Bennett David: Land Transport Management Amendment Bill — Second Reading 
Bennett David: Land Transport Management Amendment Bill — Second Reading 
[Volume:648;Page:16995] 
DAVID BENNETT (National—Hamilton East) 
: 
 It is with great pleasure that I speak in regard to the Land Transport Management Amendment Bill. This bill relates to the fundamental changes that the Labour Government is bringing about in the transport sector as the result of a number of inquiries that have identified some major problems in terms of value for money that the sector has encountered over a number of years. The ministerial advisory group report was probably the first report on the issue and it indicated there was a serious concern about value for money in many of the projects especially in the Auckland region. That report was I guess a bit of a wake-up call for the Government and it gave a formal indication that there were problems in the transport sector in terms of the way money was being used in the procurement of roading projects. 
That led to the  
Next Steps in the Land Transport Sector Review 
 which was a more substantial document that had to determine what the options would be for the future reform of the transport sector. We are seeing that reform in the legislation here today. The proposed merger of Land Transport New Zealand and Transit New Zealand with the enhanced role of the Ministry of Transport really is an indication of one of the options that the Next Steps review came up with and it has been followed by the Government in this case. 
On National’s side of the House we have a former Minister of Transport Maurice Williamson who has indicated that in many cases in the past the combination of provider and funder caused a number of problems. Not very many years ago they were actually devolved into two separate groups in order to resolve that problem. Now that we are putting them together again the problems encountered many years ago may potentially come back to haunt the transport sector in the future. 
That is of great concern to National because the strategic decision to merge the two organisations under the Next Steps review may not be the best solution to the problem of ensuring there is value for money in roading. It smacks of a rushed decision-making process by the Government. First of all the Government was not willing to acknowledge it had a problem regarding value for money and procurement. Then when proposals did come before the Government it became a matter of snapping up the proposals that it thought would be easiest to get through before an election. The Government did not have the confidence that the sector would demand in decision making at a level that will influence the future of the transport sector for many years to come because this is a major structural change in how we govern our transport sector and a large amount of Government funding is used in that sector. 
Another aspect of this legislation is the use of extensive planning processes. The National Party welcomes that; planning certainty has been long overdue. Many contractors have made it clear that they believe that certainty is a key driver of their ability to deliver serious roading projects for New Zealand. Those projects typically have a long-term life cycle in building and construction and also in usage. A year-by-year process of indicating what would be funded has caused a number of dilemmas to those who would provide the construction capability because they cannot plan ahead in the sense that they want to. The 3-year planning cycle that has been provided here is a start but the reality is that that industry along with many other strategic industries in New Zealand needs to have a much longer process than that. If we look overseas we see that many countries engage in 20 to 30-year time frames for their planning processes which gives even greater certainty to organisations involved in providing construction services. So although some planning is provided here it is not planning to the extent that would provide the impetus for the long-term solutions to be reached that we need as a country on many of these issues. In some ways having that planning provision in the legislation is a start but it certainly is not a solution that is in the best interests of New Zealand transport policy. 
Regional petrol taxes are another big part of this legislation and that is probably the most interesting provision from a public perspective. That is probably the element that people have grappled with because they understand the potential for 10c a litre to be added to petrol prices at the pump. At the moment petrol prices are excessively high as they are around the world. In a lot of cases the issue is one of supply and demand but essentially the public are resistant to another petrol tax being put on to them at a time when the economy is very slow and personal household budgets are very tight. The Prime Minister has even indicated that although this legislation will provide for regional petrol taxes she does not intend to implement them in the next year. We have an election coming up and it seems very convenient to pass legislation to provide for regional petrol taxes but then not implement them. 
If the Prime Minister thinks her decision will influence the voting public and they will be swayed by having a 1-year moratorium on petrol taxes even though they know they will be hit with them in the second and third years then she has a lot to learn. Clearly the public will see through that. They know that that provision is only a temporary measure to try to abate any cost increase and influence them to vote for this Government at the election. That simply will not work. The public know that petrol prices are high now and will go higher. A 1-year moratorium on petrol tax increases by the Prime Minister for the sake of political expediency will not work in terms of getting votes at the ballot box. 
It is also interesting to look at what the Minister of Transport Annette King said at the Transport and Industrial Relations Committee last week about regional petrol taxes. She was very averse to agreeing with the Prime Minister’s statement. The Minister is much more resilient in terms of knowing that if the roading projects or the public transport funding that is envisaged for Auckland is to go ahead there probably will need to be some kind of regional petrol tax in Auckland in the next year. The Minister was less willing to grant an assurance to the public of New Zealand that there would be such a moratorium for the next year. So we see a conflict within the Labour Party as to whether there will be a moratorium. It is doubtful whether the public can give much credence to what the Labour Party has been saying in this area because if Labour is passing a provision for a petrol tax then it intends to impose the tax. It may give a short time-frame out of that process but in reality it will impose that petrol tax at some point in time. 
It was interesting also to see what New Zealand First has come up with today in respect of petrol taxes. From listening to the speech by its member it seems that New Zealand First will not support the petrol tax and thinks it should come out of the GST component of the petrol price. That would be an interesting proposal in the sense that if the money was taken out of the GST component of the petrol price then that money would have to be taken out of some other form of Government spending. The GST component goes into the funding of the Government accounts so is New Zealand First also proposing that funding for superannuation or for its SuperGold card be reduced so that the funding the petrol tax would have provided can come from GST? Maybe that is what New Zealand First is saying but we will have to wait and see whether that is the case. But perhaps it is talking about a reduction in the foreign affairs budget to take account of lower funding from GST and from the Government from taxes to reconcile with New Zealand First’s reduced petrol tax formula. 
The regional petrol tax was also probably the part of the process that most submitters concentrated on in the sense that many councils told the select committee that they would want to have the ability to determine how the funding would be split. Currently this legislation provides for a mandatory 5c:5c split and although the Maori Party indicated that there had been some change in that definition the change is very nominal. The reality is that many councils especially those outside Auckland will not want to spend 5c a litre of any regional petrol tax on public transport simply because they do not have the ability or need to do that. The Government of the day should have taken notice of what the regions have said; the Auckland region was the only one that encouraged that split. That is another issue to do with a regional petrol tax that needs to be addressed in this legislation.