Transport Minister wrong about rail

Transport Minister Steven Joyce continues to make short-sighted decisions that will harm the New Zealand economy and hit Kiwis in the back pocket, said the Green Party today.

Mr Joyce hinted yesterday that the Government will reduce its operating contribution to national rail operator Kiwirail, and demanded that regional councils and customers “stand up” and pay more to ensure the commercial viability of rail services.

“Joyce’s professed focus on the commercial success of Kiwirail is short-sighted and disingenuous,” said Green Party Transport spokesperson Gareth Hughes.

“He continues to conveniently ignore the large on-going subsidies to private vehicles and the trucking lobby, despite the mounting evidence in numerous government reports that this has harmful economic consequences,” said Mr Hughes.

“Rail services are likely to suffer when user charges are increased, particularly when the Government is borrowing to make it cheaper and more convenient to go by road.”

Steven Joyce has presided over a policy shift that will see nearly five billion dollars invested in State Highways over the next three years, including “Roads of National Significance”, most of which had no business case and were previously low priorities for the NZTA.

“Last year, an OECD report demonstrated that there is no correlation between state highway investment and economic growth in New Zealand. In fact, by contrast it showed a strong positive correlation between investment in rail and economic growth,” Mr Hughes said.

“The Minister claims that borrowing huge sums of money to fund holiday highways will be good for New Zealand’s economy. This is patently false.

“Petrol prices are on the rise again, and without a viable transport alternative, kiwi households will be hit with higher transport costs, and higher prices for all goods that are moved by rail or road.

“This will have a devastating effect on our economy.
“Every other industrialised nation is investing heavily in rail. New Zealand will continue to fall behind if Steven Joyce doesn’t wake up and realise it’s not 1950,” Mr. Hughes said.


A link to NZTA Research Report “Managing Transport Challenges as Oil Prices Rise” (See Chapter 5, Transportation Market Distortions)

http://www.nzta.govt.nz/resources/research/reports/357/docs/357.pdf

A link to MOT report “Surface Transport Costs and Charges”
http://www.beehive.govt.nz/Documents/Files/STCCS%20Main%20Report.pdf

A link to OECD report that shows on page 62 that there is no correlation between economic growth and investment in motorways in New Zealand, and that there is positive correlation between rail and economic growth.

http://www.oecdilibrary.org/docserver/download/fulltext/5ksm87s1vv35.pdf?expires=1271890382&id=0000&accname=PARLIAMENTARY+LIBRARY&checksum=C709EF4039B003CFC665A2A274394F7F