Land Transport (Clean Vehicles) Amendment Bill (No 2)

Members, the House is in committee on the Land Transport (Clean Vehicles) Amendment Bill (No 2). Members, we come first to Part 1. This is the debate on clauses 3 to 8 and the Schedule, “Amendments to Land Transport Act 1988”. The question is that Part 1 stand part. I might just let members know that one advantage of having this bill heard consecutively is the ability to have more wide-ranging speeches is met. When we come, of course, to the committee stage, we will be focusing on those aspects of the bill, just to let the members know.

Point of order. I seek leave to debate all parts as one.

Leave is sought for that purpose. Is there any objection? There is none—there is objection. The question is that Part 1 stand part.

I’m very pleased to speak briefly in the debate on Part 1 in the committee stage of this piece of legislation. The bill, as members of the committee will see, is a relatively short one, and Part 1 is the substantial part of the bill that makes the key changes that the Government has brought to the House through this piece of legislation.

I refer members first to clauses 5 to 7. This is a piece of the legislation which deals with the issue around motorcycles and mopeds. The main way that it deals with this issue is that the amendments replace references to light vehicles with references to type A or type B vehicles. This is quite an important point for members to be aware of. The existing legislation does not require motorcycles and mopeds to pay charges or make them eligible to receive rebates under the legislative design. They’re not covered by that part of the scheme, but what it does require them to do is to set up carbon dioxide accounts. So, effectively, what this piece of the legislation does is remove that requirement to set up carbon dioxide accounts so that there are no requirements for importers of motorcycles or mopeds under the legislation. And that’s because those two terms are defined differently in the legislation. Type A and type B vehicles do refer to cars, whereas the broader term of “light vehicles” can be defined as to mean motorcycles and mopeds. And that is not the intention of the legislation to put any requirements on importers of those kinds of vehicles. So that’s a simple clarification.

Clause 8, which amends Schedule 1 of the principal Act, is important in terms of putting in transitional provisions that have the effect of deferring until 1 June 2023, the date on which charges for vehicles imported by category 2 light vehicle importers between 1 January and the 31 May are payable; similarly, the date from which a light vehicle importer may transfer carbon dioxide credits—their carbon dioxide account—to the account of another light vehicle importer. It’s just important to explain clearly what that means. This piece of legislation, the parent piece of legislation, is about putting an obligation on importers to account for the carbon dioxide emissions of vehicles that come in. And then there is a carbon dioxide standard which they are asked to meet. Now, it’s not a standard by which they cannot import vehicles if they are above that standard. It’s, effectively, a market mechanism. For category 1 importers, they will generally be the bigger importers who, for the most part, are importing new vehicles. They’ll operate that on an annual basis, so they’ll look at all of the vehicles that they import over the course of a year—some may be above the carbon dioxide standard; some may be below the carbon dioxide standard. The requirement is that, at an average level, they meet that carbon dioxide standard. If they’ve imported, overall, a fleet that is above that carbon dioxide standard, then a fee will apply. If they’re below that standard, then they’ll have a rebate which they can effectively trade with other importers. That has the effect of effectively using a market mechanism to incentivise importers to bring in vehicles that are cleaner and will drive down emissions. And that’s been very effective internationally. Most countries already have it.

So for those category 1 importers who will probably import the majority of vehicles, including most new vehicles, they’re entirely unaffected by this bill—that’s done on an annual basis; they’ll, effectively, look at what they’ve imported over the course of the year at the end of 2023; nothing changes for them. It’s the category 2 importers, which tend to be the smaller importers and tend to be more weighted towards used importers, who will be required to comply with this scheme and the carbon dioxide standard on a consignment by consignment basis. And it’s the engagement we’ve had with the industry there which suggests that it will be potentially more challenging than would be ideal for them to do that in the first half of this year. A little bit more time is needed for them to be able to do that. In that interim period, under the changes that are proposed here in clause 8, the obligations are still there. So they will still, effectively, on a consignment by consignment basis, be accruing credits or charges on those vehicles. I do note there was a comment earlier in the debate—I think from Mr Court—to say that importers would not know what rebates or charges they were incurring. That is not correct; it will be very clear. It is set out in the legislation what the carbon dioxide level is and what the charges are that are applied. They will be aware of what they are incurring.

But, effectively, under this change in Part 1, the obligation to then pay, or the ability to use rebates to enter them into the system and to trade with other importers, it’s only that bit which gets deferred until 1 June. So in terms of the totality of the scheme, the impact of the scheme, the emissions abatement function of the scheme, nothing actually changes. It’s simply the point moving from 1 January into June at which the obligation to either pay—if they’ve brought in vehicles over the carbon dioxide level, or the ability to engage in trading with rebates—it’s just that that bit gets delayed until 1 June under this change in Part 1. So those are the two substantive that are made in the bill that are reflected in Part 1, and I’m very happy to take any questions from the committee about them.

Thank you, Mr Chair, for the opportunity to take a call. Of course, in normal times, this would have had the opportunity to go through the select committee stage, and submitters would have been able to have their say. In fact, they have had their say when this went through the law back in February, and, of course, they said that this was being rushed, and now we’re here at this stage where we’re actually having to fix, in Part 1, one of the stuff-ups the Minister’s caused in regards to motorbikes and mopeds. Of course, officials advised him about the rush—the submitters certainly advised about the rush—and so the question now will be whether this actually fixes it and that we’re not actually going to be back here in six months’ time sorting out more problems because we’re rushing this legislation through under urgency.

So my question in regards to Part 1, in regards to the definitional changes, effectively, of which vehicle importers must hold carbon dioxide accounts, which replaces the words “light vehicle” with “Type A” or “Type B” vehicles—I ask the Minister when was he first advised that this was going to be an issue, and when did officials advise that this was something which would require a law change? When was draft legislation provided to the Minister? When did industry tell him that this was going to be an issue? What did they tell him and why is it being rushed through now rather than having been fixed earlier? Because the reality is we’re using urgency to fix a problem, which, from my understanding, has been known about for some months. And now we’re here in late November, with the carbon dioxide accounts required to be opened by 1 December, fixing a stuff-up which he knew about for some time.

So I’d like the Minister to be transparent, because if we had had a select committee stage, we would have had the ability to ask officials a lot of questions, to get answers to those questions. Now all we’ve got is the Minister from the most open and transparent Government in New Zealand’s history, apparently, here, and this is our only avenue and our only opportunity to actually get answers to these questions. So I look forward to a bit of openness and transparency and maybe a little bit of an apology to the Parliament and to New Zealanders that we’re having to spend this time fixing up a stuff-up.

There’s been no acknowledgment from this Government and from this Minister that there’s actually been a mistake made. If he just stood up and just said, “We made a mistake.”, a lot of New Zealanders would go, “Well, thank goodness someone’s acknowledged they made a mistake. And, yeah, we understand.”, and move on. But there’s been no acknowledgment that he’s been talking high and mighty about climate change and we have to do this, and his aspirations and his woke virtue signalling. But he can’t just say, “I’m sorry. I got this wrong. We stuffed this up. We made a mess. We didn’t listen. We rushed it and here we’re back.” Just an acknowledgment of a mistake, I think, would go down extremely well with many New Zealanders. But the arrogance of this Government has seeped right through to the top.

We’ve seen it in the comments earlier. The river of insults that have come from the Minister’s mouth earlier towards my colleague David Bennett I thought was an absolute low blow—

💬 Hon Member: Disgraceful.

Disgraceful and demeaning for the man who aspires to be the next Prime Minister of New Zealand and something which I think is just something which he should apologise for as well. So I ask those questions. This is our one opportunity to get answers around when he was advised. What advice was he given? When was the bill drafted? When did the industry tell him this was a problem? Why did we not have this legislation earlier? And why will he just not apologise to the House and to New Zealanders for a stuff-up?

This is the committee stage of the debate. It’s an important part of the parliamentary process to examine, in detail, parts of legislation that have been brought to the House. I’m very happy—I don’t think this is the time to engage in political speeches, so I’ll keep to the issue and respond to the questions that Mr Brown has asked.

Mr Brown is, effectively, correct that the definition around light vehicles versus categories 1 and 2 is, effectively, an error from the legislation. It has meant that there has been a lack of clarity around whether motorcycles or mopeds have to set up carbon dioxide accounts. Again, I’ll just repeat that there’s actually no fundamental issue here in respect of whether motorcycles and mopeds have fees or rebates that apply to them. They don’t. There’s never been any lack of clarity around that. So that’s something that the Government owns and that I own, and that’s why we brought a change to the House in order to correct that error.

I do note that this was not actually a rushed legislative process. The original legislation went through a full legislative process, a full select committee process, a full committee of the whole House stage, and actually wasn’t an issue that was picked up by anyone at that time, including submitters and including our noble Opposition, who had the ability to examine the legislation at select committee and in the committee of the whole House. It is an error in a complex piece of legislation, and we’re fixing it now. That is the state of it.

When was I first advised of this? A few months ago, around about July, August. It was probably first brought to my attention through engagement with industry. Since that time, I sought advice from officials to try to determine whether there are other ways of managing the issue, and we determined that the best and most appropriate way of providing clarity was to change the legislation so that there were absolutely no doubts about the requirement to set up a carbon dioxide account. That’s what we’re doing today.

Thank you, Mr Chair, and, Minister, thank you for coming to the Chamber to engage in this discussion around the proposed amendments. I’ve already stated clearly that ACT won’t be supporting this proposed amendment because we fundamentally disagree with the premise of the original bill. It won’t be possible to reduce New Zealand’s carbon dioxide emissions any further with this policy or with this regulation, because all of our emissions are already capped under the emissions trading scheme, Minister. So that leads me to a number of questions that I have.

We’ve heard you articulate that vehicle importers—because New Zealand only imports vehicles and we don’t make cars here. We’re entirely reliant on motor vehicles manufactured in the European Union, Great Britain, Japan, Korea, and other places around South-east Asia, and, to a limited extent, the United States, which actually makes some fantastic petrol and diesel vehicles, particularly the Dodge Ram and some of those other really, really big utes that people who have big tools and need to carry their big tools around in.

But, Minister, I want to ask you about the unders and overs first. So if, for example, I’m importing, say, just Dodge Rams, a very large petrol or diesel vehicle, and that’s my specialist market—I only import those vehicles. Or, say, for example, I’m an importer and I specialise in importing used utes and selling them to tradies and farmers. A one-year-old or even a three-month-old ute that was first registered, say, in Japan or Thailand, like a Toyota Hilux registered in Thailand, is regarded as used when it comes to New Zealand, even though it might have the same kilometres on the clock as, say, a dealer demonstrator model that’s been imported as a new vehicle. So when we’re thinking about used vehicles, if I just specialise in importing, say, utes to sell to farmer and tradie customers, I’ll only have overs. I’ll only be liable for cost. I won’t have any unders. I won’t have any savings. So that’ll be all cost that gets passed on to my customer.

Then we think about the opposite. Say, I’m a motor vehicle importer, new or used, and I specialise exclusively in low-emissions vehicles. Of course, that would help to reduce New Zealand’s carbon profile, not the world’s though, because once that car’s left the factory gate, it doesn’t really matter where it’s driven. It’s a low-emissions vehicle. Imagine if I’ve got credits under this scheme. So we’re talking about the unders and overs component. Now, if I want to, as you pointed out, sell those credits to another dealer, say my alter ego that wants to import Dodge Rams, will those trades in these carbon credits under the schemes be subject to GST, to income tax, and to the anti - money-laundering requirements? Because there has been some concern expressed by industry representatives that, actually, while this sounds good in principle, if you import tens of thousands of vehicles a year and you can balance it because you’re a big importer, that’s fine, but if you’re importing, say, just tens or a few hundred vehicles a year, this is going to be very difficult to administer, and there is an opportunity for potentially big tax liabilities or even the risk of money-laundering through the way that these credits are managed.

Then I want to ask you a further question about the delay in the time that this bill allows for the payment of the charges that might be incurred by an importer. Minister, you’ve stated that importers will—they know there’s a schedule of carbon dioxide emissions and they will know which vehicles accrue certain costs. So I understand from that that you expect the importers to account for their own liabilities. But my second question that I would like you, potentially, to seek advice from officials on, is: will the New Zealand Transport Agency (NZTA) or the organisation administering the scheme be sending out an accrual or a statement on a monthly basis, even though it’s not liable for payment until that six-month delay? Because there is considerable concern from importers that many of the smaller importers do not understand the scheme sufficiently well to carry out their own assessment of the costs they’ll be liable to pay. So they would desperately like, if there’s going to be a scheme, that they understand what NZTA or the agency administering it thinks they’ll be liable to pay for, even if there are some unders and overs and wash up. So will these importers get a statement monthly starting in January or February?

Then I just want to come back to some of the other issues raised in the regulatory impact statement, which I’m assuming applies to the initial clean vehicle standard regulations as much as it does to this amendment, because it’s voluminous. In fact, it’s a much more significant document than the three-page amendment bill that was tabled. So I just want to come to the regulatory impact statement and ask you some questions about the costs and benefits of this policy, Minister. Because it’s not clear who gets the benefit but it’s certainly clear with the clean vehicle standard who will pay the costs, and that will be people who import petrol and diesel vehicles, and those costs will be faced by individuals who import petrol or diesel vehicles, or importers, motor vehicle dealers, who import mainly petrol or diesel vehicles.

But let’s look at the benefits. So what criteria—3.2 of the regulatory impact statement—in addition to monetary costs and benefits have been used to assess the likely impact of the options under consideration, the options which produced this piece of legislation, which we’re now proposing to amend? Number one is leadership at home and internationally; this includes placing primary reliance on domestic measures to reduce emissions. Now, leadership at home and internationally: the advice we got at select committee last year was that the imposition of the Clean Car Standard at the wharf was years ahead of when the same standards would apply in the European Union and Japan. The motor vehicle manufacturers, like what you call your original equipment manufacturers, said, “This doesn’t make any sense to us because the standards in the home country where we actually make these vehicles won’t apply for some years, and yet you’re telling us we have to comply with them from 2023?” That makes absolutely no sense. That’s just going to be a tax, a tax on people who purchase or need these vehicles because we can’t do anything about it. Like, the standards we manufacture to, if there’s going to be a standard, should at the very least simply be a cut and paste from the standard where the vehicles that are imported to New Zealand are made. So, Minister, I’d like you to respond to that. Why on earth wasn’t the standard and the time frame of the countries where these vehicles are manufactured simply adopted?

Because the ACT Party’s proposed—when it comes to building products, for example—we just adopt standards from other countries, instead of making up our own. So, Minister, would you please respond to that? Because the leadership we expect from Government when it comes to climate change or any other policy is not to be leading in a way that is completely irrational, based on the advice of people who actually make cars, for example.

Then I just want to come to the next item, which is leadership at home and internationally. Sorry, it’s just expanded—

CHAIRPERSON (Greg O’Connor): OK, Mr Court, we’ve been pretty generous. The bill now. This section, please. You’re very, very broad. The Chair has been very generous. So back to the part, please.

So, now, with respect to the carbon dioxide accounts, I just want to bring your attention to item one, extent to which the initiative reduces emissions; this is page 34 of the regulatory impact statement. By what amount will this policy or this regulation, amended or not, reduce emissions? Because it’s not clear. It’s not clear if we look at the parallel legislation, the Clean Car Discount, how much that will actually reduce emissions by on an annualised basis. In response to written questions that I’ve posed to you, you’ve suggested somewhere between 5 million and 6 million tonnes of carbon dioxide equivalent by 2050. I mean, by 2050—I mean, we could have flying cars by then, Minister, to be honest. So, look, what the ACT Party wants to know, will this policy reduce emissions; if so, by how much? What will the cost per tonne be to reduce emissions, given that it looks like all of the costs at the moment are simply being applied to petrol and diesel vehicles like utes and vans and people movers for large families, which are still being manufactured in Japan and other countries, still required by New Zealanders in order to, you know, take their families places and do business? So will this actually reduce emissions; if so, by how much and at what cost per tonne, Minister? Thank you.

The member’s comments, to a large degree, were quite general and principle-based in terms of the parent legislation and the Clean Car Standard itself. I don’t think many of them particularly pertain to Part 1, but I’ll address those which did appear to. I am happy at the beginning just to confirm, in respect of his final question, that the regulatory impact statement on page 10 is, in fact, very, very clear about the emissions abatement that is achieved under the Clean Car Standard. It’s estimated to save 1.07 million tonnes of carbon dioxide between 2021 and 2050. The member asked what the abatement cost per tonne will be. It’s the opposite if there’s not a cost per tonne; it’s a positive benefit-cost ratio of 2.22, and that’s because, actually, for every tonne that we abate under this policy, New Zealand actually saves money, and that is because of the massive cost over that period of time of imported fuel that we, effectively, reduce out of the system. So it’s not a policy that costs us money to abate carbon dioxide; it’s a policy that actually has a positive economic benefit for New Zealand for every tonne of carbon dioxide that we abate. That’s on page 10 of the regulatory impact statement.

In respect of some of the member’s other questions and points, in terms of questions around the operation of the scheme more broadly—anti - money-laundering, GST, etc.—those don’t particularly relate to Part 1 of the bill, and, as I understand it, they’re being worked through with importers.

In terms of how carbon dioxide accounts will operate, that’s not Part 1 of the bill; that’s covered by Part 2 of the bill, which is really where we can have a good discussion about how carbon dioxide accounts will operate. I’d be happy to address those matters at that time.

I move, That the question be now put.

Thank you, Mr Chair. So, back on Part 1, I just want to come back to the motorcycles and mopeds error—apparently—Minister. When motor vehicle importers and submitters came to the Transport and Infrastructure Committee last year when this legislation was proposed, they identified that motorcycles and mopeds could potentially be captured. This is information that the ACT Party, through written parliamentary questions, was able to obtain in response from your office, along the lines that after some time it was acknowledged that, yes, it would capture motorcycles and mopeds. My concern with this amendment is: what other consequential impacts are there that the industry has told the New Zealand Transport Agency (NZTA) about, potentially your office or yourself, in discussions? Because we can see that there has been some external consultation—sorry, no formal external consultation, but there have been closed-door meetings with the Motor Industry Association and the Vehicle Industry Association, who primarily import used vehicles.

So I’m interested as to what other potential perverse or unintended but likely outcomes have been flagged as a result of the primary legislation and these amendments. Does it include, for example, a matter I referred to previously, that when vehicles are coming across the border and when an importer has to put information into their carbon dioxide account, the distinction between a new vehicle that lands in New Zealand unregistered and is taken to a dealer’s lot and then driven by people on test drives—what we might call a demonstrator model, that might have 15,000 or 20,000 kilometres on it, or even less, 1,500 kilometres on it. By the time it is finally sold and registered in New Zealand for the first time, how is that different to a used car that arrives in New Zealand having been previously registered in, say, Malaysia or Thailand or even Japan which has also travelled only a very few kilometres—maybe, you know, 500, 1,000, 1,500? And why would there be a difference between the way those vehicles are treated at the time of first registration, between an imported vehicle that’s done a few hundred kilometres, or potentially none, and an imported one that’s imported by an independent importer and one that’s imported by an original equipment manufacturer, say directly from the factory? The vehicles have had the equivalent running in the country that they were manufactured and supplied from.

So could the Minister in the chair, Michael Wood, please clarify, given that that’s a perverse outcome of the scheme, that a vehicle is described as used even if it’s been barely used—and, in fact, a vehicle registered in New Zealand for the first time could qualify as new, even though it’s done more kilometres than an import which is defined as used. That’s an issue that the motor vehicle industry has raised with me as the ACT transport spokesman, and I’m wondering if there are other perverse unintended potential consequences from the amendments proposed in Part 1, obviously which correct the accidental inclusion—or supposedly accidental inclusion—of motorcycles and mopeds in the rules.

Then I just want to come to this part with opening carbon dioxide accounts. Now, the ACT Party has heard that there have been significant problems establishing the IT system at NZTA in order to manage carbon dioxide accounts. In fact, like any new IT system that wasn’t fully thought-out when the legislation that empowers it was passed, often these things take much longer and cost a lot more. So, Minister, could you also please give us an idea about what was the original cost and time frame for establishing the carbon dioxide account and accounting system, what was the original cost, and what is the current time frame and likely estimated total cost?

The member asked whether there are any other potential adverse impacts that have been flagged to me; the answer is no. I’m not aware of any of those. There’ll of course be policy disagreements that you get from the sector about whether they agree or disagree with the scheme, but there are no impacts beyond that that have been raised with me, and, by definition, those things won’t be in the bill if they are other. We’re just here to debate those matters which are in the bill that is before us.

In terms of the question around how vehicles are defined for the purposes of this legislation as new or used, my understanding of that is that nothing in this legislation changes the way in which we assess whether a vehicle is new or used at the point of importation.

When it comes to the opening of carbon dioxide accounts, the most recent reports that I have received have been that, actually, very high numbers of importers have already successfully opened their carbon dioxide accounts. I’m not advised that there is any particular issue with the IT system that enables the establishment of carbon dioxide accounts. But we are wanting to make sure that the system is well set up to enable importers to have clear access as to the way in which fees and rebates may be getting applied and for the trading system to come into effect, and that’s the core need for the extension to 1 June.

I move, That the question be now put.

Thank you, Mr Chair. So I just want to come back to the question that I posed before, Minister—that I asked if potentially you need to get advice from officials on—which is: will motor vehicle importers be receiving a statement on a monthly basis between the time when the standard comes into effect, 1 December, and when they have to pay, which has been delayed by six months? So will they be receiving a statement that shows their current position—their overs and unders, for example—and what their potential financial liability might be? Because I think it’s all very well to come to the House and say, “Look, we’re going to make an amendment; we’re going to give importers, business people”—and the people that actually rely on these vehicles, because we don’t import vehicles into New Zealand just so they can sit in some lot and be polished regularly and so on. They’re actually being delivered at a rate of—you know, up to 200,000 or so vehicles a year, to people who need vehicles; they need them for their business. They need them—like people movers, for example—to get kids and their caregivers to school.

So if we’re going to be debating what seems to be a simple amendment to delay the implementation by six months, I think it’s really, really important that we understand that people who are purchasing a vehicle, that’s, say, being purchased from an auction in Japan and imported to New Zealand, and they expect to get it on a certain date, they will want to know how much they’re going to have to pay when that vehicle arrives here, and it can be between six weeks and three months. I mean I have, personally, ordered a vehicle from Japan a few years ago; a fantastic Subaru Legacy, that was purchased at auction at a reasonable price—

💬 Rachel Brooking: Oh, not as good as the Outback.

—and it was delivered to New Zealand, and the member there asks me “Wasn’t it a Subaru Outback?” Well, I’ve had a number of Subarus over the year, Rachel, and I can say they’re fantastic vehicles—

💬 Barbara Edmonds: Rachel Brooking.

Yes, Rachel Brooking, thank you very much—and I know that you also drive a Subaru and I understand it’s a turbo diesel—

CHAIRPERSON (Greg O’Connor): No, I don’t, actually, Mr Court.

So, Mr Chair, coming back to the point. So for people like myself or the Labour MP Rachel Brooking who might want to order a replacement vehicle to be purchased at auction in Japan, we would want to know not just the auction price, not just the price to ship it to New Zealand or the price to achieve engineering compliance inspection, warrant of fitness, the on-road costs; we’d also want to know what is the carbon charge that we need to pay. So I think it’s absolutely vital, Minister, that we understand—for vehicles that are imported to New Zealand between 1 December and when this delay comes into effect, between when the dealers are liable to pay for the carbon charge associated with these imports, will they know how much each vehicle is going to cost the purchaser, the person like myself, or Rachel Brooking MP who also drives a Subaru, if we order a new one or a replacement one? Because it’s not clear from the amendment that that particular issue has been resolved.

There is a concern also that the industry’s raised that the carbon dioxide database is, in fact, not complete or accurate either—which is another reason which could be behind the delay in implementation, because there’s disagreement between the carbon dioxide emissions factors that apply to used vehicles. For example, you know, is my Subaru Legacy GT model—actually, that’s what I would like to have, you know, the turbocharged model, and potentially that’s the one that Rachel Brooking, Labour MP has: the turbocharged model. Is a new one of those, is a one-year-old vehicle—does it produce the same amount of carbon dioxide as, say, a two-year-old vehicle? And, if it’s a Subaru, it will never, ever degrade in performance over its lifetime; we know that—they’re the best vehicles in the world. But, look, is the carbon database that the carbon dioxide account is on complete or accurate, Minister?

So a couple of questions there. Will the importers get a statement, and is the carbon database complete or accurate? Thank you.

Addressing some of the questions raised by the member: the member firstly makes a point that it’s important for purchasers to know what the cost of their vehicle will be; of course that’s true. The Clean Car Standard does not establish the cost of any individual vehicle, and if I can just explain, briefly, why that is.

Firstly, it’s the importer and the distributor who will set the price. And it could well be that an importer brings in a particular vehicle—if they’re a category 2 importer—that is significantly above the carbon dioxide standard, and that could incur a fee, but it could be that the following week they import a vehicle that is below the standard and incurs a rebate, and so the importer—and then the distributor—will make their own decisions about how they price their own vehicles. The Clean Car Standard applies either a rebate or a fee—or, in fact, for many vehicles, nothing—to individual vehicles, and that applies to the importer; it doesn’t apply to the purchase price. He does ask an important question, and I’m happy to clarify this in case it wasn’t crystal clear from previous answers—the importers will be able to have clear information between that period from 1 January to 1 June about any fees they have incurred or rebates that are owing to them. They will have established a carbon dioxide account, and it’ll kind of be like looking into a bank account: they’ll be able to see if there’s a fee that applies to individual vehicles or rebates that apply to individual vehicles. Again, I do note that, actually, for many vehicles, neither will apply—there’s a significant band in the middle, but they’ll, effectively, be able to look at that and understand what their position is and therefore what they might owe, or what their net rebate might be from 1 June when those come into play.

The final point he raises—I mean, it does go to a more fundamental question in the Act rather than this part, but just for the sake of clarity, he asks where the carbon dioxide values come from that we assess vehicles against. Those are values that are held by Waka Kotahi. Primarily, those values are supplied by the industry itself. In the event that a vehicle doesn’t have a value that’s applied to it when it comes into New Zealand, the primary legislation gives Waka Kotahi the ability, based on established methodologies, to apply a carbon dioxide value to that vehicle.

I move, That the question be now put.