When the roading dollar is stretched this far – what we spend on matters more than ever

As someone who spends their working life calling for good policy, on the rare occasions it comes along, it’s something to cheer about.

NRC doesn’t back political parties – we back roads being built properly and efficient freight movement. However, when a party policy looks like it will achieve that, it’s worth recognising.

Last week Act announced its transport policy – and it is good, sensible policy worth cheering about.

Called “Keep New Zealand Moving” it sets out six reforms aimed to get more transport infrastructure built from every dollar. If you haven’t read it already, take five minutes to do so.

Elections should be about voting for the parties with the best policies, not personalities, so staying informed is the best thing you can do to make your vote count.

The first reform is my favourite. Act would require “major projects to publish the lowest-cost safe option alongside the preferred option, including the cost, delivery time and benefit-cost ratio of each. Where excessive design assumptions materially increase cost, the additional cost and benefit must also be disclosed.”

This is not just good policy – it is essential. In a world where Fuel Excise Duty and Road User Charges will not be going up until 2028, we continue to live beyond our means with roading infrastructure.

Before we reach for the revenue tap, we need to get much better at spending the money we have wisely and holding those in charge of the purse strings accountable.

Talking to our members up and down the country, it doesn’t take long for the conversation to turn to how much is being wasted. Transport operators driving our roads every day see a lot.. They see excessive traffic management for straight-forward projects. Many believe road builds are too often over-engineered and that we spend too much on landscaping and underused cycleways.

They have a point.

Infrastructure budgets must be spent on infrastructure. That doesn’t mean ruling out beautification or cultural elements, but it does mean reporting on exactly how much per project is being spent on top of the pavement build. We have a lack of transparency and visible oversight when it comes to projects that cost hundreds of millions of dollars.

In a democracy, we have the power to change things.

Good policy matters. When you see it, vote for it.

A major call by the Government for roading this week: planned hikes to fuel excise duty and road user charges now won’t be happening until 2028.  It might be good news for road user pockets, but what does it mean for the state of our roads?

In theory, little change. That’s because Ministers have also agreed to top up the National Land Transport Fund to cover the lost revenue, at an expected cost of $1.476 billion over the forecast period. That commitment is the most important part of the announcement, because it means maintenance and pavement replacements will continue as planned.

But we can’t keep kicking the can down the road. Just like we need a 30-year plan for road building, we also need a stable user-pays platform for paying for them.

I’ve said it many times, our roads are the lifeblood of connectivity for our regions. They carry our food, our exports and imports, and of course ourselves. Look after them, and they give back many times over. Let them run down however, and you are not saving money, you are quietly adding to the cost of living for every New Zealander.

The evidence here is stronger than most people realise. Allen and Arkolakis, in the Review of Economic Studies, put the average annual return on the United States highway network at 108 per cent. On the best links it exceeds 400 per cent, and they are precise about where those links sit: the greatest gains are “in the densest areas of economic activity and at choke-points in the network.”

We have our own choke-points. State Highway 3 connects the energy and food basket of Taranaki to the Waikato, Auckland and the ports beyond. It has closed more than 15 times in the past year, sending trucks on 350 kilometre detours every time and costing the economy millions. Regional economic highways like that need their resilience investment now – we can’t wait for the revenue increases to land in 2028.

Deferred maintenance carries a cost of its own. Overseas reviews of road maintenance found that delaying a repair three years costs six times the preventive fix; five years, 18 times. Closer to home, the Infrastructure Commission reports we renewed our state highways at just 37 per cent of the rate they depreciated between 2012 and 2022. We have been consuming the asset for a decade.

None of this is an argument for spending more on everything. NRC supports the Government being judicious about which roads we genuinely need and can afford, and exploring creative ways to fund them such as public-private partnerships. Our first election call was to spend smarter for a better network, not simply to spend more.

But be clear about what road investment is. It is an investment in keeping the cost of living down, in the exporters who earn our living, and in productivity.

We also need to remember the longer these increases are held back, the sharper the correction will be when it finally comes. Trucking runs on razor-thin margins and tight cashflow. When the road user charges catch-up lands, it must be staggered — our members cannot absorb a price shock dressed up as a return to normal.

Let’s do the next generation a favour and get back to maintaining and paying for our roads when we need them, and not kicking that can down the road yet again.

Last Thursday, Engineering New Zealand and Stuff did voters a real service by hosting New Zealand’s Big Infrastructure Debate. Cross-party spokespeople, one room, the choices laid out. Infrastructure underpins our standard of living, and voters deserve to hear those choices argued properly.

One line stood out. New Zealand First’s Shane Jones told the room he doesn’t “see ever another four-lane highway being built in New Zealand in my lifetime” – not because Northlanders don’t want one, but because politicians will struggle to justify the cost.

It’s election season, so we expect the odd comment to fly out of a politician’s mouth without much thinking behind it. Odd, though, in a week when the Government is progressing four lanes between Warkworth and Te Hana. There is a lot at stake. Freight is a $59 billion sector, and 93% of goods go by road. It deserves serious discussion, not throwaway lines.

Plenty of good points were made that night. Yes, we must invest in what we can afford. Yes, we must stop gold-plating our infrastructure. All sensible stuff. But declaring the end of four-lane roads is silliness, and it raises questions that deserve answers. What does it say about our expectations for population growth? For productivity? For our aspiration to live in a well-off, first world democracy?

Most importantly, what is the evidence base telling us we will never need a four-lane road again?

The unfortunate truth is that New Zealand doesn’t have one. We have no reliable way of choosing the transport infrastructure that delivers more for less.

That is why National Road Carriers is calling this election for a Minister of Supply Chain. We don’t need a Minister of Rail. We need a minister accountable for supply chain productivity and growth, and a Freight Advisory Council mandated to give that minister the expertise, insights and data needed to make good decisions.

That way, transport infrastructure decisions get made on fact, not fluff.

A footnote. It was pleasing to see Transport Minister Chris Bishop respectfully disagree at this week’s Civil Contractors NZ Conference: “I think we can and should build more four lane highways… We just need to find a way to do it in a more cost-effective way.” He challenged the room to help him.

National Road Carriers is more than happy to.

We’ll shortly be sharing our 6 election calls so watch this space. If you missed the debate hosted by Engineering NZ head to the Stuff website to watch.

This is the third and final Transport Minute drawn from Aka Raupapa, the inaugural Freight & Supply Chain Superhui at the University of Waikato on 1-2 July. I’ve covered our changing workforce and how Australia’s freight strategy model is showing us the way. This week, the theme underneath both: data.

New Zealand’s freight and supply chain productivity is languishing, partly from piecemeal investment in infrastructure, warehousing and critical nodes like our ports, each assessed on its own merits, with little regard for what it delivers to the wider system. But mostly, it’s because we don’t have a centralised, reliable database to inform any of these decisions. You know how the saying goes: rubbish data in, rubbish outcomes out. That’s exactly where our freight and supply chain investment sits today.

Here’s how bad the gap is. For road freight, we don’t reliably know what is travelling where, when, or how much it’s worth. Government data is no better, we can’t even say how many transport operators there are, or how many people work in road freight and supply chain. When it comes to lifting freight task productivity, we are flying blind, which is a dangerous place to sit when our country makes its living selling goods to the world.

The good news: there is a fix, and it isn’t complicated. Once again, humbling as it is, we look to Australia. Caveat: Australia doesn’t have the perfect answer. But it has something we don’t – a freight strategy with clear goals and a plan to get there, built on reliable data. That means they have a significant head start on us.

That plan runs through the National Freight Data Hub (NFDH). Built on two years of industry consultation, it rests on three pillars: open data, data exchange and standards, and leadership and innovation. The NFDH gives government, industry and communities the information to plan infrastructure investment, run day-to-day operations, and measure how the freight system is performing.

We don’t need to build this from a blank page. National Road Carriers is already working with NZTA on transport operators sharing trucking telematics data, incentivised through improved permitting and road access. And Transporting Certification Australia is showing us the way.

But progress is slow. It needs to speed up.

Every dollar we invest in a road, a rail spur or a wharf without good data behind it is more a bet than an informed decision.

Let’s stop rolling the dice with the country’s freight network, and start deciding with the evidence we have.

I’ve sat in a lot of transport conferences. Few have felt like something actually shifted in the room. Aka Raupapa, the inaugural Freight & Supply Chain Superhui, held at the University of Waikato this week and hosted by Tainui Group Holdings, was one of them. 

I was proud to serve on the advisory panel that helped bring this event to life, and to take part on the panel “Reimagining New Zealand’s Supply Chain,” alongside leaders from KiwiRail, Talley’s and Woolworths NZ. But the real story wasn’t who was on stage. It was who was in the room: chief executives from our ports, rail and major exporters, sitting alongside the Minister of Transport, the Infrastructure Commission and Waikato-Tainui, all talking about how to drive better supply chain efficiency.  

And here’s the thing; we all agreed on the important stuff. Not on everything, but on the big call: there is a huge opportunity sitting in front of us to lift freight task productivity if we collaborate and co-ordinate across the sector instead of working in silos. Government has a clear role too – providing the strategic direction to decide where investment in our key freight nodes and transport infrastructure should go. 

On the panel, I spoke to three themes I’ll unpack properly over the coming weeks: the future of our workforce, what the Australian Logistics Council can teach us about how our own Freight Advisory Council can help step-change supply chain performance, and why shared intermodal data is a critical foundation to success. Watch this space. 

For now, one thank you, to Dave Christie, Supply Chain Strategy Director at Tainui Group Holdings who drove this event from concept to reality. Dave, you gave our sector a genuinely shared table and built a positive consensus in the room to take action. 

Aka Raupapa shouldn’t be a one-off. It should be the first of many. Let’s make it an annual fixture.