Gov­ern­ment trans­port pol­icy not fit for new re­al­ity

New Zealand Truck & Driver - - Front Page -

en­vi­ron­ment and the sim­ple fact is that it doesn’t stack up.

Again, vast por­tions of the Na­tional Land Trans­port Fund, col­lected from road users via ex­cise taxes and road user charges, will be pil­laged to prop up rail, cy­cling and walk­ing. Within the GPS is a very ob­vi­ous and dis­ap­point­ing pro-rail, anti-road bias that frames trucks as dan­ger­ous and en­vi­ron­men­tally un­friendly.

The agenda when it comes to the move­ment of freight is no sur­prise. It is based around the much-pub­li­cised pol­icy of the three gov­ern­ing par­ties that seek to ar­ti­fi­cially sup­port in­ef­fi­cient and un­eco­nomic rail freight. This would be bad enough dur­ing good times, but in the wake of COVID-19 it is bor­der­line ir­re­spon­si­ble.

The com­mer­cial road trans­port in­dus­try is the good oil that lu­bri­cates our econ­omy; an econ­omy shorn of in­ter­na­tional tourism.

For the fore­see­able fu­ture we will lean heav­ily on our pri­mary in­dus­try and get­ting prod­ucts to in­ter­na­tional mar­kets as ef­fi­ciently as pos­si­ble. This re­quires timely, adapt­able and re­spon­sive do­mes­tic trans­port – and there is only one freight mode that can do that, and that is road freight.

To have the 2021 GPS in­sti­tute pub­lic pol­icy that re­stricts the ef­fi­ciency of road freight in or­der to boost other modes just doesn’t make sense and will only serve to slow down our eco­nomic re­cov­ery.

In some good news for op­er­a­tors I note that the GPS rec­om­mends no RUC or fuel ex­cise duty in­creases for the next three years. I was, how­ever, dis­ap­pointed that the Gov­ern­ment de­cided against de­fer­ring or can­celling the RUC in­creases set for July 1.

I wrote to Trans­port Min­is­ter Phil Twyford just as the lock­down be­gan, ad­vo­cat­ing for RUC re­lief as op­er­a­tors were fac­ing a very un­cer­tain fu­ture and a ma­jor drop in freight de­mand.

Un­for­tu­nately, the re­quest was de­clined, with the Min­is­ter rea­son­ing that the fund­ing was nec­es­sary to de­liver the Gov­ern­ment’s trans­port pri­or­i­ties, many of which, as I have dis­cussed, are not in the broader in­ter­ests of road freight.

Fi­nally, I just want to voice my con­cerns over the prob­lems that have be­set the Trans­mis­sion Gully project north of Welling­ton. With the project due to be com­pleted in Novem­ber, a five-week de­lay in work due to the Level 4 lock­down has mys­te­ri­ously mor­phed into ma­jor staffing is­sues, pos­si­ble tech­ni­cal prob­lems and a pos­si­ble de­lay of more than a year in its open­ing.

This is pretty aw­ful news, not only for those who live, work and trans­port freight around the Welling­ton re­gion, but also for the Gov­ern­ment’s abil­ity to man­age fu­ture large-scale road­ing projects.

If we are to build the in­fras­truc­ture nec­es­sary to sup­port fu­ture eco­nomic growth, road users and tax­pay­ers need to have con­fi­dence that gov­ern­ment, through the use of pub­lic-pri­vate part­ner­ships or by other means, can de­liver that on-time and to bud­get.

Let’s hope a swift res­o­lu­tion can be found to Trans­mis­sion Gully’s prob­lems and it can be­gin to con­trib­ute to the eco­nomic ac­tiv­ity of the Welling­ton re­gion sooner rather than later.


THE ROAD TRANS­PORT FO­RUM HAS FOR A num­ber of years led the charge in push­ing the Gov­ern­ment to deal with un­fair com­mer­cial prac­tices – par­tic­u­larly uni­lat­eral de­ferred pay­ments – that have had an ad­verse ef­fect on the abil­ity of SMEs, in­clud­ing truck­ing com­pa­nies, to do busi­ness. Late last year the Gov­ern­ment in­tro­duced leg­is­la­tion to deal with the is­sue, which RTF re­cently dis­cussed in an ap­pear­ance be­fore a Par­lia­men­tary se­lect com­mit­tee.

“Ever since this Gov­ern­ment took of­fice, we have been in their ear to do some­thing to pro­tect small busi­nesses from un­fair com­mer­cial prac­tices and specif­i­cally uni­lat­eral de­ferred pay­ment terms (UDP),” says RTF’s Nick Leggett.

The use of UDP by large cus­tomers, some­times for as long as 90 days af­ter in­voic­ing, can make it very dif­fi­cult for trans­port op­er­a­tors in var­i­ous parts of New Zealand to op­er­ate.

“The is­sue hit the head­lines in our in­dus­try a few years ago and, while pub­lic pres­sure re­solved some in­stances of UDP, it is im­por­tant that SMEs re­ceive leg­isla­tive pro­tec­tion to pre­vent the prac­tice from re-es­tab­lish­ing it­self,” says Leggett.

Nearly half of busi­nesses sur­veyed by the Min­istry of Busi­ness, In­no­va­tion and Em­ploy­ment (MBIE) in 2018 in­di­cated that, in the pre­vi­ous year, they had been of­fered what they con­sid­ered to be un­fair con­tract terms, or other­wise treated in a way they con­sid­ered to be un­fair.

“With­out a doubt, un­fair com­mer­cial prac­tices are a sig­nif­i­cant is­sue and in the un­cer­tain busi­ness en­vi­ron­ment that has been left be­hind by COVID-19, it is even more im­por­tant that busi­ness-to-busi­ness con­tracts are fair to both sides,” says Leggett.

RTF’s sub­mis­sion is fo­cused on a num­ber of key rec­om­men­da­tions to fur­ther strengthen the Bill and in­crease pro­tec­tions for small busi­nesses.

“Firstly, we want to see the an­nual value thresh­old of con­tracts the leg­is­la­tion ap­plies to in­crease from $250,000 to $500,000,” says Leggett.

“We be­lieve $250,000 is just too low, will ex­clude too many trans­port busi­nesses, who de­spite be­ing small busi­nesses them­selves, take on large con­tracts.

“We are also dis­ap­pointed that the draft leg­is­la­tion re­tains the Com­merce Com­mis­sion as hav­ing the ex­clu­sive right to seek a court dec­la­ra­tion that a con­tract term is un­fair. The ef­fect of this is that any le­gal process to de­ter­mine an un­fair con­tract term would be long, slow and at the sole dis­cre­tion of the Com­mis­sion.”

Right from the start RTF ad­vo­cated that this power be ex­tended so that any party could have the op­por­tu­nity to es­tab­lish un­fair con­tract terms in court. This would pro­vide far greater pro­tec­tion to SMEs and would mean that large com­pa­nies know that over­bear­ing con­tract terms are sus­cep­ti­ble to chal­lenge.

RTF has also sub­mit­ted that the Bill should ap­ply to all ex­ist­ing con­tracts, not just if and when they are var­ied. Many SMEs are al­ready on longterm con­tracts sub­ject to UDP and other un­fair con­tract terms and un­der the leg­is­la­tion as drafted, would re­main un­pro­tected. RTF does not con­sider that to be fair.

Fi­nally, RTF has reser­va­tions about the pro­tec­tions to SMEs from the use of ‘un­con­scionable con­duct’ pro­vi­sions in the Bill. We con­sider that the def­i­ni­tion of ‘un­con­scionable be­hav­iour’ or ‘un­con­scionabil­ity’ is so poorly de­fined that it will be un­us­able for SMEs with­out the sig­nif­i­cant le­gal re­sources that would take to pur­sue it.

This will pre­vent small busi­nesses from as­sert­ing that a con­tract term is pro­hib­ited and will have a sig­nif­i­cant im­pact on the in­tent of the leg­is­la­tion to pro­tect SMEs.

“Even MBIE of­fi­cials voiced pref­er­ence for the leg­is­la­tion to pro­hibit ‘op­pres­sive con­duct’ rather than ‘un­con­scionable con­duct,’ says Leggett.

“Op­pres­sive con­duct al­ready ex­ists in NZ case law and would pro­vide SMEs with far greater cer­tainty when con­sid­er­ing a con­tract term.

“It is our hope that the se­lect com­mit­tee will look favourably upon our sub­mis­sion. We be­lieve the leg­is­la­tion has the right in­ten­tion and with the tweaks we sug­gest could be­come an ef­fec­tive tool to pro­tect SMEs from un­fair com­mer­cial prac­tices used by large com­mer­cial cus­tomers.”


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