Road User Charges Amendment Bill

Dr JACKIE BLUE (National) Link to this

I am pleased to stand and speak to Part 1 of the Road User Charges Amendment Bill. Essentially, Part 1 is about electric motor vehicles. There is an amendment to the preliminary provision, which states: “light electric motor vehicle means a motor vehicle whose motive power is wholly or partly derived from an external source of electricity and whose gross laden weight is 3.5 tonnes or less.” This bill will exempt light electric motor vehicles from paying road-user charges for 4 years, as a first step towards encouraging their uptake. At present, light electric vehicles are classed as diesel vehicles for the purposes of road-user charges.

The Government sees private vehicles continuing to be the most significant mode of transportation in New Zealand, and other statistics confirm this. Eighty-four percent of people go to work by car, truck, or motorbike, and 70 percent of all freight in New Zealand is carried by road. The environmental impacts of the widespread use of private vehicles need to be taken into account. Therefore, the Government feels it is important that we encourage the use of alternative fuel technologies in order to help meet our environmental obligations over time. The Government feels that this measure will encourage the uptake of electric vehicles, hence the bill that members are speaking to today. This technology will make a significant contribution to improving the efficiency of our vehicle fleet.

There are very few electric vehicles currently in the fleet, and the forgone revenue costs will not be significant. This bill is about the Government supporting a new fuel technology, and encouraging change to this new technology. Importantly, electric cars can also decrease our reliance on imported fossil fuels and improve our energy security. Combining highly efficient electric motors with our competitive advantage in renewable electricity generation will reduce the greenhouse gases produced by the transport sector, as well as the harmful emissions affecting air quality. There is no doubt that electric motor vehicle technology can make a significant contribution and improve the efficiency of our motor vehicle fleet, as well as addressing the environmental impacts of fossil fuels. Increasing the proportion of light electric motor vehicles in the fleet decreases reliance on these fossil fuels and improves our energy security. We think these are important positives. Combining highly efficient electric motors with New Zealand’s competitive advantage will reduce these greenhouse gases, and we feel this is definitely something that we want. We want to improve the air quality for New Zealanders.

Light electric vehicles are much cheaper to operate per kilometre than conventional motor vehicles, which is another added positive. Until there are economies of scale that will reduce the battery costs, early electric motor vehicles will be quite expensive. For example, the price of a conventional motor vehicle is approximately $20,000, but an electric motor vehicle, at the current time, can cost anywhere between $40,000 to $80,000, which is quite prohibitive. We see it as very important to encourage the use of electric motors, and this bill will go a way to helping to improve that uptake.

Although New Zealand does not have a light electric motor vehicle manufacturer at the current time, the Government feels there is an important role to play in improving the uptake, and this bill will go towards fulfilling that. Part of this role is also to remove the barriers that could prevent or delay the uptake of the market for light electric motor vehicles in New Zealand. One barrier has been the use of road-user charges, and this bill will obviously amend that provision. At the moment, when considering the upfront costs of early electric motor vehicle technology, road-user charges are probably only a minor consideration. We need to look at other ways to improve electric motor vehicle uptake, but this bill is a first step in the right direction. The National Party promised, in the lead-up to the 2008 general election, that light electric motor vehicles would be exempt from paying road-user charges, and now we have fulfilled that pre-election promise. In summary, we see that this bill, which will exempt light electric vehicles from paying road-user charges, will have many, many benefits. Certainly they will help the environmental impacts, they will help our reliance on fossil fuels, they will also support our energy sector, and, importantly, this is an option that, hopefully, will see New Zealanders—

Hon DARREN HUGHES (Labour) Link to this

Thank you, Mr Chairman, for the chance to participate in the Committee stage of the Road User Charges Amendment Bill. We are considering Part 1, which exempts light electric motor vehicles from paying road-user charges. I know that the Minister of Transport, Steven Joyce, has a Supplementary Order Paper that relates to this part, and I am sure he will give the Committee the courtesy of explaining how that works shortly.

I know that other members of the Opposition have questions they want to ask the Minister. I see that he is poised and ready and almost signalling to me that I should yield and let him take the opportunity to speak right now. I beg the indulgence of the Minister to complete my speech, and then I will ask him a few questions.

Obviously, the Opposition supports Part 1, to try to get an emerging market within our vehicle fleet for light electric motor vehicles. We support it for many of the reasons that the member who spoke previously has outlined. It was very pleasing to hear in Dr Blue’s speech a direct, overt reference to fossil fuel emissions. One of the things that has been missing a lot from the language of the Minister when he discusses transport policy is a commitment to battling climate change. So I want to encourage the Government—

Hon TAU HENARE (National) Link to this

Considering that the Road User Charges Amendment Bill is only three pages long, I was going to keep my speech pretty short until I heard that speech. But now I will say to Darren Hughes, the member who just resumed his seat, that this bill is in no way timid.

Hon STEVEN JOYCE (Minister of Transport) Link to this

I am very pleased to take a call in relation to the Road User Charges Amendment Bill. Personal mobility in motor vehicles has been one of the great liberators of the mechanised age—it really has—and it has created huge productivity benefits. It has given people the ability to get around and, of course, most people find a motor vehicle a hugely wonderful tool. The challenge is that if the potential—and I stress “potential”—upcoming limitations on fossil fuels and climate change issues come into play, then we will have to look for other forms of motive power, and the electric car is one of those motive powers, and also biofuel and bio-diesels. We must encourage all of those forms of motive power, and we are doing so in the case of electric vehicles with this Road User Charges Amendment Bill.

I had my first ride in an electric car the other day. Unlike Mr Hughes opposite, it was very quiet and it was a very smooth run. But there were a couple of limitations. There was no car radio because there were not quite enough watts to drive the car radio as well as the car; and it was so quiet that I was able to hear my companion speak at great length quite easily all the way through the journey. The car drove very well. The biggest risk with electric cars is that they are very hard to hear because they are so quiet.

The point is that the technology is still very new, and this legislation is really about encouraging the technology to develop. It is not a massive cost; I think if it was a massive cost the Government would be concerned about the potential drain on the road-user charges in the National Land Transport Fund. At this stage it is not a massive cost; it is about encouraging electric vehicle manufacturers who are already looking favourably on New Zealand because of our high levels of renewable electricity and renewable energy use. They like the thought of their vehicles being introduced into this market as one of the earliest markets. They like the thought of New Zealanders being early adopters of electric vehicles and then showing the rest of the world how to do it. So they are encouraged by these sorts of signals from Government that this is something that we should do.

I would like to make brief mention of the Supplementary Order Paper, which is of great length and involves moving the word “issued”. We had the word “issued” at one point in a sentence and we have issued it across to another point in the sentence. I thank my colleague Amy Adams who very cleverly and sensibly made that change to make sure the meaning was clearer. Writing good law is always a good idea and I congratulate my colleague on making that amendment, which strengthens immeasurably this particular legislation.

As well as sending a strong message to the motor vehicle manufacturers, we must acknowledge that there is still a lot of work to do in the electric motor vehicle area. The reality is that New Zealand will not be doing that level of manufacturing and work, but there are some encouraging things. One of the challenges for the uptake of electric vehicles is the sheer cost of the vehicle compared to the operating cost—the sheer upfront costs. That is a difficulty; an electric vehicle is approximately double the cost of another light vehicle of a similar motive power level. That is a real challenge and it is one the manufacturers are working on at the moment. I have heard some very interesting ways in which they are looking to approach it. A big part of the cost of an electric vehicle is the batteries, and those batteries could potentially be leased or sold to owners on a lease-back arrangement to get the operating cost of a car up, and the purchase cost of a car down, making it look a little bit more like an internal combustion vehicle in terms of the economics that people are used to. That is one of the things the industry is looking at and I think it is certainly looking at partnerships within New Zealand, including with some of the State-owned enterprises, to see whether it can have these cars introduced as early as it possibly can.

Finally, I would like to mention the importance of road-user charges. We have a system in New Zealand where road-user charge revenue is hypothecated. It is used in the National Land Transport Fund, and this Government has made a special effort to ensure that as much of it as possible is returned to the road users who pay it. It is, therefore, the way that primarily we pay for our roading system and we must not have significant precedents. I have made it clear in the explanatory note of the bill that this is not to be seen as a precedent; this is purely a one-off to encourage electric motor vehicles.

Hon DAMIEN O’CONNOR (Labour) Link to this

I welcome the chance to follow the Minister of Transport, Steven Joyce, because I wish to clarify a couple of points he made in his speech. Before New Zealanders who listened to that speech rush off to buy hearing aids, because the Minister pointed out the danger of electric cars and the fact that they are silent, I tell them that we have to be realistic. There are going to be only 300 electric cars, as estimated by the Minister himself. It is important that New Zealanders do not get alarmed at the possibility of those quiet cars zooming around everywhere.

The Road User Charges Amendment Bill is hardly huge legislation, and one of the questions I ask of the Committee is how come it is going through today. I have a suspicion it is because John Key is somewhere else in the world, because if this bill is in any way related to climate change then I have to repeat the words of the Prime Minister, who said: “This is a complete and utter hoax, if I may say so. The impact of the Kyoto Protocol, even if one believes in global warming—and I am somewhat suspicious of it—is that we will see billions and billions of dollars poured into fixing … a problem.” We can be sure this legislation does not involve billions of dollars if, indeed, the Prime Minister has come around to the thinking of the Minister of Transport.

The Minister has been careful to point out in the explanatory note of the bill that this does not set a precedent. That is a bit sad. One would hope that by passing legislation that is focused on climate change, the general objectives are to encourage the uptake of electric vehicles, even if there will be only 300, and we in the Opposition applaud that initiative. But it is hardly even the gem of a good idea. It is more like the atom of a good idea, because it will not have that much impact. None the less, as long as we are moving forward in the right direction, and if this legislation was to set a precedent, then we could be assured that the Chamber was using its time properly.

Even though the Minister says that this legislation does not set a precedent, I think we have to ask a few questions around precedents or, indeed, the objective. Does this mean that the National Government accepts that climate change is a reality? Is this the first spark, the first glimmer of hope, that we will see legislation going through Chamber that will bring New Zealand into the new world and, hopefully, put us in a position where we can say we are “100% Pure New Zealand”? That is what we are through our tourism marketing, but the reality is that, as we know, we are not quite there in terms of carbon initiatives. Electric vehicles will move us down that path, so I applaud the legislation for what it does, but surely we could accept the small precedent that might be stated in the bill—but, no, it is not—that we are moving towards a path of low-emission vehicles across the country. If that was to be the case, then the question why we did not remove the road-user charges for small diesel vehicles to encourage the uptake of them, rather than the petrol-powered vehicles that are still the predominant vehicles on our roads, must arise.

If we are trying to set a precedent, as we should be doing with any legislation, and we are encouraging the uptake of low-emission vehicles, why does this legislation not include light diesel vehicles? There are 299 electric vehicles—not 300 because the Minister for the Environment, Nick Smith, who no doubt has stated his self-interest, has one of them—somewhere in the country that will be affected and will benefit from this legislation, and I would say that will have a very, very small impact on the climate. We need to do something substantive.

MICHAEL WOODHOUSE (National) Link to this

I am very pleased to take a call on the Road User Charges Amendment Bill, and in particular on Part 1. Before I do, I wonder whether I could address the accusations made by the former member for Ōtaki in the second reading of this bill, about my flights of sycophancy as they related to the Minister. I want to reassure the Committee, and the Minister, that any compliments I give him are purely merit-based and have absolutely nothing to do with my own personal ambitions in that regard.

I come back to the select committee’s consideration of this bill. We had some members visit the Transport and Industrial Relations Committee in the deliberation. The Committee may be aware that the group included the Hon Mr Barker. He put officials through something of an examination, I think we would say, around the definitions of a light electric vehicle, including why the vehicle had to be plugged into an external power source in order to qualify for the rebate. I think that that was very fair, but the reasons for it were given. I am a bit surprised, actually, that our friends on the other side of the Chamber have not raised a Supplementary Order Paper in this regard. It may have been as a consequence of the honourable member’s cameo appearance in the committee that perhaps they were not able to produce a Supplementary Order Paper of a similarly reasoned nature.

But we have other external electrical sources, like solar power, and we also have hybrid vehicles. Of course, I was quite interested to know why hybrid vehicles were not included in the exemption from road-user charges in order to encourage the uptake, and I was told that there are no diesel hybrids on the market at the moment. So that made perfect sense to me. But I will touch on the point Mr O’Connor made in the second reading debate about diesel, which he has addressed again today. In my interjections on him during the second reading debate, we were probably at cross purposes. I thought he was talking about diesel hybrids, but he—and he has stated it again in his call in the Committee stage—was talking about light diesel vehicles, and why they are not being exempted, as well. Well that, again, could have been discussed by way of a Supplementary Order Paper. But the advice I have—and I am very happy to be corrected on this by any other member, the Minister, or the officials—is that diesel-emitting vehicles do not actually emit much less carbon than petrol vehicles do. I checked that with the good people at the Parliamentary Library. In fact, if we excluded them, we would need to exclude any light vehicle, including petrol vehicles, which is probably not a place we want to go. Obviously, this legislation is about encouraging the uptake of new technologies, and the exemption of light electric vehicles is certainly going to do that.

I also challenge Mr O’Connor on his quite spurious comments around National’s commitment to climate change, and remind him—as he should know—that National was first to propose a carbon tax or a form of emissions trading scheme, as far back as 1998. Sadly, the electorate did not quite see things the way we did, and we were not able to implement that for some time. But I think it is very important to acknowledge that this Government has a very strong commitment to deal with climate change, and there will be plenty of other examples of that as we go on.

I will also touch on Mr Hughes’ comment about the potential for shifting the burden from those exempted from paying road-user charges when they buy light electric vehicles if there is a high number of these vehicles sold. The goal is 300. Would it not be great if we had that sort of problem? But it is also worth bearing in mind that the exemption is time-bound, so we will come to 2013 and it will be reviewed. The Greens are rather concerned about the fact that the measure is contained in regulations rather than in primary legislation. I will be interested in their views on that. I notice there is not a Supplementary Order Paper on that, which surprises me. I think there were some valid concerns around that. But, again, it comes down to materiality. If we are worried about the burden being shifted to low-income earners who have low-technology cars, but believe only as few as 30 electric vehicles will be purchased, we cannot quite argue both sides of the same coin. But I will be interested in what the Greens have to say about that burden, and whether it should be in primary legislation.

I think, overall, that this is a really sound initiative, and one that I think in the future will probably see a much greater number of people taking up electric vehicles than has been the case.

IAIN LEES-GALLOWAY (Labour—Palmerston North) Link to this

I rise to make quite a specific point, and to request the Minister to respond to that point, if he would. I am not a member of the Transport and Industrial Relations Committee so I had not been closely following the progress of this bill until a matter was raised with me by an organisation in my constituency in Palmerston North. It is called Zero Emissions Vehicles. The Minister in the chair, the Hon Steven Joyce, nods his head. I do not know whether he has been in contact with this organisation, but it is developing something that is quite a visionary idea that may be some time in the making—that is, a heavy electric vehicle. The company is working on the components to create a chassis and base, on which, I suppose, there could be a truck or bus—a heavy vehicle—completely run on electricity. The company has developed the battery, and it is a long way down the road of developing the drive mechanism that could make this work.

The company has raised a question with me about the 3.5 tonne limit for the road-user charge exemption, whether any consideration was given to the possibility of a heavy electric vehicle, or whether the concept of a heavy electric vehicle was even considered. Quite reasonably, I think, the company has raised the point that an exemption would assist it in having a selling point for such a vehicle if it were able to be developed—that councils might be interested in an electric tram or bus set-up within cities, and that transport companies might be interested in the truck option, as well. So having the exemption to the road-user charges would be advantageous in the uptake of such vehicles. The company has also made another very good point, which is that given such a vehicle does not exist currently, increasing the exemption beyond 3.5 tonnes would not cost the Government anything, because there is no such vehicle. The Government would not be exempting anybody at the moment; hopefully, further down the track that might happen.

I acknowledge that I am raising this issue quite late in the piece; there is not a Supplementary Order Paper around it. Perhaps if there had been a little more consultation at the select committee, these guys could have had the option to come along and make their submission, but on their behalf I raise that with the Minister. I get the feeling from his body language that he gets the points, and I will be very interested to see what response he has to that.

DAVID BENNETT (National—Hamilton East) Link to this

It gives me great pleasure to rise and support this Road User Charges Amendment Bill in its Committee stage. When we look at the part we are debating at this stage, we see that it predominantly focuses on the use of electric vehicles and the incentives this Government is making for those vehicles.

This is a new technology, and something that may not yet be available, in the sense that we will not see a whole fleet of electric cars taking over tomorrow the fleet of cars already on the road. But it is a starting point that is going forward for the future. When we look at what is happening around the world, we see there is an attempt to do that throughout the world. People are looking for cleaner, greener forms of car technology. The New Zealand Herald today has an article about a US programme that is basically encouraging people to trade in gas guzzlers for cleaner, more environmentally friendly cars. They are not quite of the electric technology, because that is the next level. I guess that electric technology will be the next level from the one of more fuel-efficient cars, which the US is going through at the moment. But the article shows that the world is moving that way, and New Zealand needs to be in that space. This bill is putting New Zealand in that space, so that we are ahead of the game when it comes to environmental concerns, and so that we are making the best initiatives possible to encourage the best results for our transport sector. I think it is a great initiative for this Government to do that, because it is showing not only that we are up with the play internationally but that we are taking a leading role in what we are doing with electric vehicles in this case.

The Road User Charges Amendment Bill is a perfect opportunity for us to show that desire and willingness to take a lead in regard to electric vehicles. The road-user charges that would have been on these light electric vehicles will now be exempt. We want to encourage this technology to go forward and to take advantage of what we see as one of the solutions for transport in the future. When we look at the current road-user charges for an electric vehicle weighing 3.5 tonnes or less, it is about $36 per 1,000 kilometres. So that is about $400 a year, based on travelling an average of 12,000 kilometres a year. We are keen to give that initiative to the purchasers of those vehicles so that they can make that choice.

An electric vehicle will be more expensive than a contemporary vehicle at this point in time, because it is new technology that is advancing. Over time we will see the price come very much down. The amount of $400 may not seem like a lot in comparison to the cost of an electric vehicle compared with the cost of a conventional vehicle, but over time, as that technology grows, the price gap will narrow and there will not be such a big gap between them.

DARIEN FENTON (Labour) Link to this

It is a pleasure to take a call in the Committee stage of the Road User Charges Amendment Bill and to address Part 1. I do not think there is anything in Part 1 that members on this side of the Chamber would find much disagreement with.

COLIN KING (National—Kaikōura) Link to this

It is a pleasure to take a call on the Road User Charges Amendment Bill. When we stop and think about the context of this bill, we find that it is introducing an incentive to stimulate the development of electric vehicles. From listening to the speeches in this debate, we can see that members are drilling down into a wide-ranging area. While we consider Part 1, “Amendment to preliminary provision”, I draw the attention of members to the fact that it is only a bit over 100 years since we have had motor vehicles, which is quite amazing when we consider what Mercedes-Benz produced back in the late 1800s compared with what the motor vehicle is like today. When we compare the Wright brothers in America and the aircraft they flew with what air travel is all about today, then from that point of view what we are endeavouring to do today becomes significant.

It is a pleasure for me to be involved in the Committee stage of this bill, even though I was not involved in the select committee process. I commend the thoroughness with which the Transport and Industrial Relations Committee considered this bill and returned it to the House for its second reading.

Most of us would have been aware of the slot car, which was electrically run. We all had a lot of fun with that. I also draw to the attention of members opposite that in Marlborough, one thing the elderly use a lot is the mobility scooter. When we start talking about the advances that are occurring and about how the battery is becoming far more effective in today’s use, we have to use only part of our minds to imagine what will be occurring in the future. I think this bill creates an incentive. It is going some way to ensuring that we have alternatives to the motor vehicles of today that use fossil fuels. The old adage “Big things come from small beginnings” is appropriate. The member opposite talked about the atom, and we can see what atomic energy and atomic medicine can do today for the human race. We are inspired by this legislation going forward; it offers a whole wide vision of opportunity going forward.

Another point that needs to be underscored in this Committee stage of Part 1, the “Amendment of the preliminary provision”, is that the bill was an election promise from National. It is good to carry that out. We on this side of the Chamber recognise the importance of being able to portray to the nation the confidence to go forward and to build on the policies of the Government, and this legislation fulfils an election promise. When we consider that the average cost for a motor vehicle under the road-user charges is $36.07 per thousand kilometres, which equates, under a 12,000 kilometre year, to something in the region of $432 annually, we know that that is an incentive to pass this legislation.

I thank the member on the Government side for explaining to us why hybrid cars were not involved, and that they had, effectively, to be plugged into an exterior power source and recharged. Some clarification was certainly greatly appreciated there. We cannot undervalue the opportunities around technology, and this bill encourages that. It is interesting to note that given the dramatic recession of today, and the adjustments within economies and such like, we see such magnificent organisations, like Chevrolet, having to totally readjust themselves. It is important that New Zealand keeps pace with what other nations are doing.

SUE MORONEY (Labour) Link to this

It is a pleasure to finally rise and speak on the Road User Charges Amendment Bill, albeit in the Committee stage of Part 1. It is interesting because it gives us the definition of a light electric motor vehicle. I have some questions to ask the Minister of Transport about this definition, because it specifically says: “light electric motor vehiclemeans a motor vehicle whose motive”—Colin King was probably quite right to talk before about motivation—“power is wholly or partly derived from an external source of electricity and whose gross laden weight is 3.5 tonnes or less”. My question is what vehicles does this exclude? Which vehicles over 3.5 tonnes does the Government not wish to see involved in this particular legislation? Certainly, I imagine that it means the Government, as we know, is not committed to electric trains, because they will be more than 3.5 tonnes. There obviously is a big question mark. The Minister is not sure, but I think they will weigh more than 3.5 tonnes. There is a big question mark over this Government’s commitment to electric trains, or, in fact, trains at all, but I will come back to that point.

We are talking about the definition of what is in and what is out. The definition excludes particular vehicles, and I would like some clarity from the Minister about those vehicles that the Government is moving to exclude by limiting the weight to 3.5 tonnes or less. I imagine that it will exclude the juggernauts that the Government seems to want to fast track and let loose on our roads, the same juggernauts that many local government authorities up and down the country are submitting on and opposing because they know that our roads are not equipped, built, or designed to carry those sorts of weights. I imagine that the juggernauts will be excluded from the 3.5 tonnes or less definition, and that those juggernauts will be discharging this dreadful diesel that David Bennett keeps mentioning when he talks about this bill, and which apparently the National Government is using as an excuse to go around opposing the proposal for a passenger train from Hamilton to Auckland. Apparently the Government is opposing it on the grounds that it will use diesel. I ask the Minister what on earth the juggernaut trucks will be using. Perhaps they will use diesel. I wonder, if the Government is prepared to fast track this proposal for juggernaut trucks to actually start using that dirty diesel that David Bennett is so concerned about, why the National Government is so vehemently opposed to the rail passenger transport proposal for Hamilton. It is clearly not about the use of diesel, so I want to know what the real reason is.

I turn back to the bill. When I look at what this definition means, I think about it from a local perspective. I understand that the Transport and Industrial Relations Committee went through a very truncated process and I am concerned about that. I have yet to hear any justification from the Government benches as to why this very important legislation was given only 1 hour’s deliberation by the select committee. I am still waiting to hear the justification for that. If the Government had allowed the select committee to delve into this bill more deeply then perhaps it would have thought about what 300 electric vehicles on our roads in the next 5 years might mean. Is this a big move forward or a small move forward? Generally, when we look at things from the Waikato’s perspective, roughly 10 percent of any initiative can be accounted for in the Waikato. That means that for the entire Waikato region, under this interpretation of the definition of a light electric vehicle, we are talking about an exemption that might apply for 30 cars.

Dr CAM CALDER (National) Link to this

It is with absolute delight that I stand to make a few comments about the Road User Charges Amendment Bill.

Hon STEVEN JOYCE (Minister of Transport) Link to this

I rise to take a short call in response to a couple of questions raised by earlier speakers. The first question was raised by Mr Lees-Galloway about his constituents in Palmerston North. I am aware of the company he referred to, Zero Emissions Vehicles, and the work it is doing. It is encouraging and I hope the company succeeds with its project. Certainly, we would look at potentially extending that sort of incentive approach once the vehicle becomes ready for use.

In reference to Ms Moroney’s comments, it is appropriate to point out that road-user charges are not paid by trains. Trains do not pay road-user charges and they do not pull up at the weigh stations and get weighed. Her comments were a little bit irrelevant, if I may say so. In terms of passenger transport—I am a big enthusiast for its potential ability to reduce congestion in our major centres, and I think that is the point—it has to have a priority for reducing congestion in our major centres that have the most congestion. Of course, all funding involves choices between one project and another. I think the difficulty that the Waikato to Auckland train will find with the Transport Agency is simply that it will not reduce congestion on the Hamilton to Auckland road. I cannot see that happening. The route is already served by commercial, private bus services that pay their way. Huge numbers of private vehicles travel up there and, again, they fully pay their way. So that, I think, is the difficulty with the project, but we will see whether Hamilton City wants to make a contribution to KiwiRail. If it does, I am sure KiwiRail will be very keen to see that happen, but, again, it has to be done on a basis that makes some sort of sense when compared with other potential ways to invest in the transport sector. So those are the points I make in response to earlier speakers.

CAROL BEAUMONT (Labour) Link to this

Tēnā koe, Mr Chair. I rise to speak to the Road User Charges Amendment Bill. It is interesting to follow Mr Cam Calder, who was talking about promises. Many of us on this side of the Chamber immediately thought of the sorts of promises that this Government has not kept. One promise that immediately comes to mind is the promise to have tax cuts. Tax cuts for ordinary New Zealanders were, of course, cancelled, while tax cuts for the rich were a priority and were put through the House at a time when there was a real need for Government funding for a range of very important initiatives.

Let me get back to the Road User Charges Amendment Bill. I rise to speak on Part 1, which is about the exemption for light electric motor vehicles from the requirement to pay road-user charges. As my colleagues have mentioned, we are supportive of this provision. But I will comment on some of the points made in the explanatory note of the bill. Although it is true that greater use of electric motor vehicle technology would make a significant contribution to improving the efficiency of the motor vehicle fleet, decrease reliance on fossil fuels, and improve energy security—and it would be used, of course, with our comparative advantage in renewable electricity generation—those factors have been somewhat overstated in relation to this particular bill and the current take-up of electric cars.

There has been a rather grand description of the contribution that will be made by this exemption. I would note that this is in the context of a lot of inaction by the current Government in terms of the environment. Certainly, the previous Labour Government did a lot towards preparing for the introduction of electric vehicles, and, certainly, it is fair to recognise that both the previous Government and this Government are hampered somewhat by the cost of electric vehicles and the fact that New Zealand is not a priority market for manufacturers to roll out electric vehicles. That means, as others have mentioned, that the exemption for light electric motor vehicles is best left for a shortish period of time, because we do not want to see what is effectively a subsidy for those who can afford to purchase these cars when people on lower incomes cannot afford to buy such a car.

I think it is important that we talk about climate change when we talk about electric vehicles. A number of speakers across the Chamber have already done so, and I think it is a very important point to make. Michael Woodhouse’s contribution was to acknowledge the Government’s strong commitment to climate change. That is so true! In fact, we can see that the Government is very committed to climate change and its terrible consequences by its complete inaction in leadership in this area at the moment. The Government is taking New Zealand from the situation of being a world leader to being an embarrassing laggard. Even worse—because I do not think that was actually what Michael Woodhouse meant—was David Bennett’s contribution. He started to say that Labour does not care about the environment. Frankly, that is an unbelievable statement.

When we compare the record of the previous Labour Government with this Government’s record, we see that this Government is moving in the wrong direction on climate change. Since November last year, what have we seen? We have seen the emissions trading scheme being put on hold at a significant cost to investment in planting in forestry.

ALLAN PEACHEY (National—Tāmaki) Link to this

I was a member of the Transport and Industrial Relations Committee, which considered the Road User Charges Amendment Bill and reported it back to the House. It has taken me a long time to get a call, but I am now grateful for the opportunity to make a contribution to the debate on Part 1. This part is one of two distinct amendments that the Government is making to the Road User Charges Act 1977.

I will take a moment to reflect on some of the things that have been said by Opposition members, particularly by Opposition members who were members of the select committee. The committee’s consideration of the bill was careful, thoughtful, and timely, yet members of the Opposition who sat on the committee now come into the House and somehow want to squeal that they did not have an opportunity to discuss matters there that they now want to discuss in the Committee. It is quite legitimate for members opposite to raise some of the things they have raised in this debate, but it is not legitimate, when they sat in the select committee, to now complain that somehow it was the Government’s fault that they did not get around to raising matters in the committee that, in retrospect, they wanted to raise.

The purpose of Part 1 is to enable regulations to be made that exempt light electric cars from road-user charges. The intention is that the provision will take effect in October and run on a trial basis until 2013. It is envisaged that 300 vehicles will be affected. That number of 300 is logical, sensible, and reasonable, and for the former member for Ōtaki to use the word “timid” is totally out of line. How dare any member of what was the previous Government for 9 years describe anything this Government is doing as timid? I humbly suggest to the young member that maybe he should get hold of a thesaurus—such as Roget’s Thesaurus—and spend a little of his time in this House on widening his vocabulary and learning a few words that may give a fairer, more exact description of what he is trying to say. We should not ever let any member on the opposite side of the House describe the actions of this Government as being timid.

PAUL QUINN (National) Link to this

It is a pleasure to be able to take a call on Part 2 of the Road User Charges Amendment Bill, which deals with the notice that applies in respect of the road-user charge. I say from the outset that I hope—it is my sincere hope—that during discussion and debate on this part of the bill the contributions from our friends and colleagues on the opposite benches are a bit more thoughtful than we have heard on Part 1 of the bill. Those speeches seemed to meander around everything except focus on the benefits and the job that Part 1 will do.

In turning to Part 2 I will make a small contribution on it and talk about why the particular part is before us. We do not have to go back very far—to 2008—when with a rush of blood the then Minister of Transport decided that the road-user charges would go up.

DARIEN FENTON (Labour) Link to this

I really hesitate to follow that contribution by Paul Quinn. I am not sure whether anything I have ever heard in this House could possibly match it—apart from David Bennett’s contribution, which I know is to come. David Bennett will be as considered as he always is as the excellent chair of the Transport and Industrial Relations Committee. I know he will make a considered and proper contribution on Part 2 of the Road User Charges Amendment Bill.

Part 2 relates to road-user charges and follows on from Labour’s initiation of a review last year. I will go over some of the things that people have said about what happened last year. Labour announced an increase in road-user charges, and we saw a politically motivated and self-interested action by truck drivers at a time when there were unprecedented price rises in the international costs of petrol and diesel. Everybody was hurting; everybody was paying more for petrol at that time. We put up the road-user charges last year without notice because, when we increased them the year before, notice was given, which resulted in a great deal of purchasing of road-user charge certificates. A large amount of Crown revenue was lost through that forward purchasing.

After the truck driver protest, the previous Minister of Transport, the Hon Annette King, met with the head of the Road Transport Forum, the Hon Tony Friedlander, who said that the forum would work with the Government to put in place a regime that was fair to the Government but also fair to the forum. So there is no problem with that.

The objective of Labour’s review was to increase road-user charges without a great loss of revenue to the Crown, but with sufficient notice given, in particular to truckies, who were purchasing the road-user charge certificates. Part 2 of the bill addresses what came out of the inquiry that Minister King set up, and it was announced by the Minister of Transport, the Hon Steven Joyce, in May this year.

When Labour instigated the review, there had not been a review for around 18 years. During that period the ratio of trucks to cars had changed enormously, as had the weights being carried by those trucks. That meant that a great inequity had grown between trucking firms and private motorists over who was paying for road maintenance. Motorists were subsidising truckers. Heavy trucks causing substantial damage were not paying their fair share. So the Labour-led Government, after announcing the working party to examine the formula for the road-user charges for heavy vehicles, also intended to amend the Road User Charges Act for vehicles weighing more than 3.5 tonnes, in order to restrict the period of time in which pre-purchased licences could continue to be used after an increase in road-user charges.

The purpose of the proposed amendment was to allow the Government to give reasonable notice of increases, and that is exactly what the bill does. The bill is the outcome of everything Labour planned to do after we had been through a very reasonable review and a proper collaborative process. The truth is that Labour did the work on the bill. We took a lot of flack on the bill, as always, but we did the work on it, and here we are passing it.

The bottom line for Labour in this whole thing is that a fair share of all road-user charges must go towards maintaining our roads, building new roads, and improving public transport. As I said, a working party reported back to Steven Joyce. Guess what? The key recommendation was that the current road-user charges system, which is unique in the world, be retained with some suggested changes around the edges. The working party recommended that 6 weeks’ notice be given for any increases in road-user charge rates. The result is the bill, as I have said, which provides for 42 days’ notice. It also provides a mechanism to minimise the impact of pre-purchasing.

I do not want to dwell on the past, but I know that some speakers on the other side of the Chamber want to talk about what happened last year. We are interested in the bill and in the solution that Labour worked for along with the Road Transport Forum. I observe that when National is in the driving seat, there are plenty of protests. Hey, we had one yesterday outside Parliament, did we not?

DAVID BENNETT (National—Hamilton East) Link to this

When we look at the Road User Charges Amendment Bill, we see that Part 2 will amend the principal Act in regard to road-user charges. A number of speakers have touched on some of the history that went into the situation this bill tries to address. I think that the previous speaker, Darien Fenton, and also National member Paul Quinn, pretty well summed it up, in the sense that this is a bit of a historical legacy issue that comes from what happened last year.

Last year the Minister at that time arbitrarily changed the road-user charges without giving the trucking fraternity enough notice. Its members were deeply aggrieved at that, because they saw it as being an action of a Government that was heavy handed, that did not take into account the nature of their business, and that did not want to negotiate. They felt that it was a breach of trust by the previous Government, so they created a great protest that went on throughout this country. Many, many politicians got involved, and some members would have seen themselves photographed in trucks as they protested against the previous Government’s arbitrary use of its power. In fact, that Government took advantage of its power when the industry did not have the ability to respond. But industry members did respond in their own way of protesting, as the previous member talked about. They protested in a way that was constructive, and they worked to have a dialogue with the Government to produce what we have here today.

But only National has actually implemented legislation and worked out a process for the future that will deliver a solution to this issue, so that those in the industry can feel they will no longer be at the whim of Government decisions when they need some security in decision making. They need to know they have some time frames in which they can be advised of price increases, and that they have some certainty that the Government will keep to its word and will deliver in a timely but effective manner. That is what the National Government does, and is doing in this case. We are taking on board the concerns of the industry. We are working towards a solution that will be constructive for all parties involved, so that it will negate the situation where there are protests. We will have a situation, in fact, where all parties can work together in the best interests of getting the right value for our road transport sector.

The Road User Charges Amendment Bill has a very big significance for the trucking industry. It shows the industry that there is a Government that will not take such an industry at its peril and make willy-nilly decisions. It will be a Government that listens, and that tries to give the industry time frames so that the industry can reflect the changes there may be in road-user charges. That is an important consequence, and there is a brief Supplementary Order Paper in this area that basically clarifies a drafting issue. I think we need to give credit to Amy Adams, who did a fine job in working out that potential drafting problem. I give credit to her, because she stepped in at the select committee and made that change.

When we look at this legislation in its wider context, we are looking at road-user charges, but we have also debated the light electric motor vehicle portion of the bill for a significant period of time. This bill reflects a Government being willing to listen to those in the transport sector, a Government wishing to show leadership in the transport sector, and a Government having a good understanding of the transport sector. We can see that those things come through all the transport initiatives that this fine Minister in the chair, the Hon Steven Joyce, has undertaken. He is in direct contrast to previous Ministers who have not engaged with the industry, with the sector, or with the people who are on the ground and who know what is best for their industry. That point of difference has made the National Government and this Minister very successful in this portfolio.

Hon DAMIEN O’CONNOR (Labour) Link to this

We are on Part 2, and it is probably useful to go back and explain to people what we are talking about. This is the Road User Charges Amendment Bill. It is kind of the “Carrot and Stick Bill”, really, with the first part of it being the carrot—that is, we will incentivise people to buy electric cars by offering $400 a year for 300 buyers of electric cars. That is the carrot part. Now comes the stick in Part 2, which is that if one does not use all one’s road-user charges within 42 days, they lapse. Why would this happen? Well, probably the only person in this Chamber today who can remember back as far as that is Mr Peachey. He will remember what would happen on Budget day, when the Minister of Finance would get up and announce new charges. They would usually come into force at midnight, so everyone would rush down to the petrol station or liquor store and buy up large to try to get around the increasing charges. The fact that people spent more money to get there was probably irrelevant; it was the principle of the matter that was important.

There is a desire in New Zealanders, in each and every one of us, to pay as little tax as we possibly can and to spend huge amounts of money in trying to avoid tax, as the road transport industry has done on occasions. When increases in road-user charges have been announced, transport operators up and down the country have rushed to buy forward their road-user charges, thereby undermining the potential revenue for the Crown, and not really playing a fair game. To be fair to the Government, it has come up with, I think, an astute solution to this problem by saying that if there are any increases in road-user charges—and there will be—there will be a time limit. I ask the Minister in the chair, the Hon Steven Joyce, to take a call. He could get up and explain when he is likely to increase the road-user charges next, because he knows full well—

MICHAEL WOODHOUSE (National) Link to this

I will take a quick call on Part 2 of the Road User Charges Amendment Bill, because, try as I might, I cannot resist talking about the Opposition’s attempts to rewrite history from last year. It is consistent with a theme that we have had basically since this Parliament started. But I am a bit disappointed in some of the members of the Transport and Industrial Relations Committee complaining today, and in the bill’s second reading, that they did not have an opportunity to consider issues such as those raised by Mr Lees-Galloway. Yes, the committee’s consideration time for the bill was tight, but those members are no shrinking violets. They can speak up, and they do. If they had those concerns then, they would have raised them, and I think there is a bit of wisdom now being shown after the fact. If that is all they can come up with to complain about in this legislation, that is, I think, a credit to the fine Minister in the chair, the Hon Steven Joyce.

But, despite the Minister’s considerable cerebral capacity, it would not have taken much to come up with a very fair compromise arrangement to keep members of the road transport lobby satisfied that they are able to have sufficient notice to be able to put increases in road-user charges into their prices, without arbitraging the system by taking millions of kilometres’ worth of charges in advance. Even if that was happening, the Crown had the benefit of those payments with regard to the 2007 increases. The industry certainly did not get that opportunity on 30 June 2008, because absolutely no notice was given to it, notwithstanding the undertaking given by the then Minister of Transport to do so. In fact, Labour is rewriting history to quite reverse that. We are being asked to believe that members of the road transport industry came along and asked the then Minister to please do something different. She gave them notice in 2007, she said, so she did not do so in 2008. I think that is a really big stretch. The road transport lobby protested last year, because it was given an undertaking that something would happen and it did not.

So I am really supportive of this particular part. I think it reflects a very common-sense response to the situation. Thank you.

CAROL BEAUMONT (Labour) Link to this

Tēnā koe, Mr Chair. I rise to make a very brief intervention on the Road User Charges Amendment Bill. We support the specific changes provided for in Part 2, to enable notice to be given of a road-user charges increase and put the expiry of pre-purchased road-user charges at 1 month after that. I acknowledge that this measure is a consequence of the work of the Hon Annette King and the inquiry that she set up. My colleague the Hon Damien O’Connor outlined a bit of the history of that, so I will not relitigate it. This measure is a fair solution, so we agree on it.

I will continue with the theme I was speaking on a little earlier about the environment. The reason for the road-user charges, as we know, is so that truck operators can contribute to the costs they place on our road network. We have had to have increases in the charges because truck operators were not paying their fair share up to the previous increases. But one of the areas of concern we have is about the very real prospect of heavier trucks being allowed on our roads. The Rail and Maritime Transport Union made some very well-informed remarks about that, which I think are important to note while we are considering road-user charges. There is a range of reasons why allowing heavier trucks on our roads would be a problem. There are, of course, public safety issues related to slow trucks being on our roads. There is also the fact that the size increase we are talking about would make a significant difference to the difficulties on our roads, not only in terms of road safety but also in terms of the damage done to our roads, and it is unreasonable to expect other road users to pay for those additional costs.

There is also talk of replacing road-user charges—the matter we are talking about here—with a flat diesel tax, which would exacerbate the already un-level playing field between road transport, rail transport, and coastal shipping. In fact, it would be another subsidy to the road transport industry. In this document before me, Minister Joyce has been called the “Minister of Road Transport”, and I think that is quite appropriate when we see some of the changes that were announced recently, such as changing the funding balance by shifting money out of public transport and into roads, whereas of course the previous Labour Government was very much committed to having a balanced transport policy. As others have mentioned, that policy was about a multimodal transport provision.

I think the lack of that vision by the Minister of Transport and by the Government is very important when we consider the impact on our environment. We have options regarding the movement of freight. We can move freight by means of coastal shipping. We can move freight by rail. The use of larger and larger trucks is not necessarily best for the environment; in fact, we know it is worse for the environment.

I want to go back to what I was saying. I was part-way through giving an important list of backtracking by the Government in the area of the environment, and was saying we are indeed moving in the wrong direction. Members who were present at the time will recall that I was talking about the fact that the Government has used every possible excuse to delay the setting of a carbon pollution reduction target. It has scrapped the Fast Forward Fund and the research and development tax credits that would have funded agriculture’s transition to lower-polluting technologies. The Government repealed the biofuels obligation, failed to come up with any sustainability-related stimulus measures, and has generally dragged its heels.

I conclude by saying of course we support the very sensible changes in this bill, but we will continue to hold this Government to account for its lack of leadership in the area of the environment.

Hon STEVEN JOYCE (Minister of Transport) Link to this

I am taking a short call so I do not have enough time at this point to go into a great discussion with Carol Beaumont on the wider issues she raised, but four words cover them: cost-effective and productivity improvement. They are not words familiar to that member of the Labour Party, but I am sure we will have time on another day to discuss them.

I will respond to the Hon Damien O’Connor in relation to his request. He obviously was on holiday earlier in the year when the Government announced, when the expensive and administratively complex regional fuel taxes were being canned, that there would indeed be a partially compensatory increase in petrol taxes and road-user charges on 1 October this year. That was announced around 16 March. It is 1.5c a litre of new increase, alongside the 1.5c a litre previously scheduled by the previous Government, and that will be taking place this year. As at 1 October, 3c a litre has been scheduled, and the idea of getting this bill passed is to ensure that the notice period can be given. Thank you, Mr Chair.