The Budget for trucking: Positives... and disappointments
THE GOVERNMENT’S HUGE $50BILLION COVID-19 recovery budget has positives and disappointments alike for New Zealand’s trucking industry, in Road Transport Forum chief executive Nick Leggett’s opinion.
And he sees two aspects of the Budget’s job creation measures that are interesting: “The industry will be very pleased to read about significantly more support to trades training and a greater infrastructure spend.”
Prior to the Budget, Leggett had been calling for a big commitment to spending on much-needed roading projects as part of the Government’s economic recovery plan.
In his reaction to the Budget, he says: “Infrastructure is a tried and true lever to create jobs – both as an economic stimulant and to enhance capacity for greater productivity over the long term.
“So it is not surprising to see a further $3billion to fund infrastructure projects. This comes from the $50billion the Government has set aside in this Budget to recover from COVID-19.
“This infrastructure spend is in addition to the previously announced $12billion NZ Upgrade Programme. The Government’s Infrastructure Industry Reference Group is giving advice to Ministers on which projects should progress.
“As always, we advocate for spending on roads, to ensure freight can move efficiently and more safely around NZ to the ports and airports that take it to our export markets. Exports will be a massive contributor to our economic recovery.”
His overall take on the infrastructure element of the Budget? “We support the infrastructure spend but we want to be sure it is more than big announcements.
“We want confidence that there is the capability and capacity in NZ to pull off these big projects in a timely fashion and within budget.”
On the other hand, says Leggett: “We are disappointed to see NZ First grab more money for rail projects that don’t stack up – to the tune of $4.6billion.”
The week prior to the Budget, he points out, two rail lines were ruled out by KiwiRail as uneconomic: “The Gisborne to Wairoa freight line didn’t stack up. And $250,000 was spent to find the obvious – that a passenger line from Hokitika to Westport on the South Island’s West Coast came at an unrealistic price of $92million. That would leave passengers paying $400 for the return trip on a train.
And, he adds: “Now, more than ever, the economic benefits of infrastructure projects must stack up so they aid our nation’s recovery.”
Leggett says that “quite rightly”, the Budget focused on jobs – “as we look at about 1000 people a day joining the unemployment queue. Many of these are people who have never been unemployed, and have not previously experienced poverty.”
He is pleased too to see an extension of the wage subsidy – “although the threshold for the further eight weeks of wage subsidy is a 50% yearon-year reduction in the business’s income, as opposed to the original 30% reduction. For businesses in that situation, you have to wonder about their viability going forward.”
Leggett sees a potential win for trucking in the Budget’s goal “to create jobs at a time many NZers are facing unemployment. We support training and re-training as one path to employment and we believe road freight transport can make a strong contribution to this.
“As the RTF hopes to embark on a road freight transport-specific training scheme later this year – Pathway to Success – we hope the Budget allocation to trades training ($1.6billion for a Trades and Apprenticeships Training Package to help workplaces retain their trainees) will have some capacity for our industry.
“We have after all, demonstrated ourselves as a critical industry to our country’s economy, particularly in the minds of the public.”
Road Transport Forum chief executive Nick Leggett