The New Zealand transport sector continues to be an area of rapid change, influenced by the level of domestic and international economic activity.

Global changes in currency and capital flows, as well as the price of resources, can carry substantial physical consequences in terms of the flow of goods and people to, from and within New Zealand.

It is clear that we can expect significant and ongoing changes in transport demand over the next decade.

Further climate change is having a major impact on our decision-making. In export and tourism markets New Zealand trades on its reputation of being 'clean and green'.

'Clean and green' are not absolute measures and as environmental concerns become mainstream, consumers and tourists may change their attitudes about what they eat and where they travel. This in turn will have a major impact on the way the transport sector operates. In anticipation of this the Ministry is actively pursuing alternative policies that address climate change and improve sustainability, while ensuring a productive economy.

It is in New Zealand's interest to actively respond. Establishing a reputation as a global leader in tackling climate change has the potential to offer economic benefits that may outweigh the associated costs.

THE RISKS WE FACE

New Zealand's transport system is crucial to the functioning of the country. With a high level of investment going into the transport system, there is always pressure for money to be spent effectively to ensure best value for money.

The transport sector will need to be highly innovative and cost-effective to deal with both global and national economic trends. As well as environmental pressures, changes in management structures and technologies will continue at a rapid pace. There will be a continuing need for the transport sector to deliver the right services at the right price to transport users.

This is particularly the case in the land transport sector, where the government has identified the need for significant action to remedy problems such as traffic congestion in our major cities; the need to provide urban and rural infrastructure to support national and regional growth; and the need to improve the safety and environmental performance of the land transport network.

Globalisation is likely to lead to a greater emphasis on removing the economic restrictions that apply to international transport services and on developing international standards, particularly in the safety and environment area. Many of these changes involve issues of considerable public interest.

Communities and individuals are increasingly concerned at the social impact of transport systems on our communities; the impact of transport decisions on our land, water and air resources; the relationship between transport corridors and the shape of our cities; and the impact of transport safety on users and those near transport systems.

In the transport sector, these issues are increasingly being addressed through a greater focus on a sustainable transport system. Sustainable transport is about achieving balance between social and economic goals and environmental well-being in an integrated manner. In this context, developing a sustainable transport system requires rethinking how we view transport. It will require the Ministry to focus increasingly on outcomes, such as quality of access and mobility, as well as the more traditional outcomes such as safety activities and network capacity.

The Ministry's risk management framework includes mechanisms to identify, assess, monitor and mitigate risks that cover all areas of the Ministry's activities. This framework helps to develop specific strategies, plans and actions to mitigate risk.

While there are low risks in the delivery of many of our services, we have identified two main external risks and four important internal risks that may hold us back from achieving our goals.

EXTERNAL RISKS

National emergency affecting the transport sector

Following a natural or man-made disaster that threatens our national security, the government transport sector will be called on to provide assistance and advice. While the Ministry of Transport does not have an operational role, it will play a coordination role to provide strategic leadership to the sector during this time. It is the Ministry's responsibility to ensure the sector can respond quickly and effectively in an emergency.

The Ministry is managing this risk by leading the development and maintenance of the Transport National Emergency Response Plan. This plan provides a framework for transport agencies to participate in a whole-of-government response to a national emergency. In 2008/09 the Ministry will continue to develop and test this plan and incorporate lessons learned.

Failure to anticipate

The Ministry is expected to be able to anticipate changes that may have a harmful effect on the sector's ability to perform their roles well. Examples of such changes could include a significant drop in National Land Transport Fund revenue caused by motorists moving more quickly than anticipated to more fuel-efficient cars, or stronger than expected price increases in land transport construction.

Managing the introduction of new security regimes, to ensure continued international compliance, is also an important consideration. The Ministry manages these risks by having a robust monitoring and research function and strong links with the wider sector, including overseas administrations. 

Over the next financial year, in order to mitigate these risks, the Ministry will actively scan the external environment to identify emerging risks. It will also share its transport knowledge and expertise, including information about external trends, via our website to better inform the wider transport sector of current and developing issues.

INTERNAL RISKS

Ineffective monitoring of the performance of Crown entities

The Ministry risks failing to effectively monitor whether the transport sector Crown entities are performing to the levels agreed with the Minister. Inadequate monitoring could result in entities failing to deliver on agreed plans, which would compromise the entire transport system. To mitigate this, in 2006/07 the Ministry contributed to a series of reviews and embarked on initiatives to bring Crown entity monitoring and governance up to 'best practice' standards. We intend to build on this work over the next year by responding to recent government reviews, including the Cabinet Committee on Government Expenditure and Administration's (EXG) 'Review of Crown Entity Monitoring'. We will also implement a monitoring and governance work-plan so we are recognised as following 'best practice' in relation to Crown entity monitoring and governance.

The Ministry not performing its leadership function well

The Ministry must be seen to be providing strong leadership to the sector. The Ministry's success depends on it being a recognised authority on, and primary source of, quality policy advice to government on transport matters. It will effectively manage its relationships with other government departments, transport agencies, local government and the wider transport sector. It requires fostering a consultative and partnership approach with stakeholders in the development of transport policy.

Failure to build credibility will place the Ministry's ability to deliver a coordinated, effective transport system at risk. It will also affect the Ministry's ability to attract and retain the quality of staff it needs. The Ministry and the sector have been subject to a number of reviews, each looking at how its capability to lead could be improved. 

In 2008/09 the Ministry will:

  • implement, within budget constraints, changes recommended in an independent 2007/08 review of the Ministry's capability
  • implement any aspects of the Next Steps Review that are agreed by the government
  • implement the updated New Zealand Transport Strategy, which sets the overall long-term direction for transport in New Zealand

Ineffective relationship management

There is a risk that transport sector relationships with external stakeholders are damaged to the extent that the sector does not function in a cohesive, efficient, and coordinated manner.

The Ministry will take steps to mitigate this over the next year by developing and implementing a Ministry Stakeholder Engagement and Communications Strategy. As part of this strategy the Chief Executive and senior managers will engage with local government and other third parties. A stakeholder relationship team has recently been established to further enhance this work. A stakeholder survey will also be undertaken this year.

Providing inappropriate policy advice

The risk is that the Ministry provides inappropriate policy advice resulting in an adverse impact on New Zealand's transport sector and consequently the public. While this has traditionally been a low risk, there are emerging challenges that require a more holistic approach to policy analysis. During 2008/09 we will continue to roll out our new policy adviser training programme across grades and improve our capability in areas such as economic analysis, funding, and transport planning.

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