Next Steps in the Land Transport Sector review released

State Services Minister Annette King today released a land transport sector review that recommends the establishment of the Government's short to medium term funding and investment priorities for the sector and the merger of Transit New Zealand and Land Transport New Zealand.

Finance Minister Dr Michael Cullen and Ms King, as Transport as well as State Services Minister, asked the State Services Commission in January this year to lead the Next Steps review, the final in a series of reviews designed to ensure value for money in the land transport sector. The review involved the Ministry of Transport, Treasury and Department of the Prime Minister and Cabinet (DPMC).

Earlier reviews included the Ministerial Advisory Group on Roading Costs (released in February) and the Review of Value for Money in the Land Transport Sector (released in April). "The Cabinet has agreed to all the key recommendations in Next Steps regarding changes to the national planning and funding system and structure with the exception of completely ring-fencing fuel excise duty, road user charges and motor vehicle registration fees for land transport expenditure," Ms King said. "More work has been commissioned in that area."

Ms King said that the review "confirmed that, despite recent improvements, transport agencies need to work more collaboratively and with a common purpose. It has recommended a package of changes designed to support a cohesive and efficient sector.

"The review also focused on ways to improve value for money. Changes to both the planning and funding system and the structure of the sector have been recommended to achieve improvements in these areas."

Key recommendations in the report are:

• That the government establish the funding policy and investment priorities for the land transport sector, for the short-medium term, through a Government Policy Statement. • That regular reviews of funding levels are undertaken to ascertain whether the balance between investment priorities are sufficient to achieve the desired outcomes. These reviews will feed into the development of the Government Policy Statement, • Extension of the land transport planning cycle to a three-yearly basis. • All Fuel Excise Duty, Road User Charges and motor vehicle registration fees to be directed into the dedicated National Land Transport Fund, and effectively ring-fenced for land transport expenditure. • Land Transport New Zealand and Transit New Zealand to be merged, and some policy capability to be transferred to the Ministry.

Ms King says further work and consultation has also been commissioned on recommendations in the report regarding the local and regional interfaces with the proposed new planning and funding system.

"These recommendations need to be considered as an inter-related package of measures and will need some time to take effect. The decision to merge two Crown entities, with its subsequent impact on staff, has not been taken lightly, but Next Steps provides us with an opportunity to improve the performance of the government land transport sector and as a result improve its impact on the New Zealand economy and environment.

"The Ministry of Transport will lead a well structured implementation phase, with on-going support from SSC, Treasury and DPMC, and will report back to Ministers later this year. The Government is also committed to consulting with key stakeholders on how these changes can best be implemented."

ENDS

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