by frog
So Tony Friedlander is going to lead truck companies in a protest against the impact that rising prices are having on their business. I understand farmers will also be protesting against the impact that drought has on their business and airlines will be protesting about the excessive costs that gravity imposes on their business.
What I am interested to know though is what Friedlander, of the Road Transport Forum, and former National Party MP, thinks about workers’ right to strike on political issues. It would seem inconsistent to me if he were to support the right of truck companies to make their workers protest about transport costs, but oppose them as union members having the right to strike and protest about, oh, say, the privatisation of ACC.
I know the issue is about road user charges rather than the actual rising cost of transport. But please let’s put this is context; truck companies are complaining about paying an extra $53.80 per 10,000km for a five tonne truck. Compare that to the rising cost of diesel over the last two years and I would have thought truck companies would be calling out for a government that had a plan for peak oil, wanted to invest in energy alternatives and more fuel efficient ways of freighting goods.
Maybe they are. Maybe Friday’s traffic jam is going to be an oblique protest in support of the Green Party?
Because sadly the real costs that trucks, as they presently do business, now face are out of the government’s hands. What we need is plan to deal with it not to pretend it isn’t happening.
[UPDATE] I see The Standard’s readers are having a similar debate.
Published in Economy, Work, & Welfare by frog on Thu, July 3rd, 2008
Tags: , Frog, frogblog, green, new zealand, party, road transport forum, road user charges, tony friedlander, Trucks
on the trolls and those who are unable to keep on topic
I thought they were protesting about the fact that there was no one month warning as promised rather than the increase.
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You miss the point (again) Frog, this is as much a protest against this government as it is against the rise in RUC’s.
While you and Labour are busy indulging in a smear campaign the people have (and there is huge public support for the trucker’s) had enough.
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BB, are you smearing the truckies by saying this is more than just an RUC protest? Also seems like you’re smearing the Greens by saying that they have joined Labour in indulging in a smear campaign.
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Would love to know what all that’s about.
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Personally, I look forward to the working class protesting against the supposedly working class – in reality, as far removed as one could possibly get – lefties.
Delicious.
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You’d have loved Europe over the past few decades then eh!
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You don’t understand. This is a general protest against the government and their arrogance.
Annette King has no idea about business. Her rationale for rapid introduction is that truckies will ‘evade’ their share of road costs and that the increase is minimal.
This is arrogant in the extreme. Is she living on Mars? Does her army of policy analysts not talk to each other?
Has she not seen the rising cost of fuel/ ACC charges / Taxes / Compliance costs and so on. This is possibly the straw that breaks the camels back.
I sense a tipping point where this government will become least popular in the entire history of NZ. And, the out of touch sandal wearing bead swinging greens will be out on their butts.
When you get a govt more intent on banning smacking (what a joke that was) than actually implementing change to improve the economy.
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Bad timing.
Government buys a loss making rail system which cannot compete except over distances starting at Auckland/Christchurch.
The next day they raise user charges for trucking to make trucks less competitive.
The truckies understandably fear a long period of increasing user charges for roads and increased subsidies for rail.
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The issue is not $53 over 10,000km. It is as others have pointed out the fact that it was introduced without warning, and the fact that this comes on top of record costs already. And the fact that it came at the same time as the government purchased the rail network, meaning the government is effectively pouring money into one form of freight transport while imposing extra costs on its competitors, which could be argued to be anti-competitive behaviour.
As far as I can see the governments tax take on transport will already be far above what it was last year. As fuel price increases faster than inflation, the tax take increases as well, also faster than inflation. There should be no need to apply further taxes.
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“make their workers protest about transport costs” Wrong, the trucking firms are giving their employees a lawful instruction to drive their trucks to a location they are lawfully allowed to. No different to instructing a truck driver to drive to Ports of Auckland or Te Awamutu.
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Owen Mc Shane “Bad timing.
Government buys a loss making rail system which cannot compete except over distances starting at Auckland/Christchurch.
The next day they raise user charges for trucking to make trucks less competitive.
The truckies understandably fear a long period of increasing user charges for roads and increased subsidies for rail.”
Totally agree.
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BluePeter: Totally agree.
Subsidizing the railways ultimately hurts the working man by pushing up taxes and driving employers out of business.
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I heard that truckies already drove their trucks into central Auckland in order to cause gridlock, but Aucklanders never noticed the difference, so they went back to work.
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Bryan Spondre Says:
July 3rd, 2008 at 11:55 am
> Subsidizing the railways ultimately hurts the working man by pushing up taxes and driving employers out of business.
What about suubsidising the roads?
The New Zealand Land Transport Pricing study found that users of Trucking firms pay 56% of the costs incurred by trucking, meaning the other 44% is paid by the government out of general taxes. By contrast, it found that freight rail users paid 77% of the costs, leaving only 23% subisdised from general taxes.
Therefore, increasing the subsidy to rail and reducing the subsidy to trucking by raising road user charges is actually bringing them closer to a level playing field. If they keep going with these changes until both have the same rate of subsidy (which may or may not be zero), then the market will choose the most cost-effective mode of transport. Currently the market does not choose the most cost-effective solution, it chooses the most subsidised one, which is clearly less efficient.
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kiore1, Good point! Truckies should hold a critcal mass blockade of level crossings instead. Make sure they hurt the correct group of commuters.
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“The truckies understandably fear a long period of increasing user charges for roads and increased subsidies for rail.?
And so they should. Fear it, that is.
On the other hand, we (consumers) should welcome it, as this will contain rises in prices of goods, and will get trucks off the road in the longer term, reducing wear to roads caused by trucks, leaving more space for cars.
It wasn’t so long ago cheap trucking killed the railways. Looks like the boot is on the other foot now…
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kahikatea, Now that the railways are no longer required to earn a return on capital doesn’t need to be imposed on roads to make them equal to rail. The 44% isn’t paid by anybody, it simply assumed that the state, as the owner of state highways, should have made a profit from the value of the land occupied by roads, thus this 44% subsidy is actually a cost of not privatising state highways..
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There’s not an equivalence. The “capital” equivalent of a strike is a lock-out, not a “today we’re going to pay you to do something different from usual”.
If you support the right of employees to strike over political issues, do you support the right of employers to impose lock-outs over political issues?
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Hi Edge,
I think it is equivalent – here employers are asking workers to do something well outside their job description – that is to campaign politically, rather than transport freight. By comparison it is currently illegal for workers to do exactly as their job description requires (i.e. work to rule). The capital equivalent of a legal employment relations strike may in many instances be a lock out, but the capital equivalent of a political strike is using their capital to protest a political decision – such as for instance parking your trucks in the middle of a motorway.
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I hadn’t considered whether “work to rule” as a protest against the government would be lawful, in which case you may be more right, than I initially gave you credit for, but I still do think there is an important distinction.
The prohibition against political action through industrial action (whether you support it or not) is designed to protect an innocent party from suffering because of the actions of someone else (i.e. to prevent an employer from suffering because of something the government has done – and over which they have no control).
Employees do not suffer if, instead of trucking something somewhere, they sit in their trucks on the motorway. They still get paid. An employee strike over something political punishes the employer – they lose production/sales etc.
A political strike costs the employer money for something done by government. A political lockout costs the employee money for something done by the government. That is the better analogy.
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# Kevyn Says:
July 3rd, 2008 at 1:54 pm
> kahikatea, Now that the railways are no longer required to earn a return on capital doesn’t need to be imposed on roads to make them equal to rail. The 44% isn’t paid by anybody, it simply assumed that the state, as the owner of state highways, should have made a profit from the value of the land occupied by roads, thus this 44% subsidy is actually a cost of not privatising state highways..
Is all the 44% the opportunity cost of not privatising state highways?
The full costs incurred due to trucking include the cost of fixing roads due to damnage by heavy trucks, the economic costs of congestion due to cars being stuck behind trucks, the cost or road accidents caused by trucks and the cost of the aggravation of respiratory conditions by diesel emissions (which are almost all from trucks, as most diesel cars are kept well tuned). Are you saying that all of these costs are counted in the 56% that is paid for by the industry, leaving the remaining 44% entirely the opportunity cost of not privatising the roads?
Also, how do they determine what proportion of the opportunity cost from not privatising roads to assign as a cost of trucking, as opposed to a cost of car travel, buses, motorbikes, pushbikes and sheep herding?
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Well the police are telling Wellington commuters to take the train tomorrow, so the truckies are doing something useful anyway.
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Sam Buchanan said: …the police are telling Wellington commuters to take the train tomorrow…
Well, I’d suggest they should take the train every day, as long as it is practicable.
Train frequency can respond to demand – unless, like on the Auckland Western line, there remain single-track sections of the rail network – an issue that is being addressed, albeit more slowly than most of us in West Auckland would like.
The truck protest may well introduce people, who would never have thought about going there before, to public transport options.
All is good, as long as public transport is geared up for it.
Just hope they don’t hit the provincial cities, where there are no (or very limited) public transport options!
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the government should offer to manage and support the re-skilling of truckies into more sustainable industries or at least help them make the transition to sustainable fuel.
we need to manage the transition otherwise it will be far more difficult on people.
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Ash:
What sustainable fuel do you know of that can be provided in high enough quantities to run all the trucks in the country?
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The truckie protest was actually in train long before they knew anything about the road user charge increase. Looks like it as part of the C/T campaign program.
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Mr Dennis: I agree. There should be fewer trucks. Electrified rail is the future.
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ash: Truckies like being truckies. You’d be better of trying to re-skill the laid off workers from Fisher and Paykel….if you can get their attention before the head for Australia where they still make things.
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“Train frequency can respond to demand – unless, like on the Auckland Western line, there remain single-track sections of the rail network – an issue that is being addressed, albeit more slowly than most of us in West Auckland would like.”
Toad, in Auckland, train frequency has not been responding to demand. I bet you that any or all of the peak services on the Southern and Eastern Line tomorrow will make a sardine tin look comfortable. You Westies have trains that leave Britomart in the afternoon full of air, and are getting more services in two weeks, while the long suffering commuters of the South and East have to put up with services in hot, crowded and noisy ADKs with no chance of more services in the near future.
When are they going to spend money on us? The Eastern Line is full of speed restrictions that are slowing down the services.
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Remarkable that a protest that would not have happened had the Minister not lied to Tony Friedlander, is being diverted by the left into some bizarre neo-Marxist debate. Most trucks are owner-operator or contractor run, of course they can strike about whatever they want – they OWN their business. It is called property rights. Employees do not own their business, they are contracted to perform services for money.
Kahikatea – The RUC increase is derived from the MOT’s Cost Allocation Model which attributes all government spending from the National Land Transport Fund to all categories of road vehicles and determines the amount that should come from all RUC categories, fuel tax and motor vehicle registration. Maintenance costs imposed by trucks on state highways are overrecovered by trucks using state highways, and underrecovered by those on local roads, but this is simply because the rates do not differentiate by location. However rail competes with state highways.
Cars don’t pay congestion costs either, so neither should trucks. That is an argument for congestion charging, but RUC isn’t a way of doing it in its present form.
The pollution costs have changed radically since the STCC report because that was based on dirty diesel with 1500ppm of sulphur. That is the primary determinant of particulate outputs. Now diesel is at 50ppm the impact is dramatically lower. I would question whether diesel cars are well tuned either, since a fair enough are badly maintained, with inadequate oil changes and the like. The STCC update should produce an interesting result for the environmental costs. Remember trains produce the same per locomotive and STCC also said the marginal per tonne km environmental cost of rail vs road varied wildly and sometimes favoured rail sometimes road.
You can argue soundly that all local road costs should come from road users, but half of these are fixed – and not attributable to any particular vehicle type. You can argue that congestion charging should be introduced. However neither of this will make any more than a tiny difference to the road vs rail competitive position. The government has been ploughing money into rail through subsidies so rail is no longer paying its costs like STCC reported.
Quite simply, while the RUC increase is justified on the face of current spending – by no means are trucks NOT paying their fair share in a way that makes any real difference to rail freight.
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Frog, Please let’s put this in the correct context: the RUCs ona five tonne truck have just increased by 15%. The fleet average is 10%. The Government’s claim of 7% is a brilliant example of lies, damned lies and statistics. The trick they have used is to decrease RUCs on light trailers by up to 50%, depending on whether the 1 tonne gross wt. trailer has one, two, three or four axles. Nobody pays RUCs on 1 tonne trailers, or 2 or 3 tonnes either. Nevertheless you average the changes for tonnage for each axle configuration you get an average increase of 7%. Exclude these non-paid light trailer RUCs and the avergae increase is 10%.
Between 3 tonnes and 6 tonnes (ie camper vans) the increase is 15%. Above that the increase is 10% until you reach 6 tonne per axle then the percentage increases decline sharply. 6 tonne per axle is the point where most heavy vehicle operators have found that it is cheaper to fit an additional axle than to pay the higher rate of RUCs. Effectively every commercial diesel vehicle has had it’s RUCs increased by 10% or 15% this year and 20% to 30% in the last two years.
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kahikatea, First, let me apologise for the worse than usual typing in my original response. What I meant to say was that the STCC authors argued that since Tranzrail has to earn a profit from it’s tracks then a comparison of road and rail costs must apply the same requirement to roads. They also excluded GST contributions to the consolidated account whilst including external cost funded from the consolidated account.
In summary the STCC figures are (in millions):
RUCs, rego = $785
GST, PAYE = $0
Total payments = 785
Cap. return = $1105
Road works =$331
Police, fire = $89
Externalities=$669
Total Costs = $1089 = 72% payed for (GST excluded)
Plus Cap Ret=$2194 = 36% payed for (GST excluded)
Excluding capital return on non-recoverable assets = $1399 = 56% payed for (GST excluded). You’ll have to read the full report for a proper explanation of why there are recoverable and non-recoverable assets.
[Heavy] Veh. Operating & Ownership Costs = $5038 @ 12.5% = $629.75
This is $40m or 6% less than the costs to the consolidated account.
Adding this amount of GST changes the three percentages given above to 130%, 65% , 101% repsectively.
“Also, how do they determine what proportion of the opportunity cost from not privatising roads to assign as a cost of trucking, as opposed to a cost of car travel, buses, motorbikes, pushbikes and sheep herding?”
As Scott said, they used the MoT’s road cost allocation model.
http://www.mot.govt.nz/assets/NewPDFs/Cost-Allocation-Review-Final-Rep ort-3Apr01.pdf
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Not so long ago a group of Happy Valley protesters were arrested for blocking the rail line just outside CHCH – gee, I wonder if any truckies will be arrested today for blocking roads ?
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I think they’re just driving around, not so much just sitting there blocking the road…
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Truck drivers are clearly smarter than Happy Valley protesters.
What law are they breaking?
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Exactly! Though in this case, ’smarter’ might get them some abuse from drivers! It’s more of a tourist attraction in Queen St at the moment…
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haz, Ever seen a cyclist arrested on a critical mass protest ride?
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Think there were some arrests, or at least threats of arrest, on the naked bike ride in Auckland a few years ago.
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> Ever seen a cyclist arrested on a critical mass protest ride?
How is that comparable ?
Truck blocking roads and a group of bikes that at worse slow few motorists down for 1-2 minutes
http://www.criticalmass.org.nz/
And Critical Mass is not a protest.
It’s a celebration and a promotion of a mode of transport
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The nasty thing about a diesel engine is that it does NOT run on methane, lng or cng. Alternate fuels are strictly bio-diesel variations.
respectfully
BJ
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Critical mass is a protest at the domination of the motor car hence the critical mass “rallies” in Christchurch have always started in the CBD at 5pm to create maximum disruption to the maximum number of other road users. It doesn’t seem to have dawned on these protesters that riding en mass through amber/red lights defeats the pedestrian pre-emption at many CBD intersections. The only reason critical mass works is because cyclists don’t get $400 if they don’t produce ID and they can’t be traced from the bicycle registration number, so it’s not worth the hassle to the cops. Much easier to waste road safety resources raising revenue from noisy exhausts. I haven’t heard any complaints of convoys of trucks running red lights and relying on tolerance of other road users to prevent potential fatal collissions.
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Maybe Friday’s traffic jam is going to be an oblique protest in support of the Green Party?
Maybe it is, pity you missed the opportunity. The Greens should be calling for a abolishment of the RUC and its replacement with carbon taxes on diesel of commensurate value.
The RUC is a fixed charge per km driven and as such is badly increasing enviromental pollution. A truck driving at 80 kph maximising efficiency is charged the same as a truck driving at 110 kph burning 40% more fuel – and because the truck driving faster is taking less time the RUC is effectively encouraging pollution.
The Greens are missing an opportunity to use the good publicity generated by the Road Transport Forum to promote enviromental policy. Instead preferring to denigrate the RTF as a bunch of greedy pricks led by a “former National Party MP” (party of John “greedy prick” Key) and basically say that NZ needs to raise the RUC to pay for more roads. What gives?
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Could be, would require a more constructive attitude on the part of the Green movement.
The RUC is an enviromentally unfriendly tax which is marginally anti-carbon efficiency. The RUC is charged equivalently to a truck operating efficiently at 80 kph and inefficiently at 110 kph. The per km method of road charging reduces the benefit of fuel efficient operation and is therefore marginally polluting. It should be scrapped and replaced with a comensurate level carbon tax on diesel.
Instead of being constructive our Green movement is much more likely to denigrate the trucking industry and call them a big business lobby group.
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unaha-closp, RUCs halve the amount of road damage compared with fuel taxes by charging exponentially for higher axle weights. The skyrocketing price of diesel is the correct solution to your conundrum.
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Kevyn, RUCs increase at a greater than linear rate, but certainly not at the level required to equal the costs they impose.
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georgedarroch, You need to factor in the base rate charged for costs that are not related to the weight of the vehicle. Back when most construction funding was being spent improving the safety of inter-urban highways the base rate for powered vehicles was $17 per 1,000 km, roughly in line with the petrol tax at 10l/100km.
Subtract $17 for fixed costs from the 2 tonne car rate leaves 40 cents for actual wear-and-tear on the road. Take that 40 cents and increase it exponentially (3rd power) and the result is very close to the heavy vehicle RUCs minus $17 (trailers are only charged $9). Closely spaced axles seem to follow roughly a 2.5 power curve.
Canterbury University has used Transit’s CAPTIF centre to identify how different suspensions and spacing between trucks can dramaticaly reduce the damage, mainly to do with the elasticity of the gravel road base. The 2001 review of the MoT’s cost allocation model is the best source of reasonably up to data info on the subject of roading costs and where the money should come from. Good rainy Sunday reading material but best skim through to the bits you’re really interested in otherwise it can become a cure for insomnia.
http://www.mot.govt.nz/assets/NewPDFs/Cost-Allocation-Review-Final-Rep ort-3Apr01.pdf
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