Land Transport Management Amendment Bill

What a dramatic start there was this afternoon to the Land Transport Management Amendment Bill. I feel that a more appropriate title would be the “Belatedly Looking After the Workers Bill”, because at the eleventh hour, after the transaction had gone through—the Labour Government is paying nearly $700 million, plus the $100 - million odd for the loan, plus the rent holiday; it is probably a billion-dollar transaction all up to buy back the railways—Labour found out that it had forgotten about the workers. At the eleventh hour today, as part of this bill the Minister of Finance had to introduce Supplementary Order Paper 211 to ensure the Toll workers—[Interruption] Actually, if the ex-Tauranga member would like to speak, he had better take a call. The ex-Tauranga member always likes to chip away, without standing up—[Interruption]

The bill could be renamed the “New Zealand First Cave in Bill”, too. Apparently in Part 1 the New Zealand First members stood up and said no way were they going to vote for this bill if the Labour Government was not going to remove the wording about the principles of the Treaty of Waitangi. But what happened? They voted for the bill, anyway. It is like flying a white flag—[Interruption] Exactly! That party’s members say they will do what they have come here to do, but when it comes to the crunch they cave in, lie down, and accept what exists.

Let us get back to the railway workers. The Labour Government, in 11 hours, just suddenly remembered that during all the dealing, the negotiations, and pleasing the Australian shareholders when it paid a hefty price to buy back the railway, it forgot about the workers. So National will support the Supplementary Order Paper to make sure the workers in the Toll company who are being transferred into the Crown entity KiwiRail will continue their contributions to Government superannuation. That was quite a dramatic start to this bill by a Government that always claims it looks after the workers. Actually, it forgot about them during a very important transaction.

The other thing I would like once again to reinforce relates to Local Government New Zealand raising serious concerns about the lack of a partnership approach in the introduction of this bill. I was very pleased that the Minister in the chair, Annette King, actually took a call. I raised a question with her about the Government policy statement. She explained that the issuing of the Government policy statement has been changed to a 3-year cycle to coincide with the local government planning cycle, so that local government can take the Government’s direction into account. That makes sense, except, as Local Government New Zealand pointed out, it sounds as though the policy is coming from the top down and the Government is to set out the priorities.

What local authorities really want to see is a genuine partnership whereby the Government consults them before the policy statement is issued, so that a local priority or a regional priority actually gets a fair hearing before it is too late. A certain local priority for a project may be agreed to, but that might be overridden because of the Government policy statement. Local Government New Zealand therefore expressed concern—and I am not sure at this stage whether anything has been amended so that we have something here that will ease its concern—about the lack of a genuine partnership approach.

So although the title Land Transport Management Amendment Bill sounds very bland, the content of the bill is really significant. It is significant in the sense that there is concern about the super-bureaucracy that will be created with the New Zealand Transport Agency.

There are some nights and days in Parliament when one is just utterly and totally amazed. That a National Party spokesperson would get to her feet and raise the issue of New Zealand railways is, as I said today, a case of her having either the utmost gall or total amnesia. There was an outfit, according to Booz Allen Hamilton, that sold a $100 million profit-going company in 1993 not for $400 million, as was claimed, but for $328 million.

💬 Dr Wayne Mapp: She wasn’t here then.

Not being here is no excuse; to show total ignorance is the problem with National members. Too many of them were here. They are still on the front bench, and they have learnt nothing. The reality of the whole thing is that they said: “We are doing this because we cannot afford $200 million of capital to develop infrastructure, and Wisconsin Central Transportation and our friends Fay Richwhite can.” So did those companies invest $200 million? No. Did they recapitalise and take a $9-plus shareholdership down to 28c? Yes, they did. And why have they been in court in the last 12 months? It is because they robbed the public blind. They are the very same people who are lining up behind the National Party, as I speak, today—and they all know it. So for the last speaker to get to her feet and talk about the railways repurchase, is beyond anything in my wildest dreams that I would contemplate would happen here this evening.

Parts of this bill are very good and parts are not. First, I believe we should not act until we have international fuel stabilisation. Secondly, I believe there is a windfall, occasioned by GST, that could mean we could pay this money across; we could actually hypothecate it, to use a term that came out of some bureaucracy. But let me tell members this: we cannot sell that to the public—hypothecation.

💬 Hon Maurice Williamson: It is the same thing—you can’t sell it—

Oh yes, we can. My mayor wrote to me, as he would have written to all National Party MPs—although, of course, he does not have one now that “Bob the Quitter” has gone; if it is not for Bob, and for Bob’s advantage, Bob is not interested. The mayor wrote to me and asked me whether I would back this legislation, because on the whole he substantially believes it would be good. Mind you, I believe that he also thinks our ideas are more sound.

💬 Dr Wayne Mapp: Simon is out there knocking on doors.

Well, if I were him I would knock on doors with my head, because, frankly, no one can silk-purse a sow’s ear. National at the last election robbed the people of Tauranga blind, by bringing in somebody who spent all his time complaining about the local council and trying to get deals done for himself. Robbing the ratepayers blind, by getting a white elephant and selling it to ratepayers, is what the National Party calls “socialising your losses”—passing them on to ratepayers. That is why Bob has gone and bought two farms just north of Tauranga for $24 million.

💬 Christopher Finlayson: Who won in 2005?

I will tell the member who won. He should look at the Electoral Act. Nobody will get away with that sort of cheating again. Oh, no—they are laughing nervously now.

💬 Christopher Finlayson: Who got the electoral petition?

I will tell the member who won the electoral petition—the man who got the law changed. He won the petition in the end, did he not? Just because one can find three judges who, against all the record, say one thing—but let me tell that eminent lawyer at the far end over there—

The CHAIRPERSON (H V Ross Robertson): The member knows he is ranging too far.

I know, but I just want to say one thing. Those members will not be able to get up in this election and use mates’ rates of one-tenth of real and actual costs, and get away with it—sorry, but we are on to it.

I come back to my point about hypothecation. It should have gone from the GST windfall straight across to the national roading account—transparent, fee-equivalent, no commission taken off on the way through—and we would have been happy with that.

There is one other thing I want to say to Mr Williamson, who mentioned the issue of public-private partnerships. If someone cannot get a project going in 35 years and make a profit, then I would be very fascinated to know what that project is, because if the project is being run on a profit—whether it is the Millennium Wheel, the Tauranga Harbour Bridge, or anything like that—and if the developer has the utility for the public at heart, then it should be able to be done in 35 years. But the member is not talking about that, of course.

As we look back on this legislation, I think we will see it in relation to the purchase of Toll NZ by this Government. The question from the ACT party today was pretty apt. It asked how such a deal could be so great in the Government’s eyes and in New Zealand First’s eyes, when the purchase price some years ago was much less, and the company was then rorted by the purchasers, yet they now pay over $1 billion and say it is a good deal. What arithmetic is used by the Government and New Zealand First when it comes to purchasing?

The reality is that the bill before us today, the Land Transport Management Amendment Bill, is a problem in the sense that it does not take into account what the regions actually wanted. The regions wanted the ability to distribute the regional petrol tax according to their needs. The Government did not give the regions the ability to do that; it imposed a mandatory split of 5c and 5c. The regions, including Tauranga, wanted the ability to distribute that tax of 10c per litre of their own accord. That is not what the Government handed to the Transport and Industrial Relations Committee. Region after region, including the Bay of Plenty, came and submitted that the Government should give that discretion. Would New Zealand First support the Bay of Plenty? No, it did not. The Bay of Plenty wanted the ability to make that distribution according to its plans, and not according to some mandatory distribution by the Government of 5c to public transport and 5c to roading.

That is at the heart of the problem with this legislation. It does not take into account the roading needs of most of the regions of New Zealand. This legislation was set up because the Government had problems financing Auckland’s growth. It did not want to put the money in, so it decided to charge the people of Auckland through a regional petrol tax. Then it decided that if it was going to charge the people of Auckland, it might as well charge the people of New Zealand. That is the real reason for this bill. There was pressure on the Government to electrify the rail system in Auckland, and there was pressure on the Government to provide some roading in Auckland. The Government would not stump up with the cash; it would say in its Budgets that it would build these things, but it would not deliver any cash for them. Then it decided where it would get the cash: it decided it would have a regional petrol tax. This bill is the result.

This legislation has been built around one region’s desire, and does not take into account the desires of other regions around the country, including the Bay of Plenty, Waikato, and Taranaki, all of which wanted the ability to distribute the money as their regional plans dictated. That is the real crime in this legislation: it has been set up for one region, then it has been extended across the country to give some kind of consistency, but it does not provide the discretion needed for it to be effective. The regions wanted that discretion. They came in one after the other, asking for that discretion. Did New Zealand First give them that discretion? No, it did not. Did some of the other minor parties give them that discretion? No. Did the Labour Party give them that discretion? No. Those political parties stood against the wishes of the regions. The regions have been let down by this Parliament. Time after time they made submissions seeking that discretion, and they have not received it. It is a shame on the Government of the day that it has not done that in this bill, when it had the opportunity to do so.

In the interests of totally refuting that last speech, I wish to table a letter dated 30 June 2008 from the Mayor of Tauranga, Stuart Crosby, on the Land Transport Management Amendment Bill, seeking my support for the legislation.

Document, by leave, laid on the Table of the House.

I know that the previous speaker, my good colleague from Hamilton East, was talking about the regions and the relevance of the Land Transport Management Amendment Bill to the regions. I just want to state to the Committee that my colleague the member of Parliament for Hamilton East, along with the Government member of Parliament for Hamilton West, wants to congratulate warmly the Rt Hon James Bolger on his appointment as chair of KiwiRail. Speaking on behalf of David Bennett and myself, I say that we are immensely proud that a Waikato son—and I know Winston Peters joins me—

💬 Rt Hon Winston Peters: No, I don’t. He sold it, mate.

I withdraw that immediately. But I just want to say that as Waikato members of Parliament we note the appointment of James Bolger to that role today. I personally think he will do a very, very good job. The historical ironies obviously, are not lost on us.

I take this opportunity to compliment the Minister on being a very visionary Minister of Transport. I compliment her in terms of this bill, which is another important step in terms of the roll-out of a very important vision. I know that the Hon Maurice Williamson, in his heart of hearts, is envious and would agree with this; this Minister has achieved far, far more in her term, along with her predecessors, such as the Hon Mark Gosche, and the Hon Paul Swain, and other Ministers. I am very keen that we go back to a situation of creating the New Zealand Transport Agency, a new Crown entity replacing the existing Land Transport New Zealand and Transit New Zealand. I know that there were quite a lot of submissions to the select committee in terms of the split of those organisations, but I have to say, from a Waikato point of view, that, on balance, I do believe that having one entity in the end will streamline strategic transport planning in this country.

I know that the members for Hamilton East and Hamilton West would also be in accord in acknowledging the huge work already being done in terms of building Hamilton’s and the central Waikato’s transport infrastructure, and in my own electorate I note that even under the current system the western bypass—the Rotokauri Road to Rifle Range Road bypass—is a good example of strategic planning, and we see the wonderful green buses. I noticed Dr Norman today asking Ministers whether they took a bus or a car or whatever to work. I tell Dr Norman to come to Hamilton and he will see the roll-out of the New Zealand Transport Strategy. He will see an equal investment in roading infrastructure and he will see a comprehensive commitment to public transport, which is a direct and precise result of the New Zealand Transport Strategy, and which this land transport amendment bill will add to and indeed strengthen. I say to the Minister that I think that Hamilton is a very good example of the comprehensive—

💬 Hon Annette King: The biggest increase in passenger transport.

The Minister is correct; it is the biggest increase. It is quite easy sometimes to forget the huge strides that have been made. If we want to see—and Mr Maurice Williamson would agree—

💬 David Bennett: Come on, Martin! You know what Land Transport New Zealand did last month.

I have to say that if the member drives north of Hamilton he will see the huge advances in the Waikato Expressway. He does not need to read volumes and tomes or even to read the New Zealand Transport Strategy to know about the big gains. He does not need to read volumes and tomes to come into Hamilton and see the huge advance in the western arterial route. He does not need to read to see the wonderful development in our bus network, and indeed in terms of the New Zealand Transport Strategy I offer compliments to the Rt Hon Winston Peters in relation to the impact of the SuperGold Card. I am really looking forward, as a Hamilton and Waikato MP, to older New Zealanders being able to use public transport for free in off-peak hours.

I guess, when we are talking about the title of this bill, we need to try to summarise some of the things in the bill, and try to analyse whether the title conveys that impression. I think I would have named this bill the “Mixed Bag Land Transport Bill”, because some things in it are very good, and I have already canvassed those. The hypothecation issue was long overdue, and it puts to bed the argument over the years of how much money was being siphoned off to the Crown account. Now all those revenues that come from petrol tax, road-user charges, and motor vehicle registration—

💬 Rt Hon Winston Peters: We’ve come a long way on this one.

Well, actually, Mr Peters is one of the earlier converters to this view, but I think at the time when the economy was still struggling to get into balance across the board, it was a bit hard to justify. But with the levels of surpluses where they are now, I think it is the right time to do it. So, yes, we all learn, and I think we should give some credit to people who have learnt.

💬 Peter Brown: Just apologise; we’ll listen.

No, I do not need to apologise. There are other good things in the bill, like getting on to a proper planning cycle. I will be interested in the Government policy statement, because the “GPS”, the Government policy statement, is a sort of a direction of funding and funding priorities—

💬 John Hayes: I thought it was something that goes in a vehicle.

No, it is not the global positioning system; the Government policy statement is about funding priorities and areas where the funding will fall across the regime. I guess that that, in part, will offset the concerns I have about the funding agency being included in the provision agency, and so on.

Having said all that, I get back to some of the stuff National did not approve of. When we had the land transport agencies before the select committee with the Minister a couple of weeks ago, we learnt that one of the reasons they finished the last financial year with $220 million unspent was that there were too many pots of money. They said: “There is some money in this fund here, but it can’t be used for that. There is some money in this regional fund for this region but it can’t be moved to that region.” It was clear from that what happens when we build too many pots, and I think there are already too many pots in the land transport account. We would be better to actually get rid of all those little internal barriers and use the money where best we can, and, if it is not available for that year, use it somewhere else.

💬 Hon Annette King: He’d take if off them.

No, actually, I would not take it off anyone. If they were ready to go and their project was up, they are the ones that should go ahead. The problem is that that money was unspent because some people who were supposed to be up and ready were not, and they were not able to take advantage of it. In fact, Wayne Donnelly, I think, gave Tauranga as a good example of a project that was supposed to be up and running, but was not ready and had to be delayed for some time, and the money could not be spent elsewhere. So we were quite strongly opposed.

What is not in this legislation? If I wanted a better title for this bill, it would be the “What’s Not in the Land Transport Management Bill”. If there was truly a desire by the Labour Government to see alternative funding mechanisms, there would be more in this bill. I guess that after hypothecation is passed into law, it is very unlikely we will see Ministers of Finance allowing much more dedicated fund money. There will not be Crown money or other stuff coming into it, so alternative sources of revenue will have to be found. Elsewhere in the world those alternative sources are legion: private debt, public debt, public-private partnerships, private equity schemes, infrastructure bonds, all sorts of shadow tolling regimes, and so on. Yet we seem to be absolutely fixated on funding our land transport infrastructure on the one tired old boring regime of spending only the current revenue that comes in. I do not know anybody who bought his or her first house by paying cash. People went to debt markets, they got the infrastructure early at the then price, and then they serviced that debt over time. I do not know any big business that builds plant and equipment, or commits to major capital expenditure, without using debt funding or capital markets—that is what they are there for.

The Rt Hon Winston Peters asked me why we needed to change the concession period from 35 years. All I say to him is that he should look at every one of the major projects that I think we could try to emulate. He should look at the ConnectEast and the CityLink around Victoria, the M7 in Sydney, or some of the other projects there. He should go to the North-South Bypass Tunnel in Brisbane, the Millau bridge in the south of France, the M6 Toll in Britain, done by the Labour Government, and the Kilkock to Kinnegad Motorway in Ireland. Every one of those projects has had a concession period considerably longer than 35 years. When developers were asked about it, they said that to get a return in that period either the toll had to be put at a grossly unrealistic level, so that no one would use it, or, if there was a very long concession period, the toll could have a flat rate at a realistic level so the return could be attained over time. And I am sad that that was not in this legislation.

I take the opportunity in this part of the debate to put a few myths to rest. We have heard speaker after speaker from the National Party talk about the sale of New Zealand Rail. Officially it was sold for $400 million in 1993—I say “Officially” because that was fiction. New Zealand Rail had $72 million worth of debt, so effectively it was sold for $328 million, not $370 million as the Hon Maurice Williamson said earlier. That was in 1993 dollars, and if we allow for inflation—which was fairly high in 1993, 1994, and 1995, and has been modest ever since—the figure would be close to $600 million - plus. So $328 million in 1993 is worth over $600 million in 2008, when a reasonable amount is allowed for inflation. The Minister of Finance recognised that the Government had paid a premium for it. It was also quite correctly suggested that the rail was asset-stripped once it was sold. But I say “Fair go” to Toll; it has improved the rail. It is better now than it was when Toll bought it, so there is a premium price to be paid for that. Let us compare an apple with an apple, not an apple with an orange.

The other thing is, and the Hon Maurice Williamson suggested—

💬 John Hayes: What assets were stripped?

The member should not show his ignorance. There is an old saying about closing one’s mouth and not showing one’s ignorance. I will not waste my time on that individual; the guy is thicker than this piece of wood. For the last 3 years the Hon Maurice Williamson has been a firm advocate for the hypothecation of all petrol tax. He has officially changed his mind about that tonight; we have not changed ours.

💬 Hon Maurice Williamson: No, I haven’t.

Well, the member has changed his mind insomuch that he has voted against it.

💬 Hon Member: That’s because of all the other stuff.

Well, we have put a priority on hypothecation and other aspects of this bill.

💬 Hon Maurice Williamson: You were going to vote against the principles.

We wanted to vote against the reference to the principles of the Treaty of Waitangi.

The Hon Maurice Williamson said that perhaps he should have hypothecated the excise tax some years ago, but he did not do so because of the economic situation. The price of not doing it then—not hypothecating all the excise tax into the road transport account—was $1 billion per year or thereabouts worth of congestion in Auckland. The price of steel and concrete has gone up by well over 30 percent, and God knows what the price of bitumen has gone up by—I would say there has been a 40 or 50 percent increase. We have paid dearly for sitting on our hands in the 1990s and the early 2000s. We should have been transferring that money across years ago.

In 1989—or early 1990; certainly it was when Labour was in power, before National took the benches under Jim Bolger—I went to Winston Peters and said more money had to go into roading in order to keep pace with the freight that was going to move on our roads just as a result of port reform, which was coming. As I recall, the excise tax that was going into roading from petrol was 9c a litre at that time. I was a consultant involved in the port reform process. It stood out by a country mile that if we wanted this country to develop economically, we had to do something about roading, and we had to do it there and then. We should have hypothecated all the excise tax and been prepared to borrow against the income in order to get our roading into a fit state. In terms of the economy we have paid very dearly for not doing that, with a billion dollars a year worth of congestion. Also, people have lost their lives on the roads in this country because the roads have been less than satisfactory. So New Zealand First saw hypothecation as a high priority, and voted for this bill.

We are absolutely brassed off with the principles of the Treaty of Waitangi clause—absolutely brassed off. We cannot find one person in this House anywhere who can tell us what that term actually means. We think we should have got—[Interruption] Well, the member can tell me; maybe she can take a call and tell me exactly what it means. We cannot work out what it means, and I would be delighted to know what it means in terms of clause 5 of this bill.

We also wanted amendments to be made to the regional fuel tax. The Rt Hon Winston Peters has tabled a letter from the Mayor of Tauranga, supporting a regional fuel tax. I think the words in that letter were that it was “another tool in the tool box to address the problems of regions”. But a far better way than the regional fuel tax—and we are very disappointed that the Māori Party did not support us on this—would be to use the windfall GST that is currently being paid.

💬 Hon Tariana Turia: Sorry.

The member’s party should have given serious consideration to that. We will be going around this country and telling people that that is what we should be doing.

The Land Transport Management Amendment Bill is a marvellous piece of work and incredibly complex, with page after page. On that basis the title of the bill is probably quite appropriate, the Land Transport Management Amendment Bill. But I make the point that there is so much management that we have bureaucracy getting in the way of the intent of the bill. Too often this House tends to take a high view of things, and that is probably where governance has its rightful position. I will draw the House’s attention to some of the very drivers that repeat themselves throughout this legislation, including these thoughts of assisting economic development, assisting safety and personal security, improving access and mobility, protecting and promoting public health, and ensuring environmental sustainability.

To bring things down to a regional level, and to support the comments of my learned colleague David Bennett, from Hamilton East, who spoke earlier, I say that it is quite sad to see that the regions have effectively been closed out of this bill, in the sense that, quite often, when we look at the major issues that confront them, we see that they do not show up in a meaningful way in the overall configuration of the National Land Transport Programme.

I draw everybody’s attention to a situation in my own electorate. I have a newspaper headline entitled “Buck passes on Butter Factory corner”. Butter Factory corner is on State Highway 1. It is on the other side of the Bombay Hills, but the situation there has been around for as long as Blenheim has been around, and we are not able to even get it up on the radar screen. That is hugely concerning, because if members look at what works have been done around elevations and bridges, and things like that, they will see that all too often in the region it takes a death on the road before anything is done. But at Butter Factory corner we have a complex situation whereby everybody is blaming one another. Transit is being blamed by the council, and Marlborough Roads is saying that it cannot do anything, yet there was an opportunity for the regions to be able to have that flexibility.

It was good to hear that they did submit to the select committee to ask for that flexibility to be able to raise a petrol tax. It was something I felt compelled to mention at the first reading of this bill, and it is something I am pleased to see was canvassed. I am very sad that it was not taken on board and worked into the process. Maybe in time to come it might be the next step forward, because when we look at the structure and the framework about getting these matters on to the National Land Transport Programme, it takes an enormous amount of effort.

We acknowledge the building of the Awatere bridge. There were no accidents on that bridge, yet it was seen to be of such economic importance that it was a must-do. On that basis, credit where credit is due, but we do have an enormous problem around a market town such as Blenheim that has grown exponentially. We have a situation at Butter Factory corner where we have a railway line 10 metres from the apex of the corner, and when a B train truck stops on that route it is parked over the railway line. It is complex. There is the opportunity to do business with the local landowner; however, there is a bureaucratic jam in the system where nothing is happening. There is a school just up the way, and, again, no matter how good this legislation is, we must be able to see that the ability of the local region is taken on board and that we are not stymied completely.

The Automobile Association has recognised this area as the No. 1 priority. When trucks come off the State highway and turn into this particular road, cars have to back into the Canterbury Meatpackers’ freezing works to allow them to get through. The biggest problem, as is articulated here, is, sadly, when Transit does business and sits down and tries to talk to the landowner, the landowner feels that he or she is going to be screwed over.

So I just want to tell the Committee that it is very important that this is contextualised. It is a great piece of legislation, but there is a lot more work still to do.