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 Thank you for inviting me here to speak at your 64th annual conference, but first up today I want to thank you on behalf of New Zealanders for a far more important reason.

 Many New Zealanders have just experienced a rugged fortnight of heavy winter rain and stormy gales, and I want to acknowledge the work undertaken by Contractors Federation members all around the country.

 From one end of the country to the other you have been literally up to your necks in thousands of tonnes of water and debris, and I'm sure that without your members getting "stuck in", many parts of New Zealand would not have got back to normal or near normal quite so quickly.

 This ‘can do' attitude is typical of the industry represented here today, and I'd like to thank you personally for your efforts.

 Just yesterday I travelled a short distance, from Wellington to Paekakariki, on the steam train commemorating 100 years of the North Island Main Trunk Line. On the journey we were told stories of the engineering and contracting feats that enabled this line to be built --- and I believe that events of the past fortnight have proven that contractors of today have lost none of the resourcefulness that their predecessors showed 100 years ago. 

 I am here today principally to talk about transport, of course, but I wanted to start by making some general comments about infrastructure, given that it is election year, and you have two other politicians speaking later who will no doubt have plenty to say about the Government's policy.

 Of course, the federation would support investment in infrastructure ---- that's what you are all about, and I am here because I think you do a great job.

 I am aware that your federation provided welcome support in May for this Government's decision to buy Toll's rail and ferry business, and when we announced the extra $1.3 billion to guarantee and accelerate New Zealand's largest ever roading programme in Budget 2006.

 But given the performance of the National Party in running down infrastructure throughout the nine years it was last in office, and given the almost total lack of detail in its latest plans, I am sceptical about the so-called pledge of $5 billion over five years for infrastructure.

 As your members know, this Government has invested heavily in infrastructure in the past nine years, and has done so without the need to borrow.

 Transport is a good example, but so are other portfolios with which I have been involved, and your members have also been involved.

 Take health, for example. We have built seven new hospitals since 2000 (Auckland the biggest at $447 million), refurbished or significantly redeveloped eight other hospital campuses (Counties Manukau the biggest at $160 million), almost completed another three development projects (including Tauranga at $139 million), and have another five major projects underway (including Capital and Coast at $346 million and Waikato and Thames at $214 million).

 All up, the total investment in 23 hospital infrastructure projects adds up to more than $2 billion.

 As you know I am also Minister of Police --- and I am proud of the fact that not only has the Government overseen a large increase in the number of police staff (more than 2500 extra since we entered office), but we have also built or refurbished more than 30 police stations at a total cost of more than $100 million.

 In education, and I cannot really claim any credit for this portfolio, from 2000/01 to 2007/08, $3.385 billion has been allocated for school property capital works. Of this $2.955 billion has been expended to upgrade existing property and create additional capacity in our school networks.

 These figures, across just three portfolios, begin to put National's infrastructure pledges in context.

 And that brings me to one of the bigger-spending portfolios, in which both your federation and I are vitally interested.

 I'm referring to transport, of course, and I think it is rather fascinating to note that the extra $500 million a year National is promising to spend on infrastructure would not even cover the combined cost of Auckland's Victoria Park Tunnel and Newmarket Viaduct and Christchurch's Southern Motorway, projects for which the New Zealand Transport Agency will soon announce commencement dates.  

The National Party talks about spending more money on new roads, but doesn't specify what they are. They also talk about a new category of road called "roads of national significance". Well, I would like to know what roads like the Waikato Expressway, Alpurt B2, the major routes in Auckland, Wellington, Bay of Plenty and Tauranga are if they are not "roads of national significance". And they are routes on which this Government has invested billions of dollars.

 As I know your federation agrees, our modern economy demands a transport system that can effectively and efficiently move people and move freight. The Government has identified the need for significant investment in our transport system to address these demands and I am pleased that there will be many continued opportunities in the future for contractors to contribute to the development of a modern, forward looking transport system.

 That is why it is fitting this year's conference theme is ‘Resourcing Our Future'. I believe it is vital our development of the transport system provides your businesses and your staff with stability and continuity.

 It is certainly worth reiterating some of the broad or overarching principles that I believe should guide the work we are doing in the transport sector.

Firstly, transport is critical to economic progress. A high level of value for money investment is required across different modes of transport to address ongoing infrastructure needs.

Secondly, transport must be thought about in an integrated way. Each mode - from walking to rail freight, road transport to coastal shipping and air -- must play its part in our long term strategy.

Thirdly, transport must be environmentally sustainable. And fourthly, New Zealand's international transport links cannot be put at risk. We must invest so that our exporters can compete.

These overarching principles need to be the focus for everything we do. In marketing-speak they would be called "critical success factors" - in other words, these are the factors that we have to get right.

To this end the Government is currently undertaking the largest land transport programme the country has ever seen.  Last month I launched the 2008/09 National Land Transport Programme, which allocated $2.7 billion across 12 activity classes. This is a record level of investment and an increase of 12 percent from the $2.4 billion allocated in 2007/08.

 The latest NLTP means total Government investment in transport since 1999 has increased by more than 180 percent from just over $1 billion in 1999/2000 to a forecast $3.1 billion in 2008/09.

 To use my home city of Wellington, the host city of this conference, as an example, Government investment in State highways, local roads, and public transport services in this region has increased by 345 percent since 1999 to almost $300 million in 2008/09. The Government is also investing $125 million to upgrade Wellington's rail network over the next five years.

 Another exciting project, Transmission Gully, is also progressing. Stage one investigations into a preferred route are completed. The preferred route identifies cost savings of $275 million over previous estimates, bringing the revised cost estimate for the whole project to $1.025 billion. 

Phase two of investigation can now go ahead with the decision by the New Zealand Transport Agency to approve an additional $20 million in funding to prepare the information required to secure the preferred route.  This will be funded from the $80 million the Government committed as part of Budget 2006 for the investigation.

With all the investment that is occurring around the country it's becoming ever more important to ensure the way we plan and fund transport is sustainable and offers value for money.

 The amendments to the Land Transport Management Act, which came into effect at the beginning of this month, will make a significant difference to the way we plan and fund land transport activities.

 Just two days ago I launched the New Zealand Transport Strategy 2008.

As I have said, the challenge we face in the future is to improve the way we travel and move freight, but in ways that do not compromise our health or cost the environment. At the same time, we need a transport system that remains affordable, is more accessible and one that will assist economic development.

The Strategy provides direction over the next 30 years to achieve this, aligning with the Government's sustainable development, energy and climate change agendas. It sets out defined targets for the transport sector and actions to achieve these targets.

The amended Act enables the Government to issue a Government Policy Statement or GPS. The GPS will provide a high-level strategic focus for land transport investment. This will include the outcomes the Government wishes to achieve in the land transport system and how it will achieve these outcomes.

 The GPS will determine how much investment will be provided for land transport and how this funding will be raised.  The GPS will be released three yearly, rather than annually. This will assist medium and longer term planning and provide greater certainty, but issues which I know are particularly important to your federation.

The GPS outlines the funding that central government will make available through the National Land Transport programme.

 We need to invest in transport for the future, but it must remain affordable for everyone at the same time.

 The GPS does not come into effect until July next year, so key organisations will have significant time to build it into their own plans and thinking.

 Under this Government the sector has become used to huge investment in land transport and the investment is set to continue under the GPS, which gives funding certainty over six years..

 I will give you just a few examples:

•  The allocation to public transport services over the six years will be between $1.35 billion and $1.69 billion.
• The allocation to public transport infrastructure will be between $440 million and just over $1 billion.
• The allocation for new and improved infrastructure for state highways will range from $2.9 billion to $4.4 billion.
• The allocation for new and improved infrastructure for local roads will range from $1.05 billion to $1.65 billion.

 That's a minimum allocation --- and I stress minimum --- over six years of well over $5 billion in land transport alone. That puts the extra $5 billion National is talking about borrowing over five years for all infrastructure - with no detail whatsoever --- into perspective.

 There are also large allocations in the GPS across other classes, including renewal of state highways and local roads, maintenance and operation of highways and roads. I haven't included these in the Government's land transport figure.

 And, remember, funding in the NLTF is in addition to government investment in passenger and freight rail networks through ONTRACK; a major investment programme in passenger and freight rolling stock through KiwiRail; potential funding of up to $244 million for the Canterbury Transport Regional Implementation Plan over 10 years; $10 million annually for 2009/10 and 2010/11 for remaining priority projects in the Northland and Tairawhiti regional development funding programmes.

 The Act has also enabled full hypothecation - or dedication - of fuel excise duty, road user charges and motor vehicle registration and licensing fees to the National Land Transport Fund for spending on transport projects. Full hypothecation - for the first time ever in New Zealand - and interestingly voted against by the National Party - also allows for better planning and funding certainty.

 The amended legislation also empowers regional councils to develop regional fuel tax proposals to advance- regionally significant projects that will not reasonably be funded from any other source in the timeframe desired by the region. A regional fuel tax is not compulsory and will only be introduced when needed and at a level that is appropriate for the region's requirements.

 The Act has enabled the establishment of the New Zealand Transport Agency, which takes over the functions of Land Transport New Zealand and Transit New Zealand. This move will reduce the number of Crown entities involved in land transport planning and provision and lead to a more consistent and integrated decision making in the central government land transport sector.

 I haven't time today to address the individual targets in the 2008 New Zealand Transport Strategy, but I believe the Strategy provides strong direction for the next 30 years to achieve a vision that aligns with the government's sustainable development, energy and climate change agendas, while still meeting our ambitions for the economy.

There are just three other matters I want to raise briefly today.

 

 

 

 

The first is the issue of public private partnerships. The National Party spends a lot of time talking about PPPs, although they have actually never done anything about PPPs. In fact, they voted against legislation enabling PPPs in 2003. This Government enacted that legislation, and shortly the Government will make a decision on procuring funding for the Waterview Connection in Auckland, following on from the PPP working group's report.

 

The second issue is the level of criticism frequently directed at delays caused by the Resource Management Act. Well, today my colleague Energy Minister David Parker has welcomed the provisional green light for yet another renewable energy project with the Environment Court issuing a draft decision to consent Te Mihi geothermal power station in the central North Island.

 

Despite what National might say, the Resource Management Act is not causing undue delays to important projects. Under processes allowed for in the RMA, this project was deemed to be significant enough to be ‘called in' by the Minister for the Environment, which means it was subject to one substantive hearing before a specially appointed Environment Court board of enquiry. The process since it was called in has taken only six months.

 

The final matter is the issue of workforce training. I want to acknowledge the ongoing relationship between the Federation and the government, starting with the successful workforce initiative in 2005. The government has provided greater certainty for the construction sector, and I have been delighted with the industry's recruitment initiatives seen in the ongoing Shape your Future campaign, developed by the team at Infratrain.

 

After a decade when virtually nothing happened, this Government has demonstrated a huge commitment to land transport infrastructure.

 

This is an exciting time for the transport sector, and  deploying the skills, expertise and ‘can do' attitude of the contracting industry will be an important factor in bringing to reality all the strategies and programmes I have discussed today.

 I look forward to the Government continuing to have a strong working relationship with the Contractors Federation in the coming years, and thank you again very much for inviting me to join you today.

 

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