Land Transport (Clean Vehicles) Amendment Bill

on behalf of the Minister of Transport: I present a legislative statement on the Land Transport (Clean Vehicles) Amendment Bill.

💬 DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Land Transport (Clean Vehicles) Amendment Bill be now read a first time. I nominate the Transport and Infrastructure Committee to consider the bill, and, at the appropriate time, I intend to move that the bill be reported to the House by 2 February 2022.

Our Government has declared a climate emergency for a reason. It is abundantly clear that we must take action urgently to ensure a livable planet for our communities here in Aotearoa and also around the world. Our action must be sufficient to the goal of limiting global warming to 1.5 degrees above pre-industrial levels. Let’s keep in mind that temperatures have already risen approximately 1.2 degrees above pre-industrial levels, so the window of opportunity to turn this around is closing fast. We only need to look at more recent events made more intense by climate change, such as the Buller district and Marlborough regional flooding, to be reminded of just how important and urgent this is. For the sake of our futures and those of our children, we must act now. A collective effort involving every sector of the economy, every community, and every Government agency is needed to tackle the climate crisis.

Transport is a critical part of the challenge and of the solution. We have made progress by investing significantly more in public transport and rail and walking and cycling, but there is much more to do. The clean vehicles bill represents a major step towards decarbonising our transport system, which produces nearly half of New Zealand’s carbon dioxide emissions. The transport sector currently produces 43 percent of New Zealand’s carbon dioxide emissions and 20 percent of all greenhouse gas emissions. To achieve major emissions reductions, we must clean up the light vehicle fleet in New Zealand, which is currently one of the most polluting and least efficient light vehicle fleets in the OECD.

The policy objective of this bill is to achieve a rapid reduction in carbon dioxide emissions from light vehicles imported into New Zealand by first increasing the supply and variety of zero and low carbon dioxide emission vehicles available for purchase in New Zealand by applying a clean vehicle standard to importers of new and used light vehicles; (b) increasing the demand for zero and low carbon dioxide emission vehicles by providing for a clean vehicle discount scheme, designed to incentivise, through the issue of rebates or the imposition of charges, the purchase of zero and low emission vehicles; (c) informing New Zealanders about vehicle emission levels and fees or rebates in relation to light vehicles offered for sale by requiring vehicle labelling requirements.

This bill does represent a significant change for the motor vehicle industry in Aotearoa, which over the course of this decade will need to significantly adjust the types of vehicles that it imports, advertises, sells, and services. For that reason, it will be important for there to be a full select committee process to consider the bill and its implementation.

In January, we announced the Clean Car Standard, which requires vehicle importers to improve the emissions profile of new and used imported vehicles coming into New Zealand. The clean vehicle standard will regulate the supply of high-emission vehicles by requiring vehicle importers to comply with carbon dioxide emissions targets. This standard will apply to importers of new and used light vehicles. Importers of new vehicles will be required to comply with applicable targets on an annual basis across their fleet of vehicles. Charges will apply where the carbon dioxide emissions across the fleet of imported vehicles exceed applicable targets. Used vehicle importers can apply to comply on an annual basis, but by default will be required to comply when they import each vehicle, and charges will apply where their carbon dioxide account does not have sufficient credits to cover the emissions of the vehicle.

The charges are designed to incentivise meeting emissions targets. A range of flexibility mechanisms are built into the scheme to assist vehicle importers to meet those targets. Targets for vans and utes will be higher than those for cars and SUVs, to account for the difference in engine sizes and the loads that they carry. The standard will apply from 1 January 2023, when vehicle importers will be required to report on the carbon dioxide emissions of the vehicles that they import, and comply with carbon dioxide emission targets that strengthen on an annual basis.

The Clean Car Discount—as opposed to the Clean Car Standard—was launched in July of this year. This scheme offers major incentives to get drivers behind the wheel of an electric vehicle (EV) or a plug-in electric hybrid. Nearly 2,000 imported new and used EVs and plug-in hybrid EVs were purchased in July alone, so we can see that there is clear demand from the public for affordable EVs. This is the most significant action that our Government has taken to reduce emissions in our light vehicle fleet, and one that is expected to prevent more than 5 million tons of dangerous climate change - causing pollution going into our atmosphere.

The full scheme, which will launch in 2022, introduces a charge on high-polluting vehicles, as well as a broader range of rebates to encourage the uptake of electric, hybrid, and low-emission vehicles. This means whatever the new or imported used car that people choose to buy, they are all contributing to the task of cleaning up the vehicles coming into New Zealand.

Consumers who purchase high-emission vehicles will be required to pay a charge in recognition of the increased environmental and economic costs that they are imposing. The revenue from those charges will be used to reward consumers who purchase vehicles that contribute to lowering carbon dioxide emissions through a rebate issued on the first New Zealand registration of the vehicle. Charges and rebates are one-off and will only apply to light vehicles when first registered for use on New Zealand roads, and do not apply to vehicles that are already in the fleet.

Due to the disruption caused by the current Delta outbreak, the expanded Clean Car Discount rebates and fees will begin from 1 April 2022. This will give the industry more time to gear up, and the current rebates on electric and plug-in hybrid vehicles will continue until 1 April. The funding allocated in Budget 2021 will be more than enough to continue to cover the discount until the full regime comes into force.

The amendments in the bill establish the legislative framework for measures designed to influence both the supply and the demand for zero- and low-emission vehicles. The clean vehicles bill will make a huge difference to the livability of our local environment and will deliver real health benefits by significantly reducing the levels of air pollution.

Ultimately, this bill represents a positive step towards reducing carbon dioxide emissions in our light vehicle fleet and signals to New Zealanders that the vehicles that they choose can make a big difference facing the climate emergency head on.

Now, I’d like to commend the Hon Julie Anne Genter for her work in the previous term of Parliament in laying the groundwork for this bill. If I may speak not on behalf of the Hon Michael Wood for a moment but about him, I would also like to commend him for his work in completing this and in bringing this bill to the House at the earliest opportunity. Now, back again on behalf of the Hon Michael Wood, I commend the Land Transport (Clean Vehicles) Amendment Bill to the House. Thank you, Mr Speaker.

Thank you, Mr Speaker. This bill is a pipedream from a Minister or two that have some illusion of how a market works and some misunderstanding of how this bill will actually work in practice. Worse than that, it is a direct attack on the most vulnerable New Zealanders that will have to pay through the nose for this bill. This is politics of the elite for the elite, and it will hurt the people that very much are the ones that need to be looked after in the transition to a modern climate change economy and how we undertake transport. We all understand there will be change. We all understand that there will be people moving to more electric vehicles, and we don’t stand in the way at all. But we do not want a Government that sets rules that are impractical and can never work and will fail. More importantly, they will cost New Zealanders before they have worked out they have failed.

This bill is a disgrace for what it is going to do to hard-working Kiwis. The Motor Industry Association—if anybody hasn’t read a press release that begs a Government like that press release, read it. It says here that this “has demonstrated an appalling lack of understanding of how to effectively reduce emissions”. It says, also, “the targets were a nasty surprise.” They were unexpected. “There is no obvious rationale and it seems it is a revenue gathering exercise for New Zealand to have targets that are tougher than other jurisdictions like Europe.” This is at a time when nobody speaks up against this Government, and yet the Motor Industry Association has slammed them for what is, effectively, a tax grab on middle New Zealanders, and it will never work.

Now, when we have the Minister there, he did—it was a rapid reduction. Well, he has this vision that will change the New Zealand transport sector overnight. That will not happen. He was very careful to mention the word “charges” with the most gentle of breath and not talk about what that actually involves, because that will be a 15 to 20 percent increase on light vehicles, and that’s not larger vehicles; that’s basically everything over a Suzuki Swift that has that potential of that 15 to 20 percent increase in cost. That is what they are going to do to New Zealand consumers.

He talked about a significant change. Well, it is significant and it will hurt our people. Half the cars in New Zealand come from overseas in the sense that they are imported as a second-hand car. How are we going to get the amount of fleet of cars that they are talking about when there’s less than 200,000 electric vehicles (EVs) in Japan? Now, how are they going to achieve these goals? How are they practically going to see that the market will respond? Because when he talked about the market going out and buying 2,000 EVs last July, that’s because they knew they were getting a discount. If they bought a non-EV car, they’d have to be paying more next year, so they were getting in before. That is called “the market reaction”.

The market reaction to this will be different from what the Minister expects because this applies to cars that are new or used that are coming into New Zealand. What will that market reaction mean for the most vulnerable New Zealanders? The most vulnerable New Zealanders will hold on to the cars they have. They will repair them constantly. We will see gas-guzzling cars on our roads for the next 20 years that could have been taken off these roads. They will be the unsafe cars that people in vulnerable communities will continue to use. They will be the ones that use petrol and diesel because they won’t have the ability to take advantage of these credits or these payments that are going to be made to them. They are in the real world, where they have to buy the cheapest car they can get and they are going to repair that cheapest car they can get for as long as they can. That is what will happen. We won’t have this substantial great change that the Labour Party and the Green Party envisage in their dreams. Let’s look at the practise of reality: people will keep their old cars longer and they will do less for the economy and they will do less for our emissions as a country because we will be keeping those older cars. This will backfire on this Government.

We know that’s how the market operates. They do not understand how things change when people see structures that are put in place by Government that distort a market. This is a classic example of the Labour and Greens knowing better, and they think they can change the rules. But the distortion will be the opposite of what would actually happen if we enabled people to take up new technology, if we enable people to look at what the provision of that actually is as well. How is that going to work with the providers that actually import those cars? All the responsibility is on them under this bill. But we don’t actually know what’s in this bill yet, because all those costs are in regulation and the regulations haven’t been set. So it’s great for this Minister to say, “Oh, we can go to select committee and have a full process.” It will be meaningless because the Minister sets the regulations and the regulations will not be in select committee. So we can debate till the cows come home what we think the cost will be, but we will never know until we see those regulations. And those regulations, if they’re going to be substantial, if they’re going to be significant, if they’re going to be a rapid reduction, then they will hurt New Zealanders more than they will ever see.

At least sometimes the Labour Government and the Greens have enabled people to see what’s coming their way. This time they’re hiding it behind regulation. Be up front. Put those regulations out now so that people can submit on them if we’re such a decent, kind, and caring Government. Do that. Show people what they’re actually going to be paying, because when you’re paying 15 to 20 percent, that is a lot of money for vulnerable New Zealanders. That’s the reality of what will happen under this bill. Not only that, it’s going to force those hard-working Kiwis that can’t use public transport because they actually have to travel to a job at 5 o’clock in the morning across town in Auckland or wherever in New Zealand—they actually need to be able to carry some tools. They need to be able to have a trailer with their gear on the back of it. They need to actually have a ute for their business. They won’t have that opportunity.

The Minister says in one of his comments in the papers, “Every 75ks on average, there’s an EV charging port.” Well, that’s on average; we don’t actually know through the whole country. You can go more than 75 kilometres through most of this country and not have anything like that. They are convenient with the truth because they are trying to present an angle that is not actually the reality for most New Zealanders. Most New Zealanders have to get in a car to get to work. Most New Zealanders need to get in the car to go do the way they live their life. Most Kiwis that are working have a vehicle that actually helps them work, like a ute. Effectively, under this legislation, it’s basically going to stop people having a ute unless they have to pay a big tax to this Government. That is their intention. It is a tax grab to change people’s use of vehicle.

Now, that’s fine if you think you can all cycle and walk to work, and you can all take your tools and you can all take your concrete mixer and cycle to work with that. The reality is that’s not going to happen. It’s not going to be that way. The practicality is somewhat different. The practicality is that Kiwis live in a country which is spread out. The practicality is that Kiwis live in a country where we do have a lot of used imported vehicles. The practicality is that we are in a country that hasn’t got the EV charging stations all across the country that some might think we have. The practicality is that New Zealanders generally have reasonably low incomes, and they are exactly the people that this Government purports to represent, and they are exactly the people that will be hurt by this legislation.

The ultra left-winging sort of academic Labour voter is going to be fine. They’ll all be able to have an EV in Kelburn and drive to the university and drive home. That’s going to be fine. They’ll be fine. What about the worker that’s in East Auckland that has to go to West Auckland to work? How’s that going to happen? They’re not going to have an EV that’s going to do that. They can’t afford that. They need to actually have a practical vehicle. They’ve got a second-hand Japanese import; that’s what they’ve got now. And what are you going to do? Make them have that for the next 20 years. Hold those people back, hold our country’s ability back to actually achieve environmental gains. The Treasury even said that this bill has dubious elements of what it will achieve environmentally. They’ve even told you that, it’s the official advice. The industry have told the Government; they didn’t listen. The public have told the Government they don’t want a ute tax. But they have gone ahead, but the market will show them the folly of their ways and people will go out there and they will make this worse—

Order! The member’s time has expired.

I can just imagine that member—the Hon David Bennett—standing in the Senate in the late 1890s in the United States when the horses were being phased out! The reason the horses were being phased out is that New York, like many of the other cities around the Northern Hemisphere—London, Chicago—were becoming absolutely overrun with horse excrement, not that much different perhaps than—I won’t go there, as a member of my committee over there, but I think anyone will get what I’m saying. However, also, dead horses were left lying around. So, essentially, those cities were being absolutely overcome with pollution.

Move forward 120-odd years, which obviously that member has yet to do, and we are in a similar situation worldwide. Anyone who would look at what is happening around our globe, locally here—look at any country—and look at the incredible changes in climate brought about by the large increases in carbon dioxide. Now, anyone who thinks we can’t do anything about that, that we can sit here and tsk, tsk about it but not do anything is living in the 1890s, because we simply have to do it.

Now, as the chair of the select committee, which will include that member, that will be considering this legislation, I’m looking forward to putting some science behind—and the submitters who will come and see us—the commentary which we have heard. We will look at the legislation and how it is going to be enforced if in fact it is passed, because the select committee process is one where we will look at how this will work. We will look at how it’s going to impact on different parts of New Zealand. Rather than have the rhetoric that has, unfortunately, been the mainstay of this debate so far, we’ll actually get to hear from people who understand a little bit more about how this will work—for example, those who will be, essentially, administering this will be the car importers, and the incentives for them will be to bring in lower-emitting vehicles. Well, that’s a fairly smart piece of legislation, and you make sure you do involve those who are going to be most impacted.

I actually have a lot of confidence in my fellow Kiwis, particularly entrepreneurs, because they will adapt, like we have adapted to all those things that we’ve had to change, or change will be imposed on us. I say “change imposed on us”. I recently heard a presentation around climate requirements, about changes that are being imposed particularly on farming in Europe. Now, one would say that you’ve got to be careful because some of those changes, yes, will make farming a little more expensive, some aspect of it. But what they won’t do is they will not export those problems; in other words, what they won’t do is allow the production to go offshore, or, where it is offshore, nobody who is not adhering to their requirements will be able to import food into Europe or into the UK, likely—obviously, different places now.

So if we don’t comply, if we consider to keep our heads in the sand, to keep our heads in the 1890s, then, quite frankly, those who will suffer will be our farmers, will be our primary producers who will struggle to get produce into Europe, the very place we’re currently looking for a free-trade agreement. So those who don’t understand that: doing nothing is not an option, doing nothing for the climate is not an option, and doing nothing economically for New Zealand’s ability to continue to trade with the world is not an option. I hear the previous speaker talking about how we’re going to be worse off than Europe; the UK and Norway are going to be banning petrol vehicles in a fairly short time. I’ve looked through the legislation, and I don’t think we’re quite there yet.

In fact, nobody is banning utes. If anyone still wishes to have a ute, they can; they will just actually pay for the privilege of doing it. In fact, it may well be like a farmer who I spoke to at Fieldays who was lamenting the fact that his next ute was going to cost him extra. However, I asked him what sort of vehicle his wife drove, and she actually drives a hybrid. So I did point out to him that he was actually going to be better off next time they changed both vehicles. So, classic carrot and stick, which this bill is about.

So I am looking forward to having this at select committee. In its current form, in the spirit of it, I commend it to the House.

Thank you, Mr Speaker. This is a tax. This is a redistribution of funding from middle and lower income New Zealand to wealthier New Zealand. This is those who can’t afford an $80,000 electric vehicle (EV), and it’s taking money from them to assist the wealthy to buy their expensive EV. This will hurt middle New Zealanders, it will hurt families, and it will particularly hurt rural people, who have to have cars to get around. They do not have the option of public transport. The geography of Southland is the same size as the country of Switzerland. You cannot get around Southland easily in an EV. People in Southland have to take their children to their sports practices, to their sports games, to their music after school. They have to be able to take their family around in a reliable car that they know can get them there and back, and this is going to cost them extra. This is happening at the time when cost of living is increasing, so the middle New Zealand family is going to be paying more for their housing, whether it’s more for their mortgage repayments—higher interest—or more for their rent. They’re going to be paying more for their food, they’re going to be paying more for their petrol, and they’re going to be paying more for a vehicle to get them safely around.

The Motor Industry Association, as my colleague the Hon David Bennett has said, do not support this bill. They have said that it has an appalling lack of understanding of how to effectively reduce emissions. They are saying that it ignores well-thought-out and considered advice from industry. And this would have to be what we are seeing over and over again from this Government: ignoring the advice, the considered thinking, from industry and from people on the ground. I would have said from my experience running a business that when you are trying to embark on change, you try and take people with you and you try and surround yourself with experts and people who will be living the consequences of your change, and you try and take notice of them. But this Government, which is seriously lacking in expertise and experience, has chosen to ignore the advice of their own advisers, as well as those in industry. And this is becoming a pattern, whether it’s in education, health, water, or, now, this Land Transport (Clean Vehicles) Amendment Bill.

The Motor Industry Association has said that it will increase car prices by 15 to 20 percent. So if we look at a family car of around $40,000, that’s an extra $8,000. Each year we import around $5 billion worth of vehicles. That is about a billion-dollar tax grab with this legislation. So be very sure that we understand this legislation is about a tax that will take money from the middle and lower income New Zealand and redistribute it to the wealthy. Labour has said that the highest-emitting vehicles will be taxed to subsidise EVs and hybrids, but if you look at the Minister’s Cabinet paper, the table illustrating a pathway forward, by 2028 the humble Suzuki Swift will be taxed. A hybrid RAV4 will be taxed. In fact, any family vehicle aside from an EV will be taxed.

National is also opposed to the Clean Car Standard in this bill. It just goes too far. The target is unrealistic and it would take us ahead of Europe. This doesn’t make sense. We are not a producer of vehicles. We can’t get ahead of the producers of vehicles. It would require a 38 percent improvement in fuel efficiency in just three years. And where car importers can’t meet that target, they will be heavily fined, and they will have to pass that on to their customers.

Now, this is about trying to reduce emissions, and the bill was introduced today to the House by the Minister for the Environment, James Shaw. You would have to say, today, how did he feel about introducing what is going to be a tax on middle and lower income New Zealand to reduce emissions, when he and nine others from New Zealand are going to head over to a conference in Scotland to reduce emissions—to discuss reducing emissions—and, by the way, take up those managed isolation and quarantine places when they come back. Where ideology is driving the bill, the unintended consequences are not looked at, and my colleague the Hon David Bennett has pointed out a number of those unintended consequences. Those middle-income New Zealanders, those families who cannot afford an EV, will hold on to their vehicles longer. They will be gas-guzzling vehicles and they will be less safe vehicles. So it’s really important, when we’re looking at a bill like this, that we consider those unintended consequences and what they are going to mean to our families in New Zealand.

It is really unfortunate to be bringing this bill up in the House at this time, when so many families in our country are going through such difficult times, when people are at home trying to keep their children schooled, trying to do their own work from home, or, even worse, not working and not knowing if they will have a job to go back to or a business still there. It’s not a time when they can concentrate on something like this. It’s not a time when they can think through the consequences of legislation like this. And it’s a real concern that we’re going to have people having to try and think about putting submissions in on a bill when they are going through so many other issues in their life, when they are trying to think of the ways in which they are going to cope with the increases in the cost of living, as well as increases like this that will be coming at them.

National is opposed to this bill. We believe that it is not the time to be putting extra costs on to middle New Zealand and on to our families who can’t avoid them. We believe it is not the time to be rewarding those who can afford an EV at the cost of those who can’t. It is not a redistribution of wealth that we think is fair, and it is not something that should be foisted on to middle New Zealand, lower-income New Zealand at this time. Thank you, Mr Speaker.

Thank you, Mr Speaker. I was a little bit nervous about the mask taking-off; I managed to pull it off, I think. It’s a real pleasure to be in this House today and to actually speak on this bill. I’m surprised to be speaking on this bill as it’s certainly not my select committee, but it is an interesting and important piece of legislation, the Land Transport (Clean Vehicles) Amendment Bill.

I’d like to acknowledge the Hon Michael Wood and also the Hon Julie Anne Genter for the work that has gone into the creation of this bill. Also, I’d like to recognise and acknowledge the work that has happened from the Climate Change Commission report in regards to climate change, climate emissions, and what the vehicle emissions are doing to our environment. It’s an omnibus bill, sir; one that will achieve rapid reduction in carbon dioxide emission from light vehicles imported into New Zealand. It’s going to do this by doing three things: by increasing the supply and the variety of vehicles, by providing for a clean vehicle discount, and also informing New Zealanders about the types of emissions of the vehicles that they buy. So it is an incredibly important piece of legislation.

I have sat on the Environment Committee helping pass legislation on ending new offshore gas and oil exploration—

💬 Hon Member: That was a disaster, too.

—the zero carbon Act, and the Climate Change Response (Emissions Trading Reform) Amendment Act—

💬 Hon Member: How much gas have we got now? How much coal are we burning?

So it’s incredibly important. I understand the science that sits behind what we are trying to do; not about the rhetoric that is coming from the Opposition about the terrible, terrible thing that will happen. Climate change is happening, and this is something that we need to make a difference for.

So I want to talk a little bit about the fact that transport produces 21 percent of all of the emissions that we produce. Seventy percent of all transport emissions are from light vehicles. There is a definition in this bill that talks about what a light vehicle is—that’s 3.5 tonnes or lighter. So that will cover a whole series of vehicles out there. It is very useful to have that definition so people are able to participate and understand. We are behind the rest of the OECD. We have a shocking record, actually. I’m just looking at my records here. Two-thirds of all emissions come from light vehicles. So that’s those vehicles under 3.5 tonnes. The difficulty is, of course, that climate change is real and is happening and we can talk and talk and talk about how terrible it is, or we can act. And that is what we are doing: we are acting in order to change the way people think.

I would like to talk to and remind the Opposition to have a look at the climate change report that has come out. There is some really good science that sits behind what we are doing here. Check out page 88 of the report. These are the most eminent minds in this country and, in fact, some international minds who are looking at the science as to why we are doing this, and it is incredibly important that we actually follow through on what we say we will do.

It is about investing in infrastructure, it’s about investing in behaviour change, and it’s about investing in technology, and this is talked about in that report by using “Avoid, Shift, Improve” hierarchy. So these are things that we need to do. An electric vehicle (EV), even being created and built from scratch, will still save a person $7,000 to $9,000 worth of petrol costs in a lifetime. It is still 60 percent better. An EV is absolutely the way for us to go, and I am very proud to stand here today to talk about the science and not the rhetoric, and to commend this bill to the House. Thank you.

It gives me great pleasure to rise in support of the first reading of this legislation. Climate change is the single biggest issue facing all of us, our children, and our children’s children. I see the Hon David Bennett shaking his head—obviously a climate denier; won’t surprise anyone, but we must act urgently in order to reduce greenhouse gas emissions if we want to have a chance of a habitable planet even this century. I really doubt that the Opposition is aware of how urgent and pressing the risks are. It is true that in New Zealand we have been less touched by climate catastrophes than other parts of the world, but it is still affecting New Zealand. We have floods and we have droughts on a more increased basis than what we used to because of human-caused climate change.

What most New Zealanders want is to be a constructive part of the solution. New Zealanders have always put up their hands when there is a global challenge to say, “Yes, we can be part of the solution.” Most New Zealanders do want transport options that aren’t reliant on increased fossil fuels, and yet our light fleet, which is the cars, utes, and vans that people use every day, are responsible for the majority of our greenhouse pollution from transport, and it’s been the fastest growing sector over the last decade. So if we’re serious about pulling our weight in the global fight against a climate catastrophe, we must be acting with urgency to reduce the pollution that is coming from our light fleet—that’s cars, utes, and vans that people use every day. Especially if we think agriculture needs to have a slower pathway for reduction, that means we have to do even more in transport.

Of course, it is the case that mode shift—enabling people to do things besides use a private car for every single trip they make—is part of the solution: making our towns and cities more accessible, friendly, safe for walking and cycling, convenient and affordable to use public transport. But the truth is people are still going to need cars for some trips, and that’s why it’s really important that the cars that we’re importing from now—from 2021 or 2022—are not increasing emissions and locking in 20 years of high emissions.

As it happens, New Zealanders have been really let down by previous Governments—in particular, the last National Government—because there was a plan to bring in fuel economy standards in 2008, and the Hon Steven Joyce nixed that plan, and so we lost time in this race, because the fuel economy standards, had they been brought in in 2008 and flowed through in 2009 when it was planned, we would have more efficient cars on our roads, we would have spent less money on imported petrol, and we’d have less air pollution. Unfortunately, the National Government was ideologically opposed to sensible policies that have been implemented in every OECD country bar Russia, New Zealand, and Australia. And even in Australia, the conservatives are looking at voluntary fuel economy standards.

Now, the reality is that these two policies together, the research shows, are the single most effective way to influence the makeup of the cars that are coming into the country, and we all need to be part of the solution. We need everybody buying a new to New Zealand car to make some contribution. And what this does is it incentivises the vehicle manufacturers and importers to bring in more efficient vehicles, and that helps consumers, because it means consumers have better choices available to them that will cost them less to run.

The Clean Car Discount is an important part of that. And, in fact, the car industry argued really hard to have the Clean Car Discount alongside the Clean Car Standard, because it helps them ensure that they’re able to sell these lower emissions vehicles, but also that they’re able to prioritise getting those more efficient vehicles to New Zealand, and that’s part of this debate that I haven’t heard much from the Opposition. In truth, having these policies means that car companies can prioritise lower emissions vehicles for the New Zealand market, because we’re in competition for these vehicles with countries like the UK, who actually have much higher standards than we do and they have more price incentives than we do.

So up until now, it’s been difficult. And I remember when National was in Government and the Hon Simon Bridges was showing up to every photo op with an EV charger that the Government had not funded—like a privately funded EV charger—trying to show that he was pro-EV, when the Government was doing nothing to support a transition to low emissions vehicles, that Nissan decided not to offer their most cost effective brand new EV in the New Zealand market because there wasn’t sufficient incentive or support to sell them here. So the reality is that by bringing in these policies, suddenly there is an incentive to bring in not just EVs—it’s not just about EVs; it’s about lower emissions vehicles. France has had a very similar policy for two decades now and it’s been incredibly successful.

The research shows that the benefits massively outweigh the costs, and the benefits are literally to the owners of the vehicles. So any additional cost—and, frankly, there’s no evidence there will be additional cost—is offset by massive savings throughout the economy because New Zealand businesses and households are spending less money on imported oil to make the very same trips. And so that helps our current account balance and it just saves people a lot of money. So that is why, if you were looking at one of the most cost effective or beneficial economic ways to reduce emissions, these two policies are it, because normally you look at a marginal abatement cost and you’d say, “We want a lower cost way of reducing emissions.” The marginal abatement cost for the “feebate” scheme alone is estimated at between negative $71 and negative $332 per tonne of CO2. Now, what that means is that it doesn’t cost us money to reduce carbon emissions through this policy. We get savings. So we’re reducing emissions and we’re saving money, and that money is money in people’s pockets that they can then spend in the New Zealand economy.

Now, these two policies, when we looked into it and we said, “What’s the most effective way we could start to influence the vehicles coming into New Zealand?” not to just cut off all high emissions vehicles but to offer people more choice and to provide price incentives that are fair—these two policies had the evidence behind them because they’ve been implemented in almost every developed country and successful economy. Places like California have had strict vehicle emissions standards and it actually results in benefits to the economy. And I know that’s really hard for National to get their head around, because they don’t understand the economy very well, but the truth is that if you go look at the evidence—and I’m sure we’ll hear from it; we’ll hear from the experts at the select committee—this is the single most effective way, literally the only way, we’re going to start influencing the makeup of the fleet.

I talk to New Zealanders all the time. I talk to builders—my brother’s a builder. He bought a second-hand EV van for his building business before the discount, so he was gutted that he missed out on that, but I talked to other builders who say they want those options, and these policies are ultimately necessary for them to have these options, because every other country in the world is acting on this, and if New Zealand doesn’t, we will become the dumping ground for the most polluting, inefficient vehicles, which means that New Zealand businesses and households will be spending more money to do their business and we’ll have higher emissions, which is a really bad outcome. So I really do struggle with the Opposition’s arguments on this.

I just want to briefly touch on the equity issue. Now, it might come as a huge surprise to those in the National Party but the most vulnerable New Zealanders are not buying new to New Zealand cars, and you are hugely, hugely out of touch if you think the people paying the fees on this are vulnerable New Zealanders. The most polluting vehicle that will attract the highest fee is a Land Rover or a Range Rover, which retails for over $100,000. The average double-cab ute sold in this country is sold for over $80,000. The whole point of brand new ones—I mean, obviously, the ACT Party and the National Party don’t understand this policy. They’ve brought their own misleading information they’ve put out.

💬 David Seymour: The average double-cab ute?

Oh, the average brand new double-cab ute. Yes, we have the information.

💬 David Seymour: Is the member going to stand by that? Yeah, the average double-cab ute is over $80,000?

Yeah, I will show you the graph—I will show you the graph of the sales that we have from Ford Rangers, which is the most common one, yes.

💬 David Seymour: The average—the average double-cab ute—over $80,000?

The majority—the majority of them are sold for over $80,000.

💬 David Seymour: Oh, the majority of them. Is it the average or the majority?

Well, the majority are sold for over $80,000.

Now, I won’t bother responding to all of this. Look, I would love to get into this, but the truth is this is a fair policy. It means that those people who need high emitting vehicles can help contribute to the reduction of emissions and still get the high emissions vehicle they need, but altogether we’re working together to respond to our climate commitments.

Thank you, Mr Speaker. I rise on behalf of the ACT Party and in particular Simon Court, my colleague and our transport spokesperson, to speak on this bill. I know that Simon has done a tremendous amount of sector engagement and stakeholders are desperately trying to get their voices and concerns heard by the Government.

In simple terms, this bill introduces two interventionist policies. One introduces emissions standards to be imposed at the border and the other seeks to use subsidies to change consumer behaviour via a carrot-and-stick approach. There is an aim of somehow increasing supply from manufacturers offshore despite our lack of global competiveness and limited wholesale purchasing power.

This is also a great bill, as people have said, for ensuring that older vehicles stay on our roads for significantly longer due to the disincentive for purchasing new—[Interruption]

💬 SPEAKER: Order! Order!

—more fuel-efficient vehicles—

💬 SPEAKER: Sorry. The member has had her chance to have a speech. She may be being provoked, but she doesn’t have to react.

Thank you, Mr Speaker. I can finally hear myself! So this is also—

💬 SPEAKER: Order! Order! The member was in the House earlier when I made it very clear to a senior member that one does not comment on Speakers’ rulings: don’t.

Thank you, Mr Speaker. This is also a great bill for ensuring that older vehicles stay on our roads for significantly longer due to the disincentive for purchasing new, more fuel-efficient cars that have lower emissions. Due to the lack of supply, importers have few, if any, options to change behaviour and avoid the costs between now and the late 2020s, so it is simply a tax grab.

So I went on the internet and I found this [Holds up picture], and I hope someone gets this reference. [Interruption] So—yeah, very nice. That’s the new Hyundai IONIQ 5 electric vehicle (EV), which I’m told arrived in my local dealership yesterday. It is good to hear that the three-month delay in getting deliveries of EVs seems to be improving for the time being, at least for the lucky few. If you go for the long-range option, which will make it about 70 percent of the way from Auckland to Wellington—which is really good, I’ll add, but you still might want to make a bit of a weekend of it—it’ll set you back just $10 shy of $90,000.

Now, we’ve got nothing against EVs; they’re forever improving and are a marvel of innovation and capitalism. After all, the automotive manufacturing industry in North Korea doesn’t produce a single EV. But given the nature of the automotive market, we’ve got to be very careful about interventions and unintended consequences on supply and wholesale pricing, not to mention the lack of fairness in making the less fortunate subsidise other people’s fancy cars. Even Elon Musk, the founder of Tesla—speaking of fancy cars—has spoken out against subsidies and their propensity for creating false prices in the market.

These policies will have little bearing on the purchasing behaviour of the wealthiest New Zealanders, but it will almost certainly drive up costs for lower-income families, tradespersons, and those in our rural communities who have few alternatives, if any. It will also have no material impact on supply, which is patchy at best. The costs of a new or used petrol diesel vehicle could increase by between $10,000 to $15,000 between now and 2027, and that’s before any allowance for manufacturer price increases.

EVs and low-emission vehicles, incentivising demand with cash rebates when they are not even available to meet demand, has already caused wholesale price increases in Japan. On Suzuki’s website, they state the following: “From July 1st, the Clean Car Discount programme will come into effect … Suzuki’s affordable range of vehicles do not qualify for a rebate”. I’ll say that again: “Suzuki’s affordable range of vehicles do not qualify for a rebate”. I think this simple statement really highlights the Government’s priorities here. If you want an affordable car, you’re going to get the stick.

There is also a risk that the overall supply of EVs to New Zealand may be reduced for the next five to eight years as we compete with Australia for a relatively small number of vehicles available in the right-hand drive configuration, as also used in Japan, the UK, and in many other countries. Manufacturers currently supply new vehicles from factories configured in the 2015 to 2020 period, and those models will continue to be produced until around 2028 to 2030. Design for new production configurations is under way by manufacturers across the world, with higher production of EVs due to enter the new vehicle market in greater volumes from the late 2020s. This means that second-hand EVs will be only available to New Zealand from those models from the mid-2030s, around five to six years after they are sold as new.

Regarding the emissions policy in this bill, New Zealand has a hard cap on carbon emissions, so these regulations will not reduce a single tonne of carbon that cannot be emitted somewhere else. Carbon emissions from petrol and diesel are already paid for at the point of production through the emissions trading scheme, where units currently cost in the range of $53 to $75 per tonne of carbon emitted. This already adds between $9 to $11 to every tank of petrol or diesel. So New Zealand is on track to meet the climate commissioner’s projection that a price of over $50 per tonne would incentivise New Zealand businesses to reach net zero carbon by 2050.

The policy interventions in this bill will require a significant amount of Government regulation in administration and will impose a compliance time and costs to businesses. Government agencies will be required to administer the large rebate scheme alongside the Clean Car Standard at the border, with powers to audit issue credits and fees for importers and requirements for record-keeping.

The winners will be those high-income earners, as I’ve said, and the losers will be everyone else looking to get some wheels, whether it’s a highly fuel-efficient and low-emissions small car or a ute being used for legitimate or illegitimate purposes. So, personally, I think my daily drive, which uses about 5 litres per 100 kilometres, easily meets long-term carbon dioxide targets in Europe and Asia, costs brand new about 30 percent of most EVs, and even has an old-fashioned manual gearbox, is still a perfectly reasonable car to purchase and drive in 2021. Innovation in the free market is wonderful, but, sadly, technological advancements in the present day are often ignored.

ACT is opposing this bill because it is a tax grab, it is grossly unfair, and is based on pie-in-the-sky thinking about the ability of manufacturers to supply the sheer quantity of EVs needed to achieve a rapid reduction in carbon dioxide emissions, not to mention at a price point that makes it a reasonable option for everyday New Zealanders. Thank you, Mr Speaker.

Before I call Angela Roberts, I just want to make two comments. One is that we’ve got a couple of members who have been having a chat down the front and they—again, there’s a question of judgment about volume with masks on, and it’s been a bit noisier than would normally be reasonable, so if people do need to have a chat, then go out and be socially distanced in the lobby is something I would ask for.

The second point I’d make, and I understand that the member was working from a draft that could well have been prepared for someone else or by someone else, but I have noticed today a tendency for people to lapse back into reading speeches. While I wasn’t going to interrupt the member in that circumstance, I am going to issue a general warning: if people do it, I will take it as a sign that they have got nothing else original to say and we will move onto someone else.

Kia ora, Mr Speaker. Thank you. As we’ve heard, this bill intends to help this nation move towards a rapid reduction in our emissions. We are ambitious and we want a zero-carbon economy. Light vehicles really are the low-hanging fruit. We’ve already heard the numbers, they account for almost two-thirds of our transport emissions. So it is quite right that we aim to incentivise a shift in our behaviour in the use of these vehicles. We’ve seen a 93 percent increase in emissions in the last 30 years from this part of our economy alone. We need to really think about the significant impact it has had, and how we can change it. This bill starts to really focus our mind and our economy and incentivise some great behaviours.

What it does is it incentivises an increase in supply and an increase in the demand for low-emissions vehicles. It uses one of those—quite well proven, in fact, if you’ve done your homework—incentives: a simple reduction in cost barriers, OK? For those New Zealanders who do want to play their part in reducing emissions and they really want to find a way to take up the options, that will become increasingly available to them because of the incentives provided with this market intervention.

We do need to signal to the global economy that we are open for business. We support the import of low-emissions vehicles. We support the broader investment in research and development on biofuels and hydrogen-powered vehicles; not just electric and hybrid. We want the world to know that we are keen and we are open for business. It’s really important that those vehicles we hear about going elsewhere in the world can actually come here, because we will buy them, and we’re going to make it easier for New Zealanders to buy them.

It also adds certainty to the market, not just to those who are wanting to invest in the production but—as we’ve heard across the House—the entrepreneurship that is going on around the planet. We want to make sure that we’ve got certainty in the New Zealand market so that the economy will see investment in the charging stations and all of the other pieces of infrastructure that are required for us to shift to a low-emissions economy.

Our 2025 new vehicle average carbon dioxide emission targets are achievable. The sky is not falling. Our emissions are currently 171 grams of carbon dioxide per kilometre, and we plan to reach a target of 112.6 by 2025. These targets have already been met in other jurisdictions. It is possible. We are ambitious, but it’s not pie in the sky; it’s already been done elsewhere.

Further to that, countries like the United Kingdom and Norway have already declared that they will stop the sale of petrol and diesel vehicles between 2025 and 2030. So we need to move quickly to ensure we don’t become a dumping ground for the vehicles that nobody else on the planet wants or needs.

I also want to push back against the claim that this legislation will penalise middle New Zealand—or rural New Zealand. I’m really pleased that people have observed that there are many of us who cannot do our bit for the zero-carbon economy by catching a bus to school or to work or to the doctor. So what we need is access to low-emission vehicles. Most of the farmers I know—most of my neighbours—cannot afford a new, imported vehicle. Most of us are actually replacing our second-hand vehicle with another second-hand vehicle. And so what we will be doing is we will be pleased to see the potential when we replace our second-hand vehicle in a few years’ time, that there will actually be options, and they will be affordable because somebody else has already imported them into the country. By the time I can afford to replace my current rig—my current four-wheel drive—it will be something that I will be able to afford, and my neighbours down the road, in my rural district, will be able to afford. If we don’t bring these vehicles in, they will not be accessible to middle New Zealand, to our families, and to our rural communities. We need to be ambitious, we need to set standards, and we need to make it possible for people to bring these vehicles into the market.

I’d just like to finish off—people talk about thinking about our most vulnerable New Zealanders. Well, I hear from young New Zealanders every day—even though I’m no longer in the classroom discussing economics—and they remind me every day that we need to stand up and be ambitious for them. They are the vulnerable New Zealanders. We need to create a future. I’m really looking forward to this bill going to the select committee so that those concerns that have been brought forward can be addressed; that we can move rapidly and effectively and equitably to a zero-carbon economy. We have to do it for our young people, for those who will be going on strike on Friday. We can, we should, and we will. I commend this bill to the House.

Debate interrupted.