SpeechLAND TRANSPORT MANAGEMENT (REGULATION OF PUBLIC TRANSPORT) AMENDMENT BILLFirst ReadingHon MICHAEL WOOD (Minister of Transport): I present a legislative statement on the Land Transport Management (Regulation of Public Transport) Amendment Bill.SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon MICHAEL WOOD: I move That the Land Transport Management (Regulation of Public Transport) Amendment Bill be now read a first time. I nominate the Transport and Infrastructure Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 31 July 2023.New Zealand's public transport services are critical to the way that our cities and our regions function. We need high-quality and reliable public transport systems to make sure that workers can get to work that kids can get to school that communities can be connected to make sure that we cater for growth and also critically in an era of climate change to make sure that we enable people to move around our communities in as low carbon a way as possible. Supporting more people to use high-quality reliable public transport is one of the most important things that we can do to reduce greenhouse gas emissions in response to the climate emergency. This bill—Simon Court: Just get a bus on time.Hon MICHAEL WOOD: —is an important part of that story and I'll speak about why we'll do that through this bill Mr Court. This bill amends the Land Transport Management Act 2003 to establish the sustainable public transport framework which is replacing the public transport operating model—commonly known as PTOM—in Part 5 of that Act. And the primary driver for this piece of legislation and this reform is the wellestablished fact that PTOM put in place by the previous Government has been an unmitigated disaster in terms of the delivery of public transport services and in terms of the ability for us to sustain a sustainable workforce to deliver those public transport services that are needed by our communities. The members opposite who have worked themselves up into a froth in defence of Steven Joyce and his failed PTOM model—ask the question: what will you do to deliver reliable public transport services? It is relatively clear to anyone who knows anything about how public transport services operate or even just a person with a modicum of common sense that it is difficult to deliver reliable public transport services without drivers to deliver those services. The overwhelming legacy of the failed PTOM model that we will replace through this piece of legislation has been a systemic undermining of the pay and conditions of our bus drivers. Not only does that undervalue the work of people who are critical in our communities and deliver an important public service the end result of that process after 15 years of PTOM has been that bus companies have been unable to retain the workers that we need to deliver those critical public services. Matt Doocey: That's 'cos there's a workforce shortage.Hon MICHAEL WOOD: That's right. The member says there is a workforce shortage and that is because bus operators have been unable to retain workers because of the race to the bottom in the labour market created by the public transport operating model. The public transport operating model was based simply on a model of commerciality to deliver public transport services. And that is where the problem starts because the way that the marketplace was set up under PTOM involved public transport operators effectively bidding for services with territorial local authorities on the basis purely of commerciality.So the way in which operators—and operators say this as much as workers and union tell us this: the way that operators have been able to get contracts to deliver services has been to pitch in at the very lowest price. And the primary way that operators have had to do that because of the relative inability to vary the significant capital costs that are required within this particular industry has been to keep pressure down on the pay and conditions of bus drivers. And so we have had 15 years of systemic pressure put on the pay and conditions of bus drivers: low pay insecure conditions and split shifts. Now who in this House would work under those conditions? And it is a mark of members on that other side of the House that they diminish and dismiss the importance of good working conditions. They complain about the outcome of that which is that we can't keep people working in the sector but they're fundamentally unwilling to make sure that those men and women who drive our buses in our communities actually get a fair go in a way that will ensure that we can keep them there and build up a skilled workforce not just to maintain but to grow the services in public transport that we so desperately need. So the public transport operating model is a reform of the PTOM model. It's also not about throwing a baby out with the bathwater. We've gone through a full process of reviewing PTOM. We've worked out what works and we've worked out what doesn't work. What does work is that our local authorities plan and deliver those services. That is a model that fundamentally works. It is important that we do inject value for money into the system so that we make sure that the investment that does go in—whether that is through the fare box or through subsidy from local authorities and central government through Waka Kotahi—is getting a good outcome. That is beyond doubt that is important and that is embedded in the legislation. But how narrow is it to have legislation and a framework to deliver public transport services where the only thing on the table is the commerciality of those services? That doesn't go anywhere near what we need to achieve from the roll-out and growth of public transport services. And so PTOM injects a wider range of objectives into the system including ensuring that we have a sustainable labour market so that we never again get into the fix that we've gotten through National's failed PTOM model as we are experiencing today.It inserts in there an objective to ensure that we have ongoing work to decarbonise our public transport system. And it inserts objectives to ensure that we have significantly greater transparency over these services. These are public services which in all cases currently and likely in many cases as we go forward will continue to be delivered by private operators and that's fine. But we need to have good assurance that the significant public subsidy that is going into them is going into the right places to deliver good services to the people of our towns and our cities who need them. It's also worth noting that the current PTOM framework is extremely inflexible and local government has consistently said to central government that inflexible regime is something that they want changed. It is in fact unique and bizarre that—in the delivery of this core public service that is public transport in our towns and cities—local authorities are required to deliver those services through private contracting. They are banned from owning or operating any of the assets or services. We don't do that in any other area of public service delivery. Can we imagine if in the delivery of health services or education services or welfare services we said to our Government agencies and local authorities You are banned from delivering any of those yourselves. You have to privately contract them out for delivery."? We would think that that was strange and inflexible yet that was the model that PTOM put in place under the previous National Government. And again it's one of the reasons why it's failed. But this is a balanced piece of legislation. We don't require local authorities to go in the other direction and entirely own the assets or entirely deliver the services through public provision. We say to local authorities that we have trust and confidence in you to know what you need to deliver in your communities to make that choice. And so the PTOM model that has been put up through this piece of legislation will give local authorities that choice. It will give them the ability to own assets potentially. They could potentially own assets like depots and chargers and then contract out services if they thought that that was best. Some local authorities have said to me that there may be benefits to that in terms of reducing barriers to entry for more innovative private operators. It could be that local authorities through trading companies or direct private provision do look to deliver those services through public provision. Or it could be that local authorities do a mix of all of the above to get the best outcomes for their communities. That is the model that we're putting forward through the sustainable public transport framework and it is a polar opposite to the market fundamentalism of PTOM which says that these services effectively have to be privatised and delivered only by the private sector. I in fact expect that local authorities and the private sector will continue to work together constructively. The legislation also requires that territorial local authorities and regional councils coordinate much more closely together to deliver services. We currently have a situation in which regional councils tender for services but very often public transport assets are owned by territorial local authorities. That sometimes does create difficulties and frictions so there'll be requirements for them to work together. We're also looking ahead and looking to innovations within public transport that we need to cater for—for example the creation of on-demand services which are being trialled at a number of locations around New Zealand very successfully in places like Timaru. And we need to make sure that our public transport system through the Sustainable Public Transport Framework caters for those situations as well. PTOM was a failure. It has left us with a situation of collapsing services because we have not been able to retain drivers because of the poor terms and conditions and race to the bottom that it created. The Labour Party and this Government are proud to rectify that wrong and to bring forward to the House the sustainable public transport framework to deliver fairness for workers and sustainable public transport.SPEAKER: The question is that the motion be agreed to."