Genter Julie Anne: Land Transport and Road User Charges Legislation Amendment Bill — In CommitteeText is incorporated into the Bound VolumeGenter Julie Anne: Land Transport and Road User Charges Legislation Amendment Bill — In Committee[Sitting date: 08 April 2014. Volume:697;Page:16951. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green):I have to strongly agree with the contribution just made by my colleague Darien Fenton. Part 2 of this—[Interruption]The CHAIRPERSON (H V Ross Robertson): Order! I am sorry to interrupt the member. It has been a convention in this place for a number of years now that when people who do not have the floor interject on each other that is not in keeping with the custom of practice of this House. I urge members to remember that.JULIE ANNE GENTER: Thank you Mr Chair. I have to strongly agree with the contribution just made by my colleague Darien Fenton on Part 2 of the Land Transport and Road User Charges Legislation Amendment Bill which amends the Road User Charges Act.I think that for the benefit of members in the Committee today there is probably a little bit of background that needs to be explained about how the road-user charges system works. Central government spends about $3 billion a year on transport through the National Land Transport Fund. Most of that revenue comes from petrol tax and road-user charges. As I said earlier about a third of it comes from road-user charges—that is the contribution from heavy vehicles trucks and commercial vehicles using diesel. They contribute about $1.1 billion which goes to the National Land Transport Fund. Petrol tax is about $2 billion a year. What is often overlooked when people say that roads are paid for by users is that actually that is not entirely true. Local roads are 50 percent funded by ratepayers. Ratepayers pay $1 billion which is spent on transport. So the overall transport infrastructure funded by Government is about $4 billion—$1 billion from ratepayers. It is worth noting that about 50 percent of all vehicle kilometres travelled happen on local roads so it is quite a big proportion that is subsidised by ratepayers.But what is really overlooked when we talk about the economic benefit of our transport system is the huge cost to households and businesses to use the infrastructure that is being paid for with their tax dollars. Taxpayers are paying $4 billion a year. That is being spent mostly on roads mostly on a few State highways. The largest share is going to go on a few State highways which carry a tiny proportion of all vehicle trips over the next 10 years. A large portion is going to be to pay the interest on the debt that we use to fund those projects. That is going to go on for about 25 years. But what is really overlooked is that households and businesses are spending at least three times that much just to use the infrastructure that is being built with their tax dollars. Households spent about $11 billion on fuel and vehicles last year. If we included the cost of businesses—the money that they put into their vehicles—I am sure it would be even more than that.So when we talk about what is the most economically efficient way to reduce transport costs in New Zealand minor improvements to the roading network probably are not the best way to make those savings because households and businesses have to spend well over $11 billion a year just to use the infrastructure. All of that money goes overseas because we import all of our vehicles and all of the fuel that we use to run them. Even if we did find some oil offshore it would not be used in our cars and trucks because we have light sweet crude oil which we export and we do not have the capacity to refine it. It would not be the highest-value use of that fuel.I suppose what the Green Party is saying is that a more rational approach to transport investment that would actually get better bang for our buck is to invest in the modes that have been underinvested in and that benefit not only the people who use them—the people and goods that go by rail or by passenger transport whether that is by bus or by ferry or the people who walk or cycle. If you do all of those things then you get better use of your road network but you also save money on the other side because you save the money that households and businesses are having to spend to use the road network.Unfortunately it was the National Government that decided not to reopen the Napier-Gisborne line—Shane Ardern: Yeah but who closed it?JULIE ANNE GENTER: Well it was the National Government that closed that line.Shane Ardern: No no no.JULIE ANNE GENTER: Yes that is what happened. We have enormous potential to invest in our rail network which would result in quite substantial regional economic development and reduce some of the very very high inter-regional transport costs that we have here in New Zealand. The reason why we should use the transport budget to pay for that is that it also benefits road users. At the moment when we evaluate the benefits of investing in a State highway we look at the safety benefits and we look at the wider social and economic benefits. But when we look at KiwiRail we say “Well you’ve got to fund all of your infrastructure investment simply from the return that you’re making from your freight business.” That does not make sense. The usage—Shane Ardern: A billion-dollar subsidy upfront was pretty good.JULIE ANNE GENTER: It is not $1 billion a year; it was only $250 million a year. The Government is not investing enough in the rail network and that is a missed opportunity because it impacts our road network. Making it possible for some logs and some dairy products to move more quickly and more frequently by rail takes huge heavy trucks off our roads reduces the amount of money we have to spend on maintaining those roads increases the safety for people who are driving in their cars on those roads and benefits our exporters because it reduces their costs of getting their products to market.So it would make a lot more sense to take some of that enormous capital expenditure that is going into a few very low-value motorway projects in peri-urban areas which do not even carry that much of our exports and invest some of that in the rail network all across the country getting regional economic development increasing the safety of those roads improving the maintenance of those roads and also improving congestion. If we invest for example in the City Rail Link in Auckland we can get a lot of commuters off the roads. That frees up the roads for those people who need to travel by car whether they are a plumber or a builder and who have to get around by road at peak time. The best thing for them is if we can get hundreds of thousands of cars off the road and we can do that by improving our passenger rail. Since we have already invested in electrification it makes sense to build the City Rail Link because that actually doubles the capacity of the entire rail network. It means we can get 5-minute frequencies which makes rail that much more attractive for people who are using it to get into and around the city and who do not need to use a car. Once the western ring route is opened there will be alternatives for freight. The last thing we want to see is that road clogged up with commuters who are trying to get to houses that are being built way out of the city. That would not be good for road users. It is not good for freight.So what the Green Party says is that we want an economically rational investment in our transport fund. We have to keep in mind that the way we use road-user charges does not need to be on new roads. Spending money on expensive motorways with low benefit-cost ratios is not the best use of road users’ money. In fact investing in rail is in some cases a better use of road users’ money because it has a better impact on the overall economy and the transport system whether that rail is for passenger services or for freight in our regional areas. So there are lots of opportunities. This bill makes just some tiny technical changes. The overall direction that the Government is going on transport is wrong. It is actually to tax and spend—that is the approach that the National Government is taking. It is borrowing taxing and spending the money in ways that are not going to benefit taxpayers are not going to benefit the economy and are going to cost New Zealanders for decades to come. That is a very serious concern.