RTF CONFERENCE 2019

Thursday, December 5, 2019

The Road Transport Forum held its annual conference at Wairakei in September. The theme this year was ‘central focus’ and the conference attracted 13 high-profile speakers who presented on a range of topics pertinent to business, the economy, and the industry itself. Over the next couple of issues we’ll discuss some of the most noteworthy.


Keynote address – Craig Membrey
As a Beyond Blue ambassador, Australian transport operator Craig Membrey hopes to prevent anyone going through what he experienced eight years ago. After an argument with his son Rowan in July 2010, Craig didn’t hear from him for about eight months. He tried contacting him, but Rowan kept pushing him away. “Rowan rang me on the 12th of March 2011 and told me he was in trouble. I still remember the call word for word. I spoke to him for about an hour and a half. He said, ‘Dad, I’ve really stuffed my life up’. He’d been doing drugs, and then he’d been heavily drinking and hanging around with the wrong people and he’d got into trouble with the police.” Craig says his son wasn’t proud, and couldn’t believe his father wasn’t yelling at him. He told Rowan he missed him and they made plans to catch up the following week. Unfortunately that never happened. In the early hours of 18 March, police arrived to tell Craig his son had committed suicide by jumping in front of a train just before midnight.

“It wasn’t a good thing, and my life changed from that day. I’m a pretty strong person – I have to be, I employ truck drivers and deal with a transport business. You’ve got to be strong, but I don’t think it hit me at that stage.” Craig expected about 800 people to attend Rowan’s funeral, but more than 2200 turned up. “We were absolutely blown away. How loved was that kid. To see who turned up not just to support Rowan and say goodbye, but to support our family. I was just gobsmacked.” Craig was due to attend the Mid-America Truck Show with friends, but after Rowan’s death the plans were put on hold. “We weren’t going to go and then I decided I had to get my head sorted out, so a few of the boys and I took off the day after the funeral. At the show we saw these trucks done up in memory of the owner’s father or grandfather.” This struck a chord with Craig. Two days before Rowan died, Craig had bought a 904 Kenworth as a project, and when he got home he decided to turn the truck into a moving – in more ways than one – tribute to his son. Rowan was the first of at least 10 boys who took their own lives within a short space of time. All knew each other. Craig thought the truck could be used to raise awareness of depression, so he approached Beyond Blue, an Australian organisation working to address issues associated with depression, suicide, anxiety and other related mental disorders.

The truck features an airbrushed mural of Rowan, and the Beyond Blue logos, with the words ‘Proudly supporting Beyond Blue, the national depression initiative’. The truck was launched at the Castlemaine Truck Show on 25 November 2011 – the day before what would have been Rowan’s 18th birthday. Craig says the impact of the truck was amazing, and he had people tell him the truck had saved their life. “You’ve just got to get across that line. What I share with people is suicide is 100 percent preventable – if you ask for help. We get one life, we’re all on this bus and there’s no return ticket, and we don’t know when our stop is.” The police had given Craig Rowan’s phone following his death and on it he found evidence of the issues his son had been experiencing. As well, hundreds of text messages were still coming through from his friends. “His friends thought there was 3G in heaven and they were texting Rowan. This is how people deal with their problems nowadays, they don’t want to face people, they don’t want to face their problems, they just want to text message.” Craig said it was not easy for him to stand up in front of people and talk about his son’s suicide. “I’m no hero, but I love trucks and it’s my life and I never thought this Rowan truck would ever turn into a tool that can help people out. It’s been an amazing journey; it’s been eight and a half years, and it feels like it was yesterday.”

The year to June 2019 suicide rates for New Zealand were the highest since provisional statistics were first recorded for the 2007/08 year. “We need to stop this, and we need people to speak up. It just shouldn’t happen. Road accidents can happen, but suicide is 100 percent preventable – 100 percent preventable. You just have to ask and speak up and know there’s help out there.” Craig himself suffered severe depression about 18 months ago. “I thought I was superman and I think I am sometimes, you have to be to be in our industry to get anywhere in life, but the black dog got me. I knew I wasn’t myself and my family was concerned about me, my friends were concerned about me, because I really went quiet, and for me to go quiet…” Craig’s wife encouraged him to seek professional help, but he said that it still took months before he could even smile again. “I just want to share with people that when you are down, make sure you’ve got good family around you. Hopefully we leave here today and share this story and stop this happening because it’s not just them taking their life, it’s the pain they leave behind. I get concerned when I hear people say ‘well, that’s an exit in life’. That’s not an exit in life, life is beautiful, and you have to look after yourselves.”


Phil Twyford, Minister of Transport
Phil Twyford set off with an acknowledgement of the passion with which the forum represents the industry and commended the value of robust debate on transport policy even though both parties didn’t always see eye to eye. Recognising keynote speaker Craig Membrey and his journey, Twyford used the opportunity to table the government’s $1 billion spend on mental health initiatives, and voiced his concern for the health and wellbeing of people in the road transport industry.

Safety: He underlined safety as a top priority and tabled the contribution of truck implicated accidents in the road toll stats, with additional numbers from Otago University highlighting occupational driving and work-related commuting in the annual toll. “This makes road crashes by far the single largest cause of work-related deaths,” he said. “That’s why the Road to Zero draft road-safety strategy released by Minister Genter has the theme ‘vehicles as a workplace’ as a key part.” Relevant actions from the strategy included fatigue management, increasing regulatory oversight, and greater coordination and collaboration between government agencies. Other points of note were supporting private-sector initiatives to establish best practice road safety standards in the supply chain, and strengthening the regulatory regime by implementing the outcomes of the NZTA regulatory functions review and reviewing logbook and work-time requirements.

NZTA: “It’s no good having good regulations if they’re not being enforced,” he said, acknowledging the agency had not been performing its regulatory function to an acceptable standard. He said the focus had moved too much toward education and away from enforcement, and attributed that shift to the loss of staff from the heavyvehicle compliance team. “NZTA was failing in its duty to properly check the companies that certify vehicles as safe for the road. When problems with these companies were identified, there was often no follow-up.” He reiterated the need for public safety as being paramount and laid the blame for it all at the feet of the previous government, saying the regulatory issues were systemic. Twyford said he hoped to release the Ministry of Transport’s review into NZTA in the coming weeks. The review makes for sobering reading. “It’s going to take time to rebuild the agency’s regulatory role.” He noted the disruption caused by the situation and said his expectation was that the ministry and industry should work collaboratively. He said progress was being made resourcing the regulatory role at NZTA. Key appointments include Sir Brian Roche as chair, and Ken Rintoul, who brings firsthand experience as a freight haulage contractor.

Roads: Twyford noted the roads needed to be brought up to scratch also and cited a $1.4 billion spend on median and side barriers, and wider shoulders across 3300km of state highways over the next three years as being the solution. “I know that some people don’t think much of these targeted upgrades, but the research shows they save lives. For example, flexible road safety barriers can give a 70 to 80% reduction in road deaths. Shoulder widening can reduce crashes by up to 35%. Wider centrelines can do the same by 20%.” Twyford said the highways needed to be properly maintained and acknowledged the NRC’s pothole campaign before again blaming the previous government for the state of the network. “We’re now getting on with addressing the maintenance backlog. We’re spending around $2 billion to operate, maintain and renew over 80,000 kilometres of local roads, on top of the over $2 billion we’re spending maintaining our state highways.”

Freight and drivers: “Your industry is vital to our economy. Road freight accounts for 91% of all freight moved in New Zealand. Freight movements are projected to increase by more than 50% in the next 25 years, and freight volume is predicted to grow by more than 30% over the next decade.” The industry would need 2800 drivers a year for the next decade to meet the forecasted growth and currently it was attracting a little under two-thirds that requirement. He said the ministry was progressing work on an update of the heavy-vehicle driver licensing system and improved training.

Green: Discussions had begun with the forum on the future shape of New Zealand’s heavy vehicle fleet. In 2015, Twyford said, road freight accounted for 24% of all transport emissions despite accounting for just 7% of kilometres driven. “I’ve asked the ministry to investigate ways we can support change in the road transport industry towards a clean, green future. They are currently reviewing the viability of electricity, hydrogen and biofuels for heavy vehicles. Each option needs nationwide infrastructure.”

Road pricing: Twyford said as New Zealand moves towards electrifying more of its vehicle fleet, the government couldn’t rely on petrol excise and RUC to fund vital transport services and infrastructure. “Other countries are increasingly looking to a GPS-based transport pricing system, where people pay for how much they actually use the road by time and space, rather than how much petrol they use.” He said officials were investigating a GPS-based transport pricing system here that would include congestion pricing.

Long term: “We have to ask ourselves what kind of industry we want to have in 10 years? In 30? Will it be one that you recommend to your kids? That’s an important question given the average age in the industry is 54. We collectively need to look at issues like improving pay and conditions.” He questioned the sustainability of the current practice of importing cheap offshore labour rather than firms delivering secure livelihoods for drivers as well as higher safety standards, which all contribute to attracting the next generation of drivers. He offered the opportunity of a collaborative accord between government and industry along the lines of the one with the construction sector. He finished with a commitment from the government to the industry, tackling the long-term issues together, saying neither could solve them alone.


Cameron Bagrie, MD and chief economist, Bagrie Economics
The hand basin, the bathtub or the toilet: three possible scenarios for the future of the New Zealand economy over the next three years. Which will prevail? According to Cameron Bagrie, that all depends on the steps government takes. However, first a global perspective. “Economic fortunes around the globe are not looking that great. At the moment there has not been not too much of an impact on New Zealand – by and large the county’s exports are holding together okay.”

While the local economy has not been affected too much so far, Bagrie said the New Zealand economy has slowed for other reasons. Government policy uncertainty is one (“they haven’t got their act together,” said Bagrie); ‘short-termism’ across industry sectors (maximising profits in the near term at the expense of customers and staff in the long term) is another. He also iterated that a slowdown is not a downturn. “The economy is still growing, just not quickly. Three years ago growth was around 4%; it’s now down to 2.1%. That’s a little like driving along the open motorway at 70kph – we are still moving from A to B but the journey is a little frustrating.” For more broad-based evidence that things are slowing, Bagrie pointed to a simple economic indicator: the number of cars and trucks being bought. The good news, he said, is New Zealanders are buying vehicles. “The bad news is it’s at a slow rate. The number of tractors coming into the country is falling, too,” he added.

Employment and investment indicators from business are negative, though... “Domestic price inflation is moving up, growth has been slowing. That’s putting pressure on margins, which means firms make less money and invest less. When margins and profitability are under pressure and companies are nervous about government policy, they hold back.” What about the transport sector? The glass half full view is that it’s not as bad as 97/98 or 07/08. “Glass half empty, margins are coming under pressure. Normally a turn in the transport side is a pretty good harbinger to what’s going on across the broader economy,” Bagrie said, reiterating that 2.1% is still not too bad.

The fact remains, though, that the New Zealand economy has partied pretty hard and is now stuck with the hangover. “What normally turns New Zealand’s economic sidewall is the Reserve Bank getting heavy handed – lower interest rates is a good news story for ensuring the economic party can continue.” Bagrie said the Reserve Bank governor, Adrian Orr, is trying to get people to spend rather than save. The Reserve Bank might be cutting interest rates, but credit is tougher to get. “For a long time we’ve been used to talking about the price of money as opposed to its availability – the new normal is the other way round,” he said. Regarding government spending, Bagrie said the good news is that the government’s been spending a lot of money, which it has needed to do to address massive social and infrastructure issues. However, he warns there’s been some ‘accounting fudging’ going on. “The government is borrowing through crown entities like the NZ Transport Association and Housing New Zealand, shifting it off the balance sheet to say they still have the magical 20% debt target. We’re going to hurt from pushing the borrowing through alternative means. We need to think about what New Zealand needs – we need more infrastructure for which we should borrow because it’s a long-term asset.” It’s a game of borrowing from Peter to pay Paul, Bagrie said. “Technically, national land transport funding is up, $2.5 billion.

But this is being pillaged. A lot of the projects that were in the pipeline are either no longer there or being scaled down. The IMF crapped over New Zealand because of our low productivity growth – one of the big things in productivity growth is the efficiency of the roading network. At the moment pet projects are receiving money at the expense of economically enhancing projects.” Naturally, rail entered the debate. “In rail – your competitor – there is a $2.3 billion package to deal with rail links, rolling stock, deposits on ferries, and working capital … I think heavy rail needs around $400 million from the government. I wonder whether the money for the ferries will come out of the National Land Transport Fund?” Given the economics behind rail, Bagrie reckons subsidising it for a commuter section, some bulk container transport, and for the golden triangle, can be justified – but not much more. So, where does all this leave New Zealand? In the shallow hand basin, in the deeper bathtub, or down the toilet?

“We’re in the bathtub. The bathtub personifies a niggly environment where we’re getting growth but of the grumpy variety – sub par and underperforming. But it’s not a downturn, there is a plug in the bath. Growth should sit at around 1.5 to 2.5 percent for the next three or so years,” he suggested. “But, we need to be open about the challenges we are going to face. You cannot change the DNA of an economy and expect it to grow at a continuous rate overnight. “We know money has been ripped out of the National Land Transport Fund (with regard to roads) to fund debt projects – but it doesn’t matter how much government spends; if we don’t have a clear plan we’re wasting our time,” Bagrie concluded.