomes, objectives and impacts for the land transport sector for at least 10 years
- the Statement is to be issued by the Minister of Transport at least once every six years. It will contain the Crown’s Land Transport Investment Strategy, which will be reviewed at least once every three years
- the National Land Transport Programme is largely unchanged.
At a regional level:
- the Regional Land Transport Plan will set objectives, policies and interventions for at least 10 years
- the plan will be issued every six years, and reviewed every three years.
These arrangements will allow transport planning to better integrate higher-level strategic planning with lower-level tactical planning, and will reduce the amount of time regions spend in consultation over minor activities.
The changes will also enable Regional Land Transport Plans to have an outlook for a timeframe suited to their region.
How have the Act’s consultation processes been changed?
The Act’s consultation requirements have been made less prescriptive by:
- a move to a six-yearly consultation process for the regional transport planning document
- making use of the Local Government Act’s special consultative procedure discretionary
- reducing to a minimum the extent to which the Land Transport Management Act modifies Local Government Act 2002 processes
- removal of other specific requirements, particularly the prescriptive list of agencies to be consulted.
The changes will reduce consultation churn and allow regions to tailor the engagement process to specific situations.
What changes have been made to regional transport committees and why were these changes needed?
The amendments made changes to the membership of Regional Transport Committees.
Membership on Regional Transport Committees, which will prepare the new Regional Land Transport Plan, now consists of agencies that make a funding contribution: local authorities and the New Zealand Transport Agency.
Formerly, Regional Transport Committees included non-voting representatives to reflect the various objectives in the Act’s decision-making criteria. This requirement meant that some committees had more than 20 members, which often resulted in cumbersome processes.
The changes give committees the flexibility to decide who they need to hear from rather than their engagement being predetermined by legislation. The changes also confirm the principle of elected representatives making decisions, after consulting with stakeholders.
How will the planning and funding changes work under Auckland’s transport governance framework?
Auckland Transport will be responsible for developing the Auckland Regional Land Transport Plan. Its Board will be the Regional Transport Committee for Auckland with power to approve the Regional Land Transport Plan. The Board will include two members nominated by Auckland Council.
Auckland Transport will have to give effect to Auckland Council’s Long-Term Plan and its Statement of Intent, and must act in a way that is consistent with any other strategy or plan as determined by Auckland Council, including Auckland’s spatial plan or any funding agreement.
Why has the provisions for the regional fuel tax been removed?
A regional fuel tax would not be fair and equitable as the costs for one region would almost certainly be spread across consumers in all regions over time. Fuel is sold within a national market, with keen competition among suppliers in the main urban areas. Imposition of a regionally based tax would probably lead to price spreading as suppliers look to secure a competitive advantage or protect market share. Regional fuel tax is also an expensive way to collect tax, with the cost largely falling upon the productive sectors of the economy.
How have the Land Transport Management Act’s borrowing provisions been changed?
Prior to the amendments, the Act allowed the Crown or the NZ Transport Agency to only borrow for the National Land Transport Programme for cash flow management. This is similar to how households use an overdraft to ensure unforeseen costs are always met.
The Act now allows the NZ Transport Agency to borrow against National Land Transport Fund revenue to fund future projects, should circumstances suggest there is a good case for borrowing and it is prudent to do so.
The NZ Transport Agency still needs to get agreement from the Minister of Transport and the Minister of Finance under the Public Finance Act 1989 and Crown Entities Act 2004 before undertaking any borrowing.
What changes have been made to the way administrative activities are funded?
The Ministry of Transport and the NZ Transport Agency carry out a number of activities related to the protection of the land transport revenue base. These activities include:
- managing fuel excise duty refunds
- managing road user charges refunds, and assessing outstanding road user charges
- the Ministry of Transport’s land transport revenue forecasting and strategy work.
The Act now allows these costs to be met from land transport revenue rather than administration fees (as previously required).
These changes follow an independent review of the administration fee portion of charges associated with road user charges and the registration and annual licensing of motor vehicles. The review found that under the former system, administration fees did not align well with the costs they were intended to recover and that in some cases the activities provided no direct benefit to the fee payer.
Tolling and public private partnerships
Prior to the amendments, the Land Transport Management Act contained a number of confusing and complicated assessment and consultation requirements that had to be met before the Minister of Transport could approve a tolling scheme. In addition, the Act’s concession agreement regime caused confusion because it focused on ministerial oversight of arrangements that involve leases of land, and was silent on other types of public private partnership that did not involve leases of land.
A review of these provisions showed that making these more straightforward could reduce potential barriers to their use while maintaining a robust approval process.
What changes were made to the Act’s tolling and public private partnership provisions?
There are a number of statutory tests that have to be satisfied before tolling and public private partnerships can be approved and prior to the amendments, many of these were duplicated elsewhere in the Act.
The changes to tolling will simplify the process of approving tolling and replace the previous requirements with a high-level test requiring tolling proposals to be efficient and effective.
Toll operators will no longer have to provide one method of payment that does not collect personal information, as this requirement has proven impractical. Privacy will be safeguarded by use of the Privacy Act 1993, the requirement for there to be an untolled alternative route, and a requirement that personal information will only be held for as long as it is needed to fulfil a legal duty.
The amendments to the Act enable the existing toll road in Tauranga, Route K, to be brought under the Act’s toll road regime, enabling consistency between Route K and other toll roads.
The changes to the Act’s public private partnership provisions will simplify the process of approving public private partnerships by making use of the Act’s procurement regime. This will ensure there is a more straightforward process which will reduce potential barriers to the use of public private partnerships.
Why does the Act no longer provide for an anonymous method of payment for tolls?
The amendments have removed a lot of administrative processes in the Act that were thought to add value when they were introduced in 2003 but, upon re-examination, mainly add complexity. The anonymous method of payment is one example of such a measure.
There are strong privacy safeguards in place under the Privacy Act 1993. In addition, under the Act, there must always be an alternative, untolled route available to road users. An anonymous method of payment would have to be very low cost to justify the complexity involved in implementation, particularly under modern free-flow tolling systems.
Providing on-road payment (such as toll booths), required for anonymous payment, is not consistent with the service levels we want to see from free-flow tolling schemes like the Northern Gateway, or the monitoring needed to keep the toll road operating safely and efficiently. The NZ Transport Agency and Ministry of Transport have consulted with the Office of the Privacy Commissioner on the proposed amendment. While the Office considers that an anonymous method of payment is desirable, the Office agrees that this may not be achievable at a reasonable cost.
The changes also limit the circumstances in which personal information can be retained by the toll operator.
Do the changes mean there will be more tolling on New Zealand roads?
Not necessarily. The changes simply ensure that onerous approval processes do not stop tolling where it is sensible to do so. However, tolling schemes still need to go through robust approval processes, and the requirement to have a feasible, untolled alternative route remains in the legislation.
Public Transport Operating Model
Under the Transport Services Licensing Act public transport operators could decide what services they wished to provide commercially (i.e. without government subsidy). Operators could register individual trips (e.g. profitable peak-period trips) on a route as commercial services, resulting in regional councils needing to fill the gaps with contracted subsidised services. It also allowed operators to engage in strategic registrations on certain routes which created barriers to entry.
This had a number of flow-on effects, including:
- low level of competition for tenders
- little incentive for operators to keep costs down and improve the quality of services
- poor relationships between operators and councils
- difficult planning processes
The Public Transport Management Act 2008 was meant to address these problems, but created new issues that undermined bus and ferry operators’ willingness to invest in public transport assets.
What is the Public Transport Operating Model?
The Public Transport Operating Model is the new framework for building a long-term public transport public-private partnership between regional councils and public transport operators. This will be achieved through collaborative planning, joint investment and risk and reward sharing.
The model recognises that both parties have a stake in, and are reliant on each other, for delivering affordable urban bus, ferry and rail services that people want to use. As a result it was developed jointly by key stakeholders (government, regional councils and operators) involved in the delivery of public transport services, employing a partnership approach from the start.
What parts of the public transport operating model are in the legislation?
The key parts of the Public Transport Operating Model included in the Land Transport Management Amendment Act are:
Five principles, which reflect the principles and objectives that underpinned the development of the Public Transport Operating Model, will guide relevant decision-making around planning and operating public transport. These principles are:
- Regional councils and public transport operators should work in partnership and collaborate with territorial authorities to deliver the regional public transport services and infrastructure necessary to meet the needs of passengers.
- The provision of public transport services should be co-ordinated with the aim of achieving the levels of integration, reliability, frequency, and coverage necessary to encourage passenger growth.
- There should be access to public transport markets for competitors in order to increase confidence that public transport services are priced efficiently.
- There should be incentives to reduce reliance on public subsidies to cover the costs of providing public transport services.
- There should be transparency in the planning and procurement of public transport services.
- All public transport services to be contracted in a region will need to be arranged into ‘units’ and identified in a Regional Public Transport Plan.
- Units must be provided under exclusive contract to the regional council.
- A ‘unit’ is defined as all the timetabled public transport services operating on a route (or routes) identified in a regional public transport plan.
Regional Public Transport Plans
- A region that is contracting public transport services must adopt a new Regional Public Transport Plan by no later than 30 June 2015.
- Regional Public Transport Plans will include information on:
- the network of public transport and other services that the regional council proposes to provide
- the arrangement of public transport services (except exempt services) into units
- the objectives and policies relating to these services
- the contracting procedure and how procurement of units will be phased over time.
- Some services will be exempt from operating under contract and will need to be identified as an ‘exempt service’ in a register held by the relevant regional council.
- Exempt services include:
- inter-regional bus and rail services
- public transport services operating within a region that operate without a subsidy for the provision of the service, and are not identified in a Regional Public Transport Plan as integral to the public transport network
- public transport services operating within a region that is not required to have a Regional Public Transport Plan
- existing (as at 30 June 2011) fully commercial niche bus and ferry services
- services specified as exempt by an Order in Council.
- A regional council can decline registration of an exempt service only if certain grounds apply (e.g. financial impacts on units or traffic management issues).
- Exempt services may be described in a Regional Public Transport Plan, but are not subject to the objectives or policies that apply to units.
- It will be an offence to operate services that are not exempt or contracted as part of a unit.
- An order in council can be made (on the recommendation of the Minister of Transport) specifying a service is exempt, or requiring an exempt service to be provided under contract. Criteria apply.
The Public Transport Operating Model is largely a contracting model, with the legislation intended to be enabling and high level. In addition to changes to the Act, administrative changes will be required to implement the Public Transport Operating Model. Changes to the NZ Transport Agency procurement manual and other guidance released by the NZ Transport Agency will be made.
Why has a new set of principles been added to the new part 5 of the Act?
The Transport and Industrial Relations Select Committee recommended five principles for planning and operating public transport services be included in part 5 of the Act, which concerns the regulation of public transport.
These principles will guide relevant decision-making under the new part 5. Their inclusion in the Act ensures that the principles and objectives that underpinned the development of the Public Transport Operating Model become embedded in the planning and operation of public transport services.
What are public transport services?
In relation to the new part 5 of the Act, public transport services are defined as the carriage of passengers for hire or reward on all modes of transport (apart from air transport) that are available to the public generally.
The definition excludes services that do not run to a schedule, taxi and shuttle services, primarily tourist operations, and services to and from a particular event. Ministry of Education provided school bus services are also excluded.
Will all public transport services be subject to the legislation?
Yes. However, public transport services that are not an integral part of a region’s urban public transport network will be exempt from operating under contract to the regional council, and can face direct competition from other exempt services. Exempt services are unsubsidised (although may receive reimbursement for user subsidies under the Super Gold Card scheme).
Regional councils will need to establish a register of exempt services. Operators of exempt services must provide information to the relevant regional council (including on routes, stops and timetables). This information is needed for effective management of traffic and transport networks.
Is metro rail included in the legislation?
Yes. Rail was previously regulated under the Public Transport Management Act 2008, together with other public transport services such as buses and ferries. These provisions have been carried over into the Land Transport Management Act 2003. Rail public transport services will either become units or exempt services, this means:
- Inter-regional commercial rail public transport services are now exempt services.
- Contracted rail public transport services (metro rail services) will become units.
Metro rail public transport services are already provided under exclusive contract to Auckland Transport and the Greater Wellington Regional Council, with a standardised fare structure.
Commercial inter-regional rail public transport services were registered as commercial services under the Public Transport Management Act 2008. These services will be moved to the relevant regions’ exempt services register(s).
Other passenger rail services in New Zealand, such as the Taieri Gorge Railway and Christchurch trams, are outside of the framework of part 5 of the Act as they are not scheduled services, or primarily provide a tourism experience.
Why will some services within a region’s urban public transport network be exempt?
The Act makes some existing bus and ferry services, such as the Waiheke Island ferry, Wellington’s Airport Flyer and Auckland’s Airbus service exempt services.
These services are exempt because they are fully commercial services and are considered to be ‘niche’ services with their own specific fare structure.
Exempt services are fully commercial and, in contrast to contracted services, are open to competition from other exempt operators. The Act includes a mechanism that allows regional councils to seek to bring an exempt service under contract, should there be issues with competition.
Exempt services are not required to provide information on patronage and fare revenues to the regional council. However, it is common for niche bus and ferry operators, operating within a region, to provide information on fares and timetables (which is published on the regional council’s public transport website), and also participate in initiatives such as real time information and the Auckland integrated fare system. We have no reason to expect this situation will change now they are exempt services.
What does the Act require of regions transitioning to the Public Transport Operating Model?
Now the Amendment Act has come into force, a regional council that is contracting public transport services must adopt a new Regional Public Transport Plan in which services are arranged into units.
This is intended to allow operators and others to be consulted on the configuration of units and contracting requirements before the units are contracted.
A Regional Public Transport Plan, must be adopted by 30 June 2015, but may be adopted earlier.
Regional councils also need to comply with any relevant NZ Transport Agency’s guidelines (e.g. the Public Transport Plan Guidelines).
The Act makes it unlawful to operate public transport services that are not contracted as part of a unit identified in a Regional Public Transport Plan. There are transitional provisions that apply to existing services. Exempt services are not subject to this requirement as they are not contracted to the regional council.
What should be done where contracts are due to expire?
Regions with contracts due to expire after the Act comes into force should consider options such as negotiating an extension of the contract with the incumbent operator, or early adoption of a Regional Public Transport Plan. The NZ Transport Agency is able to assist regions with these options.
The Act also has a transitional mechanism that could be used for a specified period to allow a region to contract new services before it has adopted a new Regional Public Transport Plan. This mechanism will be considered on a case-by-case basis, where other viable options (such as extending contracts) have been exhausted, and where the NZ Transport Agency has no value for money concerns.
What impact do the amendments have on taxis and shuttles that are financially assisted?
The amendments make no significant changes to the regulation of these services under the Act. The amendments carried over relevant provisions from the Public Transport Management Act 2008 relating to any taxi or shuttle services that the region proposes to financially assist.
What is the relationship between the Regional Land Transport Plan and the Regional Public Transport Plan?
The Regional Public Transport Plan is required to be ‘consistent with’ the Regional Land Transport Plan, although it may include a matter outside the scope of the Regional Land Transport Plan. The diagram below outlines the nature of the relationships between the planning documents identified in the Act.
What has happened to the Public Transport Management Act 2008?
The Public Transport Management Act 2008 has been repealed with the relevant provisions amended as necessary, and incorporated into the Land Transport Management Act 2003.
The Public Transport Management Act and the Land Transport Management Act are sufficiently aligned. Having one piece of land transport management legislation, with one purpose, means councils and operators are now working to one Act rather than two.
How will this piece of legislation affect public transport services for bus, ferry and rail users on a day-to-day basis?
The change in the law will have no immediate effects for bus, ferry, and rail users. Over time, public transport users should see better integration of services, better quality of buses and overall more focus on customer needs.