Energy Innovation (Electric Vehicles and Other Matters) Amendment Bill

I will indeed have many more questions, probably. I guess, from the outset, just to let the Minister know, I did not have the opportunity to sit on the Commerce Committee, so I am looking at the bill as returned from the select committee with fresh eyes—in particular, Part 1.

Part 1, effectively, allows EECA—the Energy Efficiency and Conservation Authority, which I will hereafter refer to as EECA—to be able to actually have levies it has not had the ability to have before, in order to go right across the whole spectrum. One of the spectrums that EECA can now bring levies down for is in the transport sector. Of course, that is in reference to the increasing role that we hope that electricity will be playing in our transport sector, with the increasing uptake in purchase and use of electric vehicles on a private-use basis but also, we hope, increasingly in the commercial field, and in the public transport field as well. I note that new section 129A, inserted into the Electricity Industry Act 2010 by clause 6 of this bill, gives EECA the ability—or, requires EECA, actually—to submit a request to the Minister, seeking an appropriation of public money for the following year or any change for an appropriation for the current year that relates to costs that are intended to be recovered by way of levies.

One of the questions I have for the Minister is—given that now one of the main features of this bill is that it allows EECA to gather levies from a range of sectors—is the Minister being referred to in that clause of the bill the Minister of Conservation, or is it the Minister of the particular sector from which the levy is being derived? From my perspective, what I am very interested to learn about is, if levies for electricity use are coming from the transport sector, is that reference about submitting a request to the Minister in that instance to the Minister of Transport or the Minister of Conservation? I very sincerely ask the Minister in the chair, who is shepherding the bill through this part of its process, whether they could provide some clarification to that.

I just note, Mr Chair, while I am on my feet, that I am not sure whether the advisers have made it here to be able to give advice on those matters.

The CHAIRPERSON (Hon Trevor Mallard): It is not a matter to be raised on the floor.

OK. I hope the Minister knows the answer without the advisers being available to give that. I would be very interested to learn about that.

One of the most controversial features in this bill—oh, I should have said at the outset that Labour supports the bill. We think it is inadequate to deal with the very exciting future that we have in front of us of renewable energy being so involved in sectors like transport, but we think it is at least a start, and that is why we are supporting these parts.

One of the very controversial parts of this bill is the ability for electric vehicles to be using bus lanes. I think it is Part 2 of this bill that allows that to happen. It is controversial because, of course, the whole idea of bus lanes is to promote the use of public transport, not private transport. That is the whole idea—that we are trying to increase the number of people traveling per vehicle. In Auckland, for example, they are called bus lanes but what they are, in fact, are T2, T3, and T4 lanes. What that means is that, yes, buses use those lanes, but also so do private vehicles that are transporting two, three, or four or more passengers. If we are trying to improve congestion in the horribly gridlocked city of Auckland, which that Government has allowed to—you know, it just sat back and watched while the gridlock has got ever worse in that city. If we are trying to unlock that gridlock, then why would we allow vehicles that may have just one passenger in them—may just have the driver in them—to actually continue to use those sorts of lanes?

That is the impact of the change in that part of this bill. Lanes that have been set aside in our most congested city, and in other cities, actually, which actually require people to have multiple passengers—in fact they are really designed for buses to use, to get people out of their one person per car habit and into buses so that they can expediate their journey by having a lane dedicated to them. Now, increasingly, the lanes are going to be clogged up, potentially by single-user vehicles, whether they are electric or not. I do not know, and I would be interested to hear from the Government what the policy setting is that it is trying to address by this. What is the policy setting? Because I have no evidence, internationally or in New Zealand, that suggests that opening these precious bus lanes up to single-user electric vehicles is somehow going to magically lift the number of electric vehicles that are purchased in this country.

All the international research and evidence says that the important thing about improving our use and uptake of electric vehicles is going to be about the purchase price—that is the single biggest driver of whether there will be a large uptake of electric vehicles or not. And yet this Government is not using the best tool at its disposal to address that issue. The Government, owning one of the largest fleets in the country, is not even requiring its own departments and ministries to purchase electric vehicles. That would be the single best way of having a mass purchase of electric vehicles. That would, by definition, bring the purchase price down, and that would be the thing that would increase the uptake of electric vehicles. But, no, this Government instead says: “Hang on, hang on. We’ve got congestion rising in all of our major cities, actually, but particularly Auckland. Let’s clog up the bus lanes more.”

As I understand—I am not from Auckland, but many Aucklanders tell me that, actually, the bus lanes are pretty heavily congested these days. That is a great thing, because that is about a great uptake of public transport. But why does this Government think that the best thing it can do is start to put electric vehicles—often cars driven by one person with no other passengers—in those lanes and make it even harder for our public transport system to be the most efficient it can be?

I throw that challenge out to the Government: please explain where the evidence is that that measure will significantly increase the uptake of electric vehicles in New Zealand, and where the evidence is that it will not instead have the possibly unintended but very obvious consequence of making the public transport system in Auckland and our other major cities less efficient. If that happens, if our public transport system becomes less efficient because the buses, and the people driving with two or three people per car, and the taxis, which can also use those routes—they are getting clogged up increasingly by people, one person a car, in an electric vehicle.

I think there is a common misunderstanding: people seem to equate electric vehicles with fixing all of the woes of our transport system. Well, there is no difference. The one thing it will do is it will reduce carbon emissions, and I applaud that. I absolutely applaud that. But there is no difference, in terms of congestion, road safety, or those other aspects of our transport system we should be concerned about, that an electric vehicle delivers over a petrol-powered or a diesel-powered vehicle. They take up the same amount of space on the road. They add to our congestion. There is no road safety improvement from introducing them.

So, I want to finish my contribution by putting the challenge out to the Government to please show us the policy advice that tells us that having electric vehicles move into bus lanes is the best thing that we can do for our transport system.

I wish to pick up more or less where my colleague Sue Moroney left off—on the matter of the use of special vehicle lanes by electric vehicles. I understand the policy intention here is to facilitate and support the use of electric vehicles by allowing them to use bus lanes and other special vehicle lanes. For instance, we have had experiments with lanes for vehicles that have two or more passengers in them.

What I am interested in, though, is not so much the policy intention behind it but the enforcement, because it seems to me that it is going to be very, very challenging to enforce the rule that only electric vehicles are allowed to use what would otherwise be lanes specifically for public transport. I understand that this was raised at the Commerce Committee and that the committee’s response was to insert new clause 17A. New clause 17A, “Section 145 amended (Evidence of approved vehicle surveillance equipment)”, states: “(1) In section 145(1), after ‘moving vehicle offence’, insert ‘or a special vehicle lane offence’. (2) In section 145(2), replace ‘in proceedings for a moving vehicle offence’ with ‘, in proceedings for a moving vehicle offence or a special vehicle lane offence,’.”

I understand that the consequence of that amendment is that it will be allowable for photographs to be taken of vehicles in special vehicle lanes and that those photographs will then be used to look at the licence plate and determine whether or not that vehicle is an electric vehicle. Fine—that is one way of enforcing the rule that only electric vehicles may use special vehicle lanes.

My question to the Minister, as a representative of the Government, is about the resources that the Government is going to put towards the administration of this. What resources will the Government put into the—quite considerable, I would imagine—amount of administration that is going to be required to go through all of those photographs, all of those vehicles, and look at those registration plates to determine whether or not the vehicle is an electric vehicle and to then follow up with those that are not electric vehicles and issue fines and what have you?

Is there something that is going to be done through technology? Is there going to be new technology or at least resources made available to the Ministry of Transport, or the police, or whoever is going to be responsible for enforcing this so they can do this through technology, or is it going to be a matter of somebody sitting at a desk and going through all the photographs—sitting at a computer and going through all the photographs? I hope it is not the latter. It is one thing for us to pass legislation in this House, set up the rules, and say that this will now be possible, but it is quite another thing entirely for that legislation to be properly enforced.

My concern is that the concerns raised by submitters at the select committee are absolutely correct—that vehicles that are not electric vehicles will be able to get into special vehicle lanes. It will not be immediately obvious, and so you then have that issue of bus lanes being clogged up not just with electric cars but actually, potentially, with non-electric conventional cars as well, and that the resources will not be there to properly enforce this rule. Then it will become known that you can get away with driving in a bus lane and—hey presto—all the bus lanes are clogged up and the public transport system is then put under extraordinary and unnecessary strain.

I think that the House, in considering this legislation, needs to know that the Government has considered that as an issue—the resourcing that will need to go in to making sure that section 145(1) and (2), as amended by—[Bell rung] Mr Chairman.

The CHAIRPERSON (Hon Trevor Mallard): If the member thinks he can sort of get a bit closer to the detail of the bill, that would be good. I will give him another try.

Thank you very much, Mr Chairman. How magnanimous of you! So exactly how does the Government intend to ensure that those changes made in new clause 17A will actually be enforced to make sure that this legislation actually operates correctly?

Another area that the select committee considered was the collection of the gas levy, and the select committee recommended amending clause 13 to replace rather than amend section 23 of the Energy (Fuels, Levies, and References) Act 1989 to place liability for the gas levy solely on where the gas is sold by a retailer. That, presumably, is to simplify the process of collecting that levy—collecting the levy at the point of sale—and I wonder what consultation has been done with the retailers who are going to be required to collect that gas levy. I wonder whether that is something that is going to be simple for them or whether there are going to be additional costs for them in collecting that levy. Obviously, we want the collection of levies to be as simple and straightforward as possible, but, again, because this is a change that has been made by the select committee, what consideration has been made by the Government to ensuring that that levy will work appropriately?

Those are the only two issues that I wanted to traverse in this contribution. I am sure there will be others, and I am sure colleagues are preparing to rise to take a call as well, but if the Minister were able to address those questions, particularly, really, the question about the special transport lanes, that would be most appreciated.

Since the Labour members are asking me to speak—all right. I actually think that we are in danger, of course, of having peace break out, which is a good thing. Electric vehicles are something—and I will address some of the concerns raised by the previous two speakers—I am quite keen on, and I think a lot of members of Parliament are. They are quite expensive at the moment, but there is a really simple way around that: manufacturers could start making cheaper cars, and some already are doing that. The thing is that cars—whether they are petrol-powered, diesel-powered, or electric-powered—come in all sorts of different models and different prices, and at the moment there is just not the large second-hand market in New Zealand that we are used to having and do have in terms of petrol and diesel.

💬 Sue Moroney: You could help with that.

Ms Moroney has just called out that we could solve that by having all the Government fleet in it. Well, possibly, except that there is another little issue, and that is the issue of how long batteries last in these cars and what is happening to those batteries at the end of it. I have had the privilege of going to see electric cars being made, and one particular make of car has batteries—multiple batteries—that actually form the chassis of the car, essentially. This works really well, until I said: “Well, what happens when they die?”. The answer was they are guaranteed for 10 years. I said “Well, in New Zealand 10 years does not make an old car. So what happens then?”, and the answer was: “Oh well, you could get a new one.” I said “How much is that?”, and it is US$25,000, and I said: “Well, that’s all a bit difficult.” Then the other issue I raised was about recycling and what happens with the environmental disposal of it.

So I think it is not everything, but I think the electric vehicle certainly does deal with some of the emissions issues that we have, and I think that it is actually the way of the future, and all these things are going to come to fruition. Of course, every carmaker would love us to be able to give all sorts of subsidies, and, of course, some countries do, but they are also countries that give subsidies for everything else, and we pretty much got rid of those. A cheeky question could be what happens when they are crushed, and, of course, there could be issues, particularly if those batteries are so much part of the chassis. But anyway, I think it is certainly very interesting.

In terms of things like the use of the bus lanes, or the special lanes, or whatever—that is why this bill does not actually say that they are going to be using them; it actually gives the ability of the New Zealand Transport Agency (NZTA) and also local authorities to decide which of these special lanes can be used for electric vehicles. The point is well made that not all of these special lanes are going to be suitable, either because of the vast numbers of buses going through them, or various other reasons, so that is going to be left up to the local authorities and the New Zealand Transport Agency to decide.

I think it is also quite good to deal with an issue around how else we can encourage them. The point was made that we could have a Government fleet of them. That is, obviously, not a part of this bill. I would also hasten to add that you want to be a bit careful with that—that you do not try to determine when, for instance, police cars would all be electric. That might be a weenie bit of a problem, given the time that it takes to charge cars at the moment, and even the super chargers that are available—one is available in Hamilton; another one, I think, is being opened up on the Napier-Taupo road—take about 35 minutes to charge. Otherwise, a vehicle could take 3 to 4 hours to charge, and you cannot just sit around saying you are going to wait for the police car to charge up. I think electric vehicles are going to become even more popular in New Zealand when we end up with them taking as little time to charge as it does for people to put petrol or diesel in their car. Then, I think, we are really talking. Personally, I think that they are the way of the future, and it is just a matter of making sure that we get enough volume coming through. So this is something to encourage that.

I have visited places like Norway and California, in particular, to look at some of the things that they are doing around electric vehicles, and both of those countries do have this provision around electric vehicles being able to use special lanes. They do consider that as something that encourages them. Norway, of course, puts big taxes on imports of cars generally, but they do not have those on electric vehicles. They suggested that we could not put big taxes on top of electric vehicles, so I had to point out that we do not actually put big taxes on top of vehicles that are imported into the country in the first place, which they thought was unusual. I said we got rid of it in the 1980s; we are a free-market country. The other issue that California suggested is that we might like to make all of our car manufacturers manufacture electric vehicles, which is what they have brought in, and I said that would be excellent too, except that we do not manufacture any cars, so that is not going to work, is it? So really, we are down to these particular lanes.

We also have something else that we do for electric vehicles and electric vehicles owners, and that is that they do not contribute to the cost of the roads, and that is something that people need to realise. When diesel users pay their road-user charges, they are paying towards the money that goes into the National Land Transport Fund. In addition to that, people who pay for petrol—we are actually paying for that as well, and that is part of the cost. About 90c of the litre cost of petrol actually goes towards our road transport; that pays not only for the roads themselves but also policing of the roads. A big chunk of that goes into road policing, and it also goes towards public transport as well. It helps to meet the costs of public transport, so, actually, people who pay for petrol and diesel are contributing on a user-pays basis, plus they are also contributing to public transport. Electric vehicle owners are actually being given an exemption, which is being carried over, so that they do not contribute to that. So they are getting quite a substantial drop in the costs that they would otherwise be paying for, and that is because the roads are not generally paid out of the consolidated fund—out of the general budget.

I think it is really important that we understand that we are giving certain subsidies, and I think what is going to happen is that as charging stations become more available, as people get their heads around the fact that they can actually buy second-hand electric vehicles from places like Japan, or that manufacturers start producing cars that do not have to be at the luxury end of the market all the time and start bringing in the competition that there is in the petrol and diesel markets, we are going to find more electric vehicles becoming more commonly seen and used in New Zealand. For many people, if you lived at home and you normally travelled in the car to the city, or dropped off kids and various other things that people do, an electric vehicle makes a lot of sense, particularly if you can charge up the vehicle at night and it is fully going in the morning. But there is still quite some time to go.

I can also tell the Committee, because I know that you will be interested—I hope that you will be interested—that I have seen electric trucks being put together, too, and I know that there is an electric bus being trialled at this stage in Wellington. I went to the place where this is being manufactured in San Francisco—by a New Zealander, I should say, Mr Ian Wright, who is one of the founders of Tesla, by the way; just a plug for New Zealanders in there. I think things like garbage trucks or rubbish trucks are being converted over for electric motors, and what this means, of course—it makes a lot of sense, because they are going out during the day or night and they are coming back again, back to the station. They are not going on long treks anywhere. It would also deal with issues like noise pollution, which I think is a really important thing, particularly in cities, as well as the emissions.

So it all seems to make sense, but I think we just need to learn, sometimes, to crawl before we can run. In this case, we are making steady changes and improvements, and I think we have made some very sensible improvements that do not unduly penalise other road users but do actually give some really great incentives. Living in Auckland, as I do, any chance to be able to use those special lanes would be much welcomed, and may well encourage me down the path, next time I come to buy a vehicle, to move into the electric space. Sitting behind all those other cars, I would just love to be able to whizz by and do so legally. Thank you.

I would just like to thank Minister Collins for waxing lyrical on the periphery of this bill. It was genuinely entertaining—

The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member now and say what I was planning to say if the debate continued, and that is that we have now had half a dozen speeches that have been really good third reading contributions. It would be good, from now on, if people who had lovely third reading contributions could save them for the next sitting day when this bill could be considered. If we just focus on the wee bit that is here, and that is the Committee stage, then we can get on with it. Thank you.

It would be my pleasure to focus on the specific parts of this legislation. I do look forward to the title debate, because, my goodness me, this is the most stupidly named piece of legislation I have seen in a long time.

I would like to draw the Minister’s attention to the secondary networks clause, clause 7 of the bill. I am jumping quite far ahead, but it is one of particular interest to me, and I speak in particular about new Subpart 2A in Part 5. I would like to ask the Minister about her understanding of the Electricity Industry Participation Code of 2010, and the lack of reference to that code in this legislation. It is, in my opinion, addressing some of the issues that this bill purports to address, so the Minister’s view on that would be of keen interest to myself—and only to myself, I imagine.

The other question—and I put it to the Minister with a genuine question mark, because New Zealand First does support this legislation—is the question on the current number of secondary electricity networks in New Zealand right now. What information or what data does the Government have? I put it to the Minister that there is a great big question mark from some of the industry itself on the number of secondary networks out there. Then, of course, the implication of that is if we do not know that number, how many consumers are being serviced by secondary networks? I put it to Minister Collins that that makes this a great opportunity for this feeble bit of legislation to not only address those issues but, moving forward, say what the Government could do with regard to improving reliability of supply and the outcomes for consumers—obviously, in particular, to the two types of secondary networks and the embedded networks within the infrastructure itself. I do hope the Chair will let me respond to some of the Minister’s comments.

This does not do enough, and there is an amount of ambiguity—forgive me, Mr Chair, I am not sure to which part specifically I am speaking—around the use of the bus lanes, for example, for those electric vehicles. It is ambiguous. The identification process is ambiguous, and some previous speakers have very fairly pointed out, Minister, that the lack of identification ability, despite having these wonderful digital cameras, could—and at this stage will—create havoc on the roads. I am particularly interested, as I said, in the secondary networks issue in the new Subpart 2A in clause 7. I do look forward to some clarification on that.

Actually, while I have got the time, Mr Chair, I will go back to Part 1, because I have got through that quicker than I thought. In new section 129A in Part 1, the new section in clause 6 there, it says: “The Energy Efficiency and Conservation Authority must, before submitting a request to the Minister …”. In reading Part 1 up until that point, there is no clarification whether that means the energy Minister, the Minister of Transport, the Minister of Conservation—so, you know, there is just a clarification issue there, probably, more than anything else. Actually, at this stage, that is all I have to ask of the Minister. Thank you very much.

I am very happy to take a call on this bill, and in doing so I would like to comment particularly on some of the changes made at the Commerce Committee and some of the very good submissions received in respect of electric vehicles. The focus there will be on amendments to section 145 of the Land Transport Act and inserting new section 37A into the Road User Charges Act. Before I get on to those, I just must say I have stuck in my mind a comment from Minister Collins about the potential for the refuse industry to shift to electric vehicles. I have got to say, whenever I think of that particular industry, I think of Tony Soprano. So I have this image of Tony Soprano and the New Jersey mafia leading the way towards a brighter, more sustainable future for us.

Moving on from that, can I reflect a little bit on a couple of these changes made at select committee. The first one is new section 37A, inserted into the Road User Charges Act. By and large these seem to be sensible changes, and they relate to giving an exemption to heavy vehicles from road-user charges.

💬 Sue Moroney: Electric vehicles.

That is right, that is right—heavy electric vehicles. I guess there are just a couple of things I want to comment on. The first is the change made in select committee to section 37A(1A), which I think just makes the fairly common-sense but useful addition that when the Minister is making this recommendation—that these vehicles may be exempted from road-user charges—that the Minister does need to show that they are satisfied that the purpose of that will support the uptake of those vehicles. Just wearing my Regulations Review Committee hat, I think it is really important, when we do hand these powers to Ministers through the legislation like this, particularly when it is a power that directly relates to the economic incentives within an industry—it is effectively an impost being applied to some people and not applied to others—that we do put some onus on Ministers to actually demonstrate that there is a tangible benefit that is linked to the purposes of the original Act. So I thought that that was a sensible and constitutionally appropriate addition for the select committee to make to that. Perhaps one question for the Minister would just be what her expectation might be of the kind of evidential basis that we might expect to see from a Minister in showing that they are satisfied with that. I think sometimes we can be a bit light and airy with these things. Again, there are real impacts on an industry and on businesses. It would be good to get some satisfaction from the Minister that when these decisions are made there is some evidence on the table to base them upon.

The second thing related to section 37A, and the changes made in select committee are that we have clarified, in respect of any orders made under this part of the bill—which will then be an Act, of course—that the period in which the exemption ends must be no later than 31 December 2025. It would just be good to hear from the Minister why exactly we have chosen that date. I can see the purpose in having a date built into the legislation. In subsection (2A)(b) we say that for any orders made subsequently, the date is 5 years after the date on which the period of exemption starts. What is the particular reasoning behind, firstly, 31 December 2025, and, latterly, that 5-year period? I think the reason it is important to get a bit of clarity around those is that the particular kinds of vehicles that we are talking about, heavy electric vehicles, are going to be costly investments for any kind of business—for the Sopranos of Mount Roskill, or whoever it is—to make. We are talking about $100,000-plus vehicles, easily, and I think it is really important that we are able to give some certainty to those people that the period of exemption has some sort of rational basis and has not just been plucked out of thin air. So if we could hear from the Minister about exactly why those dates are the ones that have been inserted at the select committee stage into this legislation, I think that would be really helpful in terms of our consideration of the bill.

Moving on to the changes to the Land Transport Act 1998, we have got some changes made there to section 145 of that Act under clause 17A of this bill. These relate, effectively, to the capacity of local authorities that may choose to go down the route of giving electric vehicles the right to use special purpose lanes, particularly bus lanes. This goes to their ability to actually be able to enforce that, and of course that is pretty important, because it is all very well for this Parliament to say that something should happen or say that local authorities should or can do something, but if they do not actually have any realistic capacity to enforce it, then that is pretty pointless. I do want to go on and just talk a little bit shortly about some of the submissions received about, possibly, the utility of this whole area of the bill that is allowing electric vehicles to use special purpose bus lanes.

In respect of the enforcement issue, we received a number of very good submissions. I thought particularly it is worth taking a moment to have a look at the Ministry of Transport submission in respect of what the implications might be for electric vehicles using special vehicle lanes. What the ministry identifies in its submissions is that there are a number of additional steps that are going to need to be gone through here. Of course, we are talking about the New Zealand Transport Agency (NZTA) here, and if I think about Auckland, for example, this means the bus lanes not on arterial roads like Dominion Road, but potentially on such roads as the northern expressway or, potentially—if we ever get it, and let us pray that we do—a bus lane on the Northern Busway. So, actually, the kinds of busways that the Ministry of Transport is talking about here in its submissions are amongst the most important ones to get this right on, because they are the ones that have huge capacity. Now more than half of the vehicles crossing the Auckland Harbour Bridge come across on the Northern Busway, so we have got to get this stuff right.

There was a question put by the select committee about the cost of installing cameras for enforcement of NZTA-controlled special vehicle lanes, and the ministry identified the costs involved for automatic enforcement solutions—costs that included cameras, infrastructure, communications, applications, installation, staffing, and back-office systems. So we are talking about a pretty significant outlay, and I do have a bit of a concern here that in putting these provisions in here we are not necessarily thinking through the next step—not only whether it is desirable but, if it is desirable, whether it is even particularly practical for the road-controlling authorities, be they NZTA or the local authorities, to go down this track.

The other question I did have for the Minister of Energy and Resources—and I am hoping that it is just an area that I am not too familiar with and she can answer it fairly simply—relates to clause 17, which replaces section 22AB(1)(r) and has been inserted by the select committee. In that text, it talks about—let me just read it out—“prescribing, subject to the marking of lanes on the roadway, that on any road any traffic lane may be used or any turning movement may be made only by vehicles of specified classes or vehicles carrying specified classes of loads or no fewer than a specified number of occupants:”. What I just want to confirm with the Minister in the chair is that the purpose of this bill is to ensure that electric vehicles can potentially gain access, if a local authority chooses to go down that road. But by defining it as “specified classes”, does that potentially open it up further for a local authority to make other exemptions? So if we could get some clarity from the Minister around that, that would be very helpful, thank you.

In coming to the end of my comments in this area, I do want to reflect on this whole area of the bill. It is probably the most contentious one. The Opposition is not opposing the bill on the basis of this, and that is probably because we are making it optional for local authorities, rather than compulsory. I suspect there would be some far firmer speeches and a greater degree of opposition if we had made these provisions compulsory. But we do wonder about the utility of them. We received some very, very good submissions. There is one here from the Bus and Coach Association, which notes that when Norway did go down the route of doing this—and Norway is put up as an example of why we should allow electric vehicles into bus lanes—it made congestion worse. It made congestion worse.

Probably the very best submission of all came from the Auckland Regional Public Health Service. It also noted that point, and it noted that in every single case it has looked at—and it looked at the case of Tāmaki Drive, where Auckland Council was pressured to make it a T2 or T3 lane. Every single time you go down this track of allowing additional vehicles into bus lanes, no matter what the other public policy objectives are, you make congestion worse, not only for people in the bus lanes but for everyone else. You actually defeat the fundamental purpose of those bus lanes. Of course, those bus lanes not only reduce congestion but make for a healthier and cleaner city as well. I do not think many local authorities are going to take up that option, for this reason. We support this bill, but it would be good to hear some answers from the Minister on those questions.

Tēnā koe, Mr Chair. It is my pleasure to take a call in this Committee stage debate on the Energy Innovation (Electric Vehicles and Other Matters) Amendment Bill. I just want to highlight that this bill aims to encourage energy innovation, so I commend those on the Commerce Committee who have heard submissions. I do have a question for the Minister in the chair—but a little preamble before I get there.

I am particularly interested in new section 22AB(1)(r), inserted by clause 17 in Part 3, as my colleague Michael Wood has previously quoted. It really is from the departmental disclosure statement about the empowerment through this piece of legislation of road-controlling authorities to enable electric vehicles as well as plug-in hybrid vehicles that operate on a combination of externally charged batteries or petrol or diesel motor to be able to use what are currently designated as lanes for trucks, buses, or cars that have multiple occupants. I think the aspiration within this bill is really about increasing the number of electric vehicles we have in New Zealand. Currently we have 2,000, and I know there is an aspiration that by 2021 there will be 64,000.

I have found it interesting, looking at the history of electric vehicles, and please bear with me. The first electric vehicle was created in 1832 by Scottish inventor Robert Anderson. It is really interesting, because in 1899 electric vehicles were seen as being the car of the future. Having had a look at the history in 1900, the electric automobile in its heyday—so, of 4,192 cars produced in the United States, 20 percent were powered by electricity. By 1920, however, there was a decline because of the viability of electric vehicles. The electric car’s downfall was attributed to a number of factors, including the desire for longer-distance vehicles, their lack of horsepower, and the readily available gasoline. In the 1970s we saw a re-emergence of electric vehicles because of soaring prices of oil—from the Arab oil embargo of 1973. Also then there was the emergence of environmental issues and the quest to look at and explore the viability of electric vehicles.

In February of 2009 the American Recovery and Reinvestment Act of 2009 allocated $2 billion for the development of electric vehicle batteries and related technologies. The Department of Energy added another $400 million to fund building the infrastructure necessary to support plug-in electric vehicles. Just to finish this contribution from this particular research, the challenges are seen as being price—as my colleague Sue Moroney has highlighted—limited battery life and travel range, and building charging stations and other infrastructure to support electric vehicles.

So I have seen that in New Zealand we have 20 charging stations—I may be wrong. There is an aspiration to have another 80 by December next year. That costs approximately $60,000 per charging station. So we need an investment of $4.8 million, and it seems the private sector is putting its hand up. I have seen a press release from BMW and ChargeNet. Their aspiration is to create a network from Kaitaia to Invercargill. We have two pure electric vehicles on sale in New Zealand. They are the BMW i3 and the Renault Zoe. These charging stations apparently can charge a vehicle to 80 percent in 20 minutes, for a cost of $14.

Where I am going with this question is that I am aware of a trial—and this is what I would like the Minister to answer—in March of this year for 2 weeks on five motorway on-ramps and off-ramps in Auckland. In Auckland we have registered 1,033 electric vehicles, and so before, I guess, implementing this piece of legislation we wanted to actually look at whether or not the intention of that new section 22AB(1)(r), inserted by clause 17 in Part 3, was going to be utilised by those who own electric vehicles. From what I have been able to ascertain, Auckland Transport also said we need an information campaign, because people need to know that the vehicles that are using those special lanes for trucks, buses, and cars with multiple occupants need some sort of sticker, I think, so that the public becomes aware of why these cars are cruising down in lanes that actually have been reserved for those purposes. The New Zealand Transport Agency was to survey the owners of electric vehicles, and I am really interested in the results. I am hoping that the Minister has those—that was in March this year.

It was quite interesting to note that organisations like Mercury Energy have 42 electric cars—these are of those 1,033 registered electric vehicles in Auckland—Vector has 12, and Air New Zealand has 75, and it seemed that Air New Zealand was the one who was going to maximise that 2-week trial, and so I am very interested to know. So if the Minister could provide that information I think it would justify the inclusion of this particular amendment to the Land Transport Act of 1998 in this particular piece of legislation.

Just finally, I would like to do a bit of a shout-out to a man called Toa Greening, who is a resident of Manurewa. Toa came to see me in 2014 because he had this aspiration to bring a Tango model MINI electric vehicle, which at that time was priced at $230,000, but if somebody—I think he was hoping it would be Wellington City Council—was going to order 2,000 of these electric vehicles he could have got the price down to $29,000. I know Toa has been very active in this area, and, in fact, in 2015 Auckland Transport put out a tender for a partner operator for a citywide car-sharing scheme that utilised plug-in electric vehicles. What they were wanting to do was to, obviously, increase the demand of traffic on our roads, and increase the uptake of those who were willing to buy electric vehicles. They initially wanted a fleet of 200 to 300 cars. They envisaged 350 charging stations across the city. They had nine proposals. But I believe—and maybe the Minister can answer this question—that tender was never filled.

Auckland Transport has been active in this space for a few years. I think it is working with Cityhop to increase the number of electric vehicle users, which is a good thing. The reality of the situation that we are facing into the future is that we cannot be reliant on fossil fuels, so any work that we can do to encourage the purchasing of electric vehicles—I personally do not have an electric vehicle. I have had a look at what a Mitsubishi Outlander would cost and I think it is about 80 grand. So maybe when I am looking at updating my car, I will look at those options.

In some ways I do think that that provision in the legislation, new section 22AB(1)(r), inserted by clause 17 in Part 3, will encourage people to purchase electric vehicles, particularly if you live in South Auckland and are trying to get into the Auckland CBD—if I can use a car lane that only trucks, buses, and those with high-occupancy vehicles can use, it will be an incentive for me.

But I am just wanting to be reassured, as the House is, Minister, from the research and the evidence that it has actually been successful—that particular trial that I highlighted. If there is any information, I think it will be wonderful if you shared that with the House tonight, because not only am I interested and my colleagues here in the House but I think anybody listening to this debate will want to make sure that the provisions in this legislation and the changes to legislation are actually being done for reasons that have some evidence behind them—we are not just window dressing, but, actually, we do have some compelling evidence to say that there is some efficacy in these proposals, given that it is one of the specific changes that this piece of legislation will empower. Kia ora.

Before I seek the call, I would like to seek leave for the vote on Part 3 to be taken separately.

Leave is sought for the question on Part 3 to be taken as a separate vote. The Green Party is seeking leave to do that. Is there any objection to that course of action? There is no objection. That will happen when we come to the vote.

I would like to rise to support Parts 1, 2, and 4 of this bill but note the Green Party’s opposition to Part 3, which I am glad the Committee can take a separate vote on.

This legislation is called the Energy Innovation (Electric Vehicles and Other Matters) Amendment Bill. The other matters are pretty uncontroversial: we support the idea that the Energy Efficiency and Conservation Authority (EECA) should be able to access other energy-related levies. It was perhaps not the best way to structure it—that it specifically looked at only electricity levies. It makes sense to wrap it all in one organisation so we have a true leadership position in the New Zealand economy, working with businesses no matter what the energy is. Obviously, if you are looking at electrons or kilowatt hours of electricity, you do not discern where it comes from: gas, renewables, etc. It makes sense; equally so when it comes to the gas levy and when it comes to the “secondary networks” definition, which is contained in those Parts 1, 2, and 4.

It is the electric vehicles part that the Green Party does have considerable opposition to. We heard, from numerous submitters to the Commerce Committee, concerns that the encouraging or allowing of electric vehicles in bus lanes could be detrimental both to bus lanes and also to wider public transport outcomes. To summarise, basically, many of our bus lanes are full up with buses, and if you put electric vehicles in them as well, particularly as buses pull in and pull out as they drop off passengers—the risk is that if you add more vehicles to it, you are just simply going to clog up the bus lane and it is going to be less effective at doing its primary purpose, which is moving a large number of passengers on the buses around our towns and cities.

The big debate that we also heard in the select committee was around the enforcement of the bus lanes. This was quite a wide debate that we heard, and we canvassed some evidence internationally on how you can signal whether a car is, in fact, an electric vehicle or not. Other countries have different coloured licence plates, different stickers, or other forms of identification. The concern we had is that there would be a bit of a dilemma facing councils that would want to minimise non-electric vehicles using bus lanes if they, through a by-law, made the bus lanes available to electric vehicles. It is twofold. We do not want to see those massive congestion issues, but, secondly, we also do not want people free-riding without an electric vehicle, taking advantage of the, I guess you could consider it, perk or advantage. The problem is that people could get quite upset if they saw the other vehicle in front of them and they knew it was not an electric vehicle or could not easily identify that it was an electric vehicle, and you could get road rage.

I gave a personal example. I live quite close to a very high-traffic bus lane in Wellington, and the council often has cameras erected out the front to try to photograph those cars taking advantage of or abusing the bus lane. But what we heard from the officials is that it is going to be at the councils’ expense. If you go to any local government event anywhere up and down the country, a key message you hear is that this Parliament gives new obligations, new costs, to local government without the ability to actually raise extra revenue. I think it is a quite legitimate concern they have, and here we are yet again bringing in another obligation. There is not an easy way to stop that free-riding or that dilemma if you do not have those identifications. That is why we have got a concern.

If you were going to be promoting electric vehicles, which is, ostensibly, the objective of the energy innovation bill, there are a range of other measures you would look at. What we heard in the select committee was that putting electric vehicles in the bus lanes might have a marginal difference, but it is very much on the margins; it is not the most effective thing you could do if you truly wanted to drive a step change in the adoption of electric vehicles. It has been fantastic in New Zealand to see their growth from about 700, maybe 3, 4, 5 years ago, to more than 3,000, as we heard recently. That is fantastic, but that is a drop in the bucket. I believe there are around 70,000 new vehicle imports we have in some months—record numbers of vehicle imports and a drop in the bucket when you look at what other developed nations are seeing with the growth of electric vehicles.

I was in California recently, where the state does not offer just access to high-occupancy vehicle lanes—now, remember, these are very different to bus lanes, which often only go for a small amount of time, except for the high-occupancy vehicle lanes. In California, there are two dedicated lanes for multiple-passenger vehicles. There you also get a $10,000 state credit, a $5,000 federal tax credit, huge amounts of cash investment, not just access to high-occupancy vehicle lanes, and they have got around 3 to 5 percent, if my memory serves me correctly. In the Netherlands, I understand it is—

💬 Hon Member: 3.

—3 percent, the Minister informs me. In the Netherlands, we see a penetration of around 17 percent. In fact, Germany’s and the Netherlands’ Parliaments are having debates about whether, in fact, petrol- and combustion-driven engines should be prohibited in the coming decade, which is phenomenal.

So other countries are putting much more significant promotion measures and also more significant sticks—for want of a better word—in terms of forward planning and signalling an end to legal sales of combustion motors, but also much higher petrol and fuel excise taxes and other forms of feebate measures. So when you look around the world, there is a whole bunch of other initiatives, from infrastructure, electric charging, to tax credits, to sticks as well. In New Zealand we limit it, basically, to elimination from the road-user charge and, possibly, if councils enact it through a by-law, access to the bus lanes.

My fear is that because we are loading it all on to councils, they are going to face pressure from electric-vehicle owners to open up the bus lanes and then the councils are also going to be required to pay for all the enforcement costs. We heard, in the committee, that we could be talking in the order of tens of thousands of dollars when you look at the camera technology, the staff costs from people, literally, sitting on the side of the road—in 2017; the 21st century—looking at the vehicles and watching. You are going to have to take photographs, to scan their licence plate number through the national database because there is no sticker, there is no coloured licence plate, there is no easy identifier. So it is going to be quite difficult.

The Green Party absolutely supports the intent of promoting electric vehicles. We have launched a number of policies over a number of years, from investing in modern State high infrastructure, from rolling out a network of fast-charging stations, from fringe benefit tax changes, which are going to drive that corporate procurement, which is going to drive that second-hand car market—probably the most effective thing this Parliament could be doing if it wanted to truly drive a step change—through to a cash rebate of $1,000 etc. So, while we are talking about energy innovation, we should be talking about the truly innovative steps we could be making, not this, and that is why we are voting against Part 3.

When you look at the other parts—the gas levies, the Energy (Fuels, Levies, and References) Act amendment changes, and the “secondary networks” definition—this is not innovative. We heard that again in the committee. There were other steps this Parliament could be taking to adopt that, at a time of huge disruption and change, when you look at the global energy industry. Recently, I was fortunate enough to meet with an official from New York, where their Reforming the Energy Vision, the REV strategy, which they are rolling out in that state, is truly bringing transformative change to their energy sector. By prioritising energy efficiency and conservation and smart technologies, they are actively reducing greenhouse gas emissions. I will give you Seattle as another example, where I have met with officials. At a time when they are the fastest-growing city in the US, they have, in fact, seen an energy consumption decline of around 13 percent, because their state and federal policies have driven their utilities to invest in energy efficiency and conservation measures.

When I recently launched a paper about how getting to 100 percent renewables could look, from some consultants from the Rocky Mountain Institute, what they found is that energy-efficiency measures cost in the order of 0.6c per kilowatt hour. Compare that, a negawatt—using less electricity—with 8c or more per kilowatt hour for new generation. And that is very cheap comparatively, internationally, for new hydro and new wind generation—an order of magnitude cheaper for new efficiency and conservation.

These are the measures we should be debating instead of just the definition of secondary networks as they relate to, say, an apartment building. We should be having the conversation about how we can get solar panels on apartments, how we can get that apartment car-park using electric vehicles to feed in and discharge into the local electricity grid and to access cheaper hydroelectricity, which is often flowing at night, at close to negative prices, or charging during the day from solar panels on top of the apartment or a nearby business. If we could do that, if we could harness a distributed battery network through a network of, literally, hundreds of thousands of electric vehicles, we could be saving consumers money with the peak electricity costs, which drives the average wholesale cost, which flows through to consumers. We could be reducing the need for coal and oil to be burnt at peak times. It is a fantastic opportunity for New Zealand.

So, look, we welcome Parts 1, 2, and 4 of this legislation, but we will be voting against Part 3 because we fear it is going to damage public transport in New Zealand, and if we looked across the range of initiatives this Parliament could be debating to truly encourage electric vehicles, this is not the place you would look.

There are a couple of things I want to say about this bill, but if you give me 30 seconds—we have a brand that we take to the world. It is clean, green, “100% Pure”. It is about innovation in this space that allows us to make a difference, and I would just like to reiterate what Gareth Hughes and a number of my colleagues have said: we need to be innovative in this space if we really want to be seen to live the brand that is worth a substantial amount of money to our economy.

I just think we could have been a whole lot more innovative in this space, and I think we actually need to be, not just from a pure “let’s save the world” approach. I think we actually need to be innovative in this space because our brand is worth—well, I know it was valued 12 years ago at $20 billion a year, and if we are not seen as leaders in this, then it slowly erodes our global leadership position in anything to do with clean, green, “100% Pure”.

The irony is that a former energy Minister, when he announced this sort of stuff, turned up in a huge big ministerial BMW that drinks diesel faster than my fire engine, announced—[Interruption] that is really fast, I tell you—an energy-saving method, and then jumped back in his BMW and raced off again. I just think that the Government should be really walking the walk on this and not just talking the talk.

But what I would like to talk about, first and foremost—or secondly—is Part 2. Now, we have heard a lot about electric vehicles—how it will work, how it will not work—the pitfalls of this bill, the advantages and disadvantages, and what we could have done better, but there has been something snuck in here that I think we need to just tease out a little bit more, and this is about the applying of a levy and how this is going to work. Part 2 actually amends the Energy (Fuels, Levies, and References) Act 1989, and it is about charging a levy for the Energy Efficiency and Conservation Authority (EECA).

Now, the amendments, we are told, are necessary so that EECA can use its levy funding for a full range of activities. At the moment, the EECA levy comes off the electricity users, but what it is seeking to do is spread the levy across electricity, transport fuels, and gas consumers. At the moment, the total amount EECA can levy is set by Cabinet, and it is currently at $17.5 million. The allocation of the levy will be spread across three sources, and that will be determined by the Minister, based on advice from EECA.

I just would not mind knowing the efficacy of this advice, or what sort of advice it is going to put in front of the Minister. I mean, this is a pretty big call. We all know EECA from the ads that it runs on television, and, by and large, it does a good job, I do believe. But there are some little fishhooks in here that I think we need to tease out.

I am looking at new subsection (2A), inserted by clause 11—this is an amendment to section 14—and it says: “Despite subsections (1) and (2),”—this is from the primary piece of legislation—“levies recovered under sections 23 and 24 may be applied for the purpose of meeting a portion of the costs …”. Now, whenever I see in a bill “may” or “must”, you know there is a little bit of ambiguity. “Must” is an absolute—it has to happen; OK? There is no wiggle room there; it absolutely has to happen. When I see the word “may”, I know there is a little bit of ambiguity, and it always raises questions. Under what circumstances will these levies be applied for the purpose of meeting a portion of those costs?

Unfortunately, the Minister responsible for this piece of legislation has left. I am unsure whether the Minister in the chair at the moment, Scott Simpson, is over this bill. I suspect he is not, and I do not blame him, because it is not his portfolio area. However, it would be good to know under what circumstances these levies will be applied. When we talk about meeting a portion of the costs, again, I know that sometimes you have got to leave a little bit of wiggle room there, but what portion of the costs are we talking about? There is sufficient ambiguity in this clause to actually raise some questions that it would be good to have the answers to.

I go down to new section 14A, inserted by clause 12, and it talks about the “Energy Efficiency and Conservation Authority”—EECA—“consultation about request for appropriation”. What this talks about is that before EECA submits a request to the Minister about an appropriation of money, it must consult. It must consult with the people who are liable to pay the levy, and it must consult with any other representatives, or any other persons, who EECA believes are significantly affected by the levy. Then what EECA must do, when the request is submitted, is “report to the Minister on the outcome of that consultation.” I suppose the question this brings up is: what will the level of consultation be? The other question, which I think it is very relevant, is: will the Minister take account of this consultation?

The reason I ask this is that what EECA is required to do here is consult with those whom it is going to take money off, and my initial impression is if an agency or a body or a Minister or a Government department is going to take money off a sector, then I suspect the level of consultation will go something like this: “Can we have more money?”, “No, go away.”, “Thank you very much.” Now, I am being a little bit glib here—of course I am—but what I am saying is that an industry body, or an industry advocacy group, like EECA, has to build an incredibly powerful business case before key players are going to accept a body taking money from them to be used to drive efficiency in an area where they make a whole lot of money, if you get my point here.

So what I would really like to know—and, again, it is difficult with the Minister in the chair—is whether this is just consultation because we say they must consult. If so, what is the Minister going to do with this consultation? If, in fact, the result of the consultation is that we think that EECA has enough money, we think it does not need any more to deliver on its purpose, and we do not want to give it any more money, is the Minister then going to say: “Well, I’ve heard that consultation, it’s all very well—we’re now going to charge you a little bit more money.” This is the concern I always have when I hear about consultation with industry.

I have no doubt that EECA will approach the consultation in a proactive way. I mean, it would be mad not to. I would hate to cast aspersions on EECA’s credibility, because I think it does a good job—I just want to put that on the table—but consulting with people you want to take money off is always a little bit fraught with difficulty, and it does actually bring up conflicts of interest, I suppose.

I would also like to talk about gas levies. This was something that was snuck in there as well. What has happened at the moment is that gas levies are charged, and what we were told by officials is that the ability to collect these levies is difficult. They believe there has been under-collection by a significant amount, but the portion of levies compared with revenue is actually very, very small. But it is difficult. So what they have said is: “Look, there’s an easier way to collect this levy.”, and it just means that the retailers will collect it, and this bill sets out how they are going to do it.

But we brought up, at the select committee, a concern we had, and that is whenever Parliament says to an industry or a group of consumers or companies: “We are mandating you or we are requiring you to collect a levy.”, often a sector can use that as an excuse to increase the cost of that good or service to the consumer. What we did hear from officials is that the amount of the increase in the levy to the consumer is actually minuscule. I think we are talking about $2 million over the sector. Correct me if I am wrong, but I think it is about $2 million over the sector. So it is not much at all—for every consumer it is a fraction.

What we will be very concerned about—no, no; “concerned” is the wrong word. What we expressed concern about and what we have said we will keep a very close eye on is whether the industry actually uses this as an excuse to increase the amount that it charges to the consumer for its gas. What we heard is there is no reason why they would do that, because the amount is so little that it just would make no difference to the average bill—0.001 percent or something. If the gas companies do increase the price to the consumer, then we are going to take a good hard look at that and we are going to make sure that they do not.

But the interesting thing about this—and I am a little bit confused about this, and I should not be, because I was on the committee—is that, as section 23(3), in clause 13, says: “the levy is not payable on, and a return is not required to include,—(a) piped gas of a prescribed type; or (b) piped gas that is to be used for a prescribed purpose.” I am not too sure what a “prescribed type” is, or whether what will happen is that there will be something in the schedule that will outline what a prescribed type is or what a prescribed purpose is so in fact the levies do not have to be collected. Unfortunately, I did not get the main piece of legislation, so perhaps it is in there. But it is always a little bit difficult.

The other thing, also, is clause 14, which amends section 33. New subsection (1A) talks about regulations made under subsection (1). What this is talking about is formulas for calculating or methods of calculating the levy rates. I know I have got a couple of seconds, and I am probably going to run out of time.

I would also like to touch on the points made by the honourable member Stuart Nash regarding the amendments to consultations, which is clauses 3 to 6 and clauses 8 to 15. I guess it has always been a vexed issue as to what happens with levies, and the ownership and governance when those levies are collected, and how they are actually spent. I think we share some of the concerns around the adequate and appropriate level of consultation, if it is just token.

I note that in New Zealand we do not have the strong energy community advocacy groups that are so prominent overseas. In other countries they have very professional organisations that can have a statutory or even a semi-judicial function to advocate for their consumers, which we do not have in New Zealand. I would note it is publicly available that there were four submitters principally opposed to the use of levies to fund the activity of the Energy Efficiency and Conservation Authority. (EECA): the Major Gas Users Group, Business New Zealand, the Major Electricity Users’ Group, and the Motor Industry Association.

I guess our fear is that these professional and coordinated and organised groups could present a predominant or an overwhelming response in the consultation. We cannot just leave it up to Grey Power to advocate for energy consumers in New Zealand, I guess is my main point.

I would also point out to those organisations that in many respects they are the beneficiaries of the work of EECA. Every consumer, big or small, business or residential, in New Zealand benefits when we invest in energy efficiency and conservation. Perhaps part of the problem in New Zealand—and when you look at a recent OECD report, we have in fact got one of the lowest energy intensity ratings in the entire developed world because we use energy less efficiently than most other countries.

It might not sound like much, but effectively we are burning and throwing away billions of dollars, if you listen to the former chief executive officer, Mike Underhill, in terms of energy that we are using or burning that we do not have to. What I would prefer is if we had a true public conversation around investing in EECA.

I note the officials—in response to some of those groups that were opposed even to the idea of a levy to fund some of EECA’s activities. But it only funds less than half of EECA’s work. I think if these businesses were looking at some of their international peers, they would be more actively engaged in supporting the work of EECA and seeing the levy not as a cost to their bottom line but as an investment that is benefiting their bottom line. With such low energy intensity, New Zealand businesses are less competitive vis-à-vis other countries, because we are spending more on getting oil to New Zealand, burning oil less efficiently, paying more for electricity than we have to, and investing in equipment and plant and product that are less efficient than overseas competitors. We cannot keep competing if this is going to be the case. So I urge those organisations to get behind it.

This is a huge missed opportunity, over previous years, but also a huge low-hanging fruit for New Zealand. I have got a true vision, that we could be investing in energy, efficiency, and conservation—not seeing it as a “nice-to-have” or a marginal benefit or a side occupation. This should be at the heart of New Zealand’s energy policy, because this is going to target the true energy poverty issues that we see in New Zealand.

When we invest only in business-targeted approaches, through the bulk of EECA’s work, I think it is quite legitimate, as Stuart Nash questioned, as to who is actually going to be dominating those consultations. What we have seen in recent years is EECA moving away from the large-scale huge benefit programmes—for example, the Warm Up New Zealand scheme, which insulated 300,000 homes and did not have any of the problems that the Australian energy efficiency scheme had with its insulation roll-out.

Move away from these mass, huge benefit programmes towards more business-targeted approaches we see—for example, investing in boilers, which is good work but this has become the bulk of EECA’s work. What I would like to see is the ability for this consultation to be true and appropriate by involving consumers. Despite having insulated 300,000 homes, we know there are more than, say, 700,000 substandard homes. In New Zealand we have got 40,000 trips being made by kids to hospital every year as a result of cold, damp housing.

The CHAIRPERSON (Lindsay Tisch): Come back—come back.

So when you are looking at clauses 3 to 8, it is important that the consultation is adopted appropriately.

I move, That the question be now put.

Thank you, Mr Chair, because I did have a little bit more to say on the gas levies. The thing about this is that I know we are going to come to the title and commencement—no; we are taking it as one question, are we not? This is actually coming into play on 1 July 2017, so we are not very far, but I am assuming it will receive the Royal assent before then.

But my point is that there is actually a change in the way that these levies are collected. If we have a look at new section 23, in clause 13, it talks about gas levies. What is required is that the retailers have to report to the secretary on a quarterly basis. This has been well signalled, and I think the officials have consulted with the retailers and so they knew this was coming—of that there is no doubt. But we have seen, in a number of bills, the implementation period pushed out a little bit to allow certain industries or companies or organisations to actually get their systems in order, which would allow them to report in a timely manner—to change their systems.

What I am a little unsure of is—I am making an assumption here that the gas retailers, because this has changed, now have all the systems set up that will actually allow them to report in a way that is meaningful. As mentioned, the reason why we have made this change is simply that the ability to collect the levy under the old scheme was non-existent. It was very difficult to police. There was absolutely no suggestion of dishonesty or fraud or anything like that; it was just that it was so difficult.

We believe that the officials did not have the men and women on the ground to allow them to undertake this. The companies found it just too hard. So we have actually made it a lot easier. But we have got to make sure that we do not transfer a problem we did have, which was that it was too difficult, to the organisations that we are mandating to collect this. So I just hope that they have got the systems in place that will allow them to really hit the ground running. I must admit, this is one of the few bills where I have read about a required change in system or software, where we have said that from the day it receives the Royal assent or from 1 July this industry must comply with something that I am assuming is going to take a database or a software change.

The other thing I would like to talk about is the regulations—this is clause 14 now, on page 6—amending the prescribing levy rates. The thing that, again, concerns me a little bit, and I think we are seeing a little bit of a move to this, is “Regulations made under subsection (1) may”—this is clause 14(1A)—“(a) specify the periods for which the amounts or rates of the levies apply; and (b) include, in any prescribed method of calculating or ascertaining amounts or rates of the levies, provisions relating to any shortfall in recovering or over-recovery …”.

So, I suppose my question is again—under what conditions or circumstances would the regulations change the periods for which amounts or rates of the levies apply? What we are actually saying here is that under regulation you can change the time period, so it does not have to come back through Parliament. You can also change under regulation the amount that the levy is, which does, in fact, give the Minister, I believe, quite a bit of power. I sort of wonder, when I see these things, whether, in fact, it provides a level of uncertainty in the market place.

Again, I am not suggesting that a Minister would do this without a level of consultation, without a very good reason, or certainly without mandating the Energy Efficiency and Conservation Authority to go out, or officials to go out, and consult. But what it is saying here is that, under regulations, a Minister can actually change the amount of the levy.

Now, that gives the Minister a little bit of power and I, again—unfortunately the Minister responsible for this bill, Judith Collins, is not in the chair. I am not too sure whether the Minister there at the moment, Scott Simpson—I know he is busy reading his phone, and there is no doubt important stuff on there. But I am just wondering whether he has any idea, or any thoughts, or even within his current portfolios—under what conditions he may decide to change that levy through regulation. I just think it is good practice if you are changing something as big as this—and there certainly is a levy, which is a form of taxation, let us be honest. If that sort of stuff comes through the House, through amendments and legislation, it just provides a level of transparency that I think is important when you are changing a levy, a tax, or the terms and conditions under which that levy or tax is applied.

But apart from that, we support the bill. There are some good things here. It could have been more innovative but—let us leave it at that. Thank you very much.