Road User Charges (Light Electric RUC Vehicles) Amendment Bill

I move, That the Road User Charges (Light Electric RUC Vehicles) Amendment Bill be now read a second time.

This bill, which we are now putting through Parliament, through its second reading, is an important bill in order to ensure that all vehicles that use our roads are paying towards, contributing towards, the maintenance and upkeep of our roading network. In 2009, the previous National Government put in place an exemption for light electric vehicles and plug-in hybrid vehicles from paying road-user charges (RUCs) in order to encourage their uptake. The exemption was always to end once those classes of vehicles reached around 2 percent of the light vehicle fleet, which they have now passed, so this legislation has been brought into the House in order to transition those vehicles into the road-user charge system on 1 April.

I note that this legislation has been brought to the House and has had to go through a relatively quick process through a select committee due to the fact that the last Government failed to address these issues prior to the last election. They consulted back in 2022 in relation to what changes were needed to transition plug-in hybrids and electric vehicles into the system but failed to make any actual legislative changes.

One of the key issues which I asked the Transport and Infrastructure Committee to look at is in relation to plug-in hybrid vehicles, because, of course, if we didn’t bring this bill to the House, those vehicles would have to pay the full road-user charge rate, by means of the fact that they both are powered by a petrol engine and also by an electric battery which can be plugged into the wall and receive electricity. So if this legislation wasn’t brought to the House, on 1 April this year, the reality is that the owners of plug-in hybrid electric vehicles would be paying the full road-user charge rate of $76 for 1,000 kilometres. In order to ensure that that didn’t happen, because, of course, that would be unfair based on the fact that they do consume fuel and pay fuel excise duty, we put this legislation to Parliament in order to address the fact that the RUC rate needed to reflect the fact that they were also paying petrol excise as well. We proposed in that legislation a 30 percent RUC rate reduction based on the fact that those vehicles consume on average around 2 litres per 100 kilometres, but also reflecting the fact that the real-world usage is often different from what the manufacturer data says. And, of course, we asked the committee to particularly look at that issue to ensure that we had a fair outcome from it.

The Government has announced today that we will be ensuring that that RUC rate is extended to 50 percent, reflecting the fact that, actually, particularly, older plug-in hybrid vehicles do have a higher fuel consumption due to their battery life being either diminished or not being as good as some of the newer plug-in hybrid vehicles. So we think this is an ability to compromise and get to a better approach on this particular issue.

Of course, the select committee heard from hundreds of submitters over a very short period of time. We thank the select committee for the time that it took to listen to those submitters. As I outlined, the reason for the short select committee was, unfortunately, due to the fact that the last Government didn’t deal with this problem, but I do just want to thank the committee for dealing with those hundreds of submitters and to be able to come back to the House in such a short period of time, and I want to thank all the members of the committee for their contribution towards that.

Of course, the other change that this bill does make is in relation to battery electric vehicles, and, of course, it requires those vehicles to pay the RUC rate of $76 per 1,000 kilometres from 1 April this year. Of course, this legislation isn’t proposing to adjust the RUC rate, as other members may be wanting to do.

But I do just want to make the final point in this debate—two final points—in relation to the next steps. Firstly, this is a transition. The reality is that this bill has highlighted the fact that there are significant variances in terms of how much vehicles pay to use the road depending on what type of fuel they use. So if you have a hybrid or a plug-in hybrid or a battery electric or a diesel, the reality is that vehicles are paying a different amount to use the roads compared to others, based on the fuel that they’ve used. That’s because our system for paying to use the road has been based on fuel excise duty, which charges a certain number of cents per litre, rather than a predominantly road-user charge system, which charges based on how many kilometres we use the roads. So it’s this Government’s intention that this is the first step in transitioning all vehicles to a road-user charge so that all vehicles, regardless of what type of fuel they use, whether they’re a petrol car, whether they’re a hybrid, whether they’re a plug-in hybrid, whether they’re diesel, whether they’re battery electric, whether they’re hydrogen—regardless of what type of vehicle is using the road, ultimately, it is this Government’s view that vehicles should pay road-user charges based on the weight and the distance that they use the road, rather than based on the type of fuel that they use.

So this Government will be progressing further changes in regards to moving all vehicles to a road-user charge based on distance travelled and vehicle weight. We’re currently receiving advice on that, and we’ll be moving at pace and doing that as quickly as possible, and I note that the select committee also made that particular point in their report back to the House.

The final point is that there will be a two-month transition from 1 April. So there are over 100,000 vehicles which will be impacted by this change. We note that that is a significant number of vehicles to bring into the road-user charge system. The New Zealand Transport Agency is communicating with all of those owners of those vehicles, and there will be two months which, by the end of that two-month period—by the end of May—all those vehicles will have had to have purchased their first road-user charge licence. So we’ve tried to provide maximum flexibility in order to smoothen that transition and also to ensure that the agency is able to have time, people are able to have time, before they have to have purchased their first road-user charge licence.

So this Government supports the intent of this bill. We’re pleased with the progress it’s made. We are making the change around the plug-in hybrid rates but we’re also, as I said, outlining our intent to continue to progress work for all vehicles to be paying a road-user charge based on distance and vehicle weight. I commend the bill to the House.

Mr Speaker, thank you very much. It’s an honour to speak on this important piece of legislation. Transport across our big country for everyone—individuals or commerce—is vitally important. I wasn’t on the select committee, but I want to thank my colleagues, who arguably have saved the day, actually, particularly for plug-in hybrid vehicles.

Can I just go back a couple of steps? I’ll confess that as someone who drives probably 60,000 to 70,000 kilometres a year, owns a truck that probably creates the potholes, rides a motorbike that suffers when you hit the potholes, and has a car somewhere in the middle there, our roading system is in a dire situation, in large part because we bought heavier trucks—the last National Government put heavier trucks on the road—and then froze the funding for maintenance and improvements. So, when we came into Government, we had a big challenge of increasing substantially the funding for roading, and indeed we did do that.

As was pointed out before by the Minister: in 2009, the National Government saw the need for electric vehicles and so brought in some—well, what they thought were exemptions, of course, for electric vehicles. The idea was that we’d have a transition through to more electric vehicles in our fleet—in fact, the target being 2 percent. In fact, that only started to occur when the Labour Government brought in incentives—or the Labour coalition Government, when New Zealand First had some sense—when we brought in the Clean Car Discount that did provide a direct incentive for people to buy Teslas. Indeed, the Prime Minister took up that opportunity—and because, as we know, there’s market failure through our economy and if we’re wanting to transition forward, then we have to provide the incentives. This piece of legislation indeed moves that forward. It was going to park the incentives, because at a 30 percent discount for plug-in hybrid vehicles, they would have been paying more than the equivalent petrol vehicle. That anomaly, which would have discouraged people from the transition, was addressed by my colleague who brought in an amendment which the Minister in his wisdom is going to carry through. So thank you very much to members on the committee.

If I go back to Labour in Government, we did see this anomaly and this challenge of how we would get vehicles that, clearly, are using the road, to contribute to road maintenance. So Waka Kotahi, who I think, in my personal experience, is not the best Government organisation—I’ve seen over many, many years, them in their different forms, come to Government with advice, much of it flawed, in my view. They have changed systems. We have a road system that’s not safe, a road system that is not maintained, and a road system in which consecutive Ministers have taken advice from Waka Kotahi. I hope this current Minister is going to shake them up because I don’t believe they’ve provided the right advice on driver licensing and, as I say, on road safety and many other things. And I’m not sure that their advice on road-user charges (RUC) is the fairest way, across the board, to provide direct contribution to road maintenance, or is the right way forward.

As a truck owner, you can go online, and you can pay road-user charges and you’ll get a ticket in the mail and then you put it on your windscreen. It’s all OK and many diesel vehicle owners would know that system. But if we’re going to apply that across the whole fleet, it is going to be, in my view, a bit of an administrative challenge. That’s one of the things that is being looked at—and I’m sure the Minister might come to it—so I’m just putting on the record that what we’re doing here, in making adjustments for the right reasons and finally having the incentives in place for a decarbonised lower-emissions fleet, which we all agree is necessary—I hope that we’re not going to bring in an administrative system that becomes another challenge for the average Kiwi.

If you run a fleet of trucks, you’ll have a sound administrative system. Even if you run a couple of trucks or you run one truck, you kind of put up with the road-user charges application system. It’s not that complex but it is none the less an administrative requirement. For the average Kiwi to transition from a petrol vehicle, where every time you fill up, you pay your excise, into one of having to actively apply for road-user charges, then I think there may be some challenges. Now there’s an electronic alternative. And the question I’d ask of the Minister or of Waka Kotahi as we move forward is: what’s the cost of that system relative to the benefits, and is there an alternative? Because I think that the Minister of Transport will come back to this House, in this Government, and propose that road-user charges go up. They’ve said there will be no extra taxes or charges. Well, I don’t believe them. I’ve seen too many false statements on that area, so the issue of not only the charges for RUC but then the system of rolling that through the whole fleet is one that we in Labour, in Opposition, will challenge the Government as they move forward.

Can I acknowledge the areas in the bill where there have been exemptions made, particularly for rural vehicles. I think that’s important, particularly for rural vehicles. I think that’s important, and I’m sure that those people moving out in areas—and, obviously, there’s the evolution, in spite of what farmers might have denied, of electric vehicles on farm which will be more efficient and more effective as well, in many ways, to get around the farm. That is an evolution that I think we must also welcome.

Can I just say that the other thing that this bill will do is put the Government and our country in a better position to honour its commitments in the EU-New Zealand free-trade agreement which we will be debating after this. Because if the changes hadn’t been made by my Labour colleagues to provide a 50 percent discount for RUC for plug-in vehicles, and they had left it at 30 percent, then in fact we would have been stepping back from what has been in place: an incentive to move to a decarbonised passenger fleet.

The EU trade agreement says—and it might be discussed later—that we, as two parties to agreement, must continue to do our best to reduce emissions across our economies and contribute positively to the Paris accord goals. So, they are noble and, in fact, legal obligations, and the adjustments made in this bill mean that we will continue on that track, hopefully with people who buy plug-in electric vehicles who now will at least have the same benefit, if not a greater benefit, than remaining with an electric vehicle.

The reality is that human nature likes incentives. We heard it from a couple of the Ministers there that the farmers want incentives, they don’t want to be driven by regulation. Some would call it subsidies, I guess, and subsidies and incentives are part of human nature. What we’re doing in this piece of legislation here is shifting the obligation to pay for your use on the roads and arguably, your impact on the roads, although in my view that still has to be properly assessed. But electric vehicles and plug-in hybrid vehicles do clearly contribute to some impact on the roads, and they do have to pay through RUC, but the plug-in hybrid vehicles will pay at the appropriate level, with still a little incentive to move in that direction.

This is an important piece of legislation. It’s one step down the track to a fairer system of paying for our highway network. But if this coalition Government did as its previous National Government did—that is, move to a philosophy of sweat the assets and minimise the investment in road maintenance, safety upgrades, and road improvements—then we’ll be left when they exit office with the same dilemma we faced in 2017 when we came in, and that is the need to significantly increase the funding for our roading networks and for alternative methods of transport, including rail, cycling, walking, and just getting around our country. We did a good job. We moved us forward.

This issue of RUC or the issue of electric vehicles and plug-in hybrids and how they contribute is now being addressed through this legislation, improved dramatically by the simple rebalance of the discount rate for plug-in hybrid vehicles. So thank you to my colleagues, thank you to the Labour Party and their commitment on the select committee. We, in Labour, support this bill through the House. Kia ora.

Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. Climate change is the single biggest issue facing us right now as a country, as a people, and as a planet, and the reality is that we need to work together and cooperate on a level we never have before in order to address this challenge. It’s going to affect farmers, it’s going to affect tradies, and it’s going to affect our infrastructure if we don’t take action now.

If I told you that there was a way we could take action on climate change that not only didn’t cost us money but it saved us money and it made a more productive and efficient transport system and a more productive and efficient way of living and doing business in New Zealand, I would think that Government parties would support that, because here’s an opportunity to do something that’s not just good for the climate but it actually, in the short term, saves us money, and in transport, it’s precisely that. Everything we can and need to do for a more sustainable transport system that’s going to be better for the climate saves New Zealanders money and it creates a more productive and efficient transport system and better cities, and yet the Government is doing the opposite, in almost every area of transport, of what is good for the climate and good for New Zealand. That’s unfortunate, and this bill—this is the second reading of this bill—is a proposal that in the short term really goes in the opposite direction of what we need to do in terms of supporting more electric and low-emissions vehicles into New Zealand.

Low-emissions and electric vehicles are really a huge opportunity for New Zealand because so much of our electricity is renewable already. We’re spending so much money on imported fossil fuels to run our vehicles, and we have such a vehicle-intensive transport system—a private vehicle - intensive transport system. We’re spending all this money on vehicles, plus the fuel to run them, and the fuel to run them is mostly generating energy-related carbon emissions, which is bad for the climate. So here’s this win-win opportunity, but, unfortunately, what the Government is doing is simply taking away any incentive to switch to electric vehicles right at the time when we most need Government support and incentives in order to get that transition.

The reason the bill does this—and we heard it through the submissions. The other downside to this whole process has been that it’s been incredibly short. It’s been rushed. The select committee was given only nine days to announce submissions on the bill, to hear submissions, and to report back. The normal Parliament process is six months. Even four weeks would have allowed a better process, but we only got nine days, and in the very short time that the public had to submit on the bill, we got over 500 submissions. Now, I think we had like 36 hours for submissions.

We got over 500 submissions, and in the departmental report from the Ministry of Transport, it says that the main focus of submissions was advocating for battery electric vehicles being charged a lower road-user charge rate than what is proposed by the Government and that plug-in hybrids should be charged a lower rate. All of these submissions, the majority of these submissions—if you look on page 14 of the departmental report, it says, “the majority of these submissions agree that [electric vehicles] should contribute towards the cost of the transport system”. However, the appropriate road-user charge rate for battery electric and plug-in hybrids “should reflect their important role in reducing greenhouse gas emissions and addressing climate change concerns.”

Now, what we’re interested in here more than anything else is outcomes: what will the outcome of the policy be? When you combine the outcome of this policy with the outcome of removing the Clean Car Discount—which was having a transformational impact on the vehicles coming into the country—then the reality is we’re going to import fewer electric vehicles in the next few years. That means that every extra higher-emissions, fossil-fuelled vehicle that we get in the country locks in 20 years of emissions, and not just 20 years of emissions but 20 more years of New Zealanders paying for overseas fossil fuels, rather than using cheaper, cleaner, renewable vehicles using electricity generated right here in New Zealand, which is good for our economy and good for consumers.

So the reality is that the majority of the submissions were opposed to the proposal, even though they support road-user charges being applied to battery electric and plug-in hybrids. They support it, and there was a particularly strong submission from an industry group. We had, basically, the whole industry: the Automobile Association, the Motor Trade Association, the motor vehicle importers’ association, the vehicle importers—that’s the second-hand vehicle and the new vehicle industry groups—Drive Electric, and others. They had a big, joint submission that said, “We believe that the current planned [road-user charge] rates that will apply from 1 April [this year] on [battery electric vehicles and plug-in hybrids], creates a significant distortion between [road-user charges] and [fuel excise duty]. Reducing these RUC rates [was] requested”—so the rates in this bill were requested, and the Green Party supported their proposal that we reduce our battery electric rate to $60, and for plug-in hybrids, we advocated for $38.

Now, as it happened during this rushed process, if you read the select committee report, you would think that the Government was not going to amend the bill as introduced, and yet attached to the bill, it is amended, and it is amended to have a lower rate for plug-in hybrid vehicles, which is great. So, look, if one thing can be taken away from this, because the Government embraced this change of the lower rate of $38 rather than $52, which it was going to be—

💬 Tom Rutherford: $53.

$53. Sorry, it’s $53. So here, in clause 15(2), the amendment was made, even though the Government members of the committee said that they weren’t supporting that change. They did vote unanimously to support it, and now the Minister of Transport is saying, “Hey, actually, I did want that. I did want the committee to consider options.”

So, please, let that be a lesson to Government members of the select committee that they have a really important role to play in improving the legislation from the executive. You all—Mr Speaker, I’m not referring to you, but you all, in the Government—didn’t come here to rubber-stamp what the executive is doing. You’re hearing from the public, you’re hearing from industry, and you can make an informed call if that could help improve the executive’s lawmaking, which happened in this case. So I really encourage members to take seriously the role of select committees in improving the legislation handed down by Ministers. You’re not here at the beck and call of Ministers; you’re here to hear from the public and make that law better, and, in this case, it has happened.

The Greens supported the amendment at the select committee, and all kudos to my Labour colleagues, who ensured that that amendment was in the version of the bill that was voted on by the select committee. So here we have a reduced rate now for plug-in hybrids, which is good, but the Greens still cannot support the bill, because we don’t have the reduced rate for the battery electric vehicles.

You know, everyone can talk about fairness until we’re blue in the face, but the reality is—this is very clear from the submitters—that people who own electric vehicles are going to be paying almost twice as much as a comparable petrol car. To me, that’s not fair, and that’s what the majority of the submitters said. A reduced rate for battery electric vehicles would actually be fairer, and not only that. It does help, but like the—

💬 Grant McCallum: You’ve got to fix the roads somehow.

Chlöe Swarbrick: Take the freight off.

There are ways to ensure—

💬 Tom Rutherford: And put it where?

—that they’re—

Chlöe Swarbrick: Put it on trains.

Sorry, I’m getting a little bit derailed here by the debate next to me, which is that—

💬 Tom Rutherford: “Derailed”—well done. I see that—I see that.

Members opposite should consider whether or not we have a transport system that is user-pays, because, at the moment, it’s not, and this was also clear. I’d call the attention of the Government members to this lovely flow chart on page 2 of the departmental report, which makes it very clear that road-user charges and fuel excise duty—petrol tax—do not pay for the total cost of the roads. There’s both massive taxpayer money going into highways and there’s ratepayer money going into local roads, and so it’s not a user-pays system, firstly.

Secondly, the more important thing is: are we going to get the transition to the electric vehicles that we desperately need, because every year that we don’t, it’s going to cost New Zealand more. It costs New Zealand at every stage. All of our dairy exports do not cover the cost of our vehicle and our fuel imports annually. Everything we can do to reduce that fuel bill now means more money in the pockets of New Zealanders, more money in New Zealand, and, at that same time, it’s really essential and necessary for the climate.

What we need to do here—everyone—is think past the debate of the last century and the last few decades, and start thinking about the present and the future: how we can actually get outcomes-focused policy that’s going to be effective. If there’s one thing that members opposite cannot deny, it’s that the Clean Car Discount got outcomes for New Zealand, and all this rhetoric and slang about tradies and farmers—it’s rubbish. The vast majority of the fees were paid by high-income people, paid by businesses, and paid by people in urban areas. So if farmers need the urban places to pull their weight, that’s what the Clean Car Discount did.

Thank you, Mr Speaker. I endorse a few of the things—to the surprise of this House, potentially—of the previous speaker, the Hon Julie Anne Genter. I do agree that our road budget is not being a user pays and is too highly subsidised, hence why I was quite glad to be in the Transport and Infrastructure Committee hearing about a discount that reflects real use and costs contributing to the national road transport fund, based on what the actual damage of a car, vehicle, truck, type of vehicle, type of fuel is.

Now, the thing is we’ve heard that it was a rushed select committee, and it was a decent hearing of the evidence, I thought. We heard from over 500 submitters and, as the previous speaker has said, a few industry organisations as well. I must say I heard a lot of support for paying our way. Many people who submitted said that they feel that it is time; that this has been a well-signalled transition; that we are going to have two months, which is long enough for people to get their head around it; and that 2 percent has been well matched. Out of the 50 cars on the road, 49 also feel like it is time to have the last one in 50 pay their way.

The 50 percent discount, people should know, is based on the road-user charge (RUC) of $76 per 1,000 kilometres. Now, a 30 percent discount was seen by some submitters as not fair, but that is because, in my understanding of the evidence, they were measuring that against the fuel excise duty paid by petrol vehicles. Now, we could have a discussion, but I don’t think we will right today, about whether everybody is paying their fair share for the road, and if there is a concern about polluters paying their way, perhaps the Green member who spoke before would like to address that everybody using the road pays their way. I think freight transport has been paying a fair share. The damage that they cause means that they are paying a higher rate for their RUC, unlike under-3.5 tonne vehicles, which pay between $1 and $3 out of their road-user contribution towards roads damage.

💬 Hon Damien O’Connor: Rubbish.

Well, I hear “rubbish” from the member Damien O’Connor, but I must say that wasn’t the information, despite his misgivings of the officials, that the select committee heard.

Now, I also think, Damien O’Connor, you did have a good point in your speech before: the admin fee needs to be looked at. There are many ways in which we could do this, and going forward, I hope that the Government makes steps towards having a broad-based and fair coverage for every road user through a RUC scheme. Because the way it is being measured currently, off the fuel excise duty, although it was good for its time, is well past its use by date and it needs to be reviewed. As a resident of the great city of Tauranga—

💬 Tom Rutherford: Great place.

It is a great place, Tom Rutherford. We have two of the three toll roads in New Zealand.

💬 Tom Rutherford: Toll-ranga!

Tauranga—yeah. I understand that many people around the country haven’t had the experience of using a toll road in their driving life. Well, I can confirm, as a resident who uses one or two regularly, that it is a seamless experience, on a beautiful road, especially the Eastern Link, and when it comes to paying for our use of that road, we get an automatic bill. If you sign up, as most residents do, to the tolling portal on the internet, you get an invoice at the end of the month and it’s paid very seamlessly. I realise that a large part of the cost that comes about through the tolling scheme is through recouping from people who have missed their payment, but I think the bulk of New Zealand, as the bulk of the people of Tauranga are currently registered, will understand how easy it is to actually pay a user-pays fee.

I commend this bill to the House despite the need for having more money from the users of a service paying for it. I think that it is about time that every user of the road pays their fair way. I thank you, Mr Speaker.

I’m pleased to rise to support this Road User Charges (Light Electric RUC Vehicles) Amendment Bill. Actually, I would note that this is the first bill to come from the 54th Parliament and be reported back to the 54th Parliament, so I’m quite pleased to have been involved in that process.

It’s about road-user charge (RUC)—what is RUC? RUC, effectively, is a charge for the access to and the use of the roading system. What it is not is a charge for carbon emissions, and we’ve seen the sort of interplay between them. That is dealt with in another way, through the emissions trading scheme (ETS) cost that is applied to fuels.

Light electric vehicles (EVs) and plug-in hybrid vehicles (PHVs) were always liable for RUC. What has been happened, though, is they haven’t been paying RUC because there’s been a specific exemption. Why was that exemption there? That exemption was there to incentivise the uptake of those vehicles until they got to about 2 percent, and that’s where we’ve got to. We’re at 2 percent now, so now that is coming off. This has been signalled for a long time. It has been signalled that it was going to drop off at the end of next week—31 March, that the charge would start to apply and the exemption would end. So if this bill were not introduced, what would happen is that EVs and PHVs—light EVs, light PHVs—would all be paying the full RUC right from the beginning, so we had to do something about that if we weren’t going to apply that.

Look, it was done at pace, and we’ve heard from the member opposite, from the Hon Julie Anne Genter, that it was done at pace, and maybe we should have taken six months. Well, I don’t think either side can really beat each other up too much about that. You could say that the last Government should have done something about it, because if you’re going to do it in six months, if I count back six months, it would have been September, which, by my calculation, is before the election. That wasn’t done.

You could say, “Well, this side of the House could have done it quicker.”, but, by crikey, we’ve been doing all kinds of different pieces of work, and it’s been a very, very busy schedule. So, look, we were left in this situation where this had to be done at pace, and it was. Since the first reading on Tuesday a fortnight ago—so a fortnight ago today—it was reported back to the House on Thursday last week.

You will note the dissenting views from Labour and the Greens around that timing issue, but, look, that’s the reality of it. We were put with the work we had to do and we did it. The timetable was tight. We heard from submitters Friday before last. We dealt with the officials’ feedback, drafting, and final decisions by Zoom, because the House wasn’t sitting. That did cause us to make one slight whoopsie there, but that’s OK; we’ve ended up in the right place, I think.

Look, I want to thank everybody for the work done in a tight timetable. It involved some late hours. I want to thank the members and the alternate members from both sides of the House for their participation. I want to thank the Office of the Clerk who worked very, very hard on this, and the parliamentary drafting office and also the Ministry of Transport and the New Zealand Transport Agency (NZTA), who provided us with some great information and worked very, very hard.

💬 Hon Mark Patterson: Well chaired, too.

Oh, thank you very much. Thank you very much, Mark Patterson. Look, I especially want to thank the 518 people and organisations that made submissions in a very short period of time. They had less than 48 hours to make submissions, but they did it. I was really, really impressed they did it, and they were quality submissions too. We had 19 who appeared the following day on that Friday.

Submitters were almost entirely owners of electric vehicles, PHVs, or industry organisations, so it wasn’t like the people who own petrol vehicles were making submissions. It was the owners of PHVs and EVs who were making submissions, and, almost without exception—certainly those that we heard—they all said, “We should be paying a share. We should be paying towards the use and maintenance of the roads.” The only argument was about how much.

The EVs—I’ll deal with that one first. Several submitters noted that the RUC per distance travelled—and you’ve heard that again from across the House there—would actually be, while it’s the same as the light diesel vehicle, it’s actually higher than the average light petrol vehicle. The reason for that is that since the RUC level was set, petrol vehicles have got more efficient. So that’s a good thing, but what it does mean is that the petrol vehicle is actually going to be paying slightly less on average than the RUC. And if the RUC is applied to EVs, they’re paying slightly more than that for the moment, for the same distance travelled.

So you could consider that to be a good thing, because it means we’ve got less emissions, less petrol being used by our petrol fleet, which, of course, is the bulk of the fleet. We did consider this. The advice we got from officials was that this would have been within the legislative scope but not within the policy scope of what we were presented with. Despite the Greens, in particular, here—the alternative view that they’ve put in the report back—when we talked about whether we would actually advance this idea within the Transport and Infrastructure Committee deliberations, nobody wanted to do so—nobody wanted to do so. So the opportunity was there to raise it—probably not to win it, but the opportunity was there and it was not taken, not by the red party, not by the Green Party. So I think that is important that you know that.

So moving on to PHVs: we’re talking here about a very small proportion of the vehicle fleet—about 30,000 to 40,000 vehicles out of 4.5 million vehicles in the fleet. That’s about two-thirds of 1 percent of the entire vehicle fleet. The rate that we applied to them—the discount rate that we applied to them—was a specific issue that the Minister asked us to consider, and we’ve had pointed out to us across the House that we should have considered it and we did. We thought very carefully about it.

The issue is that PHVs, of course, use both petrol, so they pay the fuel excise duty, and they will pay RUC through the battery use. The question we’ve got there is we didn’t—and this is the important part of the bill—want them to be ending up, essentially, being double-taxed, paying for both at the full rate for the full distance that they travelled. That would have been unfair to PHV vehicles.

So the question, then, is: what is the discount rate? We heard lots of submitters, and they were all arguing for all kinds of different ways of administering it, because every single vehicle is going to be different and used in a different way. There’ll be vehicles which are used in urban environments, which are largely using battery. There’ll be vehicles which are older, so their batteries have lower capacity, so they’re more likely to be using petrol more often.

So how do you end up with a fair system? Some people argue for doing it on the basis of the age of the vehicle. Some people went even further and said you should do it by the individual circumstances of the vehicle, but you’ve got to make it administratively efficient; you can’t do it in any other way. So, really, what it came down to is what is a fair, balanced approach in terms of the discount rate that we chose. Well, that was, I think, well reflected in our select committee commentary, although the select committee commentary—and, as we’ve heard, the actual rate that was applied is slightly different because we didn’t get everything 100 percent right there, but never mind.

Labour started consulting a couple of years ago on a 20 percent discount. The bill, as introduced, said a 30 percent discount, and that really was saying that we think it’s 20, but because of the variation of the fleet, maybe we’ll be conservative; we’ll make it 30. We kind of reported back somewhat accidentally at 50 percent, and that is what Cabinet has agreed at 50 percent, and I think it’s a very, very good outcome. I think you could argue for anything between 30 percent and 50 percent. But the really interesting bit that we found when we asked officials about this, they found a European study, and that European study of 9,000 PHVs indicated an average of 4.1 to 4.4 litres of petrol per 100 kilometres, and that’s equivalent to a 50 percent discount, so that doesn’t seem an unfair outcome.

So I think the other point to make in terms of RUC is that whatever you do, it’s going to be unfair to somebody, and we need to make sure that we move to something which is fairer, and that is a RUC system right across the board.

I want to finish by addressing a couple of other issues which arose in the bill or during submissions and consideration. First of all, you’ve already heard from the Minister that there’s a two-month transition period. That is going to be quite challenging, because a lot of people—EV owners, PHV owners—are not going to be familiar with the RUC system; I acknowledge I’ve not ever been involved directly in the RUC system, and I’d imagine most of those vehicle owners won’t have been, and they’re going to need to be educated to get involved in that system and to know what they’re supposed to do.

The next point to make is that the bill exempts light EVs under 1,000 kilograms. If you look at the vehicles that are around, virtually there is no car that I can see that’s a proper-looking car that actually is under 1,000 kilograms, so you’re talking about motorbikes and light vehicles of that nature. It also makes clear that light all-terrain vehicles are also going to be exempt, because they’re generally used off road.

We’ve heard from some of the submitters that the RUC level might disincentivise the uptake of EVs, and, in the short term, that may be true, but if we move to RUC relatively quickly, it’s not going to be a big issue. The issue is much more the rate that you apply through the ETS for the ETS charge on fuel, petrol, or diesel. Also, there are other more significant issues there, not only the ETS running costs, environmental outcomes, and, of course, the cost of buying the vehicle in the first place.

We had a bit of discussion about weight, but it’s very clear that under 3.5 tonnes, the impact of weight on the road is not particularly significant, and that only 1 percent of the cost of fuel actually relates to weight. The rest is all about access and about the use of the roads and so on.

The final point I want to make, in the last few seconds that I’ve got available, is those issues which the Hon Damien O’Connor raised around RUC administrative costs—those are really important ones, and that is something which we think is really, really important that NZTA and the Government pays a lot of attention to dealing with. Those costs are too high, especially if you buy your RUC in small parcels. They’re going to be likely to be regressive. They’re largely made up of bank charges and NZTA overheads, and so they do need to be addressed and got down.

Again, I want to thank everybody who’s been involved in bringing the bill to this point and to commend the bill to the House.

The next call is a split call, I understand—Scott Willis.

Thank you, Mr Speaker. To be clear, the Minister and his merry hand of free-market preachers and adherents to the prosperity gospel seem to want to drive to the Rapture in their SUVs, because the Minister can’t abide electric vehicles (EVs), and God forbid travelling on public transport. There’s nothing like a thirst for fossil fuels to power the end times, is there? Is it because the Minister is awaiting the Rapture that he can’t be bothered with earthly details like good legislation, like climate initiatives, like a livable planet?

This Government cancelled the Inter-island Resilient Connection with no plan B for safe ferry travel across Cook Strait. The Government’s killed off light rail for Tāmaki-makau-rau, stopped Wellington moving, and supported road speed increases which will increase fatalities on our roads, so, no, they haven’t started. They want to get started on increasing fatalities on our roads—

💬 Andy Foster: Point of order, Mr Speaker. As much as we’re enjoying the speech, I haven’t yet heard one reference to the bill at all.

ASSISTANT SPEAKER (Teanau Tuiono): Just to note that relevance is the role of the Speaker—that’s me. The member may continue.

Thank you, Mr Speaker. We do need road-user charges and fuel excise duty to help pay for the upkeep of New Zealand roads—that’s true. But the Road User Charges (Light Electric RUC Vehicles) Amendment Bill, driven through urgency, has shown us the danger of speed.

Chlöe Swarbrick: It’s off track.

Ha, ha! Speed in this legislative space makes for mistakes—mistakes that the member opposite has admitted—and poor policy. Mistakes that have fallen well this time, but it’s a blitzkrieg of destruction which only really serves the fossil fuel sector.

I read in National’s electrifying New Zealand policy that “National wants a future where buses and trains are powered by clean electricity, where we go on holiday in cars powered by clean electricity,” and yet what we see is far from the rhetoric. Forget buses and trains, forget ferries, all National has done is work to disincentivise EVs and ignore the rest.

The Better New Zealand Trust submission stated: “To have any chance of meeting our climate goals the Govt must reduce … fossil fuels by all means possible.” And we’ve heard submitters’ extensive concerns about this bill through the select committee process—the foreshortened select committee process. The Motor Industry Association talked about the timing for the removal of the road-user charges exemption for light vehicles on 1 April so soon after the repeal of the Clean Car Discount. And their second concern was about the equity of road tax, regardless of vehicle engine type or motor power and the tax system used. They argued that “Motorists deserve to contribute equitably [for] their fair share for roading costs.”

So, yesterday, the rewiring New Zealand report on Electric Homes: The energy, economic, and economic opportunity of electrifying New Zealand’s homes and cars was released. I just had a meeting with Mike Casey and co. It tells us what we already know. In a petrol vehicle, only about 16 percent to 25 percent of the energy in petrol is turned into motion. Most of this energy is lost as waste. In an electric vehicle, 87 to 91 percent of the electricity it receives is converted into motion at the wheels.

This Government is simply pulling the RUC on electrifying land transport. There’s worse. This is simply bad for our rural communities. This is so bad for our rural communities. We know that rural people drive three times further than urban people and drive on the worst roads. I know where Mark lives. We could do so much better.

ASSISTANT SPEAKER (Teanau Tuiono): And could the member come back to the bill and not worry about that.

Think about the Finnish example, where RUCs are based on the roads you drive on. Poor quality roads cost less in road-user charges than urban highways with overbridges. All our rural people who drive EVs are now being doubly punished—punished for driving an EV and subsidising diesel fossil fuel vehicles, punished for paying for the privilege of driving on the worst roads in Aotearoa, and subsidising the motorways. This bill is a disaster that comes from speed. We can do so much better.

Chlöe Swarbrick: Let’s get back on track.

Let’s get back on track, not back on baccy.

Tēnā koe, e te Pīka, otirā ki tō tātou Whare tēnā rā tātou. E tū ana au ki te waha i ā te Pāti Māori anga mō tēnei o ngā pire, e mea nei te turaki i ngā ōhāki i puta i te Kāwanatanga ō mua kia whakaheke iho te putanga atu o ngā paihana patu nei i te taiao me te whakamāmā ake i ngā huarahi e pai ai te tiki atu i te electric vehicles.

[Greetings, Mr Speaker, and everyone here in the House today, salutations to you all. I stand to present Te Pāti Māori’s aspirations for this bill, to demolish the oath set down by the previous Government to decrease the dissemination of pollution on the environment and to ease the way in which we can retrieve electric vehicles.]

Te Pāti Māori have challenged the direction and vision of this Government, of course. And, you know, the real question is: what is the vision? The vision, the direction that the Government is intending for us. It’s clear that the direction of this Government is towards profit and capitalism. So, whilst their vision is fine, we must now ask ourselves: profit, capitalism—but at what cost, and to what expense?

He mārakerake te kite atu ko te taiao me te whenua te utu—so, right now, it is evident to see that it is te taiao, our environment and the land, that will bear the brunt of the cost. The amendment to this bill is reflective of a Government that prioritises profit over the environment. Since the beginning of this Government’s term in Parliament, we have seen the prioritisation of profit across various bills, including the repeal of the regional fuel tax and the current Resource Management Act amendment bill.

I now stand to discuss the road-user charges amendments. Let me remind the House, and, in particular, tēnei taha—and particularly the members opposite us—that the bill was introduced as an incentive—an incentive—not a disincentive; an incentive for our communities to transition from vehicles reliant on fossil fuels to electric vehicles instead. By making it cheaper for an electric vehicle user to use our roads, it was made more accessible and, in essence, a legitimate option for our people to consider—something that would most likely have missed the consideration of our colleagues across the room.

By introducing road-user charges, we make it less appealing and less realistic for people when faced with the choice between vehicles that run on unsustainable fuel sources and vehicles that run from a renewable energy source. This is a conversation that for us, for Māori, we often don’t get the chance to engage with. Conversations around electric vehicles or renewable energy, and the chance to have our own electric vehicles, is often exclusive of our communities—our communities that live rurally, on their whenua, by their marae, or urban communities that often survive and disconnect from their whenua, their marae, and their iwi and hapū bases. We, as Māori, are left out, yet again, or, indeed, cut out. So I stand here to enter into the conversation to prove to our people that we have every right to be here, and that while these kaupapa seem far away from our te ao Māori, our reality, all of these bills in fact do impact us, do impact our people. They work as ways to segregate us from the rest.

So when we consider the amendment to this bill in the context of climate change, which we must do—we must consider our climate and the impact we as a nation have on our whenua—it is clear that previous efforts made to support the reduction in emissions, to create accessibility to clean technology, and create sustainable public and private transport, are not prioritised by the current Government. Inā kē te wero. [That indeed is the challenge.]

I question those sitting on the other side of the House: how will the emissions reduction plan, the national adaptation plan, the carbon-neutral Government programme, the Climate Emergency Response Fund, be impacted by this change? Again, another vision, another amendment to another bill where profit is prioritised at the expense of te taiao and the whenua.

When we actually look to the so-called profit and ineffective planning and management from the current Government, it has forced them into a position where a $24 million pothole in their Budget has meant that those who use electric vehicles will have to foot the bill. I’m sure that over the short time the Government has been in term, they’ve struggled to deliver their promises, when they realise that repealing and amending all of these bills and promising tax cuts to the people has only meant that the money lost from that particular revenue stream will now have to be sourced elsewhere. Nā ka taka te utu ki te marea, ā ko te ao Māori ka pani ki waho. [And so the cost will fall on the people, and the Māori culture will be cast out.]

I rise to proudly support this bill because we’re actually a Government that was faced with a problem and we had to fix it. The previous Government hadn’t gotten around to actually solving the problem of what was going to happen when the electric vehicle (EV) subsidies finished and, suddenly, they were going to go to 76c. That’s where they were going to sit. According to the other side, that seemed, obviously, to be the solution: leave them at 76c. So we inherited this problem, and we have solved it. We’ve put a bill together, which is a transition bill, to allow for plug-in electric hybrids to receive a discounted rate because they use two sources of power, and also for EVs to contribute something to the roads that they drive on.

It was interesting, the submitters we received—and thank you to the submitters. Yes, they didn’t have much time, but the reason there was not much time is that we had to get a solution so this could be enacted by the 1 April, and that’s what we did. This is why we’re in this position. They also said, “We’re happy to contribute towards maintaining the roads.” Well, that’s great. I applaud them for that, particularly as somebody who’s had to drive around the roads of Northland, which have suffered through lack of maintenance from the previous Government, and had to put up with extra potholes, and the member opposite—Damien—would have had to dodge them on his motorbike. Because of that, it’s great to suddenly have an opportunity to have more income to actually help fix the roads, because people using the roads should help pay for it.

The reason that this is only a transition is because we’re going to be moving to a fairer system, as more and more people buy EVs—and they will, because the price of EVs, surprise, surprise, is coming down. So there’s no need for us to actually subsidise people who can afford to buy them themselves, right? So we’ve got to transition to a system whereby you don’t fund the roading maintenance and building of new roads—you don’t fund it through the energy source; you fund it through weight and distance travelled, which is a fair system. That is what we’ve got to move towards—

💬 Hon Damien O’Connor: Where’s the incentive to be more efficient?

—and that is the direction. The incentive is there, because, actually, with an electric vehicle, it is cheaper to run—they’re actually cheaper to run than a petrol vehicle and a diesel vehicle. Believe me, I know—I drive a diesel vehicle and pay plenty for the road-user charges going around. So I commend the Government for actually acting on this and getting a solution.

So I’d like to say, finally, that the people of Northland will really be very happy to finally have a bit more money spent on the roads so that we can have better roads to drive on, and the other rural people in New Zealand the same, right. That’s really, really important. So I commend this bill to the House.

Mr Speaker, if you’ll bear with me, I am going to explain some of the changes that have occurred in this bill. Because there were a number of changes which Government members are very keen on in this reading that they weren’t so keen on in the select committee room—

💬 Tom Rutherford: Oh, well we voted for them.

The member opposite—Tom Rutherford—

💬 Hon Member: He’s from Hamilton.

—he says “We voted for them”. He’s not from Hamilton, and he says “We voted for them”. Actually, that wasn’t the case and I will explain that for the House’s record, if you’ll bear with me. But, Mr Speaker, what I first want to do is to tell you why the amendment that the Transport and Infrastructure Committee made is important and to explain it for the record so there is no confusion about it.

This was inserted at the select committee stage. The select committee instructed the Parliamentary Counsel Office (PCO) to develop an amendment to the bill as proposed by the Minister—that was supported by a bare majority of members—that changed the discount rate for PHEVs, or for plug-in hybrid electric vehicles. That was because a 2022 study of 9,000 plug-in hybrid EVs in Europe suggested an average fuel consumption of 4 to 4.4 litres of petrol per 100 kilometres. That’s relevant because the average fuel consumption of light petrol vehicles in New Zealand is around 8.1 litres per 100 kilometres, and those rates are the rates that the select committee heard from officials from Waka Kotahi should be taken into account when designing the discounts for plug-in hybrid vehicles.

When the select committee heard evidence from the 518 interested groups and individuals who submitted on the bill, it was clear—and in further advice from Waka Kotahi—that the evidence for what the discount rate should be was limited. But that European study supported a 50 percent discount instead of a 30 percent discount, and that’s why PCO was asked to draft an amendment.

At the time the committee came to vote on the report, the report is drafted as if the 30 percent discount was the one that would come back to the House at committee stage. But that is not the bill that we are debating now. So the select committee’s report does not record the majority—well, the unanimous—vote that then occurred to support the 50 percent discount. So anyone looking through the records will see that the select committee’s report treats it as if it was a 30 percent discount, whereas the Labour amendment that was put up and drafted by PCO for 50 percent discount was the one that is supported and now the Minister has confirmed will be supported at committee stage. So it is Labour’s position that we consider that a 50 percent discount in the road-user charge rate would be better reflective of the relative efficiency of plug-in hybrid EVs compared to petrol vehicles, and we recommended amending the clause because of that.

So that is how, procedurally, we have got here. I think it is a good change and I’m glad that the Minister has accepted the change from the select committee. He asked the select committee to consider that particular point, and we did have some really good cross-partisan discussion about how to make this rate an effective thing for PHEV drivers. Because drivers and users have already invested in their cars. This is not a decision that only affects future purchases and incentives on users; this is actually a decision which makes someone’s investment in their personal car—or their investment in their business if they are someone like a taxi driver or an Uber—significantly different about the way that the costs will fall out for that person. So we heard from a number of submitters who drove PHEVs themselves that they would need to do things like hang up the keys on their PHEV because they wouldn’t be able to operate that as a taxi, or to change the way that they were using their car and they would use it less if that rate was applied. So I’m glad that we have made that change.

This should be viewed alongside the removal of the Clean Car Discount. That was something that the committee heard evidence on being a very effective tool of incentivising the uptake of plug-in hybrid vehicles, but that that went along with the policy for plug-in hybrid vehicles not to pay user charges. Those two things together would have otherwise been removed, and so there would have been a sort of double change for PHEV users that we didn’t think was appropriate, and that’s why we proposed the amendment.

So I want to thank my fellow committee members, despite it being a very short submission period, that was, I think, an example of committees being able to work together well. That committee was chaired by Andy Foster in a way that allowed discussion around this particular point and on the point of how much subsidy should be applied to EVs. These are technical pieces of legislation; we needed a lot of advice from the officials from Waka Kotahi and the transport ministry, and I thank those officials who engaged with us in what was a very, very quick time frame for them to need to turn around reports.

That said, it was very difficult for the committee to consider what the policy change was in the context of dumping the Clean Car Discount and the Government’s priorities on emissions, and, further, this idea that all cars would be moving towards road-user charges and the effect of this interim change on that broader change when we had no time frame for that. Those are things that should have been, and could have been, worked through by what was, essentially, a very good cross-partisan committee that was engaging in the policy detail; it was engaging with the technical advice that we were receiving and was asking good questions of submitters.

It is there that this House should be able to get into the detail of legislation and it is a casualty of the urgency process when committees are not able to do that fully, and engaging with something which has been called a “transitional process”. This will not be a transitional process that will be resolved quickly.

A transitional process—for the benefit of the Government members who have made these submissions today—would have been to extend this legislation, because this legislation had been extended several times. That should have been the policy that we examined it against: extending the exemption for EVs and PHEVs, as has been Government previously—the appropriate thing to compare this change to. Instead, we were being asked to compare it as if it would not continue at all, and that was not the right policy equivalent to be making at the select committee time. But we were doing that because we were under time pressure.

Just speaking a little bit to the thanks to the submitters. I, too, joined with my other fellow committee members in thanking the submitters who made submissions in what was, essentially, a day to put together those submissions—518 of them took the time to do that and they were technical submissions. They included a breakdown of the numbers and their projections about how not only this policy decision that the Government is taking would affect users now but users in the future. I believe that the numbers that the submitters provided us with also influenced and helped the advice that we were receiving from officials who were working under a very short time frame.

That goes, again, to the need to prioritise these pieces of technical legislation through select committee stages. It is useful for this House to have those submissions, it is useful for the officials to be able to engage with it, and it is useful for parliamentarians to appreciate what policy choices we’re being asked to make.

Because, not to bang on about this process, but it is not right that we are in this position of using a nine-day select committee process because the previous Government delayed it. We are in this process because this Government did not prioritise this on their legislative agenda. If this had been ready for first reading earlier in the process, the select committee would have been able to undertake a four-week select committee inquiry or they would have been able to extend this legislation while we were making these decisions. Using the length of the select committee process could have been an ordinary one, and that would have helped this House make reasonable and rational and cross-partisan decisions about this.

It’s important that we acknowledge what we’re doing here. We are supporting this bill because we do need to make sure that people are paying their fair share on our roads. But what “fair” is—

💬 Grant McCallum: Cover up your own inaction.

—when we’re—I hear from the other side “to cover up our own inaction”. I’ve just explained that it is, in fact, the Government’s prerogative to use urgency, but I can help the new member with understanding Government processes around urgency a little bit later on. He can meet me down in the select committee room and I can school him again on the use of Standing Orders, as I did last week. But, you know, I’ll help him along then.

But for this reading, we do support this bill. There is change needed, but the policy we should have been considering is how to appropriately take into account emissions and the environmental considerations that go alongside those considerations like the Clean Car Discount which have been removed. If a Labour Government had been making these kinds of changes, we would have done that alongside the Clean Car Discount. We would have been protecting people’s ability to choose better options for the environment, and that’s why we need to be able to really get into the detail in the select committee discussions and understand what’s being chosen between.

💬 Grant McCallum: Had your chance.

I hear from the other side that we had our chance. I did have my chance in the committee and I used it.

Thank you very much, Mr Speaker. I just want to commend the previous member, Arena Williams, for her contribution both in the House and on the Transport and Infrastructure Committee, amongst all the members that contributed on the select committee process that we have been on over the last couple of weeks. It was an interesting process, no doubt. There were some decisions made and some challenges that we faced on the select committee, but, ultimately, what we are reporting back to the House is a pragmatic approach: those that use it should pay for it.

Now, what we’re talking about, here, are the contributions that people should make to the upkeep and maintenance of our roads in New Zealand. In the electorate that I’m fortunate enough to represent, the Bay of Plenty, without a doubt—without a doubt—putting the cost of living to the side for a moment, the biggest issue facing the Bay of Plenty is transport. It’s transport, without a doubt. Let’s have a look at it: two main State highways, in our community, that are fundamentally way behind where they should be in 2024. Start with State Highway 2, the Takitimu North Link. Stage 1 is currently being progressed. State Highway 2, Takitimu northern link—it’s currently being progressed. That programme and that State highway was consented and ready to go in 2017. Cancelled, delayed, pared back by the previous Government—now being delivered by National. The second, stage 2, will be as well—all the way through to Ōmokoroa, servicing the community of the wider Bay of Plenty.

The second is State Highway 29, over the Kaimai Ranges, a really vital network that connects the city of Tauranga with the golden triangle of Waikato and Auckland. The reason I bring up those two key State highway networks in relation to this bill is that it is only fair that those people that use the roading network in New Zealand pay their fair share towards its upkeep and its maintenance. That’s what this bill proposes to do. The Road User Charges (Light Electric RUC Vehicles) Amendment Bill amends the road-user charges (RUC) regulations to add a new vehicle type, PHEVs—plug-in hybrid electric vehicles—and amends the road-user charges rates regulations to apply a reduced rate of $38 per 1,000 kilometres for plug-in hybrids. Had we done nothing, come next week, every single vehicle on the road would have paid the $76 dollars—$76 per 1,000 kilometres. Simply kicking the can down the road on this issue wasn’t feasible for us to do. On this side of the House, rather than just talking about it, we’re actually going to action and deliver it.

I would note some comments made, both by the Minister of Transport and some of my colleagues, around action that the previous Government took. In 2022, they looked into proposed options for the Government to look into what may be an equitable system to move forward with. They proposed, at that time, that plug-in hybrids pay a reduced RUC rate of 20 percent less than EVs. Yet, after going out, proposing that, talking about it, two years down the track, nothing happened—nothing happened. They went out with a proposal of 20 percent reduced and then nothing. Radio silence. Absolute silence on the issue. And now they have the fortitude to front up and complain and say, “You’re rushing us.” Well, let’s just say, you had two years where you proposed and talked about it and delivered absolutely zilch. Absolutely nothing.

💬 Sam Uffindell: It’s trade mark.

It’s trade mark. It is trade mark, Sam, in the sense that talking about it is really good, but the actual delivery is rubbish.

So, on this side, we listened to the submissions that came through the select committee. It was great to do it with my colleagues across the House, where we had some really robust and engaging discussions around the submissions we received. Now, in that process, we received 518 submissions from a variety of individuals, organisations, and different groups. And the vast majority of the submitters expressed a really clear sentiment that both EVs and plug-in hybrids should pay their fair share to the upkeep and maintenance of our roads. Submitters expressed support for several parts of the bill, including the exclusion of light EVs, a two-month transition period so people can get their vehicles up to scratch, and the expanded definition of all-terrain vehicles (ATVs).

I want to highlight that part in particular, because we haven’t actually talked about that bit from any of our speakers so far. And what I’m getting at is, firstly, we’re excluding light EVs, so anything weighing 1 tonne or less, which includes vehicles like electric motorcycles. The bill also includes an automatic exemption for all-terrain electric vehicles weighing 1 tonne or less. This acknowledges that electric ATVs weighing 3.5 tonnes or less are currently entitled to an exemption on application if they are used almost exclusively off road. Let’s look at that differentiation there: off road versus on road and what’s fair around the maintenance and upkeep and what they contribute. That’s why we’ve talked about removing them and providing them the exemption.

The bill also amends the definition of “ATVs” to include electric ATVs. Heavy EVs weighing more than 3.5 tonnes are exempt from RUCs until 31 December 2025. The reason I bring that up is it comes back to the crux of why we’ve proposed this bill, and why the Minister’s brought it to the House, why we opened for the select committee process, and why we’re here now debating it at its second reading. And it simply is: if you use the roads, you should pay your fair share to contribute to the upkeep and the maintenance of it.

And the change that has been talked about by members opposite, where we initially are consulted on $53 to 1,000 kilometres, and now we’re back at $38 per 1,000 kilometres, is to seek the balance for the need for these vehicles to pay for their fair use of the road. And noting that plug-in hybrids have a reduced rate in a sense because they also pay the petrol excise, and finding an equitable outcome is the only fair approach to take. The reduced RUC is also a temporary measure. We will be coming back in the future, as highlighted by the Minister of Transport, proposing the move for all vehicles to move to RUCs and moving them away from having excise tax on petrol to create an even more equitable system where we believe, actually, you use the road, you should pay your fair share.

Increased fuel efficiency of vehicles and the rise of electric vehicles has created variances in what motorists currently pay for the use of the road. This has meant that less fuel-efficient vehicles, often owned by low-income households, end up paying more in fuel excise duty than owners of later model, more fuel-efficient vehicles. I see my colleague Minister Goldsmith, who I know is eager to eat his dinner—eager to get out of his seat—

💬 Hon Chris Penk: He’d rather eat someone else’s!

Ha, ha! I couldn’t possibly repeat what was just said. But I just want to reiterate to the House that this has been a pragmatic outcome reached by the select committee and taken by the Minister, that it is only fair that those who own plug-in hybrids pay a reduced rate of $38 per 1,000 kilometres. And if you use the road, then you should be paying for its upkeep and its maintenance. I commend the bill to the House.

Well, it’s kai time. The House is suspended for dinner, and it will resume at 7.30.

Sitting suspended from 6.01 p.m. to 7.30 p.m.

Members, we are debating the second reading of the Road User Charges (Light Electric RUC Vehicles) Amendment Bill.

Thank you, Madam Speaker. I just want to talk briefly on this bill. I was on the Transport and Infrastructure Committee last term, and I returned for a very brief appearance in the committee when it was discussing quite a critical part of this bill, which was the issue of what discount should be given to people who had plug-in hybrids. It was really lovely to see my colleagues taking such an active role, and I was there when Arena Williams put up the possibility of an amendment, which has turned out to be something that’s been adopted by the Government in the new form of the bill.

So for people out there who are wondering what on earth this is all about, this is a bill which brings back a charge to people who have electric vehicles for their use of the roads. The reason that that was exempted for quite some time was because we really, really need to encourage vehicles that are not using fossil fuels, and so we had in the last Government a plan as to how to do that and we incentivised it. We had a carrot for people buying new vehicles, and that was the discount, the Clean Car Discount. We had some sticks, which were really those measures that said you can’t bring in really dirty vehicles into the country. So we had those kinds of measures in place, and we had taken away for quite some time the payment that electric vehicles would make to our roads, because we collect the money for road maintenance every time somebody fills up their tank for petrol, or, if you’ve got diesel, then we’re collecting it from you in a different way but it’s basically the same thing. So that’s how we were doing it. We had this incentive.

Now, everybody knew that it couldn’t really last for ever in terms of having a discount that was so entire on the use of electric vehicles on our roads. So we could see that that was going to have to come to an end at some point. The Clean Car Discount was extremely successful, probably more successful than the transport Minister at the time thought it would be. The uptake was huge, and I’m sad to see that go, because I really sincerely think that when I was in that committee and we went through that work, I went from the point of being someone who was sceptical about it to somebody who was totally convinced by the end of that process, and then I saw it work and I saw a huge uptick in the amount of vehicles. Now, that piece of work means that there’s a whole lot of vehicles out there that are electric and that will now move into the second-hand market and will mean that a whole lot of families that would never be able to buy a car that was new electric will be getting one.

And there’s a whole lot of families who bought these plug-in hybrid cars as well, and they were in a situation, when we were looking at this law, where it looked like they would be in trouble, because the plug-in hybrids were not—they were going to pay at the pump every time they filled up, and they were going to basically have a double charge, because they were going to be charged, as electric cars, like a diesel car is affected. So it was going to be a sort of double whammy for them. So there’s been an amendment here where there’s a 50 percent reduction in what they pay so that there is an accounting for the fact—and it’s rough, it’s rough. Some people will be winners and some people will be losers, but, basically, there’s an accounting for that in the percentage that has been found here of discount on what they’ll pay.

So I’m really pleased to see this happen. I think this is an area we’re going to have to be creative, we’re going to have to be nimble in the way we work, and there’ll be a lot of unknowns. It was great to see the select committee—and I was there when this happened—work on this, talk about it, and I saw that working. So I have absolute respect for the people on the committee, who had a very real, genuine discussion about this problem and how to fix it, and I commend particularly Arena Williams for coming up with the advocacy for this position. I commend the bill to the House.

I rise in support of this bill. Let’s be very clear, this bill is about road-user charges. Let’s be really clear what that means: roads are long, hard surfaces that are built for vehicles to travel along; a user is a vehicle of the said road; and the charge is a fee for that said user to use said road. Now, cars use roads regardless of their fuel source, whether it’s electric, it could be hydrogen, or it could even be ammonia, which Toyota is actually working on. And so this is all about transitioning to a fair and equitable system so that all road users are contributing to the upkeep and maintenance of roads, irrespective of the type of vehicle that they use.

We’re discussing this bill now because, of course, there’s a bit of urgency, because there’s an exemption currently in place which is going to expire. The previous National Government, they put that exemption in place to encourage EV uptake, which, of course, it did, and it was successful. But it always was designed to end, and, in the long run, all vehicles need to be part of a road-user charge system so we can have suitable upkeep of our roads. I haven’t been on the Transport and Infrastructure Committee, but, reading the report, there has been over—

💬 Hon Member: It’s their loss.

—yeah, it is their loss—over 500 submissions, and most of them pretty much all agreed that vehicles, EVs and the like, should pay a road-user charge and pay for road maintenance. Now, there’s been a lot of debate about how much that should be, and, of course, we have a road-user charge currently, but, of course, plug-in hybrids have a mix of fuel and electricity, so there has been a technical modelling and a lot of debate about what it should be. I will just point out that the Labour Government, in 2022, put out a figure of the 20 percent discount. That went nowhere, but, luckily, we have settled, through the select committee process, on a figure which is 15 percent, which I think is a fair amount. I appreciate there’s going to be winners and losers, but we do need to kind of remember the fact that this is a transition and, eventually, all vehicles will need to be in some sort of system to pay for the use of the roads.

Looking forward, we don’t want just to limit ourselves to vehicles that are electrical or petrol or diesel. There are other fuels coming along the pipeline, and I think we really need to be mindful of that. Just on Friday, I was in the mighty Ilam electorate and visited a company that helps repair roads, and you look at the effort they put in—we need to make sure we can support them to make sure we have safe roads. So, therefore, I commend this bill to the House.

Thank you, Madam Speaker. It is a pleasure to take a short call on the Road User Charges (Light Electric RUC Vehicles) Amendment Bill.

I just want to pick up on a couple of comments that the previous speaker, Hamish Campbell, made, because, you might be surprised to hear, I agree with some of it, about the fact that it is critical we, as a Parliament, are always considering how we fund our transport projects. It is a challenging area to fund. Way back in the day, when nearly all vehicles would have been funded through levies, there were some changes made by the Minister of Transport Annette King to ensure that the levies that were collected all went into transport projects, because they used to actually go into the general taxation pot. I think it points to the fact that we have a growing infrastructure deficit in this country. We have to fund our roads, and the Government opposite us is going to have a massive challenge around how they fund the very many projects that they’ve promised, especially when they add back in the one they’ve taken away from Nelson. I look forward to that happening.

But it’s a genuine issue. We have a transition occurring in our transport fleet, which means we have a growing number of road users who are not paying for the upkeep of our roads. I think that New Zealanders are about fairness, and as much as we need to continue incentivising the switch in the type of vehicle that we are using, there is an inherent sense of fairness there around the fact that all of us who use the roads need to be making our contribution to the cost of the upkeep as well as transport projects, particularly new pieces of infrastructure that we will be building.

So I wanted to just point to some of the things that the bill specifically does, just drawing particularly on the needs of those who drive hybrid vehicles. Most of us in this House will use taxis from time to time. Having spoken to a few taxi drivers, they’re pretty grumpy about what the Government was planning on doing, particularly around plug-in hybrids. Now, if you compare original hybrids, which mostly fuel on a combustion engine and then use the electric vehicle to top them up, as opposed to plug-in hybrids that are primarily electric vehicles, what we saw in the original drafting of this bill from the Government was an inherent unfairness, where you would have those drivers paying the levies on the petrol that they put into the vehicle, as well as paying the RUC—the road-user charge. There would have been a double whammy applied to those road users. At the time when the bill came through its first reading, that was pointed out. It was pointed out through questions in the House to the Minister that there was going to be extra cost added on to people using plug-in hybrids, and more so than other types of vehicles. So it’s something that our colleagues—and I’m really pleased that Arena Williams and Tangi Utikere were able to bring this into the select committee, and the select committee agreed.

Madam Speaker, in my area of Nelson, and I know I shouldn’t bring you into the debate, but in your electorate as well, we have a lot of people who actually choose hybrids instead of a full electric vehicle (EV). The reason that they do that is because of things like range anxiety. So it is actually the perfect solution to be able to have a vehicle that can draw on a combustion engine when it needs to, when you don’t have enough charging stations, when we’re driving through our rural areas, like Nelson to Motueka, Nelson across the hill to Blenheim. These are real issues for drivers wanting to do the right thing. So, in my electorate, there was a lot of push back when people heard that there was going to be a double whammy approach to plug-in hybrid vehicles in particular. I’m really pleased that Tangi Utikere and Arena Williams were able to put in this amendment. I’m really pleased that the committee agreed to the amendment, and that the Minister of Transport, the Hon Simeon Brown, has subsequently indicated his agreement.

I seem to have lost sound, that’s OK. I’ll use my singing voice for a moment. That’s OK, I can do that. And so—

💬 Hon Member: Sing—sing.

Oh, I could, you know, I could—

💬 Camilla Belich: A very good singer.

Don’t tempt me. I think where we’ve got to is a really good position here around that fairness, for fair treatment of different types of vehicles. The last thing I did want to just mention was around the process. The fact that we had a group of vehicle users that did feel that sense of unfairness, where, actually, on reflection, the Minister did go and change his view, shows the flaw in the process that the Government has applied in terms of the short period of time that we had at select committee in order to put this bill through. So there is a lesson here, that, actually, bills like this, which are so fundamental to how we ultimately collect the revenue we need to fund our critical transport infrastructure projects—it just goes to show that we actually do need to allow the committee to have the time that they need to be able to give proper consideration to a bill of this kind. I’m sure that will come up throughout the committee stage.

So Labour is pleased to be able to support this bill. I look forward to the Government—as the Opposition, I think we should always be talking across the House in a constructive way around how we do fund transport projects. I look at the—as a former member of the committee—the members before I joined did do a very good study into congestion charging in Auckland. You know, it’s an issue that is challenging for motorists to have to respond to, but these are the conversations that we need to have so that we know we’re actually getting the right incentives around the types of vehicles that people are using, but also making sure that we are collecting the revenue that we need. Auckland is going to now be facing a real challenge.

So, on that note, I really look forward to the Minister hearing the views of the Nelson electorate, and giving us our Rocks Road project back. This is an excellent bill, and I commend it to the House.

Thank you, Madam Speaker. It’s a pleasure to rise, and I want to tautoko the previous speaker, Rachel Boyack, and also acknowledge Tangi and Arena. We actually thought we might have to push them to get to our point of view and our resolution. In the end, when we listened to the submitters, we thought, “Actually, we want to go big with this discount. We want to listen to the submitters.” But, in the end, they were on board. So it was just fantastic, and I want to thank them.

I also want to acknowledge that I love travelling on our great expressways, particularly ones that are 110 kilometres per hour. As I’ve mentioned, the Waikato Expressway is just fantastic. The great thing about travelling at that speed is you actually feel safer, you can go faster, and, of course, we know it’s such a great result for more productivity throughout New Zealand. And, actually, it’s more fun too, especially if you’re playing just the right music at the right time. So I look forward to more of those roads as we now build in the maintenance, repairs, and the funding mechanisms that will enable us to do that.

Also, the Hon Damien O’Connor made some good mentions earlier about road maintenance, and I might be paraphrasing, but I’m pretty sure that road maintenance hasn’t been too great in the last six years. And the great thing about this—

💬 Hon Damien O’Connor: It’s a hell of a lot better than it was.

—the great thing—

💬 Tom Rutherford: 62,000 potholes.

62,000 potholes, I hear. I didn’t realise it was that much. Thank you, MP for Tauranga—fantastic. Imagine if we’d been collecting road maintenance—no, no, we have been collecting road maintenance. Imagine if we used road maintenance for road maintenance purposes! Wouldn’t that just be amazing? But here is a tangible measure where we can get the funding stream. And here’s a great word I want to use—because the left always talks about “equitable” and “equitable outcomes”. Well, the good thing about this road-user charge (RUC) is it’ll be equitable; it’ll be agnostic to the type of fuel, but it’ll be equitable in that it measures the amount of return we get based on weight and distance travelled. How wonderful.

And isn’t it good that this Government listens? It was interesting that, actually, National, showing leadership way back in 2009, as visionaries for the environment, thought, “Let’s subsidise the use of EV and electronic vehicles. Let’s encourage that form of transport.” And I’m pleased to report back that, 15 years later, we’ve hit success. We set a 2 percent target, and we’ve achieved it—we’ve achieved it—and now we need to refine the policy, because it’s achieved what we set out to do. And, in collaboration with our partners from ACT and New Zealand First, we’re now going to make a fit for purpose RUC.

💬 Hon Phil Twyford: A policy of low expectations.

💬 Hon Member: Oh you’d know! 100,000 homes.

You set them very low. Thank you for that comment. We’re going to increase it.

💬 Hon Phil Twyford: Congratulations—2 percent.

Yes, the member did set those expectations very low.

ASSISTANT SPEAKER (Maureen Pugh): Order! If you want to have this conversation, please take it outside. I apologise to the member.

The Hon Julie Anne Genter also mentioned before about incentives. Well, this was an incentive, and it worked, and again I must emphasise it achieved its purpose and we can now create a much more equitable outcome. In fact, I don’t know if the member for Maungakiekie is here, but he said this is actually a win-win: we can save money and the environment. And he’s quite keen to go and buy his second electric vehicle.

The other good thing is that, when we came into Government, on the back of the previous Government’s 2022 consultation—they went out at 20 percent reduction—we proposed a 30 percent reduction, and I’m so pleased that today we’re all in agreeance on a 50 percent reduction. And though we’ve been criticised for moving in urgency and moving in a very truncated select committee process, it shows that we’re an open-minded, nimble, pragmatic Government, and this is a case in point. So this is really quite incredible.

I must remind everyone in the House, too, that the primary purpose of the road-user charge is not carbon tax; the primary purpose of the Road User Charges Act 2012 is for this charge to be proportionate to the cost that the vehicle generates, and that’s, today, why we’re talking about weight and distance rather than the use of fuel.

Cameron Luxton also talked earlier about administration, and obviously the opportunity and, I guess, the challenge now is the administration of that toll tax. But it was elucidating, through the select committee process, to see that actually 80 percent of our tolling money goes into administration, and that’s far too much. But the opportunity is, of course, also to reduce that, to increase the amount that we can toll or generate through different roading mechanisms, but also to get more efficient, because we’re keen to get more efficient so that we can use that money not for bureaucracy and Government bloat but actually for delivering outcomes for our road users.

I’m also keen to see the registration stickers. I think it’s always really good when you see fresh stickers on the windscreen and they’re aligned and fresh, and it’s always good to have new registration stickers. And so that fee will go proportionately back to the renewal of those registration stickers, which I think is really key.

I think I’m just about at the conclusion of my delivery here, but I thought I’d just emphasise that—

💬 Hon Scott Simpson: Start again.

Start again? Maybe I’ll just reemphasise the point that we didn’t hear a 20 percent consultation discount on the proposed road-user charge for plug-in hybrids. We went out on consultation with a 30 percent. Yes, it was a truncated select committee process, but the submitters came, we listened, and we’re now proposing a 50 percent reduction on that plug-in hybrid rate. And so that’s very pragmatic. And I’m also very pleased to see that.

Madam Speaker, you would have heard about the phrase “Bring back Buck”. Well, Madam Speaker, we’re going to bring back RUC!

Plug-in hybrids will pay their way;

no more free rides, OK?

Funds for maintenance and repair

helping get us out of disrepair.

No more potholes and speed bumps,

but more productivity and pineapple lumps.

Madam Speaker, may I commend this bill

so that we can get our fill

to build and maintain a more productive New Zealand and get us all back on track.

The question is that the motion be agreed to.

Motion agreed to.

Bill read a second time.