Speech to the Road Transport Forum 2019
Tena koutou katoa, thank you for the opportunity to be here today.
I would like to take a moment to recognise RTFNZ Chairman Neil Reid, Chief Executive Nick Leggett, Ben Maguire, CEO of the Australian Trucking Association and all of the President’s and CEO’s of RTFNZ’s associations here today.
We don’t always see eye to eye, but I have to say the Forum is a strong and passionate voice for your industry, and it’s good for our country that we have robust debates on transport policy.
I’d also like to acknowledge Craig Membrey.
From a terribly personal tragedy, Craig’s message is a call to action for the vital importance of mental health awareness, and his message of hope as an Ambassador for Beyond Blue, promoting strategies to deal with stress, anxiety and depression.
Inspired by his late son Rowan, I know Craig has gone on to inspire the trucking community in Australia and in New Zealand with his message of hope and support.
Thank you for your work Craig.
At the election we promised to take mental health seriously and we are.
We’ve put in a billion dollars into frontline mental health services.
Safety and road to zero
The health and wellbeing of the people in your industry is something I take seriously as Transport Minister.
Safety is our top transport priority.
We know that crashes involving trucks make up more than 20 percent of deaths on our roads.
This is despite the fact that trucks are not involved in significantly more crashes per kilometre than other types of vehicles.
University of Otago research suggests around 25 percent of road fatalities involve a person driving for work, or to and from work.
This makes road crashes by far the single largest cause of work-related deaths.
That’s why the ‘Road to Zero’ draft road safety strategy released by Minister Genter has the theme ‘vehicles as a workplace’ as a key part.
I understand that the RTF were represented on two working groups as part of the Ministry’s development of the new strategy – thank you for contributing.
There are some immediate actions proposed in the strategy which are relevant to your industry.
These includes a greater focus on improving fatigue management, increasing regulatory oversight and achieving greater coordination and collaboration between government agencies.
One part is encouraging best practise for example by –
- Supporting private sector initiatives to establish best practice road safety standards in the supply chain.
Another part is through strengthening the regulatory regime including by -
- implementing the outcomes of the review of the NZTA’s regulatory functions
- and reviewing log-book and work-time requirements.
NZTA issues and the industry
But it’s no good having good regulations if they’re not being enforced.
This time last year, it became clear that the Transport Agency had not been performing its regulatory duties to the standard we all expect.
This failure, in my view, was in part a result of a reduced focus on the Agency’s regulatory role over the last decade.
Staff were redeployed and there was an emphasis on education rather than enforcement.
This was exacerbated in 2014 when the Agency lost staff from its heavy vehicle compliance team.
NZTA was failing in its duty to properly check the companies that certify vehicles as safe for the road.
It seems unbelievable, but NZTA were actually treating the people they were supposed to be regulating, as their customers.
When problems with these companies were identified, there was often no follow up.
That was unacceptable - public safety and the safety of drivers must be paramount.
The former government was asleep at the wheel while this went on for years.
I know this affected your industry.
One example was a certifier who NZTA knew was not doing a good job and they didn’t do anything about it.
He signed off on a truck trailer drawbeam that snapped off mid-drive in August 2017.
NZTA had known this certifier was dodgy for years and had a poor record going back to 2000.
Despite this, it took them until Feburary 2018 to issue a safety alert and then a further three months to revoke the certifications of potentially unsafe towbars.
Given a visual check of 62 towbars done by this certifier found fault with 61 of them, I think revoking them was the right call.
It should have happened a lot sooner.
This underlines the fact that the regulatory issues with the Transport Agency were systemic.
It’s going to take time to rebuild the Agency’s regulatory role.
I realise this is causing some disruption, and I ask for your understanding and patience while we put things right.
My expectation is that NZTA works collaboratively with the industry to help minimise this disruption.
We’re committed to safety and I hope to release the Ministry of Transport’s review into NZTA in the coming weeks.
The review makes for sobering reading.
It documents exactly what went wrong over the last nine years and sets out a road map to getting safety regulation back on track.
In the meantime we’re making great progress on resourcing up the regulatory role at NZTA.
With Sir Brian Roche in place as Chair and a strong new board behind him, including the newly appointed Ken Rintoul, who brings first-hand experience as a freight haulage contractor, the Agency is well on its way.
State of our roads
We’re also aware that it’s not just our rules that need to be brought up to scratch, it’s our roads.
That’s why our Government is investing $1.4 billion over the next three years in targeted road safety upgrades, like median and side barriers and wider shoulders, across 3,300kms of state highways.
This is expected to prevent 160 deaths and serious injuries every year once fully rolled out.
I know that some people don’t think much of these targeted upgrades, but the research shows they save lives.
For example, flexible road safety barriers can give a 70 to 80 percent reduction in road deaths.
Shoulder widening can reduce crashes by up to 35 percent.
Wider centrelines can do the same by 20 percent.
But it’s not just about installing upgrades, we know that we have to make sure our roads and state highways are properly maintained.
I’d like to acknowledge the National Road Carriers’ pothole campaign.
It may surprise you to know that the state of our roads is due to years of neglect by the former government.
From 2009 to 2017 road maintenance expenditure flatlined.
Over the same period, the cost of labour and materials grew by 12 percent and freight volumes grew by 32 percent.
They called this ‘sweating the asset’.
I call it running down the quality of vital national infrastructure, and a false economy.
We’re now getting on with addressing the maintenance backlog caused by nine years of underinvestment.
We’re spending around $2 billion to operate, maintain and renew over 80,000 kilometres of local roads – 22 percent more than the previous government.
This is on top of the over $2 billion we’re spending maintaining our state highways, which is 18 percent more than the previous government.
Last financial year, NZTA delivered its biggest recorded programme of road maintenance and is on track to deliver 70 percent more renewals compared to under the previous government.
We know you need good roads to drive on and we’re investing in our entire network, rather than in a few handpicked projects like the former government.
Freight growth and driver shortage
Your industry is vital to our economy.
Road freight accounts for 91% of all freight moved in New Zealand.
Freight movements are projected to increase by more than 50 percent in the next 25 years.
And freight volume is predicted to grow over 30 percent over the next decade.
Your industry has grown year on year for the last ten years.
However, despite this growth, the industry is not without its challenges.
Competitive pressures are driving down drivers’ incomes.
The big customers wield enormous market power.
Firms are forced to cut margins to win contracts.
This puts pressures on drivers to drive longer, not to take breaks, and meet more and more demanding schedules.
Markets are competitive of course, but when these pressures undermine safety and drive down pay packets, then it’s a problem for all of us.
On top of that, and these things are of course connected, there is a driver shortage.
The National Road Carriers Association predicts the industry will need about 28,000 drivers over the next decade to meet growth in demand from the freight industry.
That’s 2,800 every year for the next ten years needed, but we’re only getting 1700 to 1800 a year.
I know that the industry is feeling frustrated with the current heavy vehicle driver licensing system and that it’s partly to blame for the shortage.
These are concerns that I take seriously, and I know it’s an issue that needs to be addressed.
The Ministry of Transport is progressing work to update the heavy vehicle driver licensing system.
Peter Mersi, the Ministry of Transport CE will be speaking on this point later today, however I can say that heavy vehicle licensing rule changes will be progressed within this financial year.
We’re also looking at improving training, and in November 2018, the Government announced an almost $3 million investment in a new National Driver Training Centre near Palmerston North.
The programme has been developed by the Manfield Trust’s National Driver Training Centre and will be funded through the Provincial Growth Fund.
It aims to train up to 700 drivers and machine operators each year.
I’d like to acknowledge Shane’s work in this area.
The PGF is ground-breaking, investing in our regions and has made a significant boost to transport infrastructure in some of the regions that are now getting attention after years of neglect.
Industry in the long-term
But we also collectively need to look at the other issues like improving pay and conditions.
We have to ask ourselves what kind of industry do we want to have in ten years? In thirty?
Will it be one that you recommend to your kids?
That’s an important question given the average age in the industry is 54.
Self-driving trucks also pose a challenge to the industry’s model.
Is the current model sustainable?
Do you want an industry struggling with driver shortages, reliant on importing low wage drivers from overseas, with supply chain pressures piling up to make driving less and less attractive as a career?
Or do you want an industry with successful firms that can deliver secure livelihoods for drivers, higher safety standards, and can attract the next generation of drivers?
When the construction industry last year faced the collapse of yet another big company, Ebert, Government stepped up and signed an accord with the industry.
The Construction Accord sets out a way forward for both Government and the construction industry to ensure the long-term viability of the sector while improving practices, safety and productivity.
I want to hear from you if you think we need to do something similar with your industry.
We’ve already started discussions with the Forum on the future shape of New Zealand’s heavy vehicle fleet.
In 2015 road freight accounted for nearly a quarter (24%) of all transport emissions in New Zealand, despite only making up seven percent of total vehicle kilometres driven.
And each heavy truck remains in the New Zealand fleet for a long time - 24 years on average.
This isn’t helped by the fact there are aren’t really any low-emission options readily available in New Zealand.
I’ve asked the Ministry to investigate ways we can support change in the road transport industry to a clean, green future.
They are currently reviewing the viability of electricity, hydrogen and biofuels for heavy vehicles.
There’s a lot of work to be done as each option needs nationwide infrastructure, to be accessible, and offer reliability and value to you all.
This the Green Freight project, and it recognises that the transport system has a critical role to play in the transition to a net-zero carbon economy.
Over the next few months the Ministry will continue discussions with industry and I thank the support that the Forum has signalled for the project.
Of course as we move towards electrifying more of the vehicle fleet, we know that we can’t rely on petrol excise and RUC to fund our vital transport services and infrastructure forever.
The question is how do we pay for our transport system?
Other countries are also thinking about this question and are increasingly looking to a GPS-based transport pricing system, where people pay for how much they actually use the road by time and space, rather than how much petrol they use.
Officials are scoping preliminary work into a GPS-based transport pricing system here in New Zealand.
It will include looking at how we fund transport, manage demand to help ease congestion, and capture the true costs of transport.
This means a new way of thinking – it’s about using technology to drive change in human behaviour and create a new model for transport.
We are also developing a plan for congestion charging and demand management for Auckland.
The former government kicked off this work and I think it’s worth continuing to investigate.
Finally, you may have seen in the news this morning that the NZTA Board has just approved funding of $620m for the Manawatu Gorge replacement highway.
It will restore a crucial transport link that supports local and regional freight movements across the lower North Island.
Subject to resource consents, enabling works are expected to begin this year, and full construction is expected to get underway next year with completion in 2024.
To wrap up, I want your industry to be assured our Government is committed to tackling the long-term issues facing your industry.
If you’re up for it, we’re ready to work together to raise standards and try to secure a more sustainable future for your industry.
Government can’t do it alone.
Industry can’t do it alone either.
We have to work together to create a sustainable, inclusive, and productive economy.
Tena koutou, tena koutou, tena koutou katoa.