Land Transport Management (Regulation of Public Transport) Amendment Bill

I present a legislative statement on the Land Transport Management (Regulation of Public Transport) Amendment Bill.

💬 SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Land Transport Management (Regulation of Public Transport) Amendment Bill be now read a first time. I nominate the Transport and Infrastructure Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 31 July 2023.

New Zealand’s public transport services are critical to the way that our cities and our regions function. We need high-quality and reliable public transport systems to make sure that workers can get to work, that kids can get to school, that communities can be connected to make sure that we cater for growth and also, critically in an era of climate change, to make sure that we enable people to move around our communities in as low carbon a way as possible. Supporting more people to use high-quality, reliable public transport is one of the most important things that we can do to reduce greenhouse gas emissions in response to the climate emergency.

This bill—

💬 Simon Court: Just get a bus on time.

—is an important part of that story, and I’ll speak about why we’ll do that through this bill, Mr Court. This bill amends the Land Transport Management Act 2003 to establish the sustainable public transport framework, which is replacing the public transport operating model—commonly known as PTOM—in Part 5 of that Act. And the primary driver for this piece of legislation and this reform is the wellestablished fact that PTOM, put in place by the previous Government, has been an unmitigated disaster in terms of the delivery of public transport services and in terms of the ability for us to sustain a sustainable workforce to deliver those public transport services that are needed by our communities.

The members opposite who have worked themselves up into a froth in defence of Steven Joyce and his failed PTOM model—ask the question: what will you do to deliver reliable public transport services? It is relatively clear to anyone who knows anything about how public transport services operate, or even just a person with a modicum of common sense, that it is difficult to deliver reliable public transport services without drivers to deliver those services. The overwhelming legacy of the failed PTOM model that we will replace through this piece of legislation has been a systemic undermining of the pay and conditions of our bus drivers. Not only does that undervalue the work of people who are critical in our communities and deliver an important public service, the end result of that process after 15 years of PTOM has been that bus companies have been unable to retain the workers that we need to deliver those critical public services.

💬 Matt Doocey: That’s ‘cos there’s a workforce shortage.

That’s right. The member says there is a workforce shortage, and that is because bus operators have been unable to retain workers because of the race to the bottom in the labour market created by the public transport operating model. The public transport operating model was based simply on a model of commerciality to deliver public transport services. And that is where the problem starts, because the way that the marketplace was set up under PTOM involved public transport operators effectively bidding for services with territorial local authorities on the basis purely of commerciality.

So the way in which operators—and operators say this, as much as workers and union tell us this: the way that operators have been able to get contracts to deliver services has been to pitch in at the very lowest price. And the primary way that operators have had to do that, because of the relative inability to vary the significant capital costs that are required within this particular industry, has been to keep pressure down on the pay and conditions of bus drivers. And so we have had 15 years of systemic pressure put on the pay and conditions of bus drivers: low pay, insecure conditions, and split shifts.

Now, who in this House would work under those conditions? And it is a mark of members on that other side of the House that they diminish and dismiss the importance of good working conditions. They complain about the outcome of that, which is that we can’t keep people working in the sector, but they’re fundamentally unwilling to make sure that those men and women who drive our buses in our communities actually get a fair go in a way that will ensure that we can keep them there and build up a skilled workforce, not just to maintain but to grow the services in public transport that we so desperately need.

So the public transport operating model is a reform of the PTOM model. It’s also not about throwing a baby out with the bathwater. We’ve gone through a full process of reviewing PTOM. We’ve worked out what works and we’ve worked out what doesn’t work. What does work is that our local authorities plan and deliver those services. That is a model that fundamentally works. It is important that we do inject value for money into the system so that we make sure that the investment that does go in—whether that is through the fare box or through subsidy from local authorities and central government through Waka Kotahi—is getting a good outcome. That is beyond doubt, that is important, and that is embedded in the legislation.

But how narrow is it to have legislation and a framework to deliver public transport services where the only thing on the table is the commerciality of those services? That doesn’t go anywhere near what we need to achieve from the roll-out and growth of public transport services. And so PTOM injects a wider range of objectives into the system, including ensuring that we have a sustainable labour market so that we never again get into the fix that we’ve gotten through National’s failed PTOM model, as we are experiencing today.

It inserts in there an objective to ensure that we have ongoing work to decarbonise our public transport system. And it inserts objectives to ensure that we have significantly greater transparency over these services. These are public services which in all cases currently, and likely in many cases as we go forward, will continue to be delivered by private operators, and that’s fine. But we need to have good assurance that the significant public subsidy that is going into them is going into the right places to deliver good services to the people of our towns and our cities who need them.

It’s also worth noting that the current PTOM framework is extremely inflexible and local government has consistently said to central government that inflexible regime is something that they want changed. It is in fact unique and bizarre that—in the delivery of this core public service that is public transport in our towns and cities—local authorities are required to deliver those services through private contracting. They are banned from owning or operating any of the assets or services. We don’t do that in any other area of public service delivery. Can we imagine if in the delivery of health services or education services or welfare services we said to our Government agencies and local authorities, “You are banned from delivering any of those yourselves. You have to privately contract them out for delivery.”? We would think that that was strange and inflexible, yet that was the model that PTOM put in place under the previous National Government. And again, it’s one of the reasons why it’s failed.

But this is a balanced piece of legislation. We don’t require local authorities to go in the other direction and entirely own the assets or entirely deliver the services through public provision. We say to local authorities that we have trust and confidence in you to know what you need to deliver in your communities to make that choice. And so the PTOM model that has been put up through this piece of legislation will give local authorities that choice. It will give them the ability to own assets, potentially. They could potentially own assets like depots and chargers and then contract out services if they thought that that was best. Some local authorities have said to me that there may be benefits to that, in terms of reducing barriers to entry for more innovative private operators. It could be that local authorities through trading companies or direct private provision do look to deliver those services through public provision. Or it could be that local authorities do a mix of all of the above to get the best outcomes for their communities. That is the model that we’re putting forward through the sustainable public transport framework, and it is a polar opposite to the market fundamentalism of PTOM, which says that these services, effectively, have to be privatised and delivered only by the private sector. I, in fact, expect that local authorities and the private sector will continue to work together constructively.

The legislation also requires that territorial local authorities and regional councils coordinate much more closely together to deliver services. We currently have a situation in which regional councils tender for services, but, very often, public transport assets are owned by territorial local authorities. That sometimes does create difficulties and frictions, so there’ll be requirements for them to work together.

We’re also looking ahead and looking to innovations within public transport that we need to cater for—for example, the creation of on-demand services, which are being trialled at a number of locations around New Zealand very successfully in places like Timaru. And we need to make sure that our public transport system, through the Sustainable Public Transport Framework, caters for those situations as well.

PTOM was a failure. It has left us with a situation of collapsing services because we have not been able to retain drivers because of the poor terms and conditions and race to the bottom that it created. The Labour Party and this Government are proud to rectify that wrong and to bring forward to the House the sustainable public transport framework to deliver fairness for workers and sustainable public transport.

The question is that the motion be agreed to.

If you were listening to that speech from the Minister, you would expect that the problems were all from the prior Government. But this is a Minister who’s created the problems in our public transport sector. The reason why the bus won’t turn up is because there aren’t enough drivers, because he, as the Minister of Immigration, didn’t change the settings in time to allow drivers to come into the country. The reason why the ferries aren’t operating is because there aren’t enough people to be able to drive the ferries. He, as the Minister of Immigration, hasn’t changed the immigration settings to be able to let people into the country to be able to drive the ferries. The reason why the trains aren’t operating in Auckland is because he’s the Minister of Transport and he didn’t tell Aucklanders that he was going to shut the entire train network down for two years for the trains to operate. So that is a bit rich coming from the Minister of Immigration and the Minister of Transport to try to blame all the problems on a prior Government when the reliability and the issues have been happening under his watch as Minister of Transport.

Let’s put some facts on to the table. In 2019, 1.26 percent of bus trips in Auckland were cancelled. In 2020, 0.67 percent. In 2021, 0.57 percent. Last year—2022—10 percent; 270,000 bus trips in the first nine months of last year were cancelled, and those cancellation numbers have continued under this Government’s watch, all because they have not looked at what’s required.

I was at a public meeting on Monday night in the North Shore of Auckland, where bus after bus after bus is being cancelled. Auckland Transport were there and they said the number one reason we are having to cancel is because we wrote to the Minister of Immigration at the beginning of last year saying if we don’t update these immigration settings, all of the bus drivers who used to drive for us who left the country, who weren’t allowed in during COVID, we can’t access them—and, by the way, it’s going to take six months from when you change that setting to when we’ll be able to get them actually driving buses again. It took the Minister till the end of last year to actually sign that form. He still hasn’t done it for the ferry operators or train drivers. It’s unacceptable. The Minister of Transport should be talking to the Minister of Immigration. And the good news is that under this Government, he could be doing it in the mirror every morning, but the problem is he isn’t—the problem is that he isn’t.

So we get to what this bill is actually doing, and what this bill is doing is creating a whole lot more bureaucracy when it comes to creating public transport plans and doesn’t deal with the actual fundamentals that are required to make it work. At the core of it, it changes the principles based upon which public transport provision should be. It changes it from the principles of market delivering public transport, contracting with councils, getting good value for money, and making sure that the services are reliable to a Government now wanting to make sure that the public transport system achieves a whole range of other outcomes, such as reducing environmental and health impacts by reducing reliance on single-occupant vehicles and using zero-emission technology, public transport services support mode shifts, fair and equitable employment or engagement—all of these are issues which can be dealt with, and, by the way, are being dealt with through other mechanisms.

If the Minister was actually going to read the regulatory impact statement, it states very clearly that issues such as making sure that our bus fleet is electrified is already being dealt with by the New Zealand Transport Agency putting in place requirements for these contracts, issues in relation to making sure that bus drivers are paid a fairer wage. That is being dealt with. The Government allocated $61 million in last year’s Budget to make sure that bus drivers were getting standardised bus wages across New Zealand. These are issues that are being dealt with already and now we have a Government which comes along and says, “No, now we’re going to change the legislation. And, by the way, the issue, the fifth primary principle for delivery of public transport services will now be providing public transport services”—and this is the last principle—“assist public transport investment to be efficient and public transport investment to give value for money.” And then (f) but, by the way, you can ignore that.

So after all of this legislation change and all of these new principles that have been put in, the key component when it comes to public transport services, which should be efficiency, reliability, making sure the bus turns up, by the way, and value for money for the taxpayers and ratepayers who end up subsidising public transport as well, by the way—all of that can be ignored; all of that can be ignored as long as those other principles are being addressed.

So the National Party will be opposing this piece of legislation because it is not going to deal with the actual issue. The real issue is making sure that we have enough bus drivers, train drivers, ferry operators to be able to actually do the job rather than simply creating a whole new bureaucratic process. And, by the way, the evidence is clear that the Public Transport Operating Model (PTOM) has worked. It has meant that the service reliability has increased, except for when the Minister of Immigration got involved and made it impossible for bus, ferry, and train operators to be able to operate. It has meant better value for money for ratepayers and taxpayers, which is a good thing, and it has meant that more people are actually using public transport. Prior to COVID, the number of bus trips and ferry trips and train trips was exploding. People were using public transport because it was reliable, it was efficient, it worked; now it doesn’t. That’s the story up and down the country—now it doesn’t. So what people are doing is the opposite of what this legislation says. They’re getting back into their cars.

That was the message again at this public meeting on the North Shore in Auckland: the system is not working because Michael Wood, the Minister of Immigration, is not letting it work. He’s creating the problem that he says he’s trying to solve. People are getting back into their cars rather than using public transport, which means our roading network is becoming more congested and is not working efficiently. That means that more people are spending longer travelling, not less time.

And, overall, what should transport policy be about? It should be meaning that you spend less time travelling so you spend more time doing what you want to do with your day. Isn’t that such a radical idea? Where’s that in the principles? What about the idea of people spending less time travelling so they can spend more time at work, at home with their children, doing the things they love? What a radical idea! I don’t see that in the principles anywhere. It’s simply not even a consideration, because, under this Government, when you’re travelling, your time doesn’t matter.

But, of course, there’s other things which this bill covers as well. It undermines good contractual processes. The Minister went against the advice of his officials, who told him, “No, you have to go to market when you’re tendering and you’re contracting.” That market principle was taken away by the Minister. The Minister ignored the advice, and the ministry said any move from a contractual approach may reduce transparency over cost and performance. So not only are they going to make public transport worse—well, it’s already bad enough—it’s not going to be as transparent in terms of those on-time performance data points and actually making sure that the transparency around the cost is actually transparent. That is critical to a good public transport service and this is being taken away under this piece of legislation.

The other point: in-house operation. Auckland Transport is not exactly the most trusted organisation in Auckland, for those who are from outside of Auckland. But now this Government is saying, “Well, OK. Well, we’re actually going to let Auckland Council run a bus company as well as have Auckland Transport who will manage it.” I mean, how well is that going to work for Aucklanders? That’s what this legislation is saying, that Auckland Council will now be able to have a bus company within it, which won’t have to compete with the private sector, won’t have to go through a market tender process, and apparently that’s going to work better for everybody. I doubt it. This is going to cause more issues than it’s going to solve.

There are, of course, questions around exempt services and how that’s going to impact those services, the certainty required to operators who run exempt services. That is important because obviously they make investment, they buy buses, they buy boats—whatever they do to run those exempt services. They make big investments. This does not do anything to improve the certainty that those operators need.

Then, of course, we have the issue around wages and conditions. No one in this House would say that we don’t want bus drivers to be paid more. Of course we do. Of course we want everyone’s wages to be lifted, but we’re dealing with a cost of living crisis that this Government created because they printed money, because they’ve let inflation run rampant under this Government. That’s why this is an issue. So, of course, we need to deal with this issue. But this Government and operators and councils and regional councils across New Zealand are already addressing this issue by striking deals with operators. We’re seeing that in Auckland. Auckland Council has lifted wages under the PTOM model. We’ve seen the Government put $61 million towards improving wages, running through the PTOM model. It doesn’t require the Government coming in and undoing the entire model to solve it.

So there are a number of problems. We look forward to hearing submissions, because this Government ultimately has the numbers, but we will oppose this piece of legislation as it doesn’t fix the fundamental problems.

Members, this debate is interrupted and is set down for resumption following oral questions this afternoon. The House will resume at 2 p.m. for oral questions.

Debate interrupted.

Sitting suspended from 1.03 p.m. to 2 p.m.