This result area supports the Government’s priority for economic growth and value for money

Open and efficient markets are essential to drive innovation and productivity in the provision of transport services so that New Zealand businesses remain competitive internationally.

Unlike many other sectors, some aspects of transport economic regulation are held under specific transport law rather than under general competition law. We need to ensure that adequate attention is paid to this part of the transport regulatory regime, particularly as thinking on the place of competition economics in a small economy continues to evolve.

While the aviation and maritime sectors largely function in a market environment, the international dimension of these sectors has a strong influence on their operation domestically. To keep our strong international reputation and connection to international markets, we need to ensure regulation provides the necessary international confidence in the safety and security of our maritime and aviation law.

The Ministry’s role in more open and efficient transport markets

The Ministry has an important role in advising the Government on opportunities to achieve more open and efficient transport markets.

The Ministry has a leadership role to work across the transport sector to consider whether the regulatory system is fit for purpose and what opportunities exist for improving regulatory outcomes. This involves thinking more broadly about what constitutes regulation and what outcomes the Government and the sector want from the regulatory system.

The Ministry’s Regulatory Reform Programme has:

  • identified several key areas for reform
  • streamlined the regulatory design process so it is more efficient and timely
  • brought increased rigour into the rules process so only matters that genuinely require a rule are included in the programme.

The Ministry has a programme to periodically review transport legislation and subordinate regulation to ensure that it remains fit-for-purpose. This programme includes an initial assessment of whether particular aspects of the regulatory framework impose unnecessary costs on users and whether there are better alternatives, for example, less or no regulation, different regulation or non-regulatory policies. The Ministry examines transport regulation to identify where regulations, or the application of these regulations, may be inhibiting the effective operation of markets, and to better understand the factors contributing to such unintended effects.

What we intend to achieve

The following projects and activities over the next four years will enable our work to be a catalyst for more open and efficient transport markets.

Regulation 2025 reform programme

For the transport system to maximise its contribution to a thriving New Zealand, the regulatory framework needs to be fit for purpose. Otherwise, it is imposing costs on New Zealand. But more than that, transport is operating in a dynamic environment where there are increasing constraints on parliamentary time for making regulation; increasing pressure to reduce regulatory costs; and increasing new technologies that are changing the regulatory environment. It is important therefore that the regulatory framework and the associated design and implementation skills can deal with current and future demands.

As a first step, we will develop a desired future state for transport regulatory frameworks, in close collaboration with transport agencies and users. The current regulatory framework will be assessed against the agreed future state and a plan of actions will be developed to ensure future regulatory decisions will lead the sector to the desired framework.

The result of this work will be a clear vision and pathway to achieve a flexible regulatory framework that supports innovation and economic growth, but at the same time balances the need for certainty. Regulatory changes will be made more efficiently, and there should be less need to replace redundant legislation.

Offshore oil and gas installation matters

The Ministry will provide advice on improving the financial security for offshore oil and gas installations with an aim to ensure owners are able to meet the cost of undertaking their proposed activities and subsequent legal obligations. A financial security regime should:

  • ensure the financial assurance requirement is appropriate to offshore installations
  • ensure there is effective, prompt and adequate compensation for clean-up costs incurred by public agencies, and for other parties who suffer economic damage in the unlikely event of a significant oil spill
  • increase protection for the Government from the risk of bearing any clean-up costs, and the public from bearing the damage from oil pollution
  • minimise compliance costs.

Reform of the Vehicle Dimensions and Mass framework

The Vehicle Dimensions and Mass Rule 2002 has been amended regularly since coming into effect. The purpose of the Rule is to improve the safety of the road network by ensuring vehicles are fit for the surfaces and structures they move along, over or under.

The purpose of the current reform is to ensure that safety outcomes are delivered in a way that imposes the least possible administrative burden on heavy vehicles in particular.

The Ministry will work in conjunction with the NZ Transport Agency to build on the successes of the High Productivity Motor Vehicle and 50Max initiatives to further improve the operation and enforceability of the Rule.

As well as considering technical changes to the Rule, the reform will consider whether adjustments are also needed to the Land Transport Act 1998 to enable the Rule to better meet future needs.

Review of the Civil Aviation Act and Airport Authorities Act

The Ministry will provide final advice to the Government on proposed changes to the Civil Aviation Act 1990 and Airport Authorities Act 1966 to ensure that a number of economic, safety and security issues relating to these acts are fit for purpose for our future needs.

National Airspace and Air Navigation Plan

The Ministry will work with the Civil Aviation Authority and industry stakeholders on New Southern Sky — the programme to implement the National Airspace and Air Navigation Plan. The Plan sets out the pathway to modernise New Zealand’s airspace management system, and encompasses changes with a net benefit of almost $2 billion over the next 20 years. The regulatory changes supporting the Plan’s implementation will help realise these benefits by enabling the industry to take advantage of new technologies safely and efficiently.

How performance will be assessed

Results — the Ministry will know that it has achieved its stated result if, by 2025, there is:

  • a 10 per cent increase in the productivity of businesses that provide transport services
  • a 30 per cent increase in the movement of people and freight by international inbound and outbound flights.

Success — the Ministry will know that it has been successful over the next two to four years if:

  • the Ministry has implemented a prioritised programme to remove regulation that unnecessarily imposes costs or acts as a barrierto market efficiency
  • the Ministry knows how the transport regulatory system should change in order to support new business models and a rapidly changing technology environment, and has commenced work programmes to give effect to that
  • the Ministry has implemented a prioritised programme to strengthen its understanding of the key factors that may be constraining productivity growth in transport subsectors — focusing first on construction and freight
  • the Ministry understands how well the new Public Transport Operating Model has been implemented, and whether any changes are required for its benefits to be fully realised
  • the Ministry has successfully concluded international air services agreements with countries that provide key market opportunities.

 

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