Message from the Chief Executive

Photo of Martin Matthews, Chief Executive

Martin Matthews, Chief Executive

This year the Ministry has stepped up significantly to its role of leading the transport sector. The driving force has been our 2013 Performance Improvement Framework [PIF] review that asked us to bring to life our Greatest Imaginable Challenge, which is to create an environment to double the value from transport initiatives.

To achieve this, we have taken on the role of providing thought leadership about the transport sector. The Ministry has worked with transport sector colleagues, and far beyond, to develop a strategic understanding of the future of transport.

The role has taken us into a visionary space, where we look forward to New Zealand’s future and imagine how the world will change across society, the economy and the environment. What will transport need to be doing in 10 or 30 years time to help keep New Zealand thriving?

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How can today’s decisions help unlock future possibilities and make sure we do not end up in 10 or 20 years time with obsolete investments?

Our strategic projects are leading the way in this future- focused work. We have thought deeply about topics such as how the transport system could or should evolve, and how transport should be funded in the future. We are researching how regulation should evolve to meet future challenges and considering radical possibilities for public transport over the next 25 years.

Lifting the transport sector’s line of sight from immediate issues to future needs was also evident in our other policy work, including our work on leading the implementation of the Intelligent Transport Systems Technology Action Plan, the Government Policy Statement on land transport and air services negotiations. Other chosen projects such as the Future Freight Scenarios study help the freight sector plan for a future of increasingly large container ships.

We’ve also delivered an extensive programme of work, supporting the Minister to deliver on his priorities for transport. A strong focus of the Ministry over recent years has been to lift the quality of our advice and I am proud of what we have achieved in this regard. Each year we use the New Zealand Institute of Economic Research to independently assess and benchmark our work. For 2014/15 they gave our work an overall rating that places us in the top agencies they benchmark.

The Ministry’s ambitious focus is possible because of the calibre and engagement of our people. We now have the highest employee engagement scores (Gallup) in the public sector. Our score of 4.24 means for every actively disengaged staff member, there are now 27 staff members who are engaged, up from a ratio of 12:1 last year. A better than world-class ratio! Our results demonstrate our initiatives, including a focus on celebrating success, structured professional development opportunities and lifting the quality of our work, have contributed to this engaged workforce.

Over the past years, we have worked to improve our operating model, shrinking the size of our organisation and budget in a constructive way. Rather than focusing on cost cutting, we have lifted our performance and aligned our purpose throughout the organisation, reducing costs along the way. At June 2015, we are 25 percent smaller than at June 2008, and have a 15 percent smaller operating budget taking into account inflation.

As a high performing organisation, the Ministry works to deliver a transport system that is resilient, effective, efficient, and safe and responsible. These values support the Minister’s priorities for transport, which I have set out with our achievements, in the following pages.

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Advancing the long-term vision for the transport sector

As the steward for the transport system, the Ministry has an important role to look ahead at the longer-term challenges for transport, and make sure the transport system develops in ways that support New Zealand to achieve its longer-term goals.

Our strategic policy projects help drive our approach to the future, and are designed to challenge the boundaries of current thinking, and promote deep and sustained thought, research and analysis about transport and its relationship with the economy, society and environment.

In November 2014, we released the findings of our first three strategy projects, (led by external Strategy Directors) which greatly improved our skills and understanding of the sector and its future needs. The projects were:

Transport and Economics – How New Zealand’s economy will perform in the future, and what the implications are for transport
Future Demand– How our transport system could or should evolve to support mobility in the future
Future Funding– How we could or should fund our transport system in the future.

Understanding the trends, influences and changes in society that will impact on the New Zealand transport system is an important aspect of our strategic leadership. This ambitious programme of work was delivered in nine months and engaged our partners in the transport sector and other government agencies in workshops and advisory groups.

Key outcomes from the projects included models that will shape our thinking and analysis of future policy challenges, and detailed reports that are exploratory yet rigorous, challenging future assumptions and posing strategic questions. Some of our key findings include:

  • Recognition that the investment decisions we make will shape patterns of demand and not just respond to predicted future demand. We should debate the sort of access we want and decide how to invest to support the future.
  • While transport remains important, we need to look at access, not just mobility. The different ways we can improve access are with good transport systems, good spatial planning or improved digital access.
  • We have a window to think carefully about the next generation of central government revenue tools, the needs of local government, and the role that pricing tools can play in delivering the transport outcomes New Zealand wants.

We released the projects’ findings at forums in Auckland, Wellington and Christchurch, attended by CEOs and senior managers from across the broader transport sector, including many key stakeholders.

It is vitally important the Ministry continues to investigate questions raised by this work. We will work on other key strategic projects in 2015/16, such as Regulation 2025 and Public Transport 2045, that will similarly broaden our understanding and challenge our thinking about issues for the future.

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Our contribution towards the Minister’s priorities for transport

The Government’s transport specific objectives include supporting economic growth and productivity, value for money, and safety and security. These objectives reflect the wider priorities that the Government has set out in the Business Growth Agenda and the Better Public Services programme.

The Business Growth Agenda includes a specific goal to raise exports from 30 to 40 percent of GDP by 2025. More generally, the Business Growth Agenda is about the Government’s focus on economic growth as a key mechanism to create better opportunities for all New Zealanders. The transport system has an important supporting role in ensuring that the additional exports (and their associated input goods) are able to be moved efficiently and effectively around the country and internationally. The Government also has a focus on investing in modern infrastructure.

The Minister of Transport’s overarching priorities for the transport portfolio are closely aligned to those of the Government. They include supporting economic growth and productivity, delivering greater value for money, and safety. To achieve these overarching priorities, the Minister has a focus on six specific areas:

In addition to our work under each of these specific areas, the Ministry has a programme of regulatory reform that will provide benefits across a number of the Minister’s key priorities, and deliver a system that is flexible and fit for purpose for 2015 and beyond:

The following sections provide the Ministry’s contribution in support of these key areas and regulatory priorities.

Delivering the Government’s transport commitments

The Government Policy Statement on land transport 2015/16 – 2024/25

The Government Policy Statement on land transport (the GPS) sets out the Government’s investment strategy for the land transport system. $10.5 billion of land transport funding is allocated over the first three years of the GPS and a total of $38.7 billion over its full 10-year period (2015/16 – 2024/25). The GPS sets out the Government’s 10 year strategic and policy goals for land transport, as well as the funding direction needed to achieve them.

The Ministry developed and strengthened the framework in this GPS, leveraging from 2013 amendments to the Land Transport Management Act 2003. This has let us identify national land transport objectives, and present the expected results from land transport investment in a way that more clearly links with the resources allocated to achieve those objectives.

The GPS development also involved an extensive series of regional engagement sessions throughout New Zealand, involving representatives from local authorities, Local Government New Zealand and other key stakeholders. The GPS was released in December 2014 and has now been considered by local councils in the development of their regional transport plans, and by the New Zealand Transport Agency in the 2015-2018 National Land Transport Programme (NLTP), which came into force on 1 July 2015.

The GPS prioritises economic growth and productivity, road safety and value for money. It directs funding towards priority transport initiatives, particularly the continued delivery of the Roads of National Significance. Recognising the important role that local roads have in connecting communities, businesses and markets, the GPS continues investment in local roads and provides for important regional projects. The GPS also provides for continued growth in funding for public transport and active modes.

In 2015/16, the Ministry will implement a new GPS monitoring approach, based on the investment framework developed and presented in the GPS. This is expected to include monitoring of results from across the investment, including reported results from spending in activity classes, multi class reporting and Ministerial expectations.

Urban Cycleways Programme

When complete, urban cycleways investments will significantly enhance New Zealand’s urban cycleways networks, making cycling to work, school or the shops a safer and more attractive transport choice for current and future cyclists.

In August 2014, the Government announced $100 million in new funding over the next four years to accelerate cycleways in urban centres through an Urban Cycleways Programme.

In June 2015, the Minister announced the Government’s $100 million had helped to generate an overall investment of $333 million to transform urban cycling infrastructure, with 54 projects to receive funding. The $333 million is made up of the $100 million of new funding, $105 million from local government, and $128 million from the NLTP.

To guide the investment of the Crown’s funds, the Ministry developed an Investment Strategy and Terms of Reference for the Urban Cycleway Investment Panel. The Panel (chaired by the NZ Transport Agency) provided oversight and quality assurance to ensure the Programme optimised opportunities to invest in urban cycleways. The Panel also recommended to the Minister projects that would expand and improve the cycling network.

The Ministry’s next focus will be monitoring the implementation of the Urban Cycleways Programme over 2015/16-2017/18.

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Taking a multi-modal approach to deliver transport solutions

Keeping the SuperGold card sustainable

The SuperGold card transport concession scheme (the Scheme) assists over 650,000 eligible New Zealanders to remain mobile and in touch with their communities. However, the estimated annual costs for 2015/16 have risen to over $28 million; due to an increase in SuperGold cardholders, the growing use of public transport and rising fares.

In 2013/14, the Government asked the Ministry to report on options for cost efficient and sustainable funding of the Scheme. The Ministry’s review identified ways to ensure value for money, while retaining cardholders’ entitlements to free off-peak public transport services.

The Ministry has advised regional councils, user groups, service providers, Auckland Transport and Local Government New Zealand about the changes to the scheme from 2016/17. The results of these discussions will feed into a Cabinet paper due in quarter one of 2015/16.

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Auckland

Improving alignment on Auckland’s transport strategy

During 2014/15, the Ministry provided Ministers with analysis on Auckland Council’s preferred transport strategy. Auckland Council estimated it would need an additional $300 million per annum to deliver the strategy, and indicated it would like the Government to provide it with new transport funding tools.

It was recognised that an agreed transport strategy that addressed both the Government’s and Auckland Council’s transport objectives, and set out a compelling case for additional transport investment, was a prerequisite for Government considering any additional funding or funding tools.

The Ministry is now working closely with Auckland Council, Auckland Transport and the NZ Transport Agency to develop advice on how Auckland’s transport system could best develop over the next 30 years.

Auckland City Rail Link

The Government has committed to have its share of funding available for construction to start on the City Rail Link in 2020, and has indicated it will consider an earlier start date if Auckland’s CBD employment and rail patronage meet specified growth thresholds.

During 2014/15, the Ministry closely monitored progress against these thresholds and provided the Minister with one six-monthly update.

The Ministry’s February 2015 update advised the Minister that Auckland CBD employment was at just over 100,000 employees (compared to the threshold of over 122,000 employees) and rail patronage was at 12.5 million trips a year, (compared to the threshold of over 20 million trips a year, well before 2020).

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Technology and the environment

Intelligent Transport Systems

Intelligent Transport Systems (ITS) offer major opportunities to improve the efficiency, effectiveness and safety of the transport system.

The Intelligent Transport Systems Technology Action Plan 2014–18 (the Action Plan) outlines the Government’s strategic approach to ITS that will contribute to safer and more efficient transport for New Zealand. ITS apply information, data processing, communication and sensor technologies to vehicles, infrastructure and operating and management systems to benefit transport users.

The internationally recognised Action Plan has 42 actions and covers all modes of transport. The aim is to ensure we have the necessary building blocks, such as leadership, a supportive regulatory system, data, standards and accurate real-time positioning systems, to enable ITS to be implemented in New Zealand.

The Ministry is leading this work and has established an ITS leadership group of high profile Chief Executives from the public and private sector. The group’s aim is to ensure that the benefits of transport technology are captured as early as practicable to help New Zealand thrive. The group’s focus is on the potential for ITS to improve Auckland transport, particularly freight efficiency.

Other actions progressed include:

  • the development of a framework for scanning transport legislation to identify unnecessary barriers to the testing and deployment of ITS in New Zealand
  • a review of transport regulations in relation to driverless vehicles
  • a trial of connected vehicle technology in heavy vehicles in Tauranga, to test a suite of technologies to measure freight movements in the Bay of Plenty
  • research on driver distraction caused by in-car technologies
  • a vehicle standards map which identifies technologies that have the potential to improve safety and efficiency
  • mandating electronic stability control for light vehicles
  • amending Civil Aviation Rules to manage the increasing use of unmanned aerial vehicles
  • a cost benefit analysis, jointly commissioned with the Civil Aviation Authority and Land Information New Zealand, of a satellite-based augmentation system (SBAS) for aviation.

In 2015/16 we will continue our focus on the building blocks for ITS, begin an assessment of New Zealand’s readiness for connected and automated vehicles and investigate opportunities for transport through new uses of data.

New Zealand’s approach to unmanned aerial vehicle operations

The use of unmanned aerial vehicles (UAVs) in New Zealand is increasing significantly, as new uses are found for them in areas like photography, agriculture, surveying and search and rescue. However, the existing rules were designed for model aircraft and did not provide a suitable framework for activities relating to high performance UAVs.

The Ministry worked with the Civil Aviation Authority to develop a new policy approach, resulting in the amendment of the existing rule (applying to low-risk operations) and the development of a new rule for higher risk UAV operations. Industry was largely supportive of the new rules, which allow them to demonstrate to their clients that their operations have been endorsed by the safety regulator.

The Associate Minister signed the rules in April 2015. New Zealand is one of the first countries in the world to introduce rules for UAVs. New Zealand has adopted a unique risk-based approach, which puts the onus on the operator to demonstrate they are able to mitigate any risks to people and property. Unlike other countries, the rules do not differentiate between commercial and recreational activities. This means some low-risk commercial operations can be conducted without the need to obtain approval from the Civil Aviation Authority.

The new rules, which came into effect on 1 August 2015, allow the New Zealand UAV industry to move forward and innovate within a robust safety framework.

Climate change work programme

In 2014/15, the Ministry refreshed its climate change work programme to support Government objectives.

The work programme’s initial focus has been on analysis of the opportunities for electric vehicles to contribute to emissions reductions in the transport sector. In 2015/16, we will continue to consider a wider range of policy measures that could support emission reductions.

During 2014/15, Ministry officials supported the Ministry for the Environment to prepare advice to Government on New Zealand’s post-2020 climate change target. Transport officials also attended several public consultation meetings on New Zealand’s post-2020 climate change target.

The Ministry will continue to work with government agencies and wider transport stakeholders in the development of policy around transport emissions reduction.

Electric vehicles

The Ministry is providing advice to support increased uptake of electric vehicles, including advice on a range of measures around an electric vehicles policy package. This included looking at ways to ensure a cohesive network of electric vehicle charging infrastructure is developed, and addressing the lack of awareness and misconceptions about electric vehicles, and uncertainty about the total cost of ownership.

In June 2015, the Ministry supported the Minister to lead an electric vehicle roundtable meeting, attended by representatives of the new and used vehicles import industry and an electric vehicle industry organisation.

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Supporting the export economy

Air services liberalisation

The Ministry leads the New Zealand teams negotiating the international air services agreements that increase New Zealand’s connectivity with the rest of the world.

New Zealand’s approach to air services liberalisation is set out in the International Air Transport Policy Statement, issued in August 2012.

In 2014/15, we successfully negotiated expanded agreements with key and growing markets. We agreed a doubling of capacity in New Zealand’s air services arrangements with China from 21 services per week, for airlines from each country, to 42 services per week each.

This will allow for the next stage of growth in what is now New Zealand’s second biggest market.

In November 2014, for the third time, the Ministry led a team to the International Air Services Negotiations conference. Taking advantage of the conference’s unique opportunities, we negotiated new air services agreements with Bahrain, Colombia, Egypt, Greece, Oman, Serbia and the Seychelles. The agreements create the opportunity for market participants to provide benefits for New Zealanders wanting to travel to these countries and strengthen global links for travellers and businesses.

New Zealand now has more than 60 air services agreements or arrangements, including with all of our major trade and tourism partners.

During 2015/16, we will focus on putting in place arrangements to allow code-share services which connect to new services inaugurated by airlines, such as Air New Zealand’s services to Houston and Buenos Aires.

Up to date freight forecasting

The Ministry commissioned the Future Freight Scenarios study to provide impartial information to help the freight sector plan more effectively for the increasing numbers of larger ships visiting New Zealand. It examined the possible impact of larger ships on the road, rail and coastal shipping networks, freight costs, and the New Zealand economy. Ten possible future scenarios were examined.

The study showed larger container ships visiting New Zealand create both opportunities and risks. Increasing numbers of larger ships coming to New Zealand are likely to reduce the cost of shipping freight internationally. However, these savings are likely be outweighed by higher domestic transport costs, particularly for exporters and importers far away from the ports able to handle larger ships. The predicted costs highlight the importance of existing Government and private sector initiatives to lower domestic freight costs.

The Ministry released the study to key stakeholders and put it on its website in December 2014. We followed this with a wide range of sector engagements to promote discussion and raise awareness of the findings.

The study has contributed to public debate about how New Zealand should plan for larger ships.

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Safety

Safer Speeds progressed

Speed is a major cause of crashes on New Zealand roads. The speed vehicles are travelling at when involved in a crash contributes to the crash’s severity. The Safer Journeys Action Plan 2013-15 has an action to develop and implement a national Speed Management Programme (Safer Speeds) with measures to address this area of concern.

In 2014/15, the Ministry, along with the NZ Transport Agency, focused on a number of key initiatives, including:

Demerit points – speeding drivers currently receive both a fine and demerit points for offences detected by a police officer, but a fine only for offences detected by a speed camera. The Ministry investigated applying demerit points, as well as the fine, to both methods of detecting speeding offences

Speed management guidelines – with the NZ Transport Agency, we were involved in developing speed management guidelines for Road Controlling Authorities and other system designers to manage speeds consistently and prioritised to risk. The Ministry produced a paper for the Associate Minister, proposing amending the Setting of Speed Limits Rule. The draft guidelines included enabling a 110 kilometre per hour speed limit on our best roads

Speed enforcement thresholds – the Ministry investigated international best practice for speed enforcement thresholds, as part of its work for the National Road Safety Committee

Changing the conversation on speed – the Ministry also contributed to the NZ Transport Agency’s Changing the conversation on speed initiative. This long-term campaign aims to make people more conscious of road features and more accepting of speed management approaches, especially in high- risk areas.

Reducing the harm from alcohol

The Government’s initiative to lower the alcohol limit for drivers 20 years and over came into effect on 1 December 2014, helping to make the roads safer for drivers, passengers and pedestrians. The Ministry led the policy work and consultation on this important initiative.

The Land Transport Amendment Bill 2013 lowered the adult breath alcohol limit from 400mcg of alcohol per litre of breath, to 250mcg. The blood alcohol limit reduced from 80mg of alcohol per 100ml of blood, to 50mg. For drivers under 20, the limit stayed at zero.

The Ministry will review the changes in three years time, when enough data is available for conclusive results. Initial information from the New Zealand Police showed that, for drink drive offences in the 400mcg+ bracket, there were 1,007 fewer offences nationally between 1 December 2014 (when the new law came into effect) and 31 March 2015, compared with the same period the previous year – a 17 percent reduction overall.

The national average breath-alcohol level for offences in the 400mcg+ bracket also fell since the new law was introduced – meaning fewer drivers are being detected over the limit, and those that are being detected, are less intoxicated. This is consistent with an ongoing trend, which has seen alcohol-related offences significantly decline over the last five years, from 34,457 offences recorded in 2009, to 20,961 offences in 2014.

Drink-driving sanctions reviewed

At the same time as lowering legal alcohol limits for adult drivers, the Government requested a review of sanctions for drink-driving. The Safer Journeys Action Plan 2013- 15 also contains an action to promote the greater use of alcohol interlocks.

The Ministry is leading the review of drink-driving sanctions, alongside Justice sector agencies, the Ministry of Health and the NZ Transport Agency. The review’s focus has included collecting data about drink-drive offences, and analysis of sentencing trends and issues, and a cost benefit analysis. This included examining the extent to which sanctions, particularly voluntary alcohol interlocks, are used.

In May 2015, the Ministry held a workshop with a wide range of stakeholders and individuals interested in the issue. This work supported the Ministry to report to the Associate Minister in July 2015.

Drug-driving enforcement reviewed

The Ministry is leading a review of drug-driving enforcement, alongside Justice sector agencies, the Ministry of Health and the NZ Transport Agency. The review stems from Government decisions in 2012 around drug-testing technologies and a Safer Journeys Action Plan action, to identify the opportunities to strengthen drug-driving enforcement, at reasonable cost.

The review has focused on collecting data from New Zealand and overseas to estimate the scale of New Zealand’s drug-driving problem, analysis of the current situation and issues, and a cost benefit analysis. We have looked at international enforcement models (particularly Victoria’s random drug screening), how viable the models would be in New Zealand, and whether technology is available to support the approach.

In May 2015, the Ministry held a workshop with a wide range of organisations and individual stakeholders to discuss issues and possible options around strengthening enforcement. This work supported the Ministry to report to the Associate Minister in July 2015.

Reducing risks from alcohol and drugs in aviation, maritime and rail

The Ministry prepared and released the Clear Heads discussion paper about reducing the risks of alcohol and drug impairment in the aviation, maritime and rail sectors.

The review responds to a call from the Transport Accident Investigation Commission (TAIC) for significant drug and alcohol regulation in its report on the Carterton hot air balloon crash, in which 11 people lost their lives. The TAIC recommendation covered both commercial and recreational activities.

In May 2015, the Ministry completed its public consultation and considered the submissions on the Clear Heads paper from the recreational boating, maritime, rail and aviation sectors and the public. We are now developing policy proposals for Government consideration later in 2015.

Improving safety for visiting drivers

As part of the Safer Journeys signature programme to improve the safety of visiting drivers to New Zealand, the Ministry worked closely with the NZ Transport Agency and others across the transport and tourism sectors on several key initiatives. The work focused particularly on the tourist regions of southern New Zealand.

The Ministry assisted the Transport and Industrial Relations Parliamentary Select Committee in its consideration of a petition, which proposed all overseas drivers should have to sit a driving test before they can drive in New Zealand. The Ministry provided advice on related issues. The Committee said it would monitor progress on a number of visiting driver initiatives.

With Statistics NZ, the Ministry led the work to link various data sets to improve the understanding of the causes of visiting driver crashes, and identify possible solutions. The project also updated the Ministry’s crash fact sheet on overseas licence holders in crashes, and is developing risk profiles of visiting drivers.

As overseas tourist numbers increase, the Ministry will continue to work with Government and private sector groups to improve the safety of visiting drivers.

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The Ministry’s key regulatory priorities

Regulation 2025 reform programme

In its stewardship role in the transport sector, the Ministry works across the sector to consider whether the regulatory system is fit for purpose and what innovative opportunities exist for improving regulatory outcomes.

Transport also operates in a dynamic environment, with increasing constraints on Parliamentary time for making regulation, pressure to reduce regulatory costs and new technologies that change the regulatory environment.

To make sure New Zealand has a fit for purpose regulatory system for the future, which contributes to a thriving New Zealand economy, the Ministry initiated the strategic project Regulation 2025 to look at how transport should be regulated in 2025.

The Ministry identified these key issues to examine:

  • how will the transport system change and what implications will that have on what we need to regulate?
  • what new regulatory tools will be available to regulate transport?

The Ministry established an inter-agency steering group to manage the project. We held a series of one-on-one meetings with experts from New Zealand and overseas to test the scope of the investigations.

As a first stage, eight reports were commissioned to provide foundation knowledge for the work. These reports focus on questions about approaches to regulation, social marketing and new technology in regulation, the reasons for significant regulatory change and alternative models to pay for the costs of regulation.

The eight reports were delivered in September 2015. The papers will provide information to feed the development of a set of scenarios, which will explore the interdependencies between the regulatory system and transport outcomes.

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Review of Civil Aviation Act 1990 and Airport Authorities Act 1966

The Ministry is reviewing these Acts to make sure they are fit for purpose, given the significant changes in the public sector and throughout the aviation environment during their life spans.

As part of the review, we tested a range of improvements to the Civil Aviation Act, to make sure its provisions are current and effective, promoting a responsive regulatory system to support a dynamic aviation sector.

The review found that several Airports Authorities Act provisions are redundant, outdated or ambiguous. The review tested amendments to these provisions, to make sure the Act remains effective for airports and their users. We sought and received submissions, and held regional engagement sessions on a range of civil aviation related safety, security and economic issues.

We are continuing to advise the Minister on a range of issues and proposed improvements, and will support the Minister to give effect to any legislative change.

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Improving the driver licensing system

The Ministry, with the NZ Transport Agency, is leading the review of components of the driver licensing system. The review is focused on making sure the driver licensing regulations enable:

  • an improved customer experience
  • a reduced compliance burden
  • improved compliance with driver licensing while maintaining or improving road safety.

A system, which is simpler and easier to use, should also increase people’s willingness to comply with driver licensing requirements.

The Ministry and the NZ Transport Agency met with three reference groups of key stakeholders, who gave input into the review across general driver licensing, selected parts of overseas driver licensing and heavy vehicle licensing.

A public discussion document on driver licensing is planned for release in 2015/16 and we will then provide recommendations to the Government about reform proposals.

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Small passenger services review

The Ministry commenced a review of the regulatory framework for small passenger services (including taxis and private hire car services) to ensure New Zealand’s regulatory environment is both fit for purpose and flexible enough to accommodate new technologies.

The Ministry engaged with a range of interested parties (including operators, technology companies and user representative groups) to understand their views on the future of the industry and reform options. Ministerial decisions on the review are expected later in 2015.

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Improving regulatory planning and delivery

A new Four Year Regulatory Plan brings together the Ministry’s regulatory planning processes and supports its Four Year Plan. The purpose of the Ministry’s regulatory planning is to establish the Ministry and transport Crown entity regulatory-reform priorities, to achieve the Government’s transport sector goal. The Four Year Regulatory Plan has been published on the Ministry’s website for stakeholders and industry groups to access and will be updated each year.

The Ministry’s 2014/15 rules programme helped New Zealand meet key safety and health obligations under a number of international conventions. This ability to deliver on international obligations is important for New Zealand’s relationships with countries which are our trading partners. Additionally, the Ministry’s rules development programme and regulatory changes were estimated to have a net economic benefit of $75 million per annum over the next 30 years.

Notable rules that were completed or reached major milestones in 2014/15 include:

  • Aerodromes Certification and Operation Rule [Part 139], which will improve the safety of the New Zealand aviation system, by prescribing requirements for the certification, operation and safety audit of aerodromes
  • the Safety Management Systems Rule, which will require aviation operators to take a risk-based approach to safety by having a safety management system (SMS) in place
  • changes to a number of rules to enable Maritime NZ to inspect foreign ships against the current international safety standards and best practice in the International Convention for the Safety of Life of Sea, which New Zealand is obliged to implement
  • preliminary work for rule changes to allow New Zealand to ratify the Maritime Labour Convention 2006 in 2015/16. The Convention sets internationally agreed minimum standards for the provision of health, safety and welfare of seafarers on board ships
  • the Vehicle Dimensions and Mass Amendment 2014, which improved the regulatory system covering enforcement and penalties for high-productivity motor vehicles
  • the Vehicle Dimensions and Mass Amendment 2015, to allow the operation of over-weight buses on specified urban routes. Introducing higher capacity vehicles is expected to create efficiencies and ease congestion.

The Ministry and transport Crown entity staff developed an online tool to help provide guidance with best practice rules development. The plan covers both primary legislation, regulations and rules. Transport rules are developed by the Ministry and transport Crown entities. On average there are 18 transport rules in various stages of development across the modes each year.

An ongoing training programme will ensure knowledge of best practice continues to be maintained.

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Improving performance and leadership of the transport sector

To ensure that the Ministry can continue to deliver on the Minister’s key priorities, the Ministry has a programme of work focussed on growing the capability and capacity of the sector. This includes lifting performance, enhancing collaboration, and long-term stewardship of the sector.

The Ministry’s focus is on four key areas:

The Ministry’s programme of work under each of these key areas is outlined below.

Improving transport agency performance

Strengthening our governance relationship

The Ministry continued to strengthen its relationships with the four transport Crown entities. Our governance work has ongoing core functions of:

  • strategic engagement
  • stewardship advice to guide key stakeholders decision-making
  • evaluating of entity performance and capability
  • identifying key risks and potential mitigations
  • Board appointments.

Over 2014/15, in addition to the ongoing governance roles, the Ministry formalised and documented the Board appointment process, and undertook a successful appointment process review for the Transport Accident Investigation Commission.

Funding reviews across the transport sector

2014/15 was the first full year of the Ministry’s consolidated Fees and Funding Review Programme — and it was a successful year.

The Ministry has identified all fees in the transport sector to develop a consolidated multi-year programme to ensure all fees are reviewed every three to five years.

Twelve reviews were completed during the year and a further six continuing into 2015/16. The two most significant reviews completed were:

  • the MetService ongoing contract for services
  • the funding of the Transport Accident and Investigation Commission.

These reviews resulted in clearer definitions of both roles and functions. The best practice review methodology in the Ministry’s review framework established the business cases for successful requests for additional funding as part of Budget 2015.

Two significant reviews started, but not due to be completed until 2015/16 were:

  • the first three yearly review of the Civil Aviation Authority regulatory function fees. The review has two consultation stages: with all stakeholders on the methodology behind the fees and then on the level of fees
  • the scheduled Maritime New Zealand mid-point funding review.

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Improving Ministry performance

By June 2015, the Ministry has transformed the way it worked and moved closer to achieving its Greatest Imaginable Challenge, thanks to an ambitious 2 Year Plan for change.

The Ministry’s 2013 PIF review set the scene for how we needed to improve our performance. Our 2 Year Plan identified five key work streams for action – across strategic policy, sector leadership, lifting stakeholder and customer perceptions, and improving the quality and consistency of policy advice. These areas responded to issues raised in the PIF review.

As outlined earlier, the Ministry stepped up to the challenge of providing thought leadership for the wider transport sector. We appointed a set of expert Strategy Directors to lead strategic projects that emphasised sector leadership and future thinking. We delivered results and led national stakeholder discussions about the first three projects, around transport and economics, future demand and future funding. Work is underway on the next two big initiatives, Regulation 2025 and Public Transport 2045.

The Ministry’s new calendar of stakeholder engagement, and best practice stakeholder engagement and communications toolkit, bore fruit in 2014/15. The 2014 PIF Follow-Up Review reflected “marked and widespread praise for improvements in the external engagement amongst stakeholders”. The Trans-Tasman 2015 Government Department Review noted stakeholder engagement had been embraced at the Ministry, leading to a richer and deeper stream of policy advice and research.

We aimed to improve our 2013/14 score of 7.4 in the NZIER assessment on the quality of our policy advice and writing. To help achieve this, we put into place several initiatives including a programme of structured professional development to help us towards our internal target of an average score of 7.6 for our papers – papers that don’t just do the job, but add extra value to make things easier for the Ministers. For 2014/15 we received a score of 7.6 from NZIER placing us in the top four agencies they assess.

Achieving true transformation was more than delivering a list of initiatives. To succeed, staff engagement was critical. We made a conscious and visible effort to celebrate success by acknowledging staff for high quality policy advice, celebrating achievements of the 2 Year Plan milestones and creating staff-driven awards to recognise outstanding achievements and qualities. Targeted professional development opportunities and a people plan that aimed to lift leadership, support workforce development and better manage staff performance were among other initiatives that made a difference about how staff felt about working for the Ministry.

These initiatives have paid off in remarkable results for a policy-based organisation in the public sector. The most recent annual Gallup employee engagement score showed higher staff engagement than ever. After 2 years of transformation, our score had risen to 4.24 in 2014/15 (mean score out of 5). Staff turnover rates have dropped from 15 percent per annum two years ago, to 12 percent in 2014/15.

Many of the Ministry’s 2 Year Plan deliverables have become business as usual – which is how it should be in an engaged and high performing Ministry.

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Working across the transport sector Collaboration and capability

The Ministry chairs the Transport Sector Leadership

Group, which oversees delivery of the Government’s priority of Better Public Services. We look for innovative ways to improve the efficiency and quality of the services we deliver, in support of the Government’s wider Better Public Services objectives. In 2014/15, we embedded the benefits of working collaboratively across the information technology and Ministerial Services areas.

In the information technology area, a monthly forum of the Chief Information Officers across the transport sector shared IT strategies, partnership opportunities, investment insights, and experiences with vendors, allowing all transport sector agencies to learn from others’ experiences.

The result has been an environment where agencies seek feedback and peer review before undertaking initiatives. This improves the likelihood of efficient, well planned IT developments and investigations into possible sharing opportunities.

With Ministerial Services, the ability of the transport agencies to use the Ministry’s workflow system, while retaining their individual processes, has meant a more efficient system for producing high quality Ministerial replies to public enquiries.

During 2014/15, we also focused on developing a better understanding of the capability requirements of individual agencies around procurement practices. This coincided with the NZ Transport Agency’s investigation into a Centre of Expertise for procurement. The agencies started to explore how this centre could provide or support the skills and training to improve procurement practices across the agencies.

In 2015/16, the leadership group will look for tangible benefits for agencies. Priority areas for investigation and action will be accommodation, procurement, and the finance and HR/payroll systems.

Transport Domain Plan

The Ministry, in conjunction with Statistics New Zealand, made substantial progress with developing the Transport Domain Plan. The Domain Plan will identify the actions that need to be taken now to make sure that information and statistics collected about the transport system are high quality and allow Government to make evidence based policy, strategy and decisions into the future.

Ultimately, the availability of better information will result in improved policy, strategy and decision-making and a more effective transport system.

In 2014/15, we developed a list of enduring questions, which are big picture strategic questions that the Government needs to answer to make evidence-based policy, strategy and decisions about transport into the future. The 45 questions across 12 topic areas were developed after intensive discussion with a wide range of stakeholders. The questions cover key areas across the transport sector such as the vehicle fleet, freight and people and society.

The questions allowed us to identify where gaps existed around the transport information essential for answering the questions. The gaps may exist because of factors such as a lack of data, poor quality data or compatibility issues. In 2015/16, we will make recommendations about how to address the gaps, which will be implemented by a cross-agency transport group.

We also completed a draft inventory of transport-related information across government departments and Crown entities. The Domain Plan and inventory will be published in November 2015.

Research strategy

In 2014/15, in conjunction with the NZ Transport Agency, the Ministry began development of a research strategy to help prioritise our time, effort and investment into research for the transport system.

The need for the strategy arose when we jointly identified there was an overall lack of coordination between interested entities in the area of transport sector research. Developing the strategy will involve engagement across the transport sector and related government agencies. When completed in 2015/16, the strategy will enhance collaboration and coordination of research across the sector and related agencies. It will also lead to a common methodology for prioritising research.

Alongside the strategy, we also established a series of knowledge hubs across different subject areas such as personal travel, aviation and forecasting. The hubs bring people from the transport sector, related agencies and academia together to share information. As a result, participants become more aware of the data and research available from a range of sources, and opportunities for collaboration are enhanced.

In November 2014, we ran a highly successful research conference. The inaugural half-day event brought together the transport sector and stakeholders to learn about the Ministry’s research programme. Because of the positive feedback we received, the Ministry will run an expanded conference in November 2015. The next conference will be a full-day event and focus on work being done across the government transport sector.

Predicting transport demand

To enhance the Ministry’s core role of advising the Government on transport policy and investment, we needed to improve our understanding of the key drivers on transport demand, their effect on the transport system and possible impacts on transport revenue.

In 2014/15, the Ministry set up the Transport Modelling Programme to achieve these aims, and to establish strong links and collaboration with other government agencies around transport demand and investment- related questions.

Using a partnership approach, we developed and published ten forecast models across air, road, freight and revenue. Among the key findings for 2014/15 were strong growth in air passenger travel but a relatively weak growth in aircraft movement. The transport sector will use these forecasts to inform their long-term transport infrastructure planning and air travel-related revenue forecasting. The Aviation Security Service used the Ministry’s air passenger forecasts when revising their revenue model.

The Ministry’s revenue forecasts for the National Land Transport Fund (NLTF) are used by the Treasury for budgetary work and the NZ Transport Agency when developing the National Land Transport Programme. Our revised NLTF model provides accurate short-term forecasts. We also developed a structural model for road transport that allows us to change different variables (ie fuel price) to test and understand how such changes in the transport system could influence total revenue in the short and long term.

The models have greatly improved the Ministry’s understanding of current and future transport demand and contributed to better transport infrastructure planning and revenue forecasting. To increase coverage of all transport modes, we plan to produce more transport modelling work in 2015/16 including the areas of public transport, road, air and optimising investment for the Government Policy Statement.

This work is critical for the Minister, as disruptive technologies are likely to have a significant impact on future demand for public transport.

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Working internationally

In addition to having a strategic leadership role in New Zealand’s transport sector, the Ministry works on the international stage.

Between May 2014 and May 2015, New Zealand enjoyed a very successful Presidency of the International Transport Forum. This Forum is part of the Organisation for Economic Co-operation and Development and is a strategic think tank for transport policy.

Our Presidency culminated at the Forum’s Annual Summit in Leipzig, Germany in May. The theme of the 2015 Summit was Transport, Trade and Tourism. More than 1,000 participants attended from around 80 countries, among them Ministers and political decision- makers from the Forum’s 54 member countries and many invited countries.

The Presidency provided us with an opportunity to raise New Zealand’s profile on a global stage, and created opportunities to highlight examples of transport innovation in New Zealand.

It also allowed us to develop better links between New Zealand and our international counterparts, and to build strategic alliances to explore areas of common interest. We are currently in the process of exploring two follow-on research projects with the International Transport Forum and members of the Forum. This will enable us to bring international rigour to our work.

In August 2014, Nick Brown, General Manager Aviation and Maritime, became Lead Shepherd (Chair) of the Asia Pacific Economic Cooperation (APEC) Transportation Working Group. The two-year role gives the Ministry the opportunity to lead international discussion about transport and to contribute to New Zealand’s foreign policy objectives.

This Working Group of 21 economies focuses on information sharing about best practice in transport, and building the capacity of the developing economies. New Zealand has contributed particularly around ease of travel, overall economic integration and the promotion of women in transportation. Intelligent Transport Systems (ITS) have been another focus for the Working Group. The May 2015 meeting provided an opportunity for Ministry representatives to exchange information and learn about ITS technology from other economies.

I am proud of what we have achieved over the past year and look forward to the next year, as we continue to investigate and influence the future of transport and deliver on immediate transport needs.

Martin Matthews
Chief Executive, Ministry of Transport

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