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Road User Charges Amendment Bill — Second Reading


Road User Charges Amendment Bill

Second Reading

  • Debate resumed from 30 July.

ALLAN PEACHEY (National—Tāmaki) : I appreciate the opportunity to rise and speak in support of the Road User Charges Amendment Bill. My objective will be to try to bring back some structure to the debate. Members will recall that on Thursday, when the debate was interrupted, the Minister of Transport had clearly and concisely laid out for the House the provisions of the bill and its intentions. What then followed were Opposition and Green Party members who floundered around and talked on just about everything except the bill—although I give Mr O’Connor some credit for being somebody from Labour who finally acknowledged that the bill was good legislation. It is a just a shame that his fellow speakers spent so much time wandering all over the place—and they were members who sat on the Transport and Industrial Relations Committee and who should have been totally on top of their material.

The purpose of this bill is twofold. It makes two distinct amendments to the Road User Charges Act 1977. The first is to enable regulations to be made exempting light electric cars from road-user charges, and I want to focus on that for a moment. Firstly, I say to the House that this is one more example of the way that this National Government keeps its election promises. National made it very, very clear prior to coming into Government that it was its intention to do that. Maybe that is why Labour members spent so much time floundering around; they do not know a lot about keeping election promises, which is why they were thrown out on their ear in November last year.

If members look at the legislation they will see that there is a compelling logic to what the Government is proposing to do. Firstly, and I guess this is what the Greens choke on, private vehicles will continue to be the most significant mode of transport for New Zealanders for as far as we can see in the future. To deny that is to deny gravity. When we combine that with the major competitive advantage New Zealand has in the generation of renewable electricity, the logic is compelling. The intention is that the exemption will be granted for 4 years, coming into effect on 1 October 2009, and will apply until 2013, at which time it is estimated that there will about 300 electric cars in New Zealand’s vehicle fleet. The exemption is designed to encourage the use and development of a new technology and one that will, in coming years, have a significant future. The second provision—

Hon Annette King: National laughed about that policy last year—said it wouldn’t work!

ALLAN PEACHEY: I am sorry, the member will have to speak up; I am a long way away.

The second provision is to give 42 days’ notice of any increase in road-user charges for all diesel motor vehicle owners. That is fair and it is proper. Again, it is necessary to refer back to the behaviour of the previous Labour Government, which in 2008 showed that it did not have a clue about business and the effect of Government charging on business. In 2008 the Government increased the road-user charge rates without notice at a time that coincided with high fuel prices. Transport operators were unable to pass the increases on to customers straight away, and they publicly demonstrated against the increases. It was one more example of the insensitivity to the needs and best interests of business by that Labour Government and its Minister of Transport at the time, and of a lack of respect for fairness in the process. You see, for heavy motor vehicle operators the road-user charge represents a major cost of doing business. Changes in the road-user charge rates that cannot be passed on to consumers in a timely manner significantly decrease marginal profitability, and we cannot afford to have our businesses put into that position. The 42 days’ notification will improve businesses’ ability to operate by providing them with the opportunity to pass on the new costs that derive from any road-user charge increases.

This bill, the Road User Charges Amendment Bill, is a significant one that marks out a new direction for transport policy in this country. It will open up the way for further development of electric cars, and it will be fairer to heavy transport operators when it is necessary to increase road-user charges. I commend the bill to the House.

MICHAEL WOODHOUSE (National) : I am very happy to take a call in support of the Road User Charges Amendment Bill, but I am a bit bemused at the comments by members opposite about the manner in which the Transport and Industrial Relations Committee went about the consideration of this bill. I think Ms Fenton used the term “sketchily” when she referred to consideration of the bill. She wondered why the time for the report back was just one month, and why the Minister had not given any justification for why the report back was so quick. We also heard from Mr O’Connor, who was very articulate but slightly misinformed about the lack of consultation on the bill. Consultation was sought. It was sought from an organisation that represents 1.2 million road users, the Automobile Association. It was also sought from the Bus and Coach Association and the Road Transport Forum, both of which are very large diesel transport users. They represent the lion’s share of the owners of those vehicles.

Eight of the nine organisations that were asked to submit did so. Although the time frame was tight, there was certainly an opportunity for oral submissions if they were sought. Only one of those organisations sought one, and then it withdrew that decision. During the consideration of the bill not a single word came from the Opposition about a lack of consultation or unseemly haste. In fact, everybody seemed to think that the bill was very strong, tight, and appropriate for what was intended. I have no doubt that some of the amendments suggested during that consideration will be discussed during the Committee stage.

I am sure I am not the only member, and I am sure there are many members on this side of the House, who get the irony of the Labour Opposition complaining about a lack of consultation regarding road-user charges. That is really interesting, when one casts one’s mind back to 30 June last year when the then Minister of Transport, Mrs King, without any sort of notice, imposed road-user charge increases to take effect on the following day. As we know, that tapped into a very deep vein of disaffection.

Hon Annette King: What happened the year before?

MICHAEL WOODHOUSE: The year before the Minister undertook to give a month’s notice to the road transport lobby, and the road transport lobby said that she went back on that agreement. In fact, what the lobby really said was: “We understand. We don’t agree, but we understand why the Minister was worried about the significant cost impact of a lead-in, in the arbitrage that might go on.” I think there are some debatable points around that, given that the Crown has significant investments to earn interest from. The road-user industry cannot just simply go out and buy squillions of dollars worth of credits if they cannot pass that cost on. There are some cash-flow implications, but that was not the point. The point was that the Minister said she would consult, and the industry said that she did not.

Members know what we saw: rush-hour gridlock when the industry decided to vent its anger. What did the public say about that? They said “Good on you!”, because they shared the mushrooming feeling that the Labour Government had spent 9 years saying one thing and doing another. That is why the response seemed, to an out-of-touch Government, to be quite disproportionate to the issue. But it was important to the industry, and it quickly became important to the electorate.

But the solution was not that difficult, was it? All that was needed was a Minister who was prepared to listen, and for plenty of notice to be given, which is important to industries that need time to build those cost increases into their fees. That is something that Opposition members might not understand or care about, but it is very important to the issue. The select committee had the pleasure of the company of the legal-eagle eye of the member for Selwyn, Amy Adams. She has pointed out a potential ambiguity in the relevant clause that gives notice of the increase but limits the time for the use of the credits bought prior to the increase to 30 days. I understand that that will be fixed by a Supplementary Order Paper, but that is again, I think, a measure of the calibre of the present Minister, the Hon Steven Joyce, who is prepared to listen and build those nuances into the legislation. I congratulate the Minister on his fair, intelligent, and decisive action in bringing this bill to the House, and the Transport and Industrial Relations Committee on its speedy but, I think, thoughtful consideration.

I will touch on the second main purpose of the bill, which is to incentivise the purchase of light electric vehicles. In that regard we had the pleasure of the company of the Labour member Mr Barker, who provided a useful challenge to the officials around the definition of a light electric vehicle, the fact that it has to be plugged in, and whether that definition was sufficiently broad to account for new technologies that might come about—for example, solar power or the advancement of hybrid vehicles, which are not included in this bill. I am advised that that is because there are not, at present, any diesel hybrids. I think that Mr Barker has a point about that, but given that there is a sunset, if you like, on the exemption for light electric vehicles, I am sure that those new technologies can be built in later.

The other issue around light electric vehicles was raised by the Greens, and in particular by Jeanette Fitzsimons, at the select committee. On the one hand she was worried that there would be cost shifting from those who could afford light electric vehicles to those on lower incomes who had vehicles with much older technology. But at the same time we heard from Sue Kedgley in the debate on this bill that in fact probably no more than 30 vehicles would be purchased in that period. I do not think we can have it both ways. Either this is a problem for low-income people, or it will not really be taken up. Thirty vehicles, at that rate, would probably add the sum total of about 0.25c on everybody else’s diesel road-user charges.

But also I think it is important to reflect on what happened when we looked at something like liquor deregulation in the 1960s when it was brought in by, I think, that fine National member Ralph Hanan. When this House passed legislation enabling the licensing of restaurants in New Zealand, he thought it was so good that we might have as many as 50 licensed restaurants in New Zealand. Well, we probably have 50 licensed restaurants in the Octagon and a little bit around it. The point I am trying to make is that when we start small, often from those small beginnings we have a very speedy roll-out. I think that very soon instead of 30 electric vehicles we will see several hundred, then several thousand as the technology becomes more efficient and the cost of the technology comes down.

So in 2013 will we be debating the extension of this measure? Who knows whether we will be extending it to include new technologies, but I think this bill is a very good start, and I certainly commend it to the House.

Hon DARREN HUGHES (Labour) : I rise to speak on the second reading of the Road User Charges Amendment Bill. In opening, I note with interest the extraordinary praise the Minister of Transport is getting from National members this afternoon. When people are on their way up in politics, everyone wants to be their friend. I think that a lot of those National backbenchers are keen to be very close to the Minister of Transport; the potential for his continued promotion as a result of other activities within the Government seems to be causing an outbreak of good old sycophancy across the National benches. Those members are thinking that if the current Minister of Transport were to move to another, slightly more senior, portfolio, they want to be on his side. When listening to members opposite today talking about how talented the Minister is, one would have thought he created the motorcar.

Hon Trevor Mallard: They all want to be in his house!

Hon DARREN HUGHES: It is probably best that we do not explore that too far this afternoon.

The other interesting thing is being lectured by members opposite about changes to road-user charges, and particularly what happened in 2008. Many members on this side of the House recall the absolute outrage from National members at any change to road-user charges. That they had not changed for 18 years was one of those facts that got in the way of the story a wee bit for members opposite. They joined every protest around the country they could find to say how shameful it was that road-user charges were going up in order to reflect the costs on the roads of the trucking fleet. They were so outraged by that.

I have sat here all year, we have had a Budget and the Speech from the Throne, and now we have a bill that particularly and specifically addresses road-user charges, and the National Government is not reversing the charges that were so immoral, insensitive, and outrageous last year. At that period of time, the price of diesel had not headed north. As you will know, Mr Assistant Speaker, it has headed south quite significantly since the road-user charges were changed last year. It makes me wonder about the crocodile tears that were shed so blatantly by National Party members in election year. They thought there should be no additional costs to the roading industry or the trucking fleet by way of road-user charges. They thought all the costs should fall on to the petrol-using motorcars across the country. That is where the costs should have been. Those members have now come into office, and apparently those decisions taken by the previous Minister of Transport, Mrs King, were quite wise.

I am curious about whether the member opposite supports the current level of road-user charges. The Dunedin member was so verbose and articulate in his speech, and I am asking him now whether he believes that the current level of road-user charges is appropriate.

Michael Woodhouse: I’ll answer it in 30 days.

Hon DARREN HUGHES: Well, we do not quite have 30 days; we have about 15 minutes before we have to vote on this second reading. It is curious to me that National members now think that these road-user charges are at an acceptable level. National has not addressed the issue of fairness on road users who buy petrol and pay excise tax through that system.

We support the 42-day change that is coming in through this bill. It will be interesting to see what it is like in operation, because there is a chance of a lot of bureaucracy being involved in this. These are not so much bureaucrats at the front line, as at the pump line, but National does not seem too worried about that. It is clear that on some things, the cost does not really matter to National. There are some topics where anything goes, and this will have to be added to the list of some of the other topics.

The period for consultation on this bill is an issue for the Opposition. This bill went to the Transport and Industrial Relations Committee for consideration for only one hour, as Darien Fenton has told the House. There was not an opportunity for there to be—

Hon Annette King: Because Tony told them to!

Hon DARREN HUGHES: They might have been acting under advice, but we have to be very careful in terms of the Standing Orders on that particular matter.

There were only nine written submissions, only eight of them were considered by the select committee, and there were no hearings. It was also a truncated select committee process for an issue that last year National members said was so important that there had to be a chance to debate it. Members opposite may see irony in us raising this point, but we have listened to what they said last year. They won the election by saying those things. But when we scratch the surface we see that although the words from some of these new members are pretty flash, there is not a lot of depth to some of these points. There is not a lot of context to the history.

I finish by referring to the exemption that light electric vehicles will get in the legislation, because I think it is one of the more exciting parts of this short bill. It creates a real opportunity for New Zealand. It is good that there will be an exemption until 2013, but I am concerned about making sure that the Minister will show some leadership on driving that period, so we do not get to 2013 and find that New Zealand has not taken the opportunity to really develop a strong light electric vehicle fleet for New Zealand. There are a lot of exciting things happening around the world, particularly in Denmark where a huge spend of over US$135 million was announced this year that will be invested in an electric car-charging network throughout that country. I think this raises enormous chances for New Zealand to follow along that path. A lot of the costs with light electric vehicles are very low, therefore making them attractive to a country of our size. We need to have a bit of adventurousness and forward-thinking from the Government.

One of the concerns that we have had with all the transport statements made today is that the Minister does not seem to be transfixed with the contribution the transport sector inevitably makes to greenhouse gas emissions, and how we can try to use this powerful part of our economy—and, indeed, our society—to, rather than contributing to this problem, come up with new technologies as to ways of dealing with it. It seems to me that on this topic of light electric vehicles, creating incentives and creating opportunities for a proper industry to develop would be quite visionary for the Government.

My message to the Minister would be not to just turn up in 2013 and roll over this exemption, but to use the period to really get cracking on the ability of light electric motor vehicles to contribute to the New Zealand transport infrastructure and networks throughout our country. The Labour Party will be supporting the second reading of this bill.

  • Bill read a second time.