Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill (No 2)

Point of order, Madam Chair. I seek leave for all provisions to be taken as one question.

Are there any objections to the motion? We will proceed with it as one. Members, the House is in committee on the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill (No 2). The question is that Parts 1 and 2, and clauses 1 to 3 stand part.

I’ll just make a few brief introductory comments before other members contribute in this committee stage debate.

The bill, as members will be able to see, is a relatively short amendment to the primary legislation that is set out in two parts. The bill does exactly what has been described during the earlier courses of the debate.

In Part 1 of the bill, section 42A is amended, and this really is the main operative part, which, effectively, replaces the existing sections and puts in place the second temporary reduction period, which runs through from 1 March 2023 to 30 June 2023.

Of note to members: 2B here enables the Governor-General—by Order in Council made before the second temporary reduction period ends—the ability to shorten or extend the second temporary reduction period to a date specified in that order. That is to provide some additional flexibility should it be deemed to be beneficial for there to be a further extension.

I will just take the moment to say that the Government does not have a position that that will happen. But we do believe that, in order to respond to circumstances, should circumstances dictate that that would be a positive thing to do, this will give a bit of extra flexibility without having to go through an entire House procedure as we are today.

Part 2 then has further provisions which relate to the assessment period. That, of course, is an important period, whereby Waka Kotahi can assess whether purchasing might have been excessive, to ensure the integrity of the policy. Sorry, I should note that’s in Part 1, section 6, where there was a change from the previous period of 12 months, to five years.

Members, I look forward to any comments and questions that might arise during the course of this debate, and I’ll certainly do my best to answer any queries that members might have.

Thank you, Madam Chair, for the opportunity to take a call on this committee stage, which I have a number of questions that I’d appreciate the Minister of Transport answering to the House and to the public about.

The first question I have is in relation to clause 6, which replaces the 12-month temporary reduction period, after the second temporary reduction period ends, with five years. My question to the Minister is: what was the reason for deciding that the legislation should have a five-year period upon which the Government could continue to put in place the so-called temporary road-user charge (RUC) reduction scheme? What advice did the Minister receive around potential options in regards to the length of time that should be inserted into the bill? And, ultimately, why did the Government decide and settle on five years?

I think the issue here is, of course, that we support the intent of the legislation, which is to ensure that people who drive diesel vehicles—truckies, tradies, farmers—are able to get the same benefit as people who drive petrol vehicles, but this indicates that the Government has a policy of wanting to continue to extend what is, effectively, their only cost of living measure they’ve been able to put in place for quite some time. So one, I guess, is: why did they choose that period? And I guess the secondary question is: is it the Government’s intention to extend the road-user charge reduction scheme longer than 30 June, which could easily have been put in place without having to put clause 6 into the piece of legislation?

The second question I’d like to ask is in relation to those who have already purchased road-user charges since 1 February. Of course, the Minister will be aware that the last time he announced the temporary reduction—I think was the fourth time he announced the reduction; this was the fifth, I believe—was, of course, on 31 January. So people who have had to purchase road-user charges since 1 February, when this announcement was made, have had to pay the higher rate.

So the question I have there is: for those who have had to pay the higher rate—even though the announcement was made on 1 February that this would be coming back to Parliament—how are those people going to be, if at all, reimbursed for those charges? Of course, people who already owned a diesel vehicle may have had the ability to purchase those kilometres in advance, and many of them would have. But, for example, if you had purchased a new diesel vehicle on 2 February, you’d have to put at least some kilometres on to be able to drive it on the road. So those people would have had to have purchased those road-user charges at the higher rate. Then, when they go and buy more, they’ll be able to get them at the reduced rate once this bill is passed. But will there be any compensation for those people? Because, of course, if they’d purchased a petrol vehicle on 2 February and gone down to the pump, they would have been paying the lower rate of excise. So where’s the fairness for those people? I’m sure the Minister will be able to answer that question and be able to articulate to those people who are very interested in that question.

The third question is in relation to the assessments, and that is in relation to the issue where the Minister talked about one of the other processes—he said in his first reading speech—one of the other processes that we built in and will continue to build in to this reduction are some controls to ensure that we manage against the possibility of excessive purchasing.

So my question there is: what are the additional controls, if any? How many assessments have been issued? For those people who have had issue assessments issued, what happened when the RUC extension was put in place, when this temporary RUC reduction was put in place; were they then having their assessments reversed? Of course, some people would have had an assessment made that they had purchased too many kilometres when the first temporary RUC reduction was put in place. And then, of course, the Government chose to extend it, but they may have already been issued with an assessment to pay a higher rate. But, then, those kilometres may have been actually a reasonable number of kilometres to use over what has now been, effectively, a 12-month—will eventually become sort of 15 months’ worth of temporary road-user charge. So will those people—have they had to pay their assessments; will they have their assessments reimbursed?

And, of course, there’s, again, a fairness element in terms of people who, yep, may have purchased what would have been an excessive amount of kilometres for a three-month temporary road-user charge—or four months, I think it was, at the first time it was introduced—but that may not have been an excessive number if they’d known that the policy would have lasted until midway through 2023, which, of course, is some time after it was announced back in March 2022.

So those are a range of questions which I hope the Minister will be able to give meaningful answers to this House, because, I note, again, when you read the regulatory impact statements, officials have made it very clear they have not had time to be able to actually deal and address many of these issues. They were rushed last year, it’s been rushed again now, and it’s important that this House has confidence in that decision-making process and understands how those decisions were made.

The question is that—

💬 Simon Court: Oh, Madam Chair.

CHAIRPERSON (Hon Jacqui Dean): Just, oh—

💬 Simon Court: Thank you, Madam Chair.

CHAIRPERSON (Hon Jacqui Dean): It’s only because I’m so looking forward to dinner. Simon Court.

I’ve got some very quick questions, Madam Chair—very quick questions. But I would appreciate if the Minister of Transport would give us the benefit of a response.

Firstly, Minister, when was a decision taken to extend the road-user charge (RUC) discount? When I look at the regulatory impact assessment, it says, “advice needed to be provided quickly.” If “Officials did not have [enough] time to investigate the problem thoroughly. … [therefore it’s] possible [they] did not fully understand the extent of the problem to be addressed, including its scope and desired objectives. More time could have allowed evidence and data to be obtained and analysed … for greater clarity about the problem and desired objectives.”

So, Minister, question one, when did you decide to extend this discount on road-user charges? Second question, why did the Minister decide, against the advice of his officials, that—if the problem that the Government wanted to solve was to provide a bit of back-pocket relief for people during a cost of living crisis, why did the Minister decide to extend the reduction in road-user charges and fuel excise duties in parallel even though officials recommended extra support through the welfare or transfer system? The opportunities for transfers—and through additional payments that are targeted to people in hardship—clearly has merit.

Could the Minister just answer those basic questions: when did he make the decision, and why did he choose to extend the discount on road-user charges as opposed to providing extra support to people in hardship through the welfare system, as recommended by his officials? Thank you, Minister.

Madam Chair, if I could thank both members for their questions, then I’ll make a start on answering them and I might need to then continue after the dinner break. I’ll go in reverse order there.

Firstly, to Mr Court, with the questions that he has asked, the decision was taken by Cabinet. I can’t remember the precise date, Mr Court, but it was at one of the first Cabinet meetings of this year, that being at the very end of January or very early in February. This was after Cabinet had determined at the end of 2022 that Ministers should focus in and consider further steps that could be taken to address cost of living issues—we were invited to reflect on that over the summer period. So, early in the course of this year, in Cabinet’s deliberations, that decision was made.

Of course, in terms of the relative costs and benefits of the policy, we do have, in this case—although this decision was made relatively quickly and then moved to legislation fairly quickly, it’s not a new policy. It is one that, as has been commented on, was first put into place about a year ago and has had a couple of renewals. So there’s good information to fall back there on about the relative benefits.

The member asked, “What about the other options for providing cost of living relief for people?” Of course, that is something that the Government’s done. The Government did make targeted payments to people through the cost of living payment in the latter part of 2022, and has had a range of other policies in place which are designed to provide support, particularly to those who might be finding it most challenging—the minimum wage increase, for example, earlier this year.

So there are a range of policies. This is one that fits in with them. The reason we think this policy is particularly beneficial is that it provides—because it’s an existing policy and because nearly everyone engages with the transport system, be it through filling up their cars and/or using public transport—some direct income relief to pretty much every household. The total cost of this policy, this extension—that’s fuel excise duty and road-user charge together—will likely be between $700 million and $750 million. It’s a lot of money, but the way of thinking about that is that is directly $700 million to $750 million that would be coming out of household pockets that is now not having to, because it is being covered by the reductions provided for in this policy.

So we believe that the relative simplicity of the scheme and that significant benefit across both households and supply chains—and supply chain benefits’ lower costs flow on to everyone else, of course—make it a useful policy.

In the interests of everyone’s wellbeing, I’ll finish my response there to Mr Court’s questions and will very happily respond to further questions in a call after the dinner break.

Members, the time has come for me to leave the Chair for the dinner break. The House will resume at 7 o’clock.

Sitting suspended from 6.02 p.m. to 7 p.m.

Members, the House is in committee on the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill (No 2). Members, when I left the Chair for the dinner break, we were discussing Parts 1 and 2.

Before the dinner break, I responded to a couple of questions from Mr Court, and I did promise to come back straight afterwards and respond to a few questions that Mr Brown had raised in his contribution.

There were three issues which he raised. The first related to clause 6 of Part 1, which provides a five-year period for Waka Kotahi to look at taking action in the event that they do believe that there has been excessive or unreasonable purchasing of road-user charge (RUC) licences at the reduced rate. Officials advise that the five-year period is important to provide some additional flexibility for the agency if new information comes to light. In particular, what they note is that distance travelled, as recorded at the time of a warrant of fitness, is an important tool for Waka Kotahi to assess purchasing behaviour, and that when it comes to new light vehicles that are purchased, they won’t be required to have a warrant-of-fitness check for three years. So some additional time for Waka Kotahi to keep an eye on things and to be able to have conversations with people in the event that they do believe that excessive purchasing has occurred. As I said before, we don’t believe that this is a big problem—there have been hundreds of thousands of RUC licences issued over this discounted period, and a relatively small number of cases of concern—but, for the integrity of the system, it’s important that the agency does have that ability if information comes to hand that they do need to act on.

Mr Brown also asked a question which, effectively, came down to: in the little gap that we have between the RUC reductions ending on 1 February and the implementation of this legislation, will people be left worse off, and how might we manage that situation? This comes back to the RUC overlap-licence issue that I spoke about in my first reading speech. And if I can just take members through that in a bit more detail, that might be helpful in addressing that particular question. Section 31 of the Road User Charges Act will allow a person who has purchased distance at the full rate to purchase a distance licence at the discounted rate and receive a credit for the unused distance on the full-rate licence. So given it’s been a relatively small period in between—I think, actually, that will affect only a fairly small number of people, given that you are pre-purchasing your kilometres, effectively—combined with the overlap licence, I think, will largely resolve that issue and ensure that people aren’t worse off. Bearing in mind, too, that compared to people receiving the fuel excise duty (FED) discount, which will have a hard end date at the end of June, there will be people who have purchased, legitimately, RUC licences before the end of June that will carry over a little bit beyond then, so there are some swings and roundabouts in this. And all things being equal, I don’t see that people purchasing RUC licences will be disadvantaged in any material way below the benefit that people who purchase petrol and pay FED receive a benefit through the system.

Mr Brown also had a couple of questions about excessive purchasing—just wanting to get a sense of scale, I think, there, about Waka Kotahi’s enforcement behaviour. Officials advise me that Waka Kotahi have investigated, over the course of the discounts so far—basically the last year—4,405 potentially excessive purchases and, based off that, have then contacted 2,207 vehicle owners, which is a pretty small number in the context of hundreds of thousands of licences purchased in that period. The approach that the agency has taken there has generally been an educative approach, telling people that these issues are being monitored and watched, and strongly encouraging people to comply in a reasonable way, rather than going straight in with hard-enforcement action. I think that’s the appropriate way of taking things through. It’s important to note that there’s also no incentive really for heavy-vehicle owners to bulk purchase, because, under the existing framework of the Road User Charges Act, their licences expire one month after the temporary reduction period ends in any case.

Thank you, Madam Chair, and thank you to the Minister of Transport for answering mostly those questions. I just wanted to clarify a couple of points. Firstly, in relation to the five-year period in clause 6 that replaces “12 months after the end of the temporary reduction period”, the Minister was articulating the reason for that, and I’d like him to clarify for me that that is to ensure that the New Zealand Transport Agency has the ability to undertake that assessment or that review of licences. Is that the intention of that piece, for the extension over time, or is it so that the Government has a tool to be able to continue temporary reductions over a five-year period? What’s the intent of the legislation?

Secondly, the question there around the assessments: the Minister answered the question in relation to how many they had looked at as being potentially excessive purchases—the number of contacts. The question I had was: how many assessments were issued? And, of those, were any of those assessments reversed because, actually, the Government changed its policy approach and extended the temporary road-user charge reduction? That may have been an excessive amount of kilometres if it had been for only the three- or four-month period initially, but given the fact the Government has extended and extended, it may not have been an excessive amount over a 12-month period, which is, effectively, where we’re at now, and we’re going towards closer to a 15-month period. So the question there is: were assessments made? Were any of those reimbursed due to the fact that, actually, the policy has been changed and extended, effectively, a number of times?

Thank you very much, Madam Chair. And thank you, Minister of Transport, for engaging in some creative and positive dialogue in terms of questions. My question relates to Part 1, clause 4, subclause 2A(a) in terms of the date of initiation around this legislation, and I wanted to reference also, in that regard, the departmental disclosure statement, section 2.1, which is in the context around other publicly available inquiries, reviews, and reports. Obviously, this is an amendment of a piece of legislation that has already been in place, and, as would normally be considered—appreciating that, I think, the wording in here says, “rapidly changing international situation”—why is it that no inquiries, reviews, or evaluations have been undertaken in regards to this underlying policy? I don’t think it’s unreasonable to expect that we would have undertaken some aspect around that. There has been time in order to do that. What are the reasons for that; what is the rationale for that? Actually, more importantly, is there now the intent, in the period of the proceeding few months from where we are today, to actually go back and do that piece of assessment work to provide some context in terms of the effectiveness of this policy response?

The second aspect I want to question around and get some clarity on is section 3.7 of the departmental disclosure report. Again, it notes here that there was a workshop held with Waka Kotahi, who is obviously the collector of the road-user charge, on 23 March 2022 to assess the workability of the bill, but there doesn’t seem to have been any follow-up formalised—you know, engagement in regards to the main entity that is involved with this legislation. Again, it’s not clear whether there has been any subsequent sessions with the transport agency, and, if not, why not? So those are my two questions.

In answer to questions from Mr Brown and Mr Watts—Mr Brown inquired further about clause 6, and I think, really, I’ll just refer back to my previous comments there about the primary purpose of that clause. He’s asked a question about how many actual assessments have been issued as a part of Waka Kotahi’s enforcement. That is a question I have asked of officials, and, unfortunately, they do not have that information to hand, but it’s one that I’m happy, outside of this forum, to get the answer and provide to Mr Brown. My recollection from engagement with Waka Kotahi in late 2022 is it’s quite a small number. They have generally taken the approach of contacting people where they might have a concern or might have observed some behaviour that suggested excessive purchasing, having a discussion with those people, and encouraging them to behave in an appropriate way. I think the actual level of enforcement has been relatively limited once that has been taken into account.

Mr Watts asked about whether there has been any evaluation done of the policy. There was indeed a post-implementation regulatory assessment that was completed and received in January of this year. That was something, at the time that the policy was put in place about March of last year—there wasn’t the time to do some of that normal regulatory work in advance, and so Cabinet did agree to do a post-implementation assessment, and that piece of work has been completed and provided to Ministers.

In terms of the involvement of Waka Kotahi as the collector, I can assure the member that Waka Kotahi has continued to engage with both the Ministry of Transport and myself and my office in the development of this piece of legislation, and they are very comfortable with the workability of it. Obviously, it has, effectively, now been in place for around about a year, and they assure me that because of that, and because of the processes that have been put in place, they are very comfortable with their ability to implement the legislation should it go through its stages in the House this evening.

Thank you, Madam Chair. Thank you, Minister of Transport, for giving us your full attention. I’ve got a couple of questions for you. In the explanatory note on the bill, it says in the first paragraph that fuel prices in New Zealand have decreased slightly from the high points in 2022, when the initial discounts on fuel excise duty and road-user charges were offered. But I notice in the post-implementation regulatory assessment published in January 2023, the graph that shows tracking fuel prices appears to end in March 2022 with the price spike, which was following Russia’s invasion of Ukraine and what that did to world fuel prices. For some reason, even though it’s January 2023, this graph does not continue and show what fuel prices have done since then.

That appears to be an omission, and one which creates an impression that the facts of the situation are being manipulated. When I jumped on the Ministry of Business, Innovation and Employment’s (MBIE) fuel price monitor, which is updated weekly, what it showed me was the line I’ve drawn through here, which shows that fuel prices are about $2.40 a litre for regular 91, which is not too much different from what they were in March 2022, prior to Russia’s invasion of Ukraine.

So I’m wondering whether—in the explanatory note, which sets out a general policy statement, why this policy is necessary—in fact, the most basic analysis of fuel price information from MBIE’s weekly tracker has been undertaken. So, Minister, if you could answer that, that would be good.

The second question I have is around choices. My parliamentary colleague Julie Anne Genter made a good point earlier in the debate, which is that every decision around allocation of road transport funding to various projects, and how that funding is obtained, is discretionary, has trade-offs, has costs and benefits. So, Minister, I’d like you to just consider, in the post-implementation regulatory assessment, officials point out that the cost of this policy, to date, is approximately $1.3 billion. Officials make the point that due to the reductions in revenue from this policy, the Crown, from general taxation, is forced to backfill the lost revenue.

Now, we’ve heard today that the Prime Minister was unaware of how much his Government is taxing New Zealanders, but it’s a lot. It’s in the order of $118 billion forecast this financial year, which is a lot more than the $80 billion - odd that the Government was taxing New Zealanders when it came to power in 2017. So given that any of these decisions are about trade-offs, did the Minister consider any other options? For example, did the Minister consider cutting any of the other programmes that the National Land Transport Fund invests in, such as, say, the communications spend of $117 million over three years for the Road to Zero programme, or even—as much as I enjoy walking and the occasional cycle—the $670 million allocated to walking and cycling over that time frame, or any of the other, essentially, discretionary spending that doesn’t invest in the road network for road users, which are motorists, freight, and all of those economic benefits that are derived from an efficient road network.

So, Minister, is the information which the policy is based on accurate? Is there any omission? Did officials realise that, after March 2022, the price of fuel spiked and then has returned to pre-March 2022 levels? And what other options did the Minister consider to fund this cut in road-user charges apart from general taxation? Thank you.

In respect of the member’s questions about the post-implementation review, I think he’s over-analysing the situation a little bit. There’s no smoke and mirrors here; the post-implementation review is the review of the decisions that Cabinet made at that time. As I described in my previous answer to Mr Brown, Cabinet was not able to get a full regulatory impact statement at the time because of the pace that the policy was developed, and so agreed to do a post-implementation review. So the reason that the graph that Mr Court refers to, on page 7 of that document, goes through to March 2022 is because that is the information that Cabinet had in front of it upon which to make decisions and make judgments at the time that it made that decision. The post-implementation review is not about what we’re doing now; it is about reviewing the policy that was determined then.

I do note that further on in the document, when there is some assessment as to the effectiveness of the policy—I’m looking at page 21 here—there is another time series which looks at how petrol prices moved over that time. Everyone is aware that there has been a moderation of petrol prices. The member himself said that is noted—I think, in the explanatory note—that the reason the Government believes it’s important to have this further extension is that, notwithstanding that, those prices are still somewhat elevated, and there continue to be significant pressures on household budgets.

This really goes to the member’s second question, which is really about the choices that the Government has in terms of how it can offer support to households under those conditions. The member notes that the total cost of the policy, once extended, will accrue to something in the order of $1.3 billion. The point I make to the member is this, because the member and his party are often very interested in the efficiency of Government spend: this is a very efficient spend as compared to other ways of channelling money—for example, through the transfers system and other payments. Effectively, that $1.3 billion, nearly all of it is $1.3 billion of cost that come out of household budgets and is absorbed by the Crown. There is very little friction or transaction costs in this policy. It’s a simple mechanism, because we stood it up last year. The ability to extend it, as we have now done a couple of times, is pretty simple to do as well. So it’s a way in which we can quickly push through some of that benefit very, very directly to households.

I do note the post-implementation regulatory assessment notes that low-income households are likely most adversely affected by an increase in the price of fuel. While officials do think other options could have been looked at, they also note that they would have taken longer to stand up. Again, I return to comments I’ve made earlier in this debate around the fact that this isn’t the only measure the Government is putting in place to provide support around cost of living. Indeed, we have also made targeted payments over the course of the last year as one aspect of the policy.

The member asks if I considered reducing certain activities in the National Land Transport Fund. Of course, that is not my decision. The Waka Kotahi board is responsible for the investments that it makes within the National Land Transport Fund.

Thank you, Minister of Transport. I always appreciate the level of detail that you go into in your explanations, but it does raise some other issues. This regulatory impact assessment, which is a post-implementation assessment of a policy implemented at very short notice in March 2022, took 10 months to develop and is a retrospective analysis, as you point out, of a policy decision implemented in March 2022. It seems extraordinary that, between March 2022 and January 2023, nobody asked and nobody received the back-up documentation—the post-implementation regulatory analysis—that would have enabled the Minister to take to Cabinet a document that said, “This is what it’s done in the period March 2022 to January 2023.”

This looks back on the period prior to March 2022, and it doesn’t include any information, as far as I can tell, as to whether the policy worked to deliver benefits to people during a cost of living crisis—people who had transport price pressures, whether they were freight operators, whether they were companies that deliver food to supermarkets or haul quarry rock around to build roads, for example. It’s not clear why it took 10 months, and it’s not clear whether the Cabinet decision that you referred to—the first Cabinet meeting of this year—had up-to-date information, and whether there was any assessment of what happens next, after this bill is passed, and what potentially happens in the period of up to five years that this legislation would have effect. So that’s of great concern to the ACT Party and, no doubt, would be of great concern to people who are interested in how the Government makes decisions about how it spends its money.

Then we just want to come to item 11, on page 6—“Financial hardship concerns are primarily dealt with outside the transport system”—and that’s according to the official report, the post-implementation analysis you referred to. Item 11: “The rates of petrol excise duty and road user charges are set to achieve a revenue target (to fund planned transport expenditure levels).” Well, given that the Minister is proposing a cut to the amount of money that’s collected, and having announced, in the past 24 hours, $250 million to go to Waka Kotahi to fund the reconstruction of our transport networks, those vital links that have been damaged, and before any thorough assessment has been undertaken as to what the overall cost it’s going to take to rebuild those main trunk roads that connect our regions—$250 million is pretty much just to scrape silt off the road, as far as I can tell. Yet the Minister is proposing to cut the amount of money that’s collected, and yet, at the same time, we have this huge demand for funding that’s going to come.

So, Minister, I’d like you to consider what projects would you cut or defer, in the way that an incoming Labour Government did in 2017 with projects like East West Link, for example; the Waikato Expressway, for example; the deferral for ever of the four-laning from Whangārei to Port Marsden, for example; the Takitimu North Link project, which is now being delivered after being deferred by Labour—half the road for twice the price; the same for Penlink. Which projects does the Minister consider should be deferred or cancelled in order to fund this enormous expenditure that’s coming? And does it make any sense at all, given the situation we’re facing, to be potentially cutting road-user charges at a time when we need the revenue to fix our roads and make them more resilient?

In respect of some of the member Simon Court’s questions that relate to the bill, in the broadest sense, the timing of the post-implementation review, as I understand it—officials did want to assess the policy after it had been in place for a reasonable period of time, in order to be able to draw judgments about its effectiveness. It would have been very difficult for them to have done that after only a short period of time of the policy being in place, and I think it was reasonable for them to make those observations and pull together a report towards the end of 2022 and then report to Cabinet.

The member claims that there is no information here about whether the policy was actually a good policy that delivered benefits. I’d draw his attention to page 21 of the review, “Section 4: Effectiveness of the policy”, which specifically canvasses whether the policy was effective, and the header on page 22 which says, “The reduction to petrol excise duty has largely been passed on at the pump and resulted in lower petrol prices”. So the assessment there is that the policy was indeed effective at lowering the prices that Kiwis paid at the pump. The member’s other questions really do relate to broader transport investment decisions across the portfolio that are outside of the ambit of this piece of legislation.

Thank you, Madam Chair. I just want to follow on from questions that my colleague Simon Court was asking in relation to—he was asking what projects should be cut if there isn’t the revenue, and, of course, it states here that the Government is topping up, effectively, the National Land Transport Fund by the amount that is being lost in revenue. But in paragraph 113 in this regulatory impact statement, it says, “Our estimate is that the scheme, in total, when it ends on 31 January 2022”—which, of course, it will be longer than that now—“will cost the Crown around $1.3 billion. However, the final cost is uncertain and depends on several factors.”

I’d like the Minister of Transport, Michael Wood, to articulate what those several factors are, because that does have an impact on what that topping-up, in terms of the Government, effectively, filling in for the lost revenue from road-user charges or fuel excise duty—what are those factors and what are those dependencies which could lead to that amount of money potentially being lost or being less than what is actually lost and, therefore, may mean that the New Zealand Transport Agency does have some limitation on its choices that it has in relation to investing in our road network?

In answer to the member’s questions in reverse, there’ll be no limitations on the National Land Transport Fund (NLTF), because the Crown has undertaken to ensure that the NLTF is no worse off as a result of the reduced revenue. So whether there are fluctuations a little above or a little below projections, that will be covered by the Crown, and there’s no impact on the NLTF and its ability to invest in the transport network. The main factors are how much petrol people buy over that period and whether there’s any behavioural impact as a result of the reductions.

Thank you, Madam Chair. So just coming back to the Minister of Transport’s assertion that the effectiveness of this policy has been evaluated, I’d like to draw the Minister’s attention to clause 101 of the post-implementation regulatory assessment. “At this time,”—it states—“no formal or comprehensive evaluation work has been completed by the Ministry of Transport on the policy. The insights below are tentative.” This is a policy which will have cost taxpayers—motorists, who are hitting potholes or whose roads could have been stabilised with proper geotechnical remediation in that period where the money could have been spent—$1.3 billion. We’re talking about not just the Brynderwyns but roads like State Highway 1 at Mangamuka, which connects Whangārei to Kaitāia, which has been closed since August 2021, and which was previously closed for a long period of time.

So there is no formal or comprehensive evaluation work, and yet $1.3 billion has either been taken from the Crown accounts, from taxpayers, to fund this policy, or it’s been accrued as a debt on future generations—I’m not sure which. So if the Minister could clarify that: whether it’s come out of taxpayers’ revenue or whether it has in fact been added to Crown debt.

And now we look forward. This policy now has a five-year time frame and, if we’re talking about on an annualised basis, round about $1.5 billion. We’re talking maybe $7 or $8 billion of foregone revenue at a time when this country, New Zealand, needs to find the money and as many sources of capital and revenue as possible to fund and finance the reconstruction and the improvement and resilience of our road network. So, Minister, it seems extraordinary that no formal or comprehensive evaluation work has been undertaken, and, Minister, on that basis, how can New Zealanders have confidence in the decision making around this policy or any other policy that this Government might make with regard to transportation?

At the risk of repeating myself in response to previous questions, the document that the member refers to clearly points to the fact that this policy has had the intended effect of reducing fuel prices below what they would be, and as I said before, that is a direct flow-through. In terms of the policy rationale, that is sufficient for me and the Government. The investment that we have made and will make through this policy directly lowers the costs that fall on New Zealand households; $1.3 billion of cost by 1 June will have not been paid by New Zealand households but will have been saved by New Zealand households because of this policy. And we know that flows through. That is a primary driver for this policy.

As I say, and I said before as well—I’ve repeated this several times—the member is incorrect that there is any sacrifice that is made across projects funded by the National Land Transport Fund. He specifically mentioned one, the Mangamukas, which is a piece of road which has been hit by repeat extreme weather events and has been confirmed as a road that Waka Kotahi will remediate and plans to invest approximately $100 million in to do so. There is no project within Waka Kotahi’s National Land Transport Fund plans that will not occur as a result of this policy. I’ve repeated that several times, and I say it one final time for the benefit of members.

I move, That the question be now put.

Madam Speaker, the committee has considered the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill (No 2) and reports it without amendment. Madam Speaker, I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Hon Jacqui Dean): The Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill (No 2) is set down for third reading immediately.

Third Reading