Land Transport Management Amendment Bill

Hon MAURICE WILLIAMSON (National—Pakuranga) Link to this

With regard to this opportunity of debating a bill to amend the principal Act, the Land Transport Management Act 2003, I could not let the opportunity go past to test just whether the Government is genuinely serious about welcoming public-private partnerships—that is, private-sector participation. When I have looked at projects overseas on a regular basis, from the Millau Bridge in the south of France to the M6 Toll in Birmingham to the M7 in Sydney to the ConnectEast project in Melbourne, I have seen that those projects have all had a concession period in the order of 50, 60, or sometimes 65 or 70 years. The private funders have all said to me that the legislation in New Zealand is so restrictive, at 35 years maximum, that every time they try to configure up a funding proposal, they find that they just simply cannot make the return in that time frame.

Thirty-five is not the absolute number, because if we read the principal Act, it states that the term of a concession agreement must not exceed 35 years, and the Minister gets to set what that time is. It may be that the Minister chooses 25 or 35 years, but I would like to remove that artificial limit of 35 years, so I have put forward an amendment to the principal Act that changes the figure from “35” to “70”. I stress again to members that that is just a maximum. It will be a real test as to whether Labour really does want the private sector involved in public-private partnerships, because that would be the one issue that I have had raised with me as being the barrier, more than any other, by the financial institutions. If 35 years has to be the limit to recover one’s net investment in the public-private partnerships, then it just cannot work. I would say to the Minister again that she should look at any of the very successful public-private partnerships that we know about, including some that I have seen around the place—certainly in New South Wales, Victoria, Britain, France, and other places—and she will find that none of them have been able to be configured up with a concession period of 35 years. That is the reason for the amendment I am putting forward in my name.

I will come back to the eastern suburbs of Auckland, because that poses an important question. People ask me where, if they are to pay a regional petrol tax, their double-track, electrified railway line is. They ask where their dedicated busway is. Where are their options to use public transport? The people of Invercargill do not want to pay for all of these things, but why should the people of the east Auckland area pay for all these things when there is no railway line in sight for them? There probably never will be, because of the economics of trying to build a new railway passenger system and so on. I think that those people have a genuine issue.

The next issue I would raise with the Minister, which is quite an interesting one that needs some work done on it, is to do with the fact that the power has now been granted to the Secretary for Transport to designate what a State highway is. One of the problems we have had in this country for a long time—and I acknowledge that it was the case under both National and Labour, so I am not getting at anybody—is that the designation between either State highway or local road is too much of a blunt instrument. I think that we probably need to go to, say, a three or four-tier category, like a number of other jurisdictions do. We should have roads of national importance, roads of regional importance, roads of strategic importance, and then local roads. I find it bizarre that in my electorate, when I look out of my electorate office each day, I look out on to the six-lane Pakuranga Highway, which carries 64,000 vehicles per day. I want to stress that number, because it is more vehicles per day than any other road other than the motorway—64,000 vehicles per day; more vehicles than any road other than the motorway. Yet that is a local road, funded, administered, and operated by Manukau City and its ratepayers. I wonder why that is, when I can look at another road elsewhere, even in Auckland, that, because it has the designation “State Highway” in front of it, is 100 percent funded from petrol tax and road-user charges because people were lucky enough to get that designation.

I think that if there is one thing we will need to do in the future, and I know that other jurisdictions have done it quite well, it is to try to segment the various roads. We will have to say that this is a road of national importance and it will be 100 percent, this is a road of regional importance and it will be 75:25, and this is a road of local importance and it might be 50:50, as we do. It may be that we could even get down to some small roads that are more the property developer and local territorial authority’s responsibility to be funding the vast bulk of, but I would just stress again that I am not sure whether giving the Secretary for Transport this power is the right thing to do. I know that when Transit used to do the complete review of what was designated in the State highway system each year, there were all sorts of pressures on people. Some of the local authorities wanted their roads out of their books and they wanted them moved to being State highways, because if they could get that, then those roads would be 100 percent funded by the State. Others were always on about and asking why this road was a State highway and another road was not. This legislation will confer to the Secretary for Transport quite strong powers.

The last thing I want to do is to mention what I think is grossly unfair, and I hope that at some stage this matter can be reconsidered, and that is the representation on the regional transport committees by road users. It was brought to our attention along the way by the Road Transport Forum and by the Automobile Association that their people pay for all of this, and I guess that is exactly right. It is the motorcar driver and the truckdriver who pay either the petrol tax or the road-user charges, and, therefore, they should seriously have a voice. It should not have to be a crowded-out voice or multiple voices, where they can win the day by their numbers, but I would have thought that the old “no taxation without representation” principle really, really should have kicked in here. Yet the regional transport committees—we are dropping the word “land”, I remember—are still not acknowledging that those people have a right to both be represented and have voting rights. Yes, they have to be consulted, but so too does Uncle Tom Cobbleigh and everybody else. If we look at the consultation list I cannot think of anybody who will not be consulted along the way; in fact, we probably should have put in an amendment stating that anyone who was not consulted will be anyway. But these people are the ones who pay the piper. I think that the Automobile Association and the Road Transport Forum represent very well the vast bulk of either motorcar drivers or commercial road users, and I would have thought that letting them have a place at the table of the regional transport committees that are setting regional strategies would be the right thing to do.

I said that that would be my last point, but I would point out one other problem I have with regional transport programmes. Something like the Kōpū Bridge is in the Waikato zone. I know that for the Waikato region, Kōpū Bridge is not its high priority. It is not its highest priority; there are lots of things to do with the Waikato Expressway and lots of things to do with other roads around Hamilton, Cambridge, Huntly, and Ngāruawāhia. But the biggest priority of the Kōpū Bridge rests with people from Auckland and with people from the Coromandel who are trying to get to and from Auckland. We have people living on one side of the region who are trying to get through that bottleneck to the other side, and when they are locked, blocked, and stopped, it is by far a major priority. But when it comes time for the region where that located point is to set its priorities, it does not. So, again, one of the issues we have about informing the National Land Transport Programme is that it should be very careful not to be driven solely by the regional plans. Thank you, sir.

Hon DAMIEN O’CONNOR (Minister of Tourism) Link to this

I move, That the question be now put.

DAVID BENNETT (National—Hamilton East) Link to this

When we look at the Land Transport Management Amendment Bill that is before us we see that it includes the regional petrol tax, which is the part of the legislation that everybody has been focusing on. I will come back and focus on that as well, but, first, I want to draw the attention of the Committee to another part of the bill, which is to do with representation on regional transport committees. This legislation provides for a certain number of Government appointees to represent certain areas. I believe there are five such appointees to represent the areas mentioned in the New Zealand Transport Strategy, and there is to be formal representation on each transport committee to that effect.

The problem with that is that if there is a full complement of appointees, which would be the norm, then there is the potential that in some regions the number of local government representatives may be fewer than the number of Government appointees on the regional committee. There would be the potential, if, say, a busy mayor did not attend a meeting, for the Government-appointed officials on the committee to be in the majority; the elected representatives from that region would not have a majority at that meeting. I believe that at the Transport and Industrial Relations Committee we had the numbers on the potential for that to happen. A number of committees represent areas that do not have a lot of territorial authorities within their region and this situation could potentially happen to them. So there is then a dilemma if a regional transport committee’s decision making is being made by appointees rather than by elected representatives. There would be a tremendous uproar in many areas if people knew that the decision makers were not their elected people but, rather, the appointees under certain requirements in the legislation. That could be a fish-hook that comes out in the future and it is something that the Committee needs to be aware of.

The regional petrol taxes present an interesting dilemma. We have already touched on the fact that the regions are not being given the discretion to determine how to use that money. There is no discretion, it is a mandatory apportionment—5c one way and 5c the other way. It is 5c for roading and 5c for public transport. A slight amendment was made to that at the select committee to bump up the 5c for roading and to take a little bit off the 5c for public transport in relation to things like walking and cycling, but those components were minor. That defies the submissions we received from around the regions, which wanted discretion. It was obvious that the regions wanted the ability to determine their own future and not to have a mandatory clause saying that it was a 5c-5c split.

When we spoke to those regions we indicated that we would put forward an amendment to that effect. However, it appears that we do not have the numbers for that amendment to go through. It will be interesting to see whether the New Zealand First Party will make a commitment when Peter Brown gets up to speak as to whether it is in favour of the 5c-5c split, as in this legislation, or whether it would give regions such as the Bay of Plenty, which has asked for discretion in relation to the 10c.

TIM BARNETT (Senior Whip—Labour) Link to this

I move, That the question be now put. [ Interruption]

PETER BROWN (Deputy Leader—NZ First) Link to this

I raise a point of order, Mr Chairperson. I am a little bit slow on my feet nowadays. It has been a long day and I was beaten by the two members opposite who were seeking the call. Had I thought you would give me the call I certainly would have sought it, because I have not yet had a call in this debate. It is a very important bill. There is a whole range of aspects to it that have yet to be touched on. I urge you—

CHRIS TREMAIN (Junior Whip—National) Link to this

I raise a point of order, Mr Chairperson. I just wanted to note that Colin King came down to the Chamber specifically to talk about Part 1 in relation to an issue in his own electorate in Blenheim. He is keen to take a call on this.

PETER BROWN (Deputy Leader—NZ First) Link to this

I seek leave to take a call, for no longer than 30 minutes.

PETER BROWN (Deputy Leader—NZ First) Link to this

There are aspects of the Land Transport Management Amendment Bill that New Zealand First is very happy with. I will name those aspects briefly, and I think the Committee is well informed on them. The first is the hypothecation of all the excise tax taken on petrol. We think that is long overdue. I think we are the only party that has consistently advocated for that, and we have done so since our formation. We are delighted that that will occur. We also like the idea that the excise tax taken on petrol that goes into leisure boats will be used for search and rescue activities in respect of that industry.

But we do have some concerns. One is the Treaty of Waitangi clause. We object very strongly to having the words “principles of the” in front of the words “Treaty of Waitangi”. Nobody knows what that means. Nobody has been able to tell us what it means. We think those words should be deleted.

We also have concerns about the regional fuel tax regime as it is stated in the bill. We will support the Minister’s amendments because they improve the regime. We have an amendment in the name of the Rt Hon Winston Peters to add another criterion that will make the whole thing subject to the stabilisation of international fuel prices. We are hopeful that the Committee will see its way to supporting that, because it seems logical.

I know that regional councils want a regional tax, but there is a better way of doing it. There is a better way of achieving the same end, and that is to hypothecate part of the GST taken on petrol into a regional fund and allow regions to bid for it. I suggest that anything over 20c a litre of GST taken on petrol is windfall GST. A year ago the GST on petrol was 17 point something cents a litre—today it is 23c. So 4c a litre going into a regional fund would solve all the problems. It will not add to motorists’ costs, and it will provide a fund that the regions could dip into, for want of a better term, on a project-by-project basis. I urge the Committee to give serious consideration to that.

New Zealand First will vote against the provision dealing with the regional fuel tax, even with the amendments. I urge the Māori Party to give consideration to our GST idea. I know that my leader, the Rt Hon Winston Peters, has spoken to the members of the Māori Party, and I hope they take that on board. If they vote for this provision just as it is, then they are adding cents per litre simply for regions.

I think it was the Hon Maurice Williamson who outlined that not every area in the country will benefit from the regional fuel tax. The regions will pay it, but not every township will benefit. It is better that the money required is taken from the windfall GST. That would be acceptable right across this country. That would be easily done. The other night I spoke informally to the Minister of Revenue, the Hon Peter Dunne, and in two sentences he indicated how easily it could be done.

COLIN KING (National—Kaikoura) Link to this

I seek leave to take a call.

PANSY WONG (National) Link to this

What a dramatic start there was this afternoon to the Land Transport Management Amendment Bill. I feel that a more appropriate title would be the “Belatedly Looking After the Workers Bill”, because at the eleventh hour, after the transaction had gone through—the Labour Government is paying nearly $700 million, plus the $100 - million odd for the loan, plus the rent holiday; it is probably a billion-dollar transaction all up to buy back the railways—Labour found out that it had forgotten about the workers. At the eleventh hour today, as part of this bill the Minister of Finance had to introduce Supplementary Order Paper 211 to ensure the Toll workers—[ Interruption] Actually, if the ex-Tauranga member would like to speak, he had better take a call. The ex-Tauranga member always likes to chip away, without standing up—[ Interruption]

The bill could be renamed the “New Zealand First Cave in Bill”, too. Apparently in Part 1 the New Zealand First members stood up and said no way were they going to vote for this bill if the Labour Government was not going to remove the wording about the principles of the Treaty of Waitangi. But what happened? They voted for the bill, anyway. It is like flying a white flag—[Interruption] Exactly! That party’s members say they will do what they have come here to do, but when it comes to the crunch they cave in, lie down, and accept what exists.

Let us get back to the railway workers. The Labour Government, in 11 hours, just suddenly remembered that during all the dealing, the negotiations, and pleasing the Australian shareholders when it paid a hefty price to buy back the railway, it forgot about the workers. So National will support the Supplementary Order Paper to make sure the workers in the Toll company who are being transferred into the Crown entity KiwiRail will continue their contributions to Government superannuation. That was quite a dramatic start to this bill by a Government that always claims it looks after the workers. Actually, it forgot about them during a very important transaction.

The other thing I would like once again to reinforce relates to Local Government New Zealand raising serious concerns about the lack of a partnership approach in the introduction of this bill. I was very pleased that the Minister in the chair, Annette King, actually took a call. I raised a question with her about the Government policy statement. She explained that the issuing of the Government policy statement has been changed to a 3-year cycle to coincide with the local government planning cycle, so that local government can take the Government’s direction into account. That makes sense, except, as Local Government New Zealand pointed out, it sounds as though the policy is coming from the top down and the Government is to set out the priorities.

What local authorities really want to see is a genuine partnership whereby the Government consults them before the policy statement is issued, so that a local priority or a regional priority actually gets a fair hearing before it is too late. A certain local priority for a project may be agreed to, but that might be overridden because of the Government policy statement. Local Government New Zealand therefore expressed concern—and I am not sure at this stage whether anything has been amended so that we have something here that will ease its concern—about the lack of a genuine partnership approach.

So although the title Land Transport Management Amendment Bill sounds very bland, the content of the bill is really significant. It is significant in the sense that there is concern about the super-bureaucracy that will be created with the New Zealand Transport Agency.

Rt Hon WINSTON PETERS (Leader—NZ First) Link to this

There are some nights and days in Parliament when one is just utterly and totally amazed. That a National Party spokesperson would get to her feet and raise the issue of New Zealand railways is, as I said today, a case of her having either the utmost gall or total amnesia. There was an outfit, according to Booz Allen Hamilton, that sold a $100 million profit-going company in 1993 not for $400 million, as was claimed, but for $328 million.

DAVID BENNETT (National—Hamilton East) Link to this

As we look back on this legislation, I think we will see it in relation to the purchase of Toll NZ by this Government. The question from the ACT party today was pretty apt. It asked how such a deal could be so great in the Government’s eyes and in New Zealand First’s eyes, when the purchase price some years ago was much less, and the company was then rorted by the purchasers, yet they now pay over $1 billion and say it is a good deal. What arithmetic is used by the Government and New Zealand First when it comes to purchasing?

The reality is that the bill before us today, the Land Transport Management Amendment Bill, is a problem in the sense that it does not take into account what the regions actually wanted. The regions wanted the ability to distribute the regional petrol tax according to their needs. The Government did not give the regions the ability to do that; it imposed a mandatory split of 5c and 5c. The regions, including Tauranga, wanted the ability to distribute that tax of 10c per litre of their own accord. That is not what the Government handed to the Transport and Industrial Relations Committee. Region after region, including the Bay of Plenty, came and submitted that the Government should give that discretion. Would New Zealand First support the Bay of Plenty? No, it did not. The Bay of Plenty wanted the ability to make that distribution according to its plans, and not according to some mandatory distribution by the Government of 5c to public transport and 5c to roading.

That is at the heart of the problem with this legislation. It does not take into account the roading needs of most of the regions of New Zealand. This legislation was set up because the Government had problems financing Auckland’s growth. It did not want to put the money in, so it decided to charge the people of Auckland through a regional petrol tax. Then it decided that if it was going to charge the people of Auckland, it might as well charge the people of New Zealand. That is the real reason for this bill. There was pressure on the Government to electrify the rail system in Auckland, and there was pressure on the Government to provide some roading in Auckland. The Government would not stump up with the cash; it would say in its Budgets that it would build these things, but it would not deliver any cash for them. Then it decided where it would get the cash: it decided it would have a regional petrol tax. This bill is the result.

This legislation has been built around one region’s desire, and does not take into account the desires of other regions around the country, including the Bay of Plenty, Waikato, and Taranaki, all of which wanted the ability to distribute the money as their regional plans dictated. That is the real crime in this legislation: it has been set up for one region, then it has been extended across the country to give some kind of consistency, but it does not provide the discretion needed for it to be effective. The regions wanted that discretion. They came in one after the other, asking for that discretion. Did New Zealand First give them that discretion? No, it did not. Did some of the other minor parties give them that discretion? No. Did the Labour Party give them that discretion? No. Those political parties stood against the wishes of the regions. The regions have been let down by this Parliament. Time after time they made submissions seeking that discretion, and they have not received it. It is a shame on the Government of the day that it has not done that in this bill, when it had the opportunity to do so.

Rt Hon WINSTON PETERS (Leader—NZ First) Link to this

In the interests of totally refuting that last speech, I wish to table a letter dated 30 June 2008 from the Mayor of Tauranga, Stuart Crosby, on the Land Transport Management Amendment Bill, seeking my support for the legislation.

MARTIN GALLAGHER (Labour—Hamilton West) Link to this

I know that the previous speaker, my good colleague from Hamilton East, was talking about the regions and the relevance of the Land Transport Management Amendment Bill to the regions. I just want to state to the Committee that my colleague the member of Parliament for Hamilton East, along with the Government member of Parliament for Hamilton West, wants to congratulate warmly the Rt Hon James Bolger on his appointment as chair of KiwiRail. Speaking on behalf of David Bennett and myself, I say that we are immensely proud that a Waikato son—and I know Winston Peters joins me—

Hon MAURICE WILLIAMSON (National—Pakuranga) Link to this

I guess, when we are talking about the title of this bill, we need to try to summarise some of the things in the bill, and try to analyse whether the title conveys that impression. I think I would have named this bill the “Mixed Bag Land Transport Bill”, because some things in it are very good, and I have already canvassed those. The hypothecation issue was long overdue, and it puts to bed the argument over the years of how much money was being siphoned off to the Crown account. Now all those revenues that come from petrol tax, road-user charges, and motor vehicle registration—

PETER BROWN (Deputy Leader—NZ First) Link to this

I take the opportunity in this part of the debate to put a few myths to rest. We have heard speaker after speaker from the National Party talk about the sale of New Zealand Rail. Officially it was sold for $400 million in 1993—I say “Officially” because that was fiction. New Zealand Rail had $72 million worth of debt, so effectively it was sold for $328 million, not $370 million as the Hon Maurice Williamson said earlier. That was in 1993 dollars, and if we allow for inflation—which was fairly high in 1993, 1994, and 1995, and has been modest ever since—the figure would be close to $600 million - plus. So $328 million in 1993 is worth over $600 million in 2008, when a reasonable amount is allowed for inflation. The Minister of Finance recognised that the Government had paid a premium for it. It was also quite correctly suggested that the rail was asset-stripped once it was sold. But I say “Fair go” to Toll; it has improved the rail. It is better now than it was when Toll bought it, so there is a premium price to be paid for that. Let us compare an apple with an apple, not an apple with an orange.

The other thing is, and the Hon Maurice Williamson suggested—

COLIN KING (National—Kaikoura) Link to this

The Land Transport Management Amendment Bill is a marvellous piece of work and incredibly complex, with page after page. On that basis the title of the bill is probably quite appropriate, the Land Transport Management Amendment Bill. But I make the point that there is so much management that we have bureaucracy getting in the way of the intent of the bill. Too often this House tends to take a high view of things, and that is probably where governance has its rightful position. I will draw the House’s attention to some of the very drivers that repeat themselves throughout this legislation, including these thoughts of assisting economic development, assisting safety and personal security, improving access and mobility, protecting and promoting public health, and ensuring environmental sustainability.

To bring things down to a regional level, and to support the comments of my learned colleague David Bennett, from Hamilton East, who spoke earlier, I say that it is quite sad to see that the regions have effectively been closed out of this bill, in the sense that, quite often, when we look at the major issues that confront them, we see that they do not show up in a meaningful way in the overall configuration of the National Land Transport Programme.

I draw everybody’s attention to a situation in my own electorate. I have a newspaper headline entitled “Buck passes on Butter Factory corner”. Butter Factory corner is on State Highway 1. It is on the other side of the Bombay Hills, but the situation there has been around for as long as Blenheim has been around, and we are not able to even get it up on the radar screen. That is hugely concerning, because if members look at what works have been done around elevations and bridges, and things like that, they will see that all too often in the region it takes a death on the road before anything is done. But at Butter Factory corner we have a complex situation whereby everybody is blaming one another. Transit is being blamed by the council, and Marlborough Roads is saying that it cannot do anything, yet there was an opportunity for the regions to be able to have that flexibility.

It was good to hear that they did submit to the select committee to ask for that flexibility to be able to raise a petrol tax. It was something I felt compelled to mention at the first reading of this bill, and it is something I am pleased to see was canvassed. I am very sad that it was not taken on board and worked into the process. Maybe in time to come it might be the next step forward, because when we look at the structure and the framework about getting these matters on to the National Land Transport Programme, it takes an enormous amount of effort.

We acknowledge the building of the Awatere bridge. There were no accidents on that bridge, yet it was seen to be of such economic importance that it was a must-do. On that basis, credit where credit is due, but we do have an enormous problem around a market town such as Blenheim that has grown exponentially. We have a situation at Butter Factory corner where we have a railway line 10 metres from the apex of the corner, and when a B train truck stops on that route it is parked over the railway line. It is complex. There is the opportunity to do business with the local landowner; however, there is a bureaucratic jam in the system where nothing is happening. There is a school just up the way, and, again, no matter how good this legislation is, we must be able to see that the ability of the local region is taken on board and that we are not stymied completely.

The Automobile Association has recognised this area as the No. 1 priority. When trucks come off the State highway and turn into this particular road, cars have to back into the Canterbury Meatpackers’ freezing works to allow them to get through. The biggest problem, as is articulated here, is, sadly, when Transit does business and sits down and tries to talk to the landowner, the landowner feels that he or she is going to be screwed over.

So I just want to tell the Committee that it is very important that this is contextualised. It is a great piece of legislation, but there is a lot more work still to do.