Road accident costs

Press, 23 September 1987, Page 20

Road accident costs

The Minister of Transport, Mr Jeffries, attributes the rise in annual road accident cost figures since 1983 to two factors — a significant increase in all traffic volumes (not just trucks) since deregulation, and inflation over that period of about 55 per cent.

The Minister’s comments arise from a letter to the Editor from A. N. Holyoake, who writes:

“Subsequent to the deregulation of transport, the following costs have increased: (1) Annual road accident cost increased from S4OOM to S7OOM. (2) Annual road maintenance costs, when an annual saving of S37M was predicted. “The fact is that there is no saving for the consumer, only cost increases. It is about time the Government took some action to end the tremendous financial strain of this chaotic system on health and social welfare. It is not dynamic, it is lunacy.” After commenting on the rise in road accidents costs, Mr Jeffries says:

“There is little evidence to suggest that deregulation has brought about an increase in

truck accidents. While the number of trucks on the road has risen since deregulation, the number of accidents involving trucks has not risen by the same proportion. Indeed, the number of accidents per truck-kilometre has fallen. An important point to consider is although an accident may involve a truck, it does not mean that it was caused by one.

“The author states that in spite of a prediction that annual road maintenance costs would fall by S37M, they have instead risen. The prediction referred to is incorrect. Deregulation was estimated to produce an over-all cost saving to the economy of S37M. This figure was derived from the following calculations: “Reduction in rail costs, minus $lO9 million a year; non-trans-port benefits, minus $26 million a year; additional road costs, plus $9B million a year; net effect on the economy, $37 million (savings).

“From these figures it is clear that road costs were not predicted to fall by S37M, but instead to rise by S9BM. However, this figure has then to be

set against the consequent r Muc . tion in New Zealand’s total 1& H ' transport costs as a result of efficient operations. The roaduser charges system has been adjusted to reflect the true costs of the road freight infrastructure since 1983.

“I disagree that the current system is lunacy. Deregulation removed the Commodity and route restrictions favouring the New Zealand Railways Corporation (N.Z.R.C.), thereby exposing N.Z.R.C. to competition in the long-distance freight area. Resource reallocation has occurred, with operators competing with N.Z.R.C. for a share of the longdistance freight market.

"N.Z.R.C. has fought back to maintain its tonnages with better service and freight rates that in some cases have been cheaper than before deregulation. Efficient and innovative transport companies have been able to secure or maintain reasonablesized market shares under the deregulated system. Efficient allocation of transport investment in this way benefits the whole New Zealand economy and is in no way a ‘lunacy’.”