The rail industry generates $3.3 billion for the New Zealand economy each year, including almost $1 billion towards GDP and $2.3 billion in environmental, safety, health and reduced road congestion benefits, according to research released today in Auckland.
The new EY report titled The Benefit of Rail to New Zealand, commissioned by the Australasian Railway Association (ARA), also showed that the rail industry provides 1,010 full-time equivalent jobs annually in other sectors such as construction and wholesale and retail trade on top of 5,500 jobs in rail.
The report details the considerable benefits to the New Zealand economy that rail delivers including:
- $1.53 billion – reduced travel time and road congestion
- $291 million – less adverse health effects
- $267 million – lower fuel and maintenance costs
- $161 million – less crashes, deaths, and serious injuries
- $36 million – less domestic greenhouse gas emissions
Rail saves travellers 8.8 million hours and 10.3 million hours of driving annually in Auckland and Wellington respectively, and results in eight less road fatalities each year. This results from 23 million passenger journeys and 17 million tonnes of freight being moved by rail each year. Rail also reduces fossil fuel consumption by almost 150 million litres per year, taking 2,000 fuel tankers off the road and saving $195 million.
ARA CEO Caroline Wilkie said the report clearly demonstrates the critical and growing role rail plays in moving the New Zealand economy forward.
“Rail is a vital part of New Zealand’s efficient and sustainable transport network and provides billions of dollars in economic benefit across several sectors every year,” Ms Wilkie said.
“The New Zealand rail industry delivers considerable value for money – creating thousands of new jobs and supporting the construction, wholesale and retail trade, dairy and coal export industries – and is essential to a vibrant economy.”
The report noted that the savings provided by rail are a very conservative estimate given the analysis does not consider land value uplift, tourism, relative infrastructure costs, resilience, or long-term supply chain performance.
It forecasts the total $3.3 billion of economic benefits to grow over time, in response to increases in urban populations, public transit movements, and freight volumes post-COVID-19.
Without rail, New Zealand would expect a $97 million reduction in net exports, impacting NZ’s performance as an “export powerhouse”, it says.
The report details the significant benefits provided to rail reliant sectors, with rail stimulating the creation of 429 jobs in construction, for example, and generating $399 million in GDP each year for wholesale and retail trade.
“Supporting the growth in patronage movement in major cities and increasing freight volumes through significant investment will result in the restoration of a resilient, reliable, and safe rail network, thus realising massive economic gains,” the report states.
The study estimates the total, net public benefit of rail by modelling road network operations in the absence of any rail transport.
“Rail investment represents value for money to New Zealand. Moreover, the benefits of rail increasingly extend beyond the transport sector, for example offering cost savings to the New Zealand healthcare system, and supporting the financial sustainability of local government,” the report states.
Read the full report Benefit of Rail to NZ and a summary of Key Facts.
