New Minister of Transport, new opportunities

If you follow politics, either at home or internationally, the last few weeks have proven somewhat of a bonanza.

The New Zealand election result – and to a lesser degree the US one – will have a far-reaching impact on our road transport industry. The brewing international impact of COVID-19 could materialise via economic shocks, which will undoubtedly surprise us in 2021. As such, it will be vital that a strong supply chain is understood and supported by government to ensure the security of freight to reach its destination.

Prime Minister Jacinda Ardern announced her new cabinet at the start of the week. The RTF is very relieved to see that the Green Party will have no role in transport. In fact, former Associate Minister Julie-Anne Genter will not have any ministerial responsibility in the new government.

Phil Twyford is no longer the Minister of Transport and the portfolio has been passed to Michael Wood, a first-time minister and MP for Mt Roskill in Auckland. Minister Wood has given an early indication that he has a pragmatic view about roading projects (such as being open minded on the construction of a new Mount Victoria tunnel in Wellington, which was previously opposed by the Green Party).

If we look at the state of the nation from the Government’s perspective, they have to build infrastructure fast, and that will have to include roads.

On behalf of the industry, we have been in contact with the new minister this week. In our briefing paper we have outlined the contribution of the road transport industry to the New Zealand economy. We have pointed out that trucks are a key part of meeting the freight task, even if you are keen on trains, as the government has indicated it is. The convenience of door to door delivery, the resilience offered by road transport and the time sensitivity around the need to deliver many goods continues to put road transport in pole position.

We want the Government to work more closely with our industry in recognition of the contribution operators make keeping our economy moving. We would like the Government to prioritise development of a freight strategy for New Zealand. Such a strategy would recognise the importance of the supply chain and how to keep it secure by setting high level principles to guide transport investment. We must build “freight literacy” among the public and decision-makers. Developing a strategy could be a start to achieving this. 

We also want to see more transparency about where the National Land Transport Fund is spent.

Industry operators (heavy vehicles) contribute almost a $1 billion per annum through Road User Charges. It is obvious this fund has been “dipped into” by the Government for things other than road building and maintenance. We can only speculate about how much money has gone into light rail, KiwiRail and of course those cycle lanes. Meanwhile, our highways and roads have become more dilapidated, which has led to increased costs for operators via repairs and maintenance.

We have requested partnership with the Government on our driver shortage challenges. The RTF surveyed a statistically significant proportion of our industry this year (over 600 operators) about their experiences of a shortage of drivers. The survey found that 37% of operators had at least one truck parked up due to not having enough drivers. The industry is taking the initiative by starting our traineeship Te ara ki tua Road to success, but we do need support from Government to assist us with important components such as a more fit-for-purpose licensing system to ensure we maximise success.

– Nick Leggett, CE, Road Transport Forum

 

Hold politicians’ feet to the flame on promises

It’s election season and the promises are rolling in. Whoever the public of New Zealand vote in to lead us for the next three years, they must demand delivery on those promises.

We are facing the most difficult three years ahead in many of our lifetimes – except those who have lived through wars. Covid-19 continues to baffle experts on how to live with it, or vaccinate against it. Meanwhile, countries such as New Zealand become increasingly isolated with closed borders, unemployment levels will leave scars for years to come, those who are hanging onto employment are stressed to the max, and money without interest is becoming increasingly worthless.

These are tough times and they have exposed a number of cracks. Our biggest city Auckland, responsible for the lion’s share of our GDP (nearly 40 percent) has been battered in the past two months. First there was the debacle of cutting it off from the rest of New Zealand at Level 3 and then late last week, a weather event took out much of the capacity of the Auckland harbour bridge. A permanent fix is likely to be months away.

Given New Zealand’s high-risk profile due to its susceptibility to numerous natural disasters, as well as biosecurity incursions, weather events, and now a pandemic (which has always been planned for), it has been extraordinary to watch the scrambling round by Government to respond appropriately.

This week, Treasury asked us for our views about the Covid-19 experience so far and they seemed surprised when we listed the government departments that were missing in action from our perspective. Yet the Government and the public of New Zealand expect there to be food in the supermarkets and things for them to buy as if the supply chain works by magic, regardless of the disaster.

The only agencies that seem to have a grasp of the exports-imports nature of New Zealand’s ability to survive economically – and therefore, an understanding of the supply chain – are the Ministry for Primary Industries and the Ministry of Foreign Affairs and Trade.

Rule number one of preparedness for disaster is having a good network of stakeholders in advance. Yet as key stakeholders on the supply chain front, we have had to bash down doors to get the government to understand how goods get from A to B and why it’s important. Oxygen for that hospital treating Covid-19 patients anyone? This Government seems to have an aversion to advice from the business community.

When people sit for hours in traffic – as they did at the Auckland road borders in Level 3 and they have trying to get from the North half of Auckland to the other half this week – you lose productivity. Costs go up, as freight is delayed. Time is money. Not everyone can ‘work from home’, certainly not those in the supply chain.

The vulnerability of Auckland has made some things crystal clear. You can’t have your major city put under the pressure it has been in the past couple of months. That’s before we even get onto the lack of water for the summer months ahead.

There needs to be investment in infrastructure that is holistic and coordinated to give the best economic outcomes for the country as a whole.

Auckland needs to be a big focus of that investment – the rest of the country will benefit from that.

There needs to be an alternative harbour crossing and moving the country’s main port for its largest city more than one hundred kilometres away to Whangarei is a ridiculous folly that needs to be axed now. Imagine how that would have played out with a broken harbour bridge.

It’s time for whoever is in Government to get real about the state of our economy and the link between infrastructure and our recovery from Covid-19. We want to see evidence that the promised ‘shovel ready’ projects have a shovel, in the ground, with someone on the end of it, starting now. There also needs to be evidence of how many jobs were created and what was the return on investment for the economy.

We cannot waste money on the pet projects of politicians. There needs to be a solid plan. You could be forgiven for thinking right now that money grows on trees, but it doesn’t. It’s borrowed and one way or another, it has to be paid back.

– Nick Leggett, CEO, Road Transport Forum

* Find out what the five main parties are offering the road freight transport industry on our dedicated General Election 2020 page here.

Rail not the great hope for safer roads

It was interesting to see the Government’s response to our recent request to spend some of the “shovel ready” Covid-19 cash on urgent road repairs for unsafe roads was to promote rail for moving freight.

Together with the Automobile Association, Association of Consultants and Engineers, Civil Contractors NZ, Employers and Manufacturers Association, and Infrastructure NZ, the RTF has written to Ministers and spoken with their representatives about the dire state of New Zealand roads. This has generated plenty of media and public debate this week, with the six organisations representing a broad range of interests, including private car users.

Speaking to RNZ, Transport Minister Phil Twyford said: “Our record investments in rail will help take pressure off our roads by moving more freight to rail. It’s going to take more than a few years to undo a decade of neglect.”

In the same RNZ piece he said the government agreed there had been underinvestment for a decade prior to 2017 so had increased highway maintenance spending on average by 36 percent. If re-elected, I would up that another 17 percent.

Yet early in the first-term of this Labour-led coalition government he said: “there has been an over-investment in roads and motorways for decades in this country”.

We hope the increased spending promise means he’s had a change of heart from his earlier views. The six organisations that have asked for urgent road repairs have all been hearing from our members what damages and costs they are incurring because of sub-standard and unsafe road surfaces.

The pro-rail brigade actually believes that in a long, skinny country with 93,000 kms of road and 4,000 kms of rail tracks, that rail can make a dent in the effectiveness, convenience and efficiency of road freight. This is despite all evidence to the contrary. Even in European countries with vast and efficient railways, freight movers pick road over rail.

In New Zealand, the National Freight Demand Study, commissioned by the Ministry of Transport and released in October 2019, showed that freight delivered by road was 93% of the freight task, up 16% since 2012, while rail was 5.6% of the freight task, down 17% since 2012.

It is also interesting to note, again from Ministry of Transport data, the tonnage of dairy being transported on the rail network has dropped from about 3.9 million tonnes in 2013 to 2.3 million tonnes at the beginning of this year.

Ultimately, the market will decide which is the best mode for transporting their goods. Road offers door-to-door delivery, even in the remote parts of the country; is more resilient in weather events, natural disasters, and Covid-19; and is reliable for time-sensitive perishable goods.

Only 3-7 percent of the road freight task is contestable by rail. Conversely, most rail freight is contestable by road, except maybe coal transport across the Southern Alps – trains are good for that because of the weight of the coal.

Roads are the lifeblood of the economy. All road users pay for them and we all benefit from them.

Over $2 billion in taxes (petrol tax and road user charges) is collected each year for the National Land Transport Fund to fund roads. But this is now being used to fund modes of transport that make no contribution. This cross-subsidisation is at the expense of roads and hits consumers in the back pocket.

The truth is that we don’t need rail, or public transport, over roads. We need a good balance of all three. RTF supports public transport and rail, particularly rail for public transport.

What we have an issue with is the defunding of roads for pet projects in rail that cannot provide a viable return on investment, or the efficiency, effectiveness, reliability and cost benefits of road freight.

The Government is slowing down the economy by not spending on roads. Slowing down movement of goods, particularly essentials such as food and medicines, impacts on the cost of living for all New Zealanders. Every delay in delivery costs someone.

– Nick Leggett, CEO, Road Transport Forum

The road out of this mess

How do we get out of this mess? Billions of dollars have been spent by the New Zealand Government on Covid-19. That cannot go on for the years it might take to either have a viable vaccine, or to learn to live with this and other epidemics.

We’ve heard a lot from the Government about investing in infrastructure to boost the economy and getting started on “shovel ready” projects to counter rapidly increasing unemployment and financial pain. Big announcements need to be backed by delivery.

The visual that comes with the term “shovel ready” is people behind shovels building something. The reality seems to be a bit of a stretch from that – projects have to go through all the consenting processes and there have to be skilled people behind those shovels. With a closed border, getting workers is an issue.

Together with five like-minded organisations with an interest in the state of New Zealand’s roads, we wrote to Government Ministers and suggested they could add road maintenance projects to the “shovel ready” list. The advantages of these projects are that they can start immediately; provide value for money; enable job creation; and offer scalability, geographic coverage, and year-round work.

All the organisations have been hearing from our members that the poor conditions on New Zealand roads are becoming a greater cost. It’s not only a cost to businesses, but also to road safety. People die on unsafe roads.

The road maintenance programme over the past decade can be characterised by under-investment and declining levels of service on both the state highway network and local roads. The decrease in spending has meant that the volume of resurfacing and foundation replacement work has been significantly below the targets Waka Kotahi NZ Transport Agency sets for network sustainability. Foundation replacements were 50 percent below target for the period.

A study conducted by Waikato University this year for the RTF, showed transport operators have had a 55 percent increase in their repairs and maintenance costs between 2015 and 2020. This is largely due to poor road conditions causing damage to trucks. Interestingly, trucking operators have had a five percent increase in road user charges (RUCs) in eight of the past 10 years. Essentially, they keep paying more, but getting less value from roads.

At a meeting this week, Ministers’ representatives told our group – which includes Civil Contractors New Zealand, EMA, Infrastructure New Zealand, AA, and the Association of Consulting and Engineering – that there had been a 36 percent increase in road maintenance over two years. But that is not what road users are seeing. We are talking about road surface conditions, not the barriers and other trimmings that have been put in place in the name of safety.

Based on road maintenance cost and outputs data for recent years, we estimate that an additional $300 million per annum will be required for the next three years to return the network to an appropriate standard.

Our plea to have the ready shovels applied to road maintenance fell on deaf ears. This is despite there being an unprecedented length of the road network currently operating in a sub-standard condition.

We have also been told to wait for the release of the draft Government Policy Statement (GPS) on Land Transport. The RTF submitted on this and said: The 2021 GPS policy was written for a more settled economic climate and we wonder how much of it will continue to be valid within the foreseeable future.

Covid-19 has changed the shape of things and Government Ministers and their policy-makers need to be re-thinking how and where money is spent to deliver infrastructure projects, based on sound economic principles, that will enable economic recovery.

This might require agility governments are not known for. But there is too much at stake here to get this wrong. Roads have played a critical role in the response to Covid-19, getting essential goods moved around the country. Roads will continue to be the base of economic growth for years to come, getting exports to ports and airports to earn money for New Zealand, and moving New Zealanders to and from work. Road spending needs to be commensurate with the task.

– Nick Leggett, CEO, Road Transport Forum

Ask questions in the weeks leading up to the election

A month is a long time in politics and with New Zealand’s general election moved from 19 September to 17 October, we are seeing more of the impacts of the response strategy the Government has adopted to Covid-19.

That response strategy will impact New Zealand’s economy for years to come. I acknowledge New Zealand is not alone in that, but this is New Zealand’s general election and we are voting on the situation here.

Asking questions about the development and implementation of the Covid-19 response strategy, and whether or not there is a recovery strategy, should not be seen as an attack or criticism of the current Government, rather as our democratic right.

We cannot go into a general election without asking questions of all the parties and candidates putting themselves up for election, or we come perilously close to being like countries I never thought we would be compared to.

New Zealand has adopted a worrying tone against those who ask questions of the current Government regarding Covid-19, but we must be able to have open debate and all remain friends.

This is an election like no other in most of our lifetimes – those of us born post-World War 2. How we face Covid-19, particularly if there is never a cure or vaccination to prevent it, will shape the country for years to come.

The Road Transport Forum has put together an Election Manifesto – highlighting areas the road freight transport industry wants to see progress on by the next Government to enable the supply chain to operate at its best.

We put forward four questions to the five main parties and they have supplied written responses you can read on our website here. They cover Covid-19 and the economy, workforce, the environment, and the moves to legalise recreational cannabis use that will be voted on in via a referendum as part of the voting process. We urge you to read these responses from Labour, the Greens, New Zealand First, National and ACT, and continue discussions with your local candidates.

The RTF has been quite vocal about the Covid-19 response so far where it intersects with the supply chain. We thought the full Level 4 lockdown was bad, but then came Level 3 for Auckland only with a hard border to the north and south.

If the Government is learning as they go – that’s what the politicians say, anyway – they still have a lot to learn about how ports work, how goods are exported and imported, and generally, how the supply chain works. The problem is, they don’t seem to want to listen to people in the private sector who could sort a lot of issues out very quickly with their knowledge and expertise.

Pretty much everything you need, every day, comes to you on a truck. In fact, 93 percent of freight in New Zealand travels by road. We’ve seen the value of that as people have retreated to their homes in fear of Covid-19, or under Government instruction, and had everything delivered door-to-door.

To keep our economy moving we must have good roads. We are concerned that while there has been a lot of talk about building roads as a means to boost the New Zealand economy, we don’t believe there is the capability to contract and manage such projects within the New Zealand workforce. With our border closed indefinitely, how are we going to get the people needed to get these projects underway?

Many sectors are concerned about not being able to get people with the right expertise into the country to enable their businesses to keep running. This too, will have a significant economic impact if the primary sector, for example, can’t get people in to help with seasonal work and harvests.

With international tourism off the map, it’s our primary products we rely on to generate an income – dairy, meat, wood, fruit, wine and fish.

It will be very important for the supply chain moving forward that New Zealand doesn’t yo-yo in and out of highly restrictive Covid-19 response levels and that Government comes to the party on letting skilled workers into the country. We also need to see progress on border management that allows for movement to keep our economy going, and preferably growing.

A lot of businesses are limping along and it feels like there is no end in sight. We cannot accept that. There must be a plan and there must be consultation with real experts on that plan – not a whole lot more people at the top.

Now is the time to ask your questions of those who will shape our future for the next three years.

– Nick Leggett, CEO, Road Transport Forum

Time to take a breath on port decisions

I fail to see why there is the perceived need to rush into moving Ports of Auckland, or the rush to pick a favourite to replace it.

So, I was pleased to see the Government release, this week, a sensible and measured report that stopped the push to develop Northport in its tracks. The promises around Northport were only ever based on New Zealand First’s desire to secure the Northland electorate seat at this year’s election.

RTF has spoken out against the move to Northport on many occasions because of the cost it would add to move freight further away from its end destination. That’s before you even get into logistics and environmental impacts.

As a country facing severe economic hardship in the wake of Covid-19, the Government cannot afford to spend money on poorly thought-out projects that don’t stack up on costs versus benefits.

The government-commissioned report prepared by Sapere Research Group – Analysis of the Upper North Island Supply Chain Strategy Working Group Options for moving freight from the Ports of Auckland – endorses the folly of a rushed move to Northport. The report says that assessment of regional economic development effects suggests that, on its own, a relocation of port activity is unlikely to substantially alter regional economies. It says most of the gains would be felt in regions outside where the rise in activity takes place.

The argument that moving to Northport would benefit the Northland economy is dead in the water.

The report also endorses our point that it is clear that distance to market is critical to the supply chain and that Northport is generally considered too far from main markets to function as a primary import port. It is worth noting that 80 percent of New Zealand’s freight is distributed to points south of the current Ports of Auckland.

What’s at play here? Influential Aucklanders don’t like the look of a working port in their downtown area and, at some point, Ports of Auckland will reach capacity – though Covid-19 might extend that timeframe.

Aside from the optics, the country needs to look at how it can best manage the flow of exports and imports that are the mainstay of our economy. We cannot become so isolationist in our response to Covid-19 we forget that. We are already seeing a worrying trend with global airlines responding to the New Zealand Government’s border policies.

It seems to be a peculiar New Zealand thing to respond to big issues by quickly coming up with options A or B and force a choice, when it need not be a binary choice.

The Sapere report suggests we have a good 30 years to tackle capacity issues for Ports of Auckland. They look at the current options on the table and conclude a new port in Manukau Harbour is the number one contender in a cost-benefit analysis. This has been met with some derision due to the nature of New Zealand’s west coast tidal flows and the suitability for shipping.

Again, this reflects more on New Zealand’s decision-making capability rather than the well-researched report.

Sapere acknowledges that long lead times for planning, consenting and constructing port capacity outside Ports of Auckland mean there is a shorter window of time for a decision about the long-term strategy to future proof port capacity. That window is approximately 10-15 years.

Surely, in that time, there can be a sensible assessment of what the problem we are trying to solve is and how best to solve it, rather than trying to retro-fit a solution to meet the needs of politicians, or other vested interests.

The problem is: How we can increase port capacity, anticipating growth, for exports and imports that flow through the upper North Island supply chain?

We’re supposed to be this innovative little country that punches above our weight. You’d think we could solve that problem over 15 years.

– Nick Leggett, CEO, Road Transport Forum

Shovel-ready – the misleading catchcry of 2020

On Monday this week, New Zealand’s capital city ground to a grid-locked halt for five hours because of a small slip on State Highway 2. This shows us a number of things to be concerned about.

The city predicted to be hit by a big earthquake any day now has no transport resilience; the management of the response to the slip leaves us wondering about the capability in New Zealand to build all this new infrastructure cash is being splashed at; and the needs of a handful of cyclists seemed to take precedence over the many motorists trying to get north of Wellington city on both SH1 and SH2 from 2.50pm, when the slip was first reported, until 8pm, when traffic cleared.

On RNZ the next day, in explanation of the magnitude of the five-hour snarl-up, the safety of cyclists – with their cycle lane on SH2 closed by the slip – was cited by NZTA as one reason for closing one traffic lane to cars and trucks. NZTA conceded that closing one lane on a highway in peak hour traffic causes major issues and is a vulnerability for Wellington. There was no mention of the existing cycleway that runs adjacent to this part of SH2. It is apparently a bit rough and is being upgraded, but surely it could be used in this kind of situation?

Every winter this road has a slip at least once, causing this kind of traffic mayhem. A lot of commuters reported this was the worst wait they’d ever had. While the slip appeared very small, there was apparently a lot of instability in the bank running alongside the highway. It was also difficult for crews to access the site and get the appropriate gear there due to the built-up traffic.

This highlights the dangerous lack of resilience in the roading network and the clear need for the Petone to Grenada highway, which has been put on ice by the Government. This is despite it being listed as a top priority in the Wellington Lifelines report – to safeguard New Zealand’s economy in the event of a magnitude 7.5 earthquake on the Wellington Faultline. Our economy certainly can’t take another hit right now.

On Monday, motorists trying to get to Petone and beyond in the Hutt Valley were advised to take SH1 and then go across SH58. That just caused SH1 to gridlock and added 40km-plus to people’s journey home. Another reason to get the Petone to Grenada highway out of the mothballs, and of course, to get Transmission Gully finished.

The situation with SH2 can only be described as chaos, with no clear strategy or plan of action for something that is a regular occurrence in winter and could cost lives in a major earthquake.

Added to the mess that Transmission Gully has become – with a finish date moving out all the time to now possibly 2023 – it is hard to have confidence in the big picture planning for New Zealand’s transport network, particularly for our major cities. When it comes to Auckland, I only need to say “light rail” and you get the picture.

The situation in Wellington is sadly reflective of many parts of New Zealand’s road network. Operators are constantly telling the Road Transport Forum how much harder it is to get their trucks from A to B, or the damage their gear suffers and the additional cost pressure that puts on them. The state of the road – be it poor maintenance or limited capacity – is usually to blame for these pressures.

With our current track record, there are some big question marks hanging over New Zealand’s ability to recover from the economic hit caused by Covid-19 by building infrastructure. We don’t have the expertise, and with our borders closed indefinitely as we try and eliminate Covid-19, where are we going to get the necessary help from?

Each day another announcement is made about money being spent somewhere on infrastructure. New Zealanders need to mark all these announcements and hold those making them to account to actually deliver; to have the capability to plan, design and manage these projects; and to have the people on the end of all those shovels to do the work.

Shovel-ready may well be the most misleading catchcry of 2020.

– Nick Leggett, CEO, Road Transport Forum

Infrastructure announcements will not save New Zealand’s economy

The penny is starting to drop that New Zealand is in a precarious economic position we may not recover from for decades. There’s a big difference between saying building infrastructure will contribute to New Zealand’s economic recovery from Covid-19, and the reality of the gap between announcement and creation of paying jobs.

I’ve been quite vocal about my concerns around Transmission Gully. If the Government can’t even complete the one big roading infrastructure project on the books, how can we have confidence they can get others running and completed?

Many share my concerns and this week, New Zealand’s largest construction company Fletcher Building announced it would be slashing about 1000 jobs in New Zealand as it moves to reduce staffing by 10 percent.

It has been reported that Fletcher Building had more than 400 operating sites closed during New Zealand’s level 4 lockdown. It said it recorded zero revenue in most of its New Zealand operations during the lockdown. In Australia however, where there has not been a total lockdown, revenue ran at about 90 percent of its prior expectations.

Our biggest construction company doesn’t have much confidence in the road ahead and the expected market downturn means it has to reduce its workforce, losing valuable skilled workers. They are not alone. We are seeing 1000 people a day join the unemployment queue. The cost to this country will only play out over time, but we can expect our young people won’t want to stick around and pay the bills being racked up now and we will be looking at another brain-drain.

The Government has tagged about $15 billion for infrastructure, but announcements do not jobs make. There’s a big gap between something being deemed “shovel ready” and well, the shovels actually going into the ground with workers attached to them.

Even the Amalgamated Workers Union national secretary Maurice Davis is calling for a faster start on infrastructure projects to offset job losses in the construction sector. He suggests the Government look at fast-tracking projects they deferred when they came to power.

In a last-ditch attempt to get some business nous into the economic recovery the Prime Minister’s Business Council has told her that Australia is “co-optimising” the economic consequences of the Covid-19 outbreak better than New Zealand. Chair Fraser Whineray sent a blunt letter holding up Australian Prime Minister Scott Morrison’s high-powered National Covid-19 Coordination Commission as exemplary.

The voice of business is not so well heard here in New Zealand. You can see that in suggestions for a four-day working week and an extra public holiday. These are further costs already crippled businesses simply won’t be able to bear. They’ve only just got back to work in many instances and now the Government wants them to pay for more days off. This also shows the Government’s complete lack of understanding of the fact that many businesses operate seven days and/or are coordinating with parts of their businesses in other time zones. The five-day, 9am-5pm work week is no longer reality for many.

You can see the disregard for business in the policy – written by people with no business experience – and in Wellington where we now wander in a ghost town. Public servants are staying home instead of coming into the city to work and contributing to the retail and hospitality businesses that have conveniently been there for them for years.

If the Government really cared about jobs, jobs, jobs, they would get their own workers back into Wellington’s offices spending their considerable salaries.

The trouble we are in will not be cured with kindness. It won’t be fixed by well-meaning workshops. The meaningless daily press conferences and the hiding behind Covid-19 needs to stop. As Mr Whineray put it in his letter:

“To avoid the endemic problem with the public sector’s misallocation of New Zealanders’ resources held by the Government in non-core activity and low productivity within the public sector we need a very strong business in involvement alongside central Government.”

– Nick Leggett, CEO, Road Transport Forum

Best minds required for economic recovery

New Zealand’s Covid-19 experience has shown how out of touch some members of our Government are with the businesses that drive the economy. This is pretty worrying when we look at the road ahead to some kind of economic recovery once the virus has done its worst globally.

This week alone, the Government referred to the five day extension of the Alert Level 4 lockdown as “two business days”; Labour MP Deborah Russell pontificated on the short-comings of small business owners who can’t keep their closed businesses operating in a global pandemic; and Employment Minister Willie Jackson said nobody would be impacted by the lockdown being extended a week.

Even more tone deaf, the Greens came out with a proposal to spend $9 billion over 10 years putting fast trains throughout New Zealand. Hundreds of people are becoming unemployed by the day, businesses are going under, our borders are closed, and this is their best solution?

Like much of New Zealand, the road freight transport industry has a good share of small and medium sized businesses. They have a lot invested in plant and property – their trucks and yards – and every day off the road costs money. The smaller the business, and the longer the days off the road, the more the damage is done.

All businesses will be to some degree reliant on the Government to stimulate the economy both during the various stages of the Covid-19 global pandemic, and once it is over and a vaccine is found.

Given the amount of debt the country will be in, and the hardship facing its people, you want the very best minds on the job and you want their decisions to be based in evidence, not ideology.

Let’s unpick this fast rail idea. The Greens say: “Building rail creates more jobs than building motorways”. We would like to see the evidence base behind that statement before the country throws away $9 billion on what is essentially a pipe-dream.

Rail will never replace roads. We need roads – the Covid-19 crisis has shown us that. All those essential goods and essential workers have gotten to where they need to go via roads. In any crisis, help comes first via roads. Investment in infrastructure to boost the economy must include investment in roads, as well as rail.

If there is $9 billion left over for a vanity project, it surely still has to measure up in a costs versus benefits equation.

As the executive director of the New Zealand Initiative, Dr Oliver Hartwich, told Parliament’s Epidemic Response Select Committee on Thursday, “What distinguishes a good project from a bad one is that a good project’s benefits are greater than its costs”.

Of course there is no mention of this in the Green Party’s statement about fast electric trains for passengers and freight, including on routes such as Christchurch-Ashburton-Timaru.

On that route alone, much of the freight is food – dairy, meat, fruit and vegetables. Food needs to travel by road and one journey will always beat the three putting it on a train would take – truck to train, train to station, truck to end destination. Trains don’t go to supermarkets, or dairies, or other food stores.

As for passengers on that route – let’s take a look at where fast trains already operate, such as Europe. In the France-Germany-the Netherlands-Belgium grouping, you’ve got a combined population of about 178 million people. New Zealand has just 4.7 million people and the Timaru-Ashburton-Christchurch grouping has about 460,000 people. The fast trains in that European cluster are fantastic, but they are also expensive. It is often cheaper to fly the route. So with the huge population base, fast trains still have to cover their costs with high ticket prices for passengers.

Expensive for passengers and not suitable for freight, how exactly is this plan going to help us during one of our worst economic slumps?

We hope the Government’s Infrastructure Industry Reference Group will recommend investing in critical roads at this time. The RTF has written to that group advocating for three road projects that relate directly to efficient movement of freight in the three major economic regions of New Zealand.

These roads are:

  • The Petone-Grenada Link in Wellington
  • The East-West Link between Onehunga and Mt Wellington in Auckland
  • Selwyn to Timaru highway, four lanes

We believe this would better serve our economic rebuild than a very expensive fast rail – which we don’t believe has been properly costed – in a country that doesn’t have the population base to use it.

– Nick Leggett, CEO, Road Transport Forum

Minister bags her own Government’s infrastructure announcement

On 2 February, Julie Anne Genter provided judgement to the world on “the good, bad and the ugly” of the recent Government infrastructure announcement, via an article in The Spinoff.

A casual observer would not recognise that the author was in fact, Associate Minister of Transport, with actual responsibility for the package. It is just plain weird for her to be passing judgement on its key elements and stating that the New Zealand Upgrade “falls short” on what is required to “reduce climate pollution, ensuring people have enough to thrive, and protecting nature”.

That however, is the nature of the current coalition Government. Once upon a time, Cabinet responsibility meant that collectively made decisions were appropriately backed by all Ministers, and their Associates. Now, not so much.

In a case of having her cake and eating it too, Julie Anne Genter agrees with a Green pressure group that it was disappointing that incredibly expensive motorway projects made up the lion’s share of the New Zealand Upgrade and that it is “nowhere near what we need.”

She then goes on to attack “transport” saying every sector must pull its weight in cleaning up our act and that we have been one of the worst in recent years. Of course, the usual arguments are then prevailed upon about transporting more freight by sea and rail. She mentions the need to electrify the vehicle fleet (no other options though) and of course doesn’t mention any incentives for business that are well within her power to fight for now.

Our industry needs to be on guard when we reflect on the new roads promised in the New Zealand Upgrade. Firstly, there are two or three elections between now and the start of some projects. It’s concerning that Julie Anne Genter goes on to say that she will be reviewing the scope of projects like Mill Road and the Tauranga Northern Link to make sure they include continuous bus lanes and off-road cycleways. To me, this sounds as though the traditional four lane road that we thought we had been promised could well be compromised – becoming two lanes for cars and trucks (one in each direction) and two lanes for buses and bikes – and be subject to a “green wash”.

The other really serious concern for our industry – and any Kiwi keen on moving around and having a productive economy – is that if this incarnation of Government alters post-election on 19 September to a Labour-Green coalition; how safe are any of the announcements we value from the New Zealand Upgrade package? If the Greens are a stronger voice in the next Government, the demands of their extreme elements will only grow. Businesses should be worried.

In the “green wash” we have to also watch the fantasy this Government has created around rail. This week we submitted on a Bill before Parliament proposing to give yet more money to subsidise rail, and to take it from the fund paid for by road users to maintain and build roads. I’ve labelled this highway robbery. We can only see roads further run down and unsafe as the largesse to KiwiRail continues unchecked.

Rail’s environmental benefits over road are simply illusionary. Any level of success for rail transport is entirely dependent on truck transport. Measuring environmental performance solely on the basis of the relative performance of the truck versus train, instead of the reality of point-to-point sender to receiver, is a very narrow perspective, typically favoured by academics without any interest in economics.

And despite the socialist desire to control markets, customers actually decide how they want to send their goods. The vast majority favour road. Rail freight’s strength is in long-distance transportation (over 500km) of high volumes of relatively low value products, such as coal. It’s interesting to see the Green movement promoting that.

The reality is, this Government spurns business and makes decisions based on ideology alone.

– Nick Leggett, CEO, Road Transport Forum