Extra $45m for NZTA after damning report on regulatory failures

Emergency funding is being pumped into the NZ Transport Agency after a scathing review found regulatory failures and an environment where bad news was deemed unacceptable.

The Government is injecting up to $45 million of funding into the NZ Transport Agency in the wake of a damning report about its failure to properly regulate the transport sector.

Transport Minister Phil Twyford has pinned the blame on the previous National-led government prioritising new roads over public safety - an allegation National has rejected.

The Government announced a review into the NZTA’s regulatory functions after the death of a Dargaville man in early 2018 was linked to poor enforcement of Warrant of Fitness (WoF) providers.

A report prepared by Wellington consultancy MartinJenkins has now outlined systemic deficiencies within the NZTA, with the issuing of licences to operators treated as “those parties paying for a service, rather than their qualifying for a privilege to operate”.

It found there was a lack of oversight or leadership of the regulatory system within the agency since its inception in 2008, with a focus on customer service at the expense of regulatory actions.

“Enforcing compliance was recognised as an option but was often seen as the intervention of last resort and was significantly overshadowed in messaging by a more communications-oriented, customer service approach,” the report said.

Regulatory experience at senior leadership levels was weak, while a “pervasive culture of bad news being unacceptable” influenced what information was shared with managers and the NZTA board.

“Staff reported that they feel unsafe to express their views. One interview noted that a regular comment by a senior executive was: ‘If you’re not on the same boat, get off’.”

A separate report on how the Ministry of Transport had monitored the NZTA’s performance found a “light touch approach” between 2007 and 2015, which was similar to the rest of the state sector but not fit for purpose given the inability to identify significant performance issues.

The ministry had improved its monitoring work in recent years, with improved relationships and better information sharing with Crown entities in the transport sector.

Responding to the reports, the Government said it would provide up to $45m in repayable capital injections to address the backlog of regulatory compliance cases and meet existing cost pressures within the NZTA.

It would also create a “director of land transport” with statutory responsibility for the NZTA’s regulatory functions and powers, require the NZTA board to develop a new regulatory strategy, and instruct the Ministry of Transport to update the NZTA’s regulatory objectives.

Transport Minister Phil Twyford says the Government is cleaning up the mess led by its National-led predecessor with the NZTA. Photo: Lynn Grieveson.

Speaking to media, Twyford said the report was “a textbook study in the failure of light-handed regulation that has been fashionable in New Zealand for so long” and sought to blame the National government for not addressing the shortcomings sooner.

“We’re cleaning up a mess here that was left by the former National government. The report clearly documents massive regulatory failure for the nine years that National was office, the report clearly states that the priorities and incentives were wrong, that the transport agency was encouraged to focus on building roads at the expense of its regulatory mandate.”

He believed the regulatory failures had contributed to the “massive blowout” in deaths and serious injuries on New Zealand’s roads, although it was not the sole factor.

NZTA board chairman Sir Brian Roche said the agency had had “a real wake-up” in the last year, and had strengthened its processes as it looks to recruit up to 100 new staff over the next 18 months.

“The key message is the position we were in was not good enough, we have to do a job that maintains the confidence and trust of the New Zealand public and we’ve failed in that - that’s what we’re seeking to address.”

Roche said the NZTA would “go back to basics” in its regulatory functions, and did not believe the added scrutiny and enforcement would be too punishing for WoF providers and other operators.

"Regulators have a job to do, they can’t be everyone’s best friend, but they have to do that in a way which is transparent, equitable and fair.”

“Will there be some disruption to the industry? Potentially but I wouldn’t get ahead of that.”

Morale had improved since the period covered in the review, and he “unequivocally” believed that staff would no longer hesitate to raise concerns with their managers.

“I don’t think there’s cultural rot, I think we’ve got an environment now where speaking up is actually just a given. Regulators have a job to do, they can’t be everyone’s best friend, but they have to do that in a way which is transparent, equitable and fair.”

National’s transport spokesman Chris Bishop claimed Twyford was being misleading in his claims about the NZTA’s performance under the last government, saying the review’s findings did not suggest the agency had disregarded public safety.

“Under National, the NZTA was renowned as one of the highest performing agencies in Australasia. Today, under Phil Twyford, it is dysfunctional.”

Bishop said the Government’s decision to cancel roading projects across New Zealand would lead to unnecessary deaths as it prioritised “building a slow tram in Auckland”.

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