www.viewpoint.net.nz - NZ Transport, Aviation, Logistics & Supply Chain Blog

Land Transport and Transit to merge?

Land Transport and Transit are set to merge as further consolidation in the government agencies continues.  This follows the previous merge of Transfund a few years ago.

Minister of Transport Annette King said: "Despite recent improvements, transport agencies need to work more collaboratively and with a common purpose."

I believe that this is a sensible move and will remove one additional layer of bureaucracy and hopefully enable a quicker more consistent approach to land transport in New Zealand.

The government is also considering directing all road user charges to roading rather than the general fund.

If this happens and transit and LTNZ have a common vision we may actually see some real change and much needed infrastructure in place sooner.

Why can’t we have a simple budget?

Labour continues to deliver complex policies, that may have good intentions, but that in reality add extra layers of bureaucracy and cost to our country and slows progress to below that of a snail.

To recap, there is KiwiSaver, which will compel employers to contribute an additional 4% of salaries to the KiwiSaver programme.  Secondly there is the Regional Roading Tax for Auckland and Wellington.

Both of these will have a huge affect on the profitability and compliance costs for any Transport and Logistics business, and both have huge positives and negatives to them.

The enormous problem I have with most of what the Government is doing is this…

Nothing is simple!

KiwiSaver will be a huge administrative nightmare for business and rather than just give tax cuts or making contributions tax free they are giving tax credits. How confusing to the average person!

As for the tax on fuel to cover roading in Auckland and Wellington.  Labour have told the councils they must consult extensively with the public about where they spend the money. This means the money won’t start being collected for another 15 – 18 months.

Auckland and Wellington need roads now, not 5 years of consultation and happy talk.

Councils need the ability to lead, not get caught up in consultation and RMA’s.

For more simple summaries of the budget from treasury click the below links:

KiwiSaver Employers Fact Sheet (PDF)
Infrastructure Changes for Roads
18 Pages Executive Summary of Budget

Transport companies get a 3% increase in costs

Some significant cost increases to the Trucking Industry in the last few days.

Firstly the long awaited increase in the Holidays Act from 3 weeks to 4 weeks. I was thinking about the implication of this to the industry. We currently have around 25,000 ‘Heavy’ Truck drivers. Each of them is now entitled to an additional 1 weeks leave. For an industry that it already short of drivers, it now needs around another 500 drivers just to cover the additional 125,000 days annual leave to be taken this year.

Don’t worry about finding an additional 500 drivers, it will be easy – Yeah Right

The second issue is the increase in Road User Charges with 48 hours notice. It is estimated that the 11% increase in RUC will increase operators costs by 1%. This is a significant amount of money that can not be recouped from customers instantly.

A 3% increase to transport companies costs from 1 April. Welcome to the new financial year guys. Sorry I don’t have any solutions apart from getting a new government.