Paul Swain Speech: Working together to fund a better passenger transport system

Good morning and thank you all for attending this breakfast. This is an excellent opportunity for me to talk with the people who are making key transport decisions in the regions. In particular, I would like to acknowledge David Stubbs, the chair and Transfund for making this possible.

Early on, this government recognised that it takes a collaborative approach to achieve results. We have been working on building a strong relationship with you on many fronts. Transport, and particularly passenger transport, is a case in point.

This morning I will outline the direction this government is taking on transport as a whole, and acknowledge the important role you are playing to help us achieve our goals. I will also refer to the role Transfund has to play, and has played, in improving passenger transport in New Zealand.

I will leave Simon Whitely of Transfund to outline the proposed patronage funding scheme and of course the workshop later in the day will allow you and your officers to explore the proposal in more detail.

So, to begin, I would like to reiterate this government’s vision for transport.

This government aims to return New Zealand to the top half of the OECD countries in terms of per capita income. Transport, including passenger transport, has a major role to play in helping us get there. In the New Zealand Transport Strategy, released late last year, the government set out its vision of having an integrated, safe, accessible, sustainable and affordable transport system. Local government have responded positively to the NZTS and we look forward to working with you to make the vision become a reality.

Last February the government increased petrol tax by 4.7 cents (incl GST) a litre. The money raised was used to fund a $227 million land transport package called Moving Forward.

Of the $227 million: $94 million went to roading particularly for severely congested roads; $30 million went to regional development; $30 million went to alternatives to roading, such as rail; $36 million for public transport, $3 million to promote walking and cycling; and an extra $34 million for road safety education and enforcement.

This $227 million was on top of normal transport expenditure.

One of the major differences between this and previous governments is that we recognise the transport system is multi-modal. It is about trains, planes and cars as well as buses, ships, cycling, walking and taxis.

While the majority of government expenditure on infrastructure will continue to be on roads, our focus is on investing more in other areas, including alternatives to roading.

One of my first actions as Minister of Transport was to direct Transfund, and Transit, to expand their criteria so that non-road applications for land transport projects get a fair hearing.

Funding for alternatives to roading has almost doubled and the government has purchased Auckland’s railway lines.

This government is also intent on achieving a sustainable transport system. I asked Transfund, and Transit, to come up with a 10-year plan. This is the first time that a government has taken a long-term view of land transport.

One of the reasons for doing this is that we need to identify how we are going to best use what resources we have. As always, there are more projects than there is funding. It is also worth noting that our existing revenue streams, such as fuel taxes, will not keep up with demand as cars become more fuel-efficient.

Another reason for developing a long-term plan is to encourage communities to consider the big picture and identify their regional transport infrastructure priorities within this.

This government wants to provide local solutions to local issues. You know your communities’ needs and you also know how best to meet those needs. We are keen to assist. And that is what we will do.

The New Zealand Transport Strategy recognises the benefits of attracting new passengers to use public transport. Getting more people out of their cars and into public transport will assist in the relief of severe congestion and also result in environmental benefits.

The combined efforts of central and local government have turned passenger transport into a viable alternative to using a car, at least in the major cities. In 1999 the government introduced patronage funding as a way of boosting flagging services. The initial scheme was designed to boost such services with the intention of reviewing it three years later.

Since them, funding has almost doubled from $36.3 million in 1998-99 to $71.2 million in 2002-03.

This boost has increased the use of passenger transport. Since 1999, the number of journeys taken on passenger transport has increased by 24.9 per cent. Since 1999, we have seen some major regional passenger transport initiatives, thanks to the financial contributions of councils and Transfund.

These include the hugely popular Orbiter bus service in Christchurch, the Britomart centre in Auckland and the Lambton Interchange in Wellington. Green bus lanes are now a common sight in regional centres and work has recently started on the North Shore Busway project in Auckland.

As a result of these initiatives, there are now three times as many people using buses. The Bay of Plenty and Auckland have experienced a 23 per cent increase in trips taken on buses and ferries.

We have certainly had excellent results to date. This is due to the tremendous effort local government has put into bus services, and also the investment in buses and services by the commercial bus industry.

However the current funding system was never expected to continue indefinitely. When the patronage funding scheme was proposed in November 2000 Transfund said it would review it in 2003. In March 2002, Transfund announced that the scheme would continue in a modified form until 20 June, 2004, to allow time for this review to be completed.

Last year, Transfund conducted a survey of those regional councils and territorial local authorities responsible for passenger transport. These organisations indicated it was important to fund core public transport systems and requested a need for long-term certainty and that the value of existing passengers not be overlooked. The proposed funding scheme addresses these concerns. Transfund has come up with a new funding system that, through ongoing partnership between local and central government and with industry, we can build a sustainable, effective passenger transport system for the future.

The government is committed to funding continued growth in passenger transport as a core element of our transport policy. Under the proposed model government funding will continue to increase, albeit at a slower rate.

Regional councils are asked, under the proposal, to contribute to funding future growth along with central government. We need to reach agreement on how to fund the growth into the future.

I commend Transfund for ensuring adequate time has been set aside today and over the next three months for full consultation with you and the industry on the proposal. It is only by working together that we will build the best possible transport system for New Zealand.

In my view a positive feature of the new model is that there will now be, unlike at present, scope for Transfund to fund initiatives that will improve existing services. Such initiatives might include the provision of low-floor buses, improving access for the disabled and elderly and/or low emission buses to benefit the environment.

Transfund is seeking the views of local government, stakeholders and the industry on options for a new funding system. The proposal does not represent Transfund or government policy at this stage. The results of the consultation process will be carefully considered before any decisions are made.

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