Land Transport (Clean Vehicle Standard) Amendment Bill

Thank you, Mr Speaker. I move, That the Land Transport (Clean Vehicle Standard) Amendment Bill be now read a second time.

Mr Speaker, thank you for the opportunity to speak on the second reading of this bill. It’s been interesting listening to members on the other side of this House try to argue the potential of this bill and say, “Well, actually, the cost recovery principles aren’t the right way to do it.” Well, actually, this bill does two things. One is it has a small cost recovery element to it. That is only a very small element of this piece of legislation. The actual cost of operating the system is around $6.5 million per annum for the operation of the clean vehicle standard. For the members opposite to say, “Well, that’s actually going to be the cost that’s going to disrupt the market.”, well, it is a very small amount, ultimately, of the entire cost of what actually—it’s $5 to $10 or $20 a car. It’s a very small amount. We think, when it comes to services the Government is providing, actually it’s important that there is cost recovery in place, because the alternative, which the members on the other side of the House don’t like to talk about, is: who has to pay?

The other alternative is taxes have to be increased on every single New Zealander—or the magic money tree. The magic money tree—just appropriate it. So this is about doing two things. This bill does two things. Firstly, it allows for the clean vehicle standard to be amended by regulation, and the argument in favour of that is to ensure that the market settings—we’re not arguing about whether or not there should or shouldn’t be a Clean Car Standard; we accept the importance of a Clean Car Standard; we accept the role that it plays in terms of ensuring New Zealand can get the mix of vehicles and that we can lower the emissions of those vehicles over time. But, at the same time, those standards need to strike the right balance between being stringent enough to ensure New Zealand continues to receive a clean supply of vehicles, but not too stringent that importers cannot meet them, leading to hiked vehicle prices for New Zealanders.

Of course, as members have been saying, the overs and unders in the system need to be met, but if the standard becomes too tight and, actually, the supply of vehicles to achieve its standard is not available, simply the penalties in the regime will be passed on to consumers, and we want to avoid that. So the other side is also arguing for higher vehicle costs for New Zealanders. They’re arguing for two things. They want to increase taxes for New Zealanders and they want to increase the cost of buying a vehicle for New Zealanders. That’s what the other side of the House is arguing by opposing this piece of legislation.

The bill does two simple things, and I think they’re very important. I think the third thing that the other side of the House—well, the point that the other side of the House are missing is that the legislation they passed requires me as the Minister of Transport to have started a review of the Clean Car Standard before 30 June 2024. Now, of course, we know 30 June 2024 is on Sunday. I was required to start that review before 30 June 2024. I started that review back in January, following the law that the last Government set, but the reality was they required me to review it, but they’d already legislated the standard, so that they required the Minister of Transport to review a standard that couldn’t be adjusted. That’s exactly the type of legislation the last Government put in the House. So if you think about bad lawmaking, that is the epitome of bad lawmaking. In fact, the officials at the time even said that it should be set by regulation rather than by legislation.

This is a very sensible piece of legislation. It simply changes one very small part of the clean vehicle standard regime in terms of the ability to set the standard by the Minister rather than by legislation. Secondly, it requires a cost recovery model rather than imposing the cost of that on to all New Zealanders, and, as the other side have failed to explain, where are they going to find the money to pay that bill?

The question is that the motion be agreed.

Kia orana, Mr Speaker. Look, this is the second reading stage and usually in the normal scheme of things, we would now be referring to a select committee report; we would be thinking about the various aspects that those who had submitted to that process will have said about this proposed legislation. Whether it is narrow, small, or otherwise, it would have still been subject to the same process. What we’ve heard is less than five minutes from the Minister of Transport in his second contribution this evening on this bill, and I don’t think members on this side of the House are none the wiser as to some of the issues that we raised in the first reading contribution.

We’ve asked the Minister to share with the House who he consulted with as part of the process of bringing this bill to the House. It’s not as if he ran out of time—there were minutes on the clock—and yet we have still not had that particular issue addressed. I think that’s actually very serious, because usually by now we would have heard from the community and submitters and heard what their views are. Now, the Minister has clearly undertaken some consultation—we know that—but we do not know the details of who he has consulted with, and why is that? Is it because he is ashamed of the fact that he hasn’t actually consulted with some industry participants who would give him some information that actually it’s not a good idea to bring this bill to the House? We are still waiting for him to address that.

Look, the Clean Car Standard was phased in from December 2022 and the prime focus was to target a significant reduction in carbon dioxide emissions for light vehicles. Now, that has an everyday impact; it has an everyday effect. When we look at the context of light vehicle emissions across the entirety of the emissions spectrum, we know that they are a significant source of transportation emissions within this country of Aotearoa New Zealand. Yes, we know about the environmental factors, but what we’re still waiting to hear from the Minister is the level of consultation of the individuals that he’s had. Has he talked with any environmental groups?

Hon Peeni Henare: Probably not.

TANGI UTIKERE: Probably not; Mr Henare, we don’t know. I guess we will have the committee, the whole House stage to work through that. We can pose the questions to him, but we can only hope that the Minister will actually address them. There is an absolute need here in New Zealand to increase the number of low- to no-emission light vehicles within the fleet so that members of the public and others can actually—and companies and the like—access that in terms of their provision. That’s exactly what the Clean Car Standard does.

What we are talking about here is effectively enabling the Minister, by way of secondary legislation, to water down, potentially, what the standards would be. At the moment, they are in primary legislation. If the Minister chooses to execute it via regulation, yes, there is a requirement for the Minister to consult prior to exercising those secondary legislation rights. I am still looking forward to hearing, hopefully, from Simeon Brown how he intends to approach that—if he intends to approach that—and why it is that he identifies the industry participants or the individuals who he would consult with or thereabouts.

There is absolutely a need to encourage and incentivise an uptake of low- to no-emission light vehicles, and there is nothing from this Government—and certainly nothing in this legislation—that locks that in and seeks to address and support that as well. Earlier this evening, my colleagues the Hon Dr Megan Woods and the Hon Damien O’Connor talked about the fact that if we don’t do anything in this space, then our country will simply have to write a cheque to address the limitations as a form of mitigation as a result, and that is simply unacceptable. When the Government has an opportunity to do something about it and they’re choosing not to provide the certainty, that is completely unacceptable.

What we do have in front of us is a copy of the regulatory impact statement, so let’s have a look at that. The regulatory impact statement does have the numbers and it tells us that there are around 1,000 vehicle importers who import around about 300,000 new and used motor vehicles over the course of a year. Now, there are two options that have been identified in the regulatory impact statement as to how this particular user-pays charge—as the Minister has said it is—could be garnered.

The first is that you could simply just spread the total amount across all of the importers, and basically there would be an annual fee that would come out at the end of the machine. Now, there is some inequity in that because if you are a smaller player—a smaller importer—you still pay the same amount or the same fee on an annual basis as a big importer, right? So I get that.

The other option is that it could be by way of recovery, and I sense this is the direction in which the Minister is heading, by way of a per-car fee. So it didn’t matter what the price of the vehicle is, but the car would have a component—and there’s a table that outlines the various costs per vehicle and how much that would look like, noting that there is a set administration fee regardless of the price of the vehicle—and that’s how that would happen. Now, that’s perhaps a little bit more equitable, but there are administration costs in there as well.

What’s really interesting is this suggestion from the Minister that, “Well, it’s $5 to $20. It’s really a small amount, $5 to $20.” Well, how does that compare with the $2.25 that senior citizens got from this year’s Budget per week? Just a small amount: $2.25. Now, the Minister seems to think that $5 to $20 is a small amount. When he reflects on his own Government’s Budget—and noting that this was part of the Budget urgency motion originally that didn’t manage to get through for the Government—there are questions around that. So the Minister might take the view or the perspective, that this, in the general scheme of things, is a relatively small amount of money. But we need to balance that with the incentivisation that it provides for purchasers to think about what their choices will mean for emissions in this country.

Now, I do accept that, yes, the fixed-fee percentage might be small, but it could be seen as a tax. Call it what you like, it could be seen as a—it is a tax, actually. When you apply it onto a vehicle, it is a tax. Every single bit of dollar that this Government seems to need to meet the promise to fund $2.9 billion for landlords, perhaps that’s the reason that is driving this decision from the Minister. He will argue, of course, I’m sure—well, we don’t know because we don’t seem to hear from him; he doesn’t take his full call allocation as part of this debate. But he might form the view that, actually, all of this sort of stuff does add up in the end of the day, but it’s not actually really worth it.

I think this will allow the Government to effectively authorise and permit or allow dirtier cars, less efficient cars, to increase in numbers coming in of vehicles that would have higher operating costs over the tenure of the vehicle’s lifetime as well, and will also seek to penalise those for whom it’s a little bit more difficult to make the decision—it’s a little bit more difficult.

That’s why this standard and this piece of legislation worked in tandem with the clean car rebate—the Clean Car Discount; they were two pieces of legislation that worked in tandem. Now, we could give the Government a little bit of fair dues, I suppose, if they—as they have—rolled back and struck out the Clean Car Discount in that rebate. But they have not replaced it with any other adequate incentive to encourage purchasers to uptake no- to lower-emission vehicles as part of their household choices or their company choices, and this is really, really unfortunate.

It is important for those carbon dioxide targets to have a real sense of ambition. When we’re talking about the transportation sector—which we all know, the sector emissions are huge; they are significant—taking steps within this sector and making a change will make a huge difference in terms of our emissions profile and the role that New Zealand will play in terms of continuing to do our bit. In fact, if we are to have any progress or make any progress towards our climate change aspirations, we need to ensure that we are actively pursuing—and that the Minister is actively pursuing—ways in which the transportation sector’s emissions can actually be reduced. This piece of legislation is certainly not doing that.

So we continue to oppose this bill, and that’s actually a very easy choice for this side of the House. Because, from first reading to second reading, we have not heard anything in terms of addressing the concerns, answering the questions that we have posed to the Minister and others, and we still encourage the Minister—as we work through to the committee of the whole House stage—to provide the answers to give some answer to us at this stage. We continue to not support this bill.

Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. Before I get into the weeds of the Land Transport (Clean Vehicle Standard) Amendment Bill and the difficulties that I see with it, I just want to put it in the larger context of why we need an effective Clean Car Standard and an effective price incentive, like the Clean Car Discount, and why New Zealand benefits from those policies. Everyone in New Zealand benefits from those policies and that’s because we are in a climate crisis.

Putting fossil fuels into the atmosphere is changing the atmosphere, it’s trapping more heat, it’s creating more extreme weather events, and we’ve known about this for decades. I appreciate that maybe not everyone in the House has known about it for decades, but there are climate scientists, and certainly people in the Green Party have known about it for decades. We’ve been saying it, because a whole bunch of countries got together and signed up to the Kyoto Protocol in the early 1990s, and around that time—and I know, because I was growing up in the United States at that time—there started to be a kind of organised lobby against climate action, and the organised lobby was funded by fossil fuel companies because they didn’t want the world to take action; they wanted to sell more oil and gas, not because it’s good for all of us but because it was good for them, because they were making money out of it. But they knew that it was going to make life more difficult, and impossible in some parts of the planet, if we carried on doing it. Of course, it’s more than just fossil fuels, but that’s the big driving one.

In other countries, where they took climate change seriously and they didn’t have so many lobbyists from car manufacturers who didn’t want to change what they were doing, because they wanted to carry on making big profits, they brought in policies like fuel economy standards, and they brought in policies like feebates. And what happened? Their vehicle fleets became more efficient. That efficiency is good for everyone because it means we spend less money to drive a certain distance and to move our goods a certain distance. But the thing is that, without those policies in place, the car manufacturers—and the American car manufacturers in particular kept lobbying to not have those standards—found it more profitable in the short term because the higher-emissions vehicles were less costly for them to make and they could sell them for more. People don’t really take into account the ongoing operating costs of the vehicle when they purchase their vehicle, so they’ll pay more for a vehicle that actually costs them more in the long run.

Now, this is a very easy problem for a country like New Zealand to solve, because we don’t have an oil industry that actually powers our cars. All of our oil is exported. All of our oil has always been exported because it’s not the kind of oil that you refine into petrol and put in your cars and trucks. So we do import oil, and we could still have the benefit of exporting the oil that we produce while having the benefit of not spending money importing oil. For those who really care about farming and dairy and its contribution for New Zealand, they might be interested to know that all of our dairy exports do not pay for all of our car and fuel imports on an annual basis. So, if we can do the same amount of business with spending less money on imported petrol and diesel and spending less money on imported cars, that’s a direct productivity gain to New Zealand, something the Government parties should be interested in. But they are not, because the truth is the Government parties are the parties of the status quo and they are the parties of the big corporate lobbyists. They’ve been lobbied for this bill by the car industries that import the highest-emitting vehicles.

I welcome the Government parties to listen to reason on this, because the cost-benefit analysis of the Clean Car Standard and the Clean Car Discount together was positive, and it mainly benefited all New Zealanders, who would then be spending less money on petrol to drive around. If Government parties actually cared about climate change, which they clearly don’t, and making some sort of contribution, they would take seriously the evidence around the policies that are going to lead to more efficient vehicles in New Zealand and lower-emissions vehicles. They’ve already demonstrated they have no interest in making our cities more efficient for transport. They don’t want to make it easier for kids to walk and cycle. They’re actually going to make it more dangerous for kids to walk and cycle to school. They’re going to make it more difficult for people to take public transport. They’re trying to kill rail freight in this country by cancelling a contract with an overseas ally in South Korea—shocking, shocking for New Zealand’s reputation.

Here we are; we’ve got the data right in front of us. Before the Clean Car Discount and Standard were brought in, the average emissions of vehicles coming into New Zealand was 189g per kilometre. The car industry said, “We can’t change that. We can’t possibly change that.” But then, when we brought in the Clean Car Discount, it dropped quite rapidly to 165g per kilometre, decreasing 30g per kilometre per year.

Grant McCallum: The ute tax, you mean.

Hon JULIE ANNE GENTER: And when we had the Clean Car Discount and Clean Car Standard operating, it dropped to 136g per kilometre. Now, I hear members opposite bringing up a kind of pejorative description of that policy, and I invite those members to reflect what is really important here. We all need to work together in order to solve the climate crisis. We have an opportunity to work together to have a more efficient vehicle fleet, a more efficient transport system that is good for New Zealand’s productivity. The members opposite say no. They turn it into a culture war that is not based on any evidence whatsoever and then they blame it on me. Mr Speaker?

SPEAKER: Yeah, talk to the Chair, not engage across the House in conversation like that. Carry on.

Hon JULIE ANNE GENTER: Mr Speaker, I welcome you to notice the level of interjections and perhaps tell members opposite—

SPEAKER: And I just commented on it.

Hon JULIE ANNE GENTER: Thank you. So if we want an effective policy to reduce emissions from our vehicle fleet, which everyone in New Zealand benefits from, except the very small number of people who happen to be selling high-emitting vehicles, and they can switch to selling low-emitting vehicles—that’s the purpose of the policy. It’s not just about changing the consumer’s choice; it’s about changing the option that is even available for consumers to make. When we didn’t have fuel economy standards—and we were one of only three countries in the developed world to not have fuel economy standards, along with Russia and Australia, which is now bringing in some sort of standards—we were a dumping ground for the most polluting, inefficient vehicles in the world. How is that good for New Zealand? How? Can any member opposite explain to me how it’s good for New Zealand to be a dumping ground for high-polluting vehicles? Is there any rationale for that? No.

That’s why we have the Clean Car Standard, and what this bill is doing is actually introducing a whole lot of uncertainty, because it is taking away standards and targets that were set in legislation years ago, after a thorough consultation process and a full select committee process, in which everybody was able to make their voices heard. Those have been known by the industry for years now. It’s taking away that certainty and it’s saying, “We don’t know what the targets are going to be two years from now. We don’t know. The Government is going to make it up. It’s not going to go through a select committee process.” It’s going through this bill, under urgency, and they are clearly being lobbied by the highly polluting vehicle importers, who don’t want to have to meet the standard.

I welcome members opposite to show us how it is that they are introducing certainty by taking away already agreed and consulted upon targets that have been known for years and replacing it with nothing tonight or tomorrow, and then saying the Cabinet is going to make up its own decision about what those targets are and just pass them without going through a consultation process. Clearly we’re getting closer to those years of 2025, 2026, 2027, and what everybody has known would be the targets is no longer going to be the targets. And there’s this totally uncertain scheme for recovering the cost from the vehicle importers themselves. So I don’t see how anyone can say this bill is increasing certainty for the vehicle industry or for anyone when it’s clearly intruding a whole lot of uncertainty and an unknown cost recovery scheme, unknown targets for the next three years.

Clearly, combined with the removal of the Clean Car Discount, we have seen the average emissions of vehicles coming into the country jump up to 161g per kilometre, and there’s simply no way to practically achieve the outcome that we all know we have to achieve, which is reducing carbon emissions. There are huge benefits to reducing carbon emissions. There’s almost no losers in New Zealand from these sorts of policies. So it is a real shame that the Government parties in Opposition opposed these policies when they are policies that could have been supported across party and would be effective at getting a wide range of benefits for New Zealand.

I rise in support of this bill, because, you know, New Zealand’s a beautiful country. It’s a great country. I love this country to bits, but I have to say, I don’t think the international motor vehicle developers are clinging on with bated breath to see how New Zealand goes on their clean vehicle standard. They are private industries who go about investing for the future of their company and making sure that their consumers get what they want.

I am very happy to have heard read out on the other side of the House a list of companies that have developed electric vehicles for utes for tradies and farmers to get a piece of, because it just shows that that sort of thing is happening in the world. Tradies like myself, who go out to work in a vehicle that’s supplied for them to go and do their job based on their requirements—it’s a great thing to have in a free country.

Facts matter. I mean, we’ve just gone a quick google search of this. Statistics New Zealand, for the end of June 2022—it turns out that fuel imports were $7.1 billion and car imports were $6.8 billion. So we’re talking roughly $14 billion. It turns out our exports of dairy were $25.6 billion. So I don’t know where this number that was being thrown about—that they are combined—was coming from, but perhaps we’ll hear some more later.

Look, we want to see lower vehicle costs for the hard-working, backbone tradies and farmers of New Zealand that Labour used to care about. I commend this bill to the House.

Two quick things: it seems to me that the Opposition is assuming a couple of things are going to happen. The first one is that the downward trajectory that there is at the moment, in terms of the clean vehicle system emissions, is somehow going to stop. Well, it clearly is not going to stop. The second one is the assumption that somehow the Minister will actually turn that around, and I don’t think that’s going to happen either. So I think that this is simply allowing the Minister to give a greater degree of flexibility, and that’s why I commend this bill to the House.

Thank you, Mr Speaker. The contributions that we’ve heard from every member on that side of the House remind me of the many Remuera tractors, Pakuranga tractors that I see every day in Tāmaki-makau-rau from members in Auckland, who sit there with their arm out of the ranger, scoffing at Clean Car Standards that this country relies on.

We heard some data there that talked about facts from a few years ago, which was why we put these standards in place, to make sure this country can once again lead the world in being green. What this Government is doing is creating uncertainty in the market. The Minister’s going to say, “Don’t worry, the market will sort itself out.” Well, when these standards were decided upon, it was made clear that the inequities will continue to happen in this country, with those who can afford to buy the vehicles, and those who can’t. So the biggest cost gets heaped on the people who can’t afford it the most. Let that one sink in—not the Remuera person who drives a Ford Ranger, not the person in Pakuranga who drives a Toyota Hilux, but the opportunity for families to have a car that meets these standards that allows it to be affordable is being stripped away. When we remove these standards, that’s what it does. It makes sure that this country does become a dumping ground for old cars—fossil fuel - burning cars.

While the member on the other side of the House talks about “Oh, don’t worry, car producers, that’s not what they’re fixated on. They’re not fixated on New Zealand.”, that might be fair and well in his world, but when all of those diesel-burning, fossil fuel - burning cars get dumped here—and let’s be very clear: a large number of second-hand cars get dumped here—you continue to create further inequities in this country. That side of the House doesn’t understand the longer repercussions of removing this clean vehicle standard.

We heard on that side of the House that “Oh, you know, the cost is pushed out on to those who sell these vehicles, and ultimately they’re pushed on to the consumer.” When we don’t meet the standards we signed up to, we have to pay a bill, and the taxpayer is going to have to pay that bill. That’s what this Government is doing to the New Zealand taxpayer. But it’s OK, you’ll get to drive your Ford Ranger; you’ll get to drive your Toyota Hilux.

What I garner from a number of the interjections from the other side of the House is that the technology’s not there in the ute system. Well, that’s actually not the case. Interesting, I was driving along in Auckland the other day, and I got overtaken by two hybrid Toyota Hilux utes—trucks, utes that were designed to meet a very strict and demanding target, which is something that this country bought into. It’s something that taxpayers have bought into. It’s something that most of the world has bought into because they know the impacts of climate change. So when we see the Minister coming forward with the Land Transport (Clean Vehicle Standard) Amendment Bill, we can’t support this bill in the House. We need to make sure that we are a responsible citizen in the world. What we’re not seeing from this Government is a clear plan on how we’re going to meet these targets that we all signed up to—we all signed up to.

Once upon a time in this House, we all talked about the need for climate change measures to ensure that our children and our grandchildren have a future. This bill doesn’t do that for us. It takes us backwards. It continues to say, “Oh, the farmers.” We’re here for the farmers too—we’re here for the farmers too. I want to paraphrase Mr James Meager: “The right don’t own the farmers; the right don’t own the businesses.” Get the hell out of here! I can tell that member that all of those Aucklanders sitting there driving their utes and supporting their constituents to drive more utes—wow. When they go back to the voting booths in a couple of years’ time, they’ll see that ultimately the bill is going to fall to the taxpayer when we pay because we didn’t meet the obligations that we signed up to. It’s as simple as that—it’s as simple as that. They are kicking the can down the road; or, in this instance: well, they put the can on the back of a ute and set it off into the sunset. It’s not good enough.

What I can also say, because it’s the same Minister that has the challenges with supplying power in Northland—Mr Grant McCallum will agree with this—perhaps it’s the Government’s way of saying that they’re too scared to invest in proper infrastructure to allow electric vehicles (EVs) to operate in this country. That’s what it sounds like to me, Mr Grant McCallum: not enough power in Northland to fuel the EV cars in Northland, my friend. But that’s OK because, apparently, this Government have a plan. I’m yet to see one; what we’re going to see at the passing of this bill, ultimately the New Zealand taxpayer isn’t going to see one either.

Thank you, Mr Speaker. I rise to take a call on this bill. I’m going to divide my speech into four parts. The first part will talk about the wider context that this bill operates in. The second part talks about one aspect of the bill, which is the user-pays aspect in clause 5, in new section 167BA.The third aspect sets targets under clause 6. Then, the last part of my speech will talk about the Government’s use of urgency. Just to be clear, I echo the words of my colleague and friend Hon Julie Anne Genter that we will not be supporting this bill.

The wider context that this bill operates in is, you know, since the Budget, this Government has passed legislation that’s undermined our climate response every step of the way. Earlier today, they passed a bill exempting the biggest emitter—the biggest emitter—in our economy, the biggest emitter in New Zealand, the agricultural sector, from having to pay its agricultural emissions. The second bill that they passed today was the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill. Now, we’ve heard during the committee of the whole House stage that the Minister of Transport didn’t commission any analysis around whether it might flood the markets and cause the emissions trading scheme auctions to fail further. The third aspect that they passed was the Waste Minimisation (Waste Disposal Levy) Amendment Bill, which, again, the Minister for the Environment didn’t say that they would guarantee that it would be used for waste minimisation funds. Now, I’m going to talk about why that’s important and why the wider context leads us to distrust the bill.

Now, the user-pays context that the polluter pays—it’s not a bad principle in theory. I think polluters should have to pay for the cost of the pollution. The problem is that clause 6 doesn’t actually set the standards; it gives the Minister of Transport the power to set the standards. Now, in the context of everything that’s going on so far, in the context of all the anti-climate action that this Government has taken, how could we possibly trust that this Government is actually sincere about reducing emissions?

Hon Member: They’re not.

FRANCISCO HERNANDEZ: They’re not—they’re not—that’s right. They’re absolutely not. We’ve seen that they’re willing to exempt our biggest sector from paying emissions. We’ve seen earlier this year how they were going to—in the changes around the road-user charges, how they charged petrol hybrid electric vehicles the same as the big polluters. So with the Minister setting these standards, in theory, the Minister could actually set higher charges for less polluting vehicles and lower charges for higher polluting vehicles. We just don’t know. With the sort of standard of climate policy that this Government is doing, I wouldn’t entirely rule that out.

Now, the second aspect of this bill is that it allows the Minister to set the targets, it abolishes the existing targets, which, as we’ve heard adequately from this House, are already set, are already established, are already certain, and they’re introducing more uncertainty. We simply have no idea what these targets might be. So the cumulative effect of all of that is to actually weaken New Zealand’s climate response. In the Minister’s speech, he explicitly made a commitment that the targets would be less stringent than the current ones. So in the context of that, how could we support this bill when it’s going to be a retrograde step for the climate, and it’s going to be a retrograde step for the people?

When we delay the climate transition, the cost of it doesn’t actually fall on the most well-off in society; the burdens of climate change and the burdens of climate change impact fall on those least able to pay for it. So by delaying the climate transition—which, let’s be clear, the Government has been very explicit that this bill has been designed to decrease the standards, which will delay the climate transition and which will lead to New Zealand beyond a dumping ground for high emission vehicles—it’s not doing anyone any favours. We’ve seen that global volatility around the world has led to higher petrol prices. I mean, I’m not a ball-gazer, I’m not a fortune teller, but if I were to make a bet, I would bet on more uncertainty in terms of oil, in terms of global markets, in terms of the price of oil going up.

In encouraging high-emission petrol vehicles, you’re locking the poorest in society in to forms of transport and forms of vehicles that will actually cost them more in the long run. It doesn’t make sense. And look, the urgency is really bad too, but I didn’t get to that. Thank you.

Well, I rise in support of this very good bill. The farming community of New Zealand—we’ve got rid of the ute tax. I just want to assure the member on the other side of the House that I do not drive a “Remuera tractor”, I drive a “Maungatūroto tractor”. And from Maungatūroto, I can see the Brynderwyns, which are opening tonight—one hour from now. Great news. With that, I commend the bill to the House.

Thank you, Mr Speaker. There are 300,000 vehicles imported into New Zealand every year, roughly—25,000 a month. The only chance that you get to make those 300,000 vehicles efficient is when you import them and register them for the first time, because once they’re here, they’re valuable and someone uses them to the end of their useful life. So if you want to improve the efficiency of the vehicle fleet, you’ve got to do it at the point of import and first registration.

We know that by the time the last Government was voted out of office by the crowd on the other side, of those vehicles that were being imported every month, 48 percent were hybrids, 7 percent were plug-in hybrids, and 20 percent were full battery electric vehicles. That’s a total of roughly 76 percent. Three-quarters of the vehicles being imported were hybrids, plug-in hybrids, or battery electric vehicles. What’s that now? What’s that now? They got rid of the Clean Car Discount, because they’re all arse about face on the other side. They didn’t come up with a mechanism to replace the—

Hon Members: You can’t say that!

Hon DAVID PARKER: It’s perfectly parliamentary, I would have thought. Maybe I won’t repeat that comment, Mr Speaker.

SPEAKER: It speaks to the member’s own habits more than anything else.

Hon DAVID PARKER: What are we at now? Now, 41 percent of the vehicles are petrol and 16 percent of them diesel, which is a total of 57 percent being internal combustion motors rather than 25 percent as it was prior to the change of Government.

Now, if the Government was going to get rid of the Clean Car Discount, it should have already increased the standard to make the standard do the work, because every month that that is delayed, we get another 25,000 vehicles, half of which are internal combustion, increasing our emissions. And every one of them will be belching greenhouse gas emissions until they’re completely worn out in 15 years’ time. So the indifference that this Government is showing to emissions in transport is going to have a long-term consequence both for the environment in terms of those increased greenhouse gas emissions, for New Zealand’s imported oil bill, because we have to import more oil. The case for electric vehicles in New Zealand is better than virtually any other country in the world, because 85 percent of our electricity is renewable and generated locally and it’s going up.

If this was the only mistake that the Government was making on climate, it would be lamentable, but you’d think, well, maybe they’ll get it right eventually. But, of course, as others have said, this is part of a long litany of mistakes that are already being made deliberately by the other side on climate. They signed up to the zero-carbon Act, they pretended to buy into the budgets, just like they pretended to buy into the child-poverty targets, but it was just a ruse. It was just a ruse to get elected, because everything they have done tells the truth, and the truth is they’re taking this country backwards now.

No, there’s lots of reasons the National Party are going back in the polls. This isn’t the main reason; it’s one of the reasons, but it’s not the main reason. The main reason is because they’re dragging the economy into the dirt. But they show their economic illiteracy in this piece of legislation, because it increases the bills of New Zealanders, it increases our current account deficit, and it takes the country backwards on climate as well. They say they’re going to rely on the price of carbon through the emissions trading scheme (ETS), and what do they do? Well, they gut it by taking 50 percent of the emissions out that relate it to agriculture. Now, agriculture was always going to have a sweet deal. They were always going to have 90 or 95 percent free allocation or the equivalent thereof. But now they can completely let off the hook to the cost of the rest of the economy who bear that cost of the non - price based measure in agriculture.

Now, the guys on the other side, they say, “I trust the ETS. We’ll let the ETS do the work.” Well, I tell you what: that’s a market. That’s a market. And I tell you what: we understand markets on this side. The other side don’t. And I tell you what: the private sector understands markets. They understand that National’s ruining this market, because what’s happened to the ETS price that they say they’re going to rely upon more than the prior Government? The prices collapse. The private sector doesn’t believe that the National Party is going to use the price on carbon to release emissions, because it’s gone down from about $75 per tonne of carbon when we left office to $50. It’s $75 to $50, a 33 percent drop in the price of carbon.

I see we’ve got the ACT Party saying, “Hooray, hooray, hooray.” Well, that is absolutely typical, given the members that are sitting there, that they would celebrate the price and the collapse of carbon when the Government that they are part of says that they’re going to rely upon the price of carbon to drive emission reductions. As it happens, the price on carbon actually isn’t the most effective way of reducing your emissions in cars. Cars are the most energy-intensive item that most people ever own in their life. You buy a fridge in New Zealand that has an efficiency standard. You buy a washing machine that has an efficiency standard. You get a dishwasher. You get a heat pump. All these things have efficiency standards. That’s why you need efficiency standards at the point of import for the most energy-intensive carbon-producing item that most people use. That’s why you do need to have standards. That’s why this Government should already have toughened the standards.

This piece of legislation shouldn’t be here kicking down the code, leaving the discretion to the Minister to actually slacken those standards. I don’t trust that they won’t do that. But the shame is that they should have already done the analysis as to what is the effect of the abolition of the Clean Car Standard on the make-up of the fleet. The only way to compensate that, if you’re not going to use feebates, like that system had, is to have a more rigorous standard for vehicles at the point they are imported. So, every month, of those 25,000 vehicles that are coming in every month, the number of those that are petrol vehicles has gone up astronomically—and diesel vehicles—and the number of hybrids, battery electric—how backwards is that as a country? Aren’t you ashamed of that? I’m ashamed of that. We’re a better country than that. Members on the other side of the House should hang their heads in shame. We’re a better country than that. We’re going backwards, and we don’t even have an industry.

I can almost understand the economic illiteracy of the National Party members when it comes to agricultural admissions. They go in for simple tropes that somehow they’re protecting the agricultural industry. They’re actually not long term. They’re actually making a mistake there too. But I can understand their protectionist instincts. They’ve always had them on that side, protectionist instincts for agriculture. I can almost understand that. But you haven’t even got a car industry to protect. We don’t make cars in New Zealand. We end up producing the bag end of cars produced by the other parts of the world, in part because those cars often can’t be sold in the countries in which they’re made now, because they’ve got standards that are tougher than ours.

So, look, economic illiteracy—it’s why you guys are going backwards in the polls. You know you’re worried. Look at them smiling. You’re going to come back here and you’re going to one day apologise to the people of New Zealand for every month of an extra 10,000 petrol and diesel vehicles coming into the country that could be battery electric vehicles and plug-in hybrids and hybrids that would be saving people money at the pumps and actually helping save the world. I know that it sounds a bit dramatic to say that, but you know, we’re actually pretty close to the tipping point. Don’t you take fright at the fact that people are dying going for walks in Greece at the moment from these unprecedented heat waves? Don’t you worry about the temperatures of the sea being higher than has ever been recorded in history? Don’t you worry about that? I know I do.

I actually accept the science. I accept that New Zealand has to do our share, because if a country with all our advantages and no car industry to protect can’t do the right thing here and actually have a decent standard to make sure that those vehicles aren’t imported about 15 years before they’re worn out, it’s pretty poor policy, and that’s why this side of the House will be voting against this bill.

I thank the member for the long list of things that I need to do.

Thank you very much, Mr Speaker. I just couldn’t help myself, sitting there listening to that diatribe of absolute waffle from David Parker, when he said, “Oh, Labour is the party of agriculture.”, and, yet, they turned up to Fieldays for a day and then left, didn’t have a stand there, and rolled out their Red Bands from the packet, without a spec of dirt on it, and said to the community, “Hey, we represent you.” Nah, nah, nah—nah, nah, nah—we don’t buy it on this side and the New Zealand public see straight through it, and I commend the Land Transport (Clean Vehicle Standard) Amendment Bill to the House.

Mr Speaker, thank you for the opportunity to take a short call on this second reading of the Land Transport (Clean Vehicle Standard) Amendment Bill. I want to thank members around the House for engaging in what has been a really interesting and lively debate, and it points to a good committee of the whole House stage coming, where we can get into some of these issues. But there is still a misunderstanding about two important aspects of this bill.

On the one hand, we have members opposite shouting “ute tax”. What’s this then? Grant McCallum, what does this do? What is this? If one would think that the Clean Car Discount was a ute tax, then what is a piece of legislation which spreads cost from clean small cars to large, big cars? How is that different to the tax that you’re worried about? Luckily, I’m here to tell you, mate. The difference is that in this sort of legislation, you’re designing a tool that Government can use that isn’t intended to pass on those costs, because they’re costs that are designed to be borne by the industry, not the consumer. Those are generally large sector participants in the industry who can adjust what kind of cars they import so that they do not pay the tax. So when the National Party talks about things like time-of-use charging, you might say that was a tax, but it’s not intended to be paid; it’s intended to change the behaviour of people who, if they did not change their behaviour, would pay the tax. So in this scenario we have large importers but also small importers who are able to offset certain cars between themselves.

A really interesting and recent example is that this system as it’s being designed now would create some difficult costs for importers of small cars that are not hybrids or electric vehicles. So say a car like a Suzuki Swift, which is a small car so it doesn’t enjoy the weight settings that exempt, say, a Toyota Hilux from some of these requirements but is not an electric car. Those cars are on the receiving end of some of the more difficult parts of this. But you have Toyota actually saying in the media recently that they are interested in working with Suzuki because they have so many really good cars for a scheme like this and that they import lots of small electric cars that they would be able to offset not only their large Hilux offerings but also something like a Suzuki Swift imported here. So we see really good examples of where the industry can not only avoid this cost but are also interested in working together to make sure that the entire industry is lowering its emissions profile.

I wanted to make sure that we all know that point going on to select committee stage, because to describe this as a tax—one might see this as a tax, but it’s not something that will be paid by consumers. It’s not designed in a way that is designed to put costs on to consumers, and so we need to be debating what we’re really debating here when we get to that point.

The second point that I just want to clarify is that the Minister gave a bit of a confusing explanation of New Zealand being car takers in a world of car makers, because most of the cars that are imported into New Zealand are already compliant with international standards that far exceed our own standards. When the member Cameron Luxton stood and gave his contribution about the industry being far ahead of New Zealand standards, that’s right. But it’s not because industry are stepping themselves out faster and faster and faster than other legislation, it’s because in Europe they’re up to Euro 7 now, and in 2035, they will have banned combustion engines. So every large car manufacturer that imports into the European markets that share these standards needs to comply with much higher standards.

To give you another practical example, that’s why the Mitsubishi diesel-engine cars that we have in New Zealand use a diesel particulate filter, which is not required by these standards but is required by those Euro 7 standards. It’s a way of processing the particulates in diesel fuel to make sure that they are compliant with the emissions requirements in Europe. That doesn’t need to happen in New Zealand legislation, but it’s something that is a standard in all of those cars that are imported here. The flipside of that is that if we don’t have legislation like this, we get ourselves on par with those countries who will take any cars, and all of the cars that don’t comply with legislation anywhere else in the world.

This bill will amend the Clean Car Standard in line with our Government’s environmental commitments. Thanks to a user-pays model, it will save taxpayers money in what has been a prolonged cost of living crisis. I commend the bill.

Mr Speaker. Prior—

SPEAKER: Wait for a moment. I think it’s just a really good idea just to cut down the conversations among members at such a loud level.

Hon Dr MEGAN WOODS: Thank you, Mr Speaker. Prior to the introduction of the clean vehicle standard, the Productivity Commission noted that New Zealand was one of three developed countries in the world without such a standard. One was Russia, one was Australia, and one was New Zealand. This was the group of countries that we were putting ourselves with.

What we can see, then, is New Zealand as a market—and the Hon David Parker talked about this in his contribution—was accepting cars with higher emissions than other parts of the world, because the market could see that this was a place that you could dump high-emitting vehicles that simply weren’t allowed into other jurisdictions. For example, the top-selling new light vehicle models, the most efficient variants available in New Zealand have, on average, 21 percent higher emissions than comparable variants in the United Kingdom. The very real reason is that they have a robust regulatory regime around the standards of emissions of vehicles.

What we have is a Government bringing legislation to this House to introduce under urgency and pass under urgency that wants to water down the standards that we as New Zealanders should expect in our vehicle fleet. There is no real cause that’s spelt out in any of the documentation. In fact, I’m going to go through some of that, and I note that the Minister, in his speech on this reading, didn’t address what I think are some really real issues that he needs to address from the Parliamentary Commissioner for the Environment that were released earlier this week in an open letter to the Minister, given that there is no select committee process and no process for expertise such as the commissioner to input into that.

There will be, as we go through this bill clause by clause in the committee stage, a number of questions that the Minister will need to address in regards to what the Parliamentary Commissioner is setting out. One of those that I think that this House deserves an explanation on is that we have a Minister that is bringing forward the ability of the Minister, by regulation, to change the standards outside of the statute by three years. This is significant in terms of our emissions targets. What the Parliamentary Commissioner is saying is that the legislation should contain some criteria and methodology that will inform the Minister’s decisions around vehicle emissions standards whenever they exercise that regulation-making power.

Now, it is not too much to ask, that a piece of legislation that allows the Minister to make decisions by regulation and brings that forward, that we should be able to see laid bare in the legislation how he is going to do this. What is the kind of criteria and what is going to guide that decision making? We haven’t seen any of that in this legislation. Something the Minister will need to address is why not? Because one of the problems the Minister is going to have when he gets into the chair is contained in the documentation that has been on the Table with the bill, the departmental disclosure statement, which I think is a very interesting read on this piece of legislation. Did the regulatory impact analysis team in the Treasury provide an independent opinion of the quality of any of the regulatory impact statements? No, they didn’t, because they’ve been reviewed by a panel of representatives through the Ministry of Transport. It’s been given a “partially meets” rating against the quality assurance criteria for the purpose of informing Cabinet decisions.

So Cabinet did not have all the information it needed when it made the decision, and yet the Minister thinks that he knows so much he can bring it to the House without any scrutiny at select committee. It hasn’t even had that. This from a Government that has set up a Ministry of Regulation and it is saying that they’re going to lift the standards around decision making like that. So the Minister’s going to have to explain to us why it is he is the world expert in this field that doesn’t need his Cabinet colleagues to have that analysis when they’re making decisions at the Cabinet table, and, certainly, we don’t need it as parliamentarians when we’re expected to pass laws in this House.

Then, something else I found very interesting in the departmental disclosure statement: are the aspects of the policy to be given effect by this bill that were not addressed by or that now vary materially from the policy options analysed in these regulatory impact statements? Yes. So not only did he not get the kind of information he should have been taking to his Cabinet colleagues in the policy advice, but then he changed it after that as well. So, obviously, this Minister is a genius when it comes to these matters and we look forward to him answering these questions in the chair, because unlike anything we’ve seen from this Minister before, I’m looking forward to a session when he actually answers some questions and has some information at his fingertips and things that he hasn’t just made up in his office before he’s come down to the House and had to come back and correct days later.

One of the things that we see is that the cost recovery impact statement developed for this bill did not address the aspects of the bill relating to the modification of the Clean Car Standard’s emissions targets. So, you know, why would you want a piece of legislation that is actually about how we are reducing our emissions? It’s baked into the emissions reduction targets that his colleagues and he, as a Cabinet Minister, are going to have to report on in only a few short months—didn’t even consider it; didn’t consider how changing the regulations around the standards in our vehicle fleet are going to impact on our targets. This is woeful lawmaking. This is lawmaking that makes absolutely no sense. It is lawmaking that is being made on the fly. It is lawmaking that is being made without advice. It is lawmaking that is being made that does not meet the standard of what New Zealanders should expect.

The Ministry of Transport, the Minister’s officials, had to give an exemption from the requirement to analyse that aspect of the bill, the aspect of the bill that was about the emissions targets. So, members opposite, you’re quite happy to pass legislation that is just giving an exemption to thinking about reducing our climate emissions—doesn’t matter. It is time this Government actually just owned what it is. It is a Government that cut $3 billion worth of funding out of climate action in this year’s Budget. It is a Government that has no plan when it comes to reducing our emissions. It is taking us backwards on every initiative that it was achieving against our emissions reductions plan.

The members of this Government are going to cost New Zealanders. We have two choices: we cut our emissions here at home and we keep jobs in New Zealand, we support New Zealand industries, and we back New Zealanders to have efficient cars to drive, or we go the way of, say, the Swiss, who are currently in the process of paying to put electric buses on the roads in Vietnam because they cannot meet their own emissions targets domestically.

As I said in my first reading speech, I make no apologies that my colleagues and I, every day of the week, will stand up and say that we will do everything to maximise our emissions reductions at home, to keep jobs in New Zealand, to keep highly skilled work in New Zealand, and to back New Zealanders, rather than thinking you can just trade your way out of this by going and buying expensive credits on the international market. What we’re seeing in this departmental disclosure statement is this Government isn’t even thinking about that. They’re not even considering it. It’s not part of their decision-making framework. They do not care about the cost impost that they are putting on New Zealanders, which is in the order, by Treasury’s estimates, of probably around $600 million a year.

Think about that. We have a Budget next year with a $2.4 billion operating allowance and Treasury’s own analysis would suggest if we were to block that as a contingent liability, then it would be in the order of around $600 million. This is what this Government is going to cost us, and every day they bring nonsense legislation like this to the House that further erodes our own domestic reduction, they are costing New Zealanders more. Every dollar we have to spend overseas buying credits will not be spent on schools, will not be spent on hospitals and it will not be spent on New Zealanders’ futures. That is what this Government is putting at risk.

Mr Speaker, Happy Matariki to you. To quote from the Broadway show Hamilton: “Talk less, smile more.” I commend this bill to the House.

This bill is set down for committee stage immediately. I declare the House in committee for the consideration of the Land Transport (Clean Vehicle Standard) Amendment Bill.

In Committee

Clause 1 Title