Swain Paul: Land Transport Management Bill — Second Reading 
Swain Paul: Land Transport Management Bill — Second Reading 
[Volume:612;Page:9315] 
Hon PAUL SWAIN (Minister of Transport) 
: 
 I move  
That the Land Transport Management Bill be now read a second time 
. I would like to thank members of the Transport and Industrial Relations Committee for the excellent work they have done on the bill. The committee listened very carefully to the many considered submissions it received and the bill has been improved as a result. I would like to offer a special word of thanks to Helen Duncan who chaired the select committee for the most part but had to step aside towards the end of the committee’s considerations for health reasons. Thanks also to the Hon Roger Sowry who stepped in at short notice to complete the process. 
The bill broadens the focus of land transport funding encourages more long-term planning and allows for greater funding flexibility. The bill also represents a further example of the ongoing collaboration between the Labour-Progressive Government and the Green Party on transport issues signalled in the cooperation agreement signed after the last election. I would also like to acknowledge the input of the United Future party particularly around issues to do with alternative funding transport mechanisms. 
The bill reflects a multimodal approach. It is an important step in implementing the New Zealand Transport Strategy. I was heartened by the support that the principles underpinning the bill received from submitters. However many submitters sought changes to improve the implementation of the bill. Some thought that the decision-making framework set in the bill was too complex while others were concerned about consultation. Many submitters also called for more funding tools to be made available in addition to the bill’s tolling and public-private partnerships and others argued that these provisions were too restrictive. The select committee has addressed these issues. 
The bill integrates the New Zealand Transport Strategy into land transport funding and management decision-making processes. The bill’s purpose reflects the New Zealand Transport Strategy’s vision as do the objectives of Transit New Zealand and Transfund New Zealand. The strategy’s objectives are used as important criteria for decision makers to take into account. Decision makers need to make decisions after carefully considering and balancing each of the strategy’s objectives. The committee has worked hard to ensure that the decision-making criteria throughout the bill have been made as consistent as possible whether as Transfund approving funding for a busway or the Minister making a decision on a tolling scheme. Overlaps and duplications have been addressed. 
Some submitters argued strongly that efficiencies should be included in the bill as an explicit decision-making criterion. The Transport and Industrial Relations Committee has recommended that this be done. In my view efficiency is implicit in the concept of sustainability which is ingrained in the bill’s purpose and elsewhere. None the less I believe there is value in stating this explicitly. The committee has recommended that it become one of Transfund’s criteria for approved funding and this is a good proposal. This is a critical decision-making point of the bill. Transfund of course is responsible for allocating some $1.2 billion of land transport funding. 
The committee has also recommended explicitly linking the key documents in the bill with the bill’s purpose. These documents include land transport programmes prepared by Transit and local government the  
Annual National Land Transport Programme  
prepared by Transfund and  
Regional Land Transport Strategies  
prepared by regional councils. This approach strengthens the relationship between these documents to the bill’s strategic framework. Land transport programmes and the national land transport programme are also combined with 10-year financial forecasts. This ensures that programmes have a long-term view. 
The committee also recommended that the strategic nature of regional land transport strategies be emphasised by requiring that strategies identify the transport outcomes sought by the regions and the strategic options for obtaining these outcomes. To underpin these changes the membership of the committees that prepare these strategies also needs to be changed. Regional land transport committees will now need to consist of interests that reflect the objectives of the New Zealand Transport Strategy as well as representatives of local government Transfund and the Land Transport Safety Authority. The regional land transport committees must also take into account the views of network providers like Transit. 
Regional land transport strategies will also need to contain a traffic demand management strategy. Traffic demand management is becoming an increasingly important way of dealing with the pressure on our roading infrastructure. It is simply not possible to build our way out of congestion. Traffic demand management measures can range from better integration of traffic management systems to travel blending which incorporates the use of more than one mode of travel within a single journey. Other examples include walking school buses teleworking and special public transport services for major events. 
The bill also allows regional councils to own public transport infrastructure and services. The committee has suggested deleting the complicated approval process set out in the bill and instead utilising the provisions of the Local Government Act. This is a very good proposal and I support it. 
A number of submissions raised concerns about a new power for the Minister to give instructions in relation to funding priorities. This was set out in clause 14 of the bill as introduced. The committee has recommended that this power be deleted and instead that we rely on the Minister’s powers to issue general directions on Government policy as set out in schedule 1. The power to use directions was carried over from the existing Act. Such directions must be published in the  
Gazette 
 and presented to the House. The Minister cannot give directions on individual projects. 
There were concerns expressed that the bill’s consultation requirements were far too onerous. The bill as introduced provided for consultation on land transport programmes 10-year financial forecasts and tolling and concession agreements. It should be remembered that the existing Transit New Zealand Act provides for consultation on land transport programmes with many groups. The recommendation to combine programmes with 10-year financial forecasts means that a whole layer of consultation has been removed by the committee. There was also some inconsistency between the lists of groups that should be consulted and the committee has recommended changes to address this issue—another good change. 
The committee has also recommended a closer link between the new Local Government Act and the Land Transport Management Bill. Local authorities which are responsible for 80 percent of the land transport system must consult under the provisions of the Act. The principles and processes under the Act have been brought into the bill to give greater clarity about who should be consulted and how they should be consulted. In addition it has been made clear that local government does not need to consult under the provisions of the bill if it has already consulted on its long-term council community plan. This was something that local authorities called for in their submissions. Further the tolling and concession agreement provisions provide that consultation is not required if there has already been consultation under the bill or any other enactment on the proposal to toll or enter into a concession agreement. 
As far as tolling and concession agreements are concerned the bill as introduced puts into place a generic framework for approving tolling schemes and concession agreements. Tolling schemes require approval by Order in Council while concession agreements require ministerial approval. At present toll arrangements require special legislation. Many submitters supported the Government’s move to make these tools available as an alternative way of funding roading projects. While some argued for strong conditions for such schemes many felt that the provisions were too restrictive. When dealing with roads which are so critical to communities a balance needs to be found between the need for public control and private sector investment. 
A major issue that concerned many in local government and the private sector was the requirement for approval at a very late stage in the process. There was concern that this would discourage investment because there would be an unwillingness to invest in developing projects if there was no certainty that approval would come. The committee has arrived at a very good pragmatic solution. Early conditional approval can now be given after the Minister has considered core criteria such as whether the project would contribute to the purpose of the bill and the outcome of any public consultation. Conditional approval can then be issued. This means approval can come before tenders are issued and the successful tenderers can know with certainty what preconditions they need to meet before beginning tolling or entering into a concession agreement. 
The committee has also ensured that the decision-making criteria for tolling and concession agreements are as consistent as possible. There are however some unique features of such arrangements that need to be considered. The bill as introduced made it clear that tolling could be used only for new roads. Existing roads could be included only if there was an engineering reason for them to be included. Many submitters argued that tolling should be possible on existing roads and some went so far as to say that widespread tolling should be allowed such as the congestion pricing in London. The committee quite sensibly concluded that allowing such schemes would go well beyond the policy of the bill. The Government has some sympathy with the argument that more funding tools should be made available. To this end the Government is working with the Auckland region to investigate such approaches and would look to include any new mechanism in future legislation if required. The committee has none the less recommended that there should be some additional flexibility to include existing roads where the existing road is physically or operationally integral to the new road. The toll revenue though must be used for the new road. The committee has also made it clear that emergency vehicles should be exempted from tolls. 
As far as concession agreements are concerned there was concern that the bill was too inflexible in how it treated risk. For example the public sector was precluded from compensating the private sector if traffic forecasts were not met. Such issues are normally matters for commercial negotiation and have been removed. However a broader provision has been included that will not deter future options of sustainable transport solutions. The committee has recommended that leasing be allowed for concession agreements. The bill as introduced allowed only licence agreements. Leasing is a more familiar instrument for investors so this change will give them greater certainty. The successful Melbourne City link project uses leasing. 
Some submitters argued that the proposed term of 35 years should be extended. The committee was satisfied that a term of this length was suitable for most purposes. It has however recommended that the term can be extended for 10 years if there are exceptional circumstances two-thirds of the way through the concession agreement’s term. 
In summary the select committee has made some very very good changes to the bill and I recommend to the House that it now be read a second time.