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At a higher level, the GPS supports consideration of other modes, such as rail and coastal shipping

Government policy statement on land transport 2018 released – By Chris Dann

The final government policy statement (GPS) on land transport issued on 28 June heralds record transport spending of $4 billion, increasing to $4.7 billion per annum by 2027/28, funded by increased fuel levies and road user charges.

Perhaps more interestingly, it confirms this government’s well-signalled pivot away from building new roads to maintaining and improving what we’ve got, improving safety, and taking a more holistic, lower-emission and ‘mode neutral’ view of transport options.

The GPS guides investment in transport by setting out the government’s priorities, objectives and available funding over the next 10 years. It allocates funding ranges in different activity classes. 

The GPS is used by the NZ Transport Agency (NZTA) and local authorities to determine which projects or programmes will receive funding from the National Land Transport Fund (NLTF), which is fed by fuel excise duties, road user charges, motor vehicle registrations, licensing fees and so on. 

Priorities and themes

GPS 2018 has four strategic priorities: 
  • • Safety – including a doubling of investment in road safety promotion and a 14% increase in road policing 
  • • Access – described as providing increased access to economic and social opportunities, enabling transport choice and resilience
  • • Environment – reducing emissions
  • • Value for money.
Themes are included to “influence how the results are delivered”:
  • • A mode-neutral approach to transport planning and investment decisions 
  • • Incorporating technology and innovation into the design and delivery of land transport investment 
  • • Integrating land use and transport planning and delivery. 
All activity classes are allocated more funding except for state highways, which see an 11% reduction (offset by increases in maintenance funding for both state highways and local roads). 

Highlights include:
  • • Public transport funding increases by 68% 
  • • Walking and cycling improvements receive an extra 116%
  • • Regional improvements (projects to improve safety, resilience and access for people and goods) and local road improvements are significantly up
  • • 
New activity classes for rail and ‘rapid transit’.

The rail category is transitional and applies specifically to urgent urban and interregional passenger rail projects. Rapid transit funding is for busways and light rail infrastructure in Auckland and other major metropolitan areas.

Safety

Safety is a key strategic priority for the government – one aspect of the GPS which enjoyed broad support from the over 900 submissions received on the draft GPS after it was released in April.
  

Specific policies mentioned for funding include infrastructure treatments and speed management changes; development of a new road safety strategy and action paper (including considering a ‘Vision Zero’ (i.e. no deaths or serious injuries) framework like Sweden and Norway; and improving the vehicle fleet, such as considering new road safety technology standards for vehicles, like side underrun technology on heavy vehicles and reviewing vehicle classifications to ensure safe and appropriate road use by different vehicle types.

Regions and resilience

GPS 2018 supports investment in an increased focus on regional transport, including developing transport connections that are crucial for linking production points with key distribution points and enhancing visitor journeys.

Investment to improve resilience on routes where disruptions pose the highest economic and social costs is also a priority. This includes investments to improve resilience to gradual change (erosion and rising sea levels) and high-impact events such as earthquakes.

Technology

Technology is a key theme – a way of delivering on all of the strategic priorities. The GPS announces the government’s desire to use technology to provide the public with better transport services and provide the infrastructure and services to support electric, connected and autonomous vehicles. To get there, the GPS encourages funding for testing, trialling and supporting the deployment of new technology.
  

Not mentioned in the GPS (oddly) but of direct relevance is the Future Technology Leadership Group announced by the government in March to develop a 10-year Land Transport Technology Roadmap to help harness some of the $1.5 billion per annum estimated value from intelligent transport systems.

From RONS to mode neutral

Perhaps the most controversial aspect of GPS 2018 is the shift toward ‘mode neutrality’. The government believes that NLTF investment needs to be more balanced across transport modes.

While seven of the National-led government’s ‘roads of national significance’ (RONS) which were already underway would continue, nine further RONS projects have been shelved. Funding is reallocated to public transport, walking, cycling and rapid transport.
  

At a higher level, the GPS says moving goods by road may not be the best option and supports consideration of other modes, such as rail and coastal shipping, to reduce costs such as greenhouse gas emissions, deaths and serious injuries.

The Road Transport Forum contends that supporting rail and coastal shipping through the NLTF amounts to cross-subsidisation rather than mode neutrality, because those modes do not contribute to the NLTF.

However, the GPS does not in fact authorise the use of NLTF revenue for rail freight and coastal shipping infrastructure – yet. A single line in the GPS acknowledges that: “over time … the scope of the GPS is likely to expand to include aspects of rail freight and coastal shipping”. We expect the second stage GPS (discussed below) to include such an expansion.

Where’s the money coming from?

There will be three increases in petrol excise duty of 3.5 cents per litre from 30 September this year (on top of the Auckland regional fuel tax which kicked in on 1 July) and again in 2019 and 2020. An equivalent increase in road user charges will be implemented from 1 October 2018, with increases also intended in the following two years following a review of the way road user charges are set. 

There will be three increases in petrol excise duty of 3.5 cents per litre from 30 September this year (on top of the Auckland regional fuel tax which kicked in on 1 July) and again in 2019 and 2020. An equivalent increase in road user charges will be implemented from 1 October 2018, with increases also intended in the following two years following a review of the way road user charges are set. 

As noted above, the NLTF is fed almost entirely by petrol taxes and road user charges. Infrastructure New Zealand argues that funding model is unrealistic [see above].

What’s next?

NZTA will adopt the National Land Transport Programme (NLTP) by 31 August 2018. The NLTP will confirm the activities to be funded through the NLTF over the next 
10 years, including the state highway improvement projects that will be delivered over this period.

A second-stage GPS is also planned in 2019 in order to “fully realise government direction for transport investment”. 

When completed, the Future of Rail study and a new road safety strategy will feed into that second-stage GPS. GPS 2018 flags that this second-stage GPS will “reflect further action taken by the government to improve the efficiency of the New Zealand vehicle fleet” and will investigate enabling funding for rail and coastal shipping.

We will watch closely for developments.

Chris Dann heads the transport and logistics team for law firm Anthony Harper; the team is one of the few in New Zealand with strength and experience along all facets of the supply chain; for further information, visit www.anthonyharper.co.nz


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