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Appendix A: Land transport investment framework

Investment in the land transport network is made under the framework set out in the Land Transport Management Act 2003 (the Act), which requires the following documents to be issued.

Government Policy Statement on land transport (the GPS)

The GPS is issued by the Minister of Transport. It sets out what the Government wants land transport to achieve through investment in different types of activity (for example, road improvements, road policing and public transport). It must also set out how much funding will be provided and how this funding will be raised.

Each GPS is in place for a period of 6 years, but must set out the results that the government wishes to achieve over a ten year period from the allocation of funding. The GPS also enables the government to take a longer term view of its national land transport objectives, policies and measures.

The Crown land transport investment strategy sits within the GPS and must be reviewed every 3 years. It must state the overall investment likely to be made in the land transport sector over a period of 10 financial years. Components, such as the short to medium term results to be achieved from the allocation of funding, must look forward 6 years but may look forward up to 10 years. In addition, the strategy’s forecast funding ranges must extend out to 10 years.

More detailed information about the content and purpose of the GPS is laid out in Appendix B.

National Land Transport Programme (the Programme)

The New Zealand Transport Agency (the Agency) must develop a Programme every 3 years to give effect to the GPS. The Programme sets out the specific activities that will be funded to give effect to the GPS.

Regional Land Transport Plans

Regional Land Transport Plans are prepared by Regional Transport Committees and by Auckland Transport for Auckland. They list the planned transport activities for a region for at least 10 years and are used to prioritise applications for Government funding through the Agency. Regional Land Transport Plans must be issued every 6 years and reviewed every 3 years. Regional Transport Committees and Auckland Transport must ensure consistency with the GPS when preparing Regional Land Transport Plans. The linkages between these different documents are set out in Figure 4.

Figure 4: Linkages between land transport documents

 Figure 4 - Overview of Land Transport documents and relationship between each

 

Funding for land transport investment

While the GPS provides a national picture of land transport funding, the specific detail of how funding is invested is the responsibility of the Agency. The Agency’s investment in the land transport system is implemented using the National Land Transport Fund (the Fund) The Fund is main central Government funding source for the land transport system.

All fuel excise duties and road user charges go directly to the Fund. Additionally, a portion of motor vehicle registration and licensing income and other revenue is paid into the Fund, while a small subset of activity, such as funding for the SuperGold Card free off-peak public transport scheme, is supported directly from the Government’s consolidated fund.

The Agency, the New Zealand Police, and approved organisations such as regional, district and city councils receive funding from the Fund for the land transport activities that they deliver, such as the construction and maintenance of State highways and local roads, road policing, and public transport.

Figure 5: Funding flows

Figure 5 - Illustrates the income and expenditure of the Land Transport Fund 

Appendix B: Purpose, scope and required content of the Government Policy Statement (GPS)

A core function of the GPS is to set out the Government’s priorities, objectives and funding available for the land transport sector. A GPS describes:

  • the Government’s priorities for expenditure from the National Land Transport Fund (the Fund)
  • how it will achieve these through the allocation of funding ranges for different activity classes (for example, the maintenance of State highways, road policing and walking and cycling)
  • how much funding will be provided
  • how the funding will be raised.

Under the Land Transport Management Act 2003, the GPS must set out:

  • the results that the Crown wishes to achieve from the allocation of funding from the Fund over a period of at least 10 consecutive financial years (longer-term results)
  • the Crown’s land transport investment strategy
  • the Crown’s policy on borrowing for the purpose of managing the National Land Transport Programme (the Programme)
  • specify any additional expected funding for land transport activities, including any appropriations made by Parliament (subject to the Public Finance Act 1989).

It may also set out national land transport objectives, policies, and measures for a period of at least 10 financial years.

The GPS cannot specify particular projects to be funded, or levels of funding for individual interventions. It also does not cover port, airport, maritime or aviation investment, although it may impact on land transport links to port and airport facilities.

The Crown’s land transport investment strategy must:

  • link the amount of revenue raised from road users with planned levels of expenditure from the Fund
  • for the first 6 financial years of the GPS and any subsequent years that the Minister considers relevant, address the following matters:
      1. the short-term to medium-term results that the Crown wishes to achieve through the allocation of funding from the Fund
      2. the activity classes to be funded from the Fund
      3. likely revenue, including changes to the duties, fees, and charges paid into the Fund
      4. the identification of an expenditure target for the Programme
      5. a maximum and a minimum level of expenditure for the Programme for each year (subject to the ability to carry forward funds from the closing balance of the Fund from one financial year to a future financial year)
      6. an allowable variation between expenses and capital expenditure incurred under the Programme and the inflows received by the Fund
      7. funding ranges for each activity class
      8. the allowable reasons for varying the expenditure target identified under subparagraph (iv) when making funding allocation decisions
      9. a statement of the Minister’s expectations of how the Agency gives effect to the GPS
      10. the forecast funding ranges for each activity class for the period of 4 financial years following the first 6 financial years of the GPS
      11. the overall investment likely to be made in the land transport sector over a period of 10 financial years and the likely or proposed funding sources.

 

Appendix C: Summary of key policy direction (or strategy) documents

Connecting New Zealand (see www.transport.govt.nz(external link))

Connecting New Zealand contains the Government’s broad long term policy direction for the whole transport sector to assist investment decision making. It is a key document for land transport, and identifies economic growth and productivity, road safety and value for money as areas of focus.

Business Growth Agenda (see www.mbie.govt.nz(external link))

The Business Growth Agenda is focused on six key inputs that businesses need to succeed: export markets, capital markets, innovation, skilled and safe workplaces, natural resources and infrastructure. For transport, this means ensuring that the transport system enables the efficientand effective movement of people and goods from the farm gate, through our cities and to overseas markets. While infrastructure is important, the agenda is also focused on minimising the costs of transport on businesses and improving access to export markets.

National Infrastructure Plan (see www.infrastructure.govt.nz(external link))

The National Infrastructure Plan sets the vision that by 2030 New Zealand’s infrastructure is resilient and coordinated, and contributes to economic growth and increased quality of life. The plan provides the framework for infrastructure development over the next 20 years and is focused on ensuring that we make better use of existing infrastructure, and that new investment will meet long term needs.

New Zealand Energy Efficiency and Conservation Strategy 2011 – 2016 (see www.eeca.govt.nz(external link))

The New Zealand Energy Efficiency Conservation Strategy (NZEECS) contributes to the delivery of the Government’s energy priorities set out in the New Zealand Energy Strategy. The NZEECS sets 5-year targets and objectives to provide consistency and certainty for investment. In terms of transport, the objective is for “a more energy efficient transport system with a greater diversity of fuels and alternative energy technologies.”

Safer Journeys Strategy: New Zealand’s Road Safety Strategy 2010 – 2020

Safer Journeys is the Government’s road safety strategy to 2020. Safer Journeys establishes a vision of a safe road system increasingly free of death and serious injuries. Safer Journeys adopts the Safe System approach which involves safe speeds, safe vehicles, safe road use and safe roads and roadsides.

Intelligent Transport Systems (ITS) Technology Action Plan 2014-18 (see www.transport.govt.nz(external link))

The ITS Technology Action Plan outlines the Government’s strategic approach to encouraging and enabling intelligent transport system technologies in New Zealand. It covers ITS issues and opportunities and provides an outline of central Government’s ITS related work over the period of 2014–18.

Public Transport Operating Model (see www.transport.govt.nz(external link))

The Public Transport Operating Model sets the operating environment for the delivery of public transport. It is a fully contracted model with features designed to incentivise commercial behaviour, create efficient networks, encourage a partnership approach to growing patronage, and reduce the level of public subsidy. Under this model, public transport contracts will be awarded through a mix of direct negotiations and tendering. The legislative elements of the model are set out in Part 5 of the Land Transport Management Act 2003. The operational elements are in the New Zealand Transport Agency’s Procurement Manual and Guidelines for preparing Regional Public Transport Plans.

 

Appendix D: Glossary

Activity

Defined in the Land Transport Management Act 2003 as a land transport output or capital project, or both.

Activity class

Refers to a grouping of similar activities.

Active modes

Transport by walking, cycling or other methods which involve the direct application of kinetic energy by the person travelling.

Approved organisations

Organisations eligible to receive funding from the New Zealand Transport Agency for land transport activities. Approved organisations are defined in the Land Transport Management Act 2003 as regional councils, territorial authorities or a public organisation approved by the Governor-General by Order-in-Council.

Connecting New Zealand

A document that summarises the Government’s broad direction for the transport sector over the next decade.

Fuel excise duty

A tax imposed by the Government on fuel and used to fund land transport activities.

Hypothecation

The direct allocation of all income from a tax or charge (eg fuel excise duty or road user charges) to a particular type of activity, eg the National Land Transport Fund.

Land Transport Management Act 2003

The main Act governing the land transport planning and funding system.

Land transport performance and productivity

Performance and productivity measures differ by activity. Lead indicators include:

  • The speed-flow of a road
  • Tonnes per heavy vehicle kilometre travelled for freight
  • Costs per passenger kilometre for public transport
  • The number of deaths and injuries per vehicle kilometre travelled for safety
  • The sealing cost per lane kilometre for maintenance
  • Net benefits per dollar spent for all forms of investment.

Land transport revenue

Revenue paid into the National Land Transport Fund under the Land Transport Management Act 2003.

Major metropolitan areas

The following urban areas, as defined by Statistics New Zealand in Classification-Urban Area 2013 v2.0, which have significant areas with employment densities greater than 100 jobs per square kilometre. In New Zealand this includes:

  • Northern Auckland Zone
  • Western Auckland Zone
  • Central Auckland Zone
  • Southern Auckland Zone
  • Hamilton Zone
  • Tauranga
  • Porirua Zone
  • Upper Hutt Zone
  • Lower Hutt Zone
  • Wellington Zone
  • Christchurch
  • Dunedin

Maintenance

Repairing a road so that it can deliver a defined level of service, while leaving the fundamental structure of the existing road intact.

Motor vehicle registration and licensing fees

Motor vehicle registration and licensing fees are defined as land transport revenue and are a charge paid by vehicle owners and operators.

The Motor Vehicle Register established under the Transport (Vehicle and Driver Registration and Licensing) Act 1986, which is continued under Part 17 of the Land Transport Act 1998. It records the details of vehicles that are registered to operate on the road.

Ministry of Transport

The Government’s principal transport policy adviser that leads and generates policy, and helps to set the vision and strategic direction for the future of transport in New Zealand.

National Land Transport Fund

The set of resources, including land transport revenue, that are available for land transport activities under the National Land Transport Programme.

National Land Transport Programme

A programme, prepared by the Agency, that sets out the land transport activities which are likely to receive funding from the National Land Transport Fund. The National Land Transport Programme is a 3-yearly programme of investment in land transport infrastructure and services.

National Infrastructure Plan

A document which sets out the Government’s 20-year vision for infrastructure. It provides a common direction for how economic and social infrastructure is planned, funded, built and used.

New Zealand Transport Agency

The Government agency with statutory functions to manage the funding of the land transport system and manage the State highway system.

Public transport

Passenger transport infrastructure and services contracted by central and local Government.

Regional Land Transport Plans

Plans prepared by Regional Transport Committees that set out each region’s transport objectives and policies for a period of at least 10 years. This includes bids for funding from the National Land Transport Programme.

Regional Transport Committee

A transport committee which must be established by every regional council or unitary authority for its region. The main function of a Regional Transport committee is to prepare a Regional Land Transport Plan. Auckland Transport performs this function for Auckland.

Road controlling authorities

Authorities and agencies who have control of the roads, including the Agency, territorial authorities, Auckland Transport, the Waitangi Trust and the Department of Conservation.

Road user charges

Charges on diesel and heavy vehicles paid to the Government and used to fund land transport activity.

Roads of National Significance(RoNS)

Routes which have been nominated by Government as critical to improving economic productivity and growth. Currently there are seven projects on the RoNS programme, based around New Zealand’s five largest population centres. The focus is on moving people and freight between and within these centres more safely and efficiently.

State highways

A road operated by the Agency, as defined under the Land Transport Management Act 2003.

Total Mobility Scheme

Subsidised taxi services.

 

 

Appendix E: Relevant sections of the Land Transport Management Act 2003 (the Act)

Please note that these sections are excerpts rather than complete replications of the Act.

Relevant sections

Section 3. Purpose

The purpose of this Act is to contribute to an effective, efficient, and safe land transport system in the public interest.

Section 66. Minister must issue GPS on land transport

  1. The Minister must issue a GPS on land transport —
    1. before the start of the first financial year to which it applies; and
    2. that covers a period of 6 financial years.
  2. The Minister must issue a replacement GPS on land transport under subsection (1) before the current GPS on land transport expires. If a GPS on land transport that is issued under subsection (1) is replaced, the GPS on land transport that is replaced expires on the date that it is replaced.

 

Section 67. Preparation or review of GPS on land transport

  1. When preparing or reviewing a GPS on land transport, the Minister must —
    1. a. be satisfied that the GPS on land transport contributes to the purpose of this Act; and
    2. take into account —
      1. any national energy efficiency and conservation strategy; and
      2. any relevant national policy statement that is in force under the Resource Management Act 1991; and
    3. have regard to the views of Local Government New Zealand and representative groups of land transport users and providers.
  2. For the purposes of subsection (1), the Minister must, at least once in every period of 3 financial years, review the Crown’s land transport investment strategy required under section 68(1)(b).
  3. To avoid doubt, nothing in subsection (2) limits section 90(1).
  4. Before issuing a GPS on land transport, the Minister must consult the Agency about the proposed GPS on land transport.

 

Section 68. Content of GPS on land transport

  1. 1.The GPS on land transport must include —
    1. the results that the Crown wishes to achieve from the allocation of funding from the national land transport fund over a period of at least 10 consecutive financial years; and
    2. the Crown’s land transport investment strategy; and
    3. the Crown’s policy on borrowing for the purpose of managing the national land transport programme.
  2. The Crown’s land transport investment strategy—
    1. must link the amount of revenue raised from road users with the planned levels of expenditure from the national land transport fund; and
    2. must, for the first 6 financial years of the GPS on land transport and any subsequent years that the Minister considers relevant, address the following matters:
      1. the short-term to medium-term results that the Crown wishes to achieve through the allocation of funding from the national land transport fund:
      2. the activity classes to be funded from the national land transport fund:
      3. likely revenue, including changes to the duties, fees, and charges paid into the national land transport fund:
      4. the identification of an expenditure target for the national land transport programme for each year:
      5. a maximum and a minimum level of expenditure for the national land transport programme for each year (subject to the ability to carry forward funds from the closing balance of the national land transport fund for a financial year to a future financial year):
      6. an allowable variation between expenses and capital expenditure incurred under the national land transport programme and the inflows received by the national land transport fund:
      7. funding ranges for each activity class:
      8. the allowable reasons for varying the expenditure target identified under subparagraph (ii) when making funding allocation decisions:
      9. a statement of the Minister’s expectations of how the Agency gives effect to the GPS on land transport; and
    3. must specify the forecast funding ranges for each activity class for the period of 4 financial years following the first six financial years of the GPS on land transport; and
    4. must state the overall investment likely to be made in the land transport sector over a period of 10 financial years and the likely or proposed funding sources.
  3. The GPS on land transport -
    1. may set out national land transport objectives, policies, and measures for a period of at least 10 financial years beginning on the date that the GPS on land transport is issued; and
    2. must, subject to the Public Finance Act 1989, specify any additional expected funding for land transport activities, including (but not limited to) any money that Parliament may appropriate for the purpose.

 

Section 69. Status of GPS on land transport

To avoid doubt, a GPS on land transport is not—

    1. a direction for the purposes of Part 3 of the Crown Entities Act 2004; or
    2. a legislative instrument for the purposes of the Legislation Act 2012; or
    3. a disallowable instrument for the purposes of the Legislation Act 2012.

 

Section 70. Agency to give effect to GPS on land transport in respect of funding of land transport system

  1. The Agency must give effect to the GPS on land transport when performing its functions under subpart 1 of Part 2 in respect of land transport planning and funding.
  2. To avoid doubt, the GPS on land transport may not impose an obligation on the Agency to approve or decline funding for a particular activity or any combination of activities under section 20.

 

Section 71. Availability of GPS on land transport

As soon as practicable after issuing a GPS on land transport, the Minister must -

    1. present a copy of the GPS on land transport to the House of Representatives; and
    2. arrange for a copy of the GPS on land transport to be given to each of the following:
      1. the Secretary:
      2. the Agency:
      3. the Commissioner:
      4. every approved organisation:
      5. the Auckland Council; and
    3. make a copy of the GPS on land transport publicly available in accordance with section 108.

 

Section 11. Annual report on national land transport fund

  1. After the end of each financial year, the Agency must prepare an annual report on the national land transport fund.
  2. The annual report required under subsection (1) must be prepared in accordance with generally accepted accounting practice, and must include -
      1. an explanation of how the funding of activities or combinations of activities under the national land transport programme has contributed to the achievement of any outcomes, objectives or impacts set out in the relevant GPS on land transport
  3. The provisions of the Crown Entities Act 2004 in respect of the preparation, audit, presentation, and publication of a Crown entity’s annual report (including its financial statements) apply, with all necessary modifications, to the annual report required under subsection (1)

 

Other relevant sections

Section 14. Core requirements of regional land transport plans

Before a regional transport committee submits a regional land transport plan to a regional council or Auckland Transport (as the case may be) for approval, the regional transport committee must -

    1. be satisfied that the regional land transport plan -
      1. is consistent with the GPS on land transport;

 

Section 19E. Variation of national land transport programme.

If the GPS on land transport is amended under section 90(1), the Agency must vary the national land transport programme as soon as practicable if necessary to give effect to the amendment. Sections with particular relevance to regional land transport committees

Section 20. Approval of activities and combinations of activities

  1. In approving a proposed activity or combination of activities, the Agency must be satisfied that -
    1. the activity or combination of activities is -
      1. consistent with the GPS on land transport;
  2. When approving an activity or combination of activities as qualifying for payments from the national land transport fund, the Agency must be satisfied that the expenditure on the national land transport programme and any expenses associated with any borrowing undertaken in accordance with section 10(1)(b) in the relevant financial year will not exceed the lesser of —
    1. the maximum level of expenditure for the national land transport programme outlined in the GPS on land transport for that financial year and the actual or anticipated amount of the closing balance of the national land transport fund at the end of the previous financial year; or
    2. the sum of —
      1. the anticipated inflows to the national land transport fund in that financial year; and
      2. the actual or anticipated amount of the closing balance of the national land transport fund at the end of the previous financial year; and
      3. the allowable variation for that financial year specified in the GPS on land transport

 

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