So what impact does the Budget 2009 have on the transport industry? We thought we'd help you answer this question by pulling together a summary of all the transport related changes we could find in the budget.

New roads

With around 70% of all freight in New Zealand going by road, new spending on the country's state highways is keenly sought after by the industry. Funding for highways needs to increase as good transport infrastructure is essential to growth.

The Finance Minister's Executive Summary of the Budget states that the new Government Policy Statement on Transport signals an increased investment in the state highway network of about $1 billion over the next three years. Total spending will be $10.7 billion over the next decade.

The additional funding over three years will come from three sources:

• $420m reallocation from non-state highway classes (including savings on administration costs).
• $258m in new Crown investment (paying for the NZ Transport Agency's share of Wellington Passenger rail infrastructure).
• $283m increases in fuel taxes (commencing 1 October and replacing regional fuel taxes).

Rail

In addition to $258 million of new rail funding, the Government has agreed to make a debt facility available to KiwiRail. This includes $115 million to fund its purchase of 20 new locomotives and to provide it with access to working capital.

Biodiesel boost

Energy and Resources Minister Gerry Brownlee announced that a new grants programme for biodiesel production will kick-start the biodiesel industry in New Zealand.

As part of Budget 2009, $36 million will be allocated to the programme over three years.  The grants will be available to domestic biodiesel producers selling their product to New Zealand consumers for a range of end uses.

Shipping

One glaring omission from the Budget 2009 is the lack of support for the maritime industry. The abandonment of the SeaChange strategy to build up New Zealand shipping in favour of building more roads could be a mistake. We need better state highways but an efficient nationwide freight network cannot be based on one or two key modes of transport. All modes need to be used as effectively as possible to compete against and compliment each other.