Recommendations

It is recommended that Ministers direct officials to prepare a Cabinet paper containing the following recommendations:

Overview:

190 agree that a new strategic framework be established for the land transport sector ("the sector") which integrates the NZ Transport Strategy, medium to long term guidance to the sector, and a Government Policy Statement on land transport;

191 agree that planning and funding arrangements for the sector be redesigned to support this framework;

192 agree that central Government institutions in the sector be realigned to support this framework;

193 note that these changes would require changes to legislation;

Implementing the New Zealand Transport Strategy:

194 note that the 'Implementing the New Zealand Transport Strategy' (INZTS) document, currently being developed by the Ministry of Transport (the Ministry), will provide medium to long term guidance to the sector and for the preparation of the proposed Government Policy Statement (GPS);

Government Policy Statement:

195 agree that a GPS be issued by the Minister of Transport (the Minister), on a three-yearly basis, which would include:

  • the Government's funding priorities including priorities of national strategic importance;
  • the funding range within which each activity class is to be set for the following three years with estimates for the next three years;
  • Fuel Excise Duty/Road User Charges (FED/RUC) levels for the following three years;

196 agree that the GPS may also include other strategic or policy matters, such as funding evaluation and Financial Assistance Rate (FAR) policy;

197 agree that the Ministry lead the three yearly GPS process;

198 agree that officials report back on the nature of the GPS and how it is to be given effect in legislation;

National Land Transport Programme

199 agree that the National Land Transport Programme (NLTP) become a three yearly document and include:

  • all activity classes and activities that the Land Transport Agency (see below) anticipates it will consider for approval over the following three years or has approved;
  • an expenditure estimate for each activity class for a further seven years;
  • a clear rationale, including how the NLTP gives effect to the GPS;

200 agree that the National Land Transport Fund (NLTF) may go into surplus or deficit within any one year, but any unplanned deficit must be recovered in the following year;

Regional planning and prioritisation

201 agree that regional councils through arrangements such as Regional Land Transport Committees (RLTCs) be responsible for prioritising all regional and local land transport funding proposals, including State highway activities, in Regional Land Transport Programmes (RLTPs);

202 agree that the RLTPs:

  • be prepared on a 3 yearly cycle;
  • include the list of prioritised activities that the region proposes be considered for inclusion in the NLTP;
  • include an expenditure estimate for each activity class for a further seven years;

203 agree that only activities included in a RLTP be eligible for funding through the NLTF. This excludes nationally-led expenditure and other central expenditure such as funding for the Land Transport Agency's own administrative costs;

204 agree that Regional Land Transport Strategies (RLTSs) and RLTPs must be consistent with the GPS;

205 agree that all consultation on activities funded from the NTLF take place at the regional level through preparation of the RLTPs;

206 agree that Approved Organisations not be required to undertake additional consultation on activities proposed for funding by the Land Transport Agency as a prerequisite for approval in the NLTP;

207 direct officials to report back on:

  • the merits of a phased introduction to the regional prioritisation as set out in recommendations (12) to (17) across regions;
  • alignment of timeframes between the GPS, the NLTP, RLTSs and RLTPs;
  • the implications of recommendations (12) to (17) for the Auckland region;
  • the implications of recommendations (8) to (14) for the Authority's Land Transport Programme (Land Transport New Zealand's Road Safety Programme) and whether this method of prioritisation is appropriate for this expenditure;
  • the appropriate arrangements necessary to undertake the role in (12) and this include consideration of RLTCs and their composition;
  • the implications of recommendation (15) and the exact nature of the activities that would be excluded from the regional prioritisation process as set out in recommendations (12) to (17);

National Land Transport Fund:

208 agree that all FED and RUC be directed to the National Land Transport Fund (NLTF);

209 agree that the existing revenue and cost guarantees be replaced by the new processes including the introduction of the GPS, subject to appropriate grand-parenting provisions relating to funding for the next two years and projects in the current State highway forecast;

210 direct officials to report back on the implementation of (20) and (21) including whether the processes for setting FED and RUC can be improved;

Funding Additional to the National Land Transport Fund

211 agree that, in the event that Crown funding is used to fund land transport activities, a separate, transparent process be put in place to provide for clear accountability to Ministers for the use of this Crown funding;

212 direct officials to report back on the implementation of (22);

Activity approval

213 agree that approval of individual activities continue to be carried out on a statutorily independent basis by the Land Transport Agency;

214 agree that the Minister, advised by the Ministry, would approve the funding evaluation procedures prepared and applied by the Land Transport Agency;

215 direct officials to report back on whether, and if so how, the Land Transport Management Act (2003) should be amended to reinforce the need for activities to be cost effective;

Roading design standards

216 agree that, while each road controlling authority is responsible for setting the design standards for roading activities under its jurisdiction, the Minister, as advised by the Ministry, would have the reserve power to direct a road controlling authority to apply certain standards;

Review and monitoring

217 agree that the Ministry, on behalf of the Minister, have a new function to monitor and review a selection of activities funded through the NLTP at any stage pre, post and during an activity's life-cycle;

218 endorse the Ministry developing a strategic approach to the development of accountability documents and the use of accountability processes which will:

  • align the Ministry and Crown agencies accountability documents where feasible to ensure shared outcomes and measurement;
  • ensure a clear focus on the Crown's purchase and ownership interests;
  • highlight the expectation of improving collaboration across the sector;

Rail

219 endorse the Ministry as the lead agency on rail policy;

220 endorse the Treasury as the lead agency for the current commercial negotiations on the Rail Network Access Agreement;

221 direct officials to report back on the implications for planning and funding of rail once the current commercial negotiations are complete;

Central Government Institutions

222 agree that there are two viable options for the structure of the central Government agencies to carry out the roles and functions recommended in this report:

Option 1: (referred to in the body of the report as Option A): Enhanced Ministry of Transport (to carry out the policy, high level planning, high level funding, and certain monitoring and review functions) and two separate statutory Crown entities, provisionally called the "Land Transport Agency" (to carry out activity level planning and funding, including consultation with regional councils and territorial authorities for regional prioritisation, and some monitoring and review) and "State Highways New Zealand" (to focus on State highway design, procurement, maintenance and operations);

Option 2: (referred to in the body of the report as Option C): Enhanced Ministry of Transport (to carry out the functions in option 1 and additional monitoring of all the Land Transport Agency's activities) and a single statutory Crown entity (to carry out the combined functions of the Land Transport Agency and State Highways New Zealand as described in option 1);

223 agree that, on balance, option 2 is preferred on the basis that the benefits of integration would be greater than the benefits of retaining separately focused entities;

224 agree that, if option 2 is chosen, the Land Transport Agency be established as a Crown agent, in accordance with the relevant provisions in the Crown Entities Act 2004;

225 agree that, if option 2 is chosen, the Land Transport Agency continue to have the same statutorily independent functions currently held by Land Transport NZ;

226 agree that, if option 2 is chosen, the statutorily independent functions currently held by the Director of Land Transport come under the authority of the board of the Land Transport Agency rather than being vested in the chief executive or another officer in the entity;

227 agree that the implementation process identify the specific functions and capability that should transfer from Land Transport NZ and Transit NZ to the Ministry of Transport in order to enable the Ministry of Transport to carry out the enhanced role detailed in this report;

Board of Land Transport Agency

228 direct officials to report back on ways to ensure that the Land Transport Agency maintain focus on value for money, including:

  • board membership in terms of desirable knowledge, skills, experience and diversity; and
  • board composition, including the possible use of one or more committees, either to advise the board or to act under delegation from the board, and how such committees might be assured;

Implementation

229 agree that the implementation process be overseen by an Implementation Steering Group, chaired by the Chief Executive of the Ministry of Transport, and consisting of the Ministry, Treasury, Department of the Prime Minister and Cabinet, and the State Services Commission;

230 direct the Implementation Steering Group to report to the Ministers of Transport, State Services, and Finance with an implementation plan including milestones;

231 direct the Ministry to report back on the capacity and capability needed to fulfil any additional roles and functions conferred on it by this Review;

Monitoring of Progress

232 direct the Steering Group to put in place an evaluation strategy to determine the effectiveness of the package of changes after a suitable time period.

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