Road User Charges Amendment Bill

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.

💬 David Bennett: Annette King was it?

Yes, I think it was Annette King—the former Minister of everything and master of nothing. That decision led to the roads being blocked and traffic being at a standstill throughout the motu. Frustrated motorists were piled up right across the highway networks of New Zealand as drivers of truck after truck, instead of being out delivering the people’s goods and moving parcels along the way, were so incensed that they were voting with their feet, so to speak, although in this case they were voting with their trucks. In fact, they gridlocked this city of ours, Wellington, as they drove on Parliament. The sheer disappointment to them was that out of the blue they got a significant increase on their road-user charge with no notice, and for a whole month they had to carry that increased fixed cost to their business—

💬 Jo Goodhew: Don’t you mean out of the red?

Yes, exactly—not out of the blue; out of the red, coming from the red Government of the day, the money-grabbers, who just slapped another fine and an impost on businesses and said they had to pay it. Businesses had no chance to be able to recover those costs imposed by the nanny State Government of the day.

As a result, the National Government has reacted to make sure that if road-user charge increases are justified, then they should be appropriately announced, in terms of forewarning, so that adjustments can be made, particularly for the owner-drivers who are mostly affected by these sorts of imposts that the Government can place on them. They will then have a chance to adjust their business model and be able to continue in a profitable way, contributing to the economy of New Zealand in the way they do, moving the traffic along the highways, getting the containers to the ships and to KiwiRail, and being part of the intermodal transport line that Darren Hughes raised in his rather poor contribution on Part 1. His speech was very much below his normal high standard. In fact, none of the previous speakers has risen to the dizzy heights of his or her normal standard. That has been most disappointing. It was interesting in Darren’s contribution that he waffled on about an intermodal transport line, which would have been more appropriately dealt with in this part of the debate.

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?

💬 Hon Darren Hughes: What was that about?

It was about adult and community education funding. Where was the Minister for Tertiary Education? She was inside. A couple of weeks ago there was another protest outside Parliament, which was about the Government ditching pay and employment equity. There will be another protest, about school support staff who have been offered a zero percent pay rise, on Friday this week in Auckland.

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.

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—

💬 Hon Steven Joyce: We’ve told you.

The Minister can take a call. He knows full well that the cost of roading and the lack of investment in infrastructure under the previous National Government through the 1990s means that we have to invest more money. Road-user charges are a big source of income, and it is inevitable that he will increase the road-user charges in this country. What Part 2 does is to say that when an increase is announced, those people who rush out and buy up road-user charges will have only 42 days in which to use them. I think it is a fair solution, and it is not very often that I acknowledge in this Chamber that anything put in place by this Government is fair.

But I go back to Part 1, as the carrot part of this legislation. The incentive to get people into electric vehicles is rather pathetic, rather minimal. The question I ask in relation to Part 2 is why we have not got the same exemption in the same provisions for light diesel vehicles as we have seen in Part 1—that is, an exemption for light diesel vehicles with the objective being to reduce emissions up and down this country in the future. The Government omitted to include them. It did not take the opportunity to make a significant change, and it has left the owners of light vehicles, which are those under 3.5 tonnes, to still pay road-user charges when, arguably, they should be incentivised, even if it is just for smaller cars, as the Minister knows.

Part 2 is the good part of the legislation. Part 1, as I have stated before, is rather pathetic and rather small. It is not even a germ of a good idea. It is a token gesture towards climate change issues in this country from this Government.

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.

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.

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.

The question was put that the amendment set out on Supplementary Order Paper 33 in the name of the Hon Steven Joyce to Part 2 be agreed to.

Amendment agreed to.

Part 2 as amended agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 agreed to.

Bill to be reported with amendment presently.

House resumed.