Land Transport (Clean Vehicle Standard) Amendment Bill

Members, we now come to the debate on clause 2. Clause 2 is related to the commencement.

Point of order. Thank you, Madam Chair. I just had a point of order relating to prior to the vote, and I’ve just waited until after the vote because, obviously, not wanting to interrupt the vote, and it’s the first available opportunity to raise this point of order. Madam Chair, when you decided to not take a final call from Tangi Utikere, you said that it was because the vote had begun. I’m not questioning your ability to decide when to take a vote—which I think is well understood to be at your absolute discretion—but my point of order is that if you refer to Speakers’ ruling 80/4, there is complete discretion that the Chairperson has in relation to being able to take a call—

CHAIRPERSON (Barbara Kuriger): Yeah, and I did use that discretion. There was no one on their feet when I started to take that vote, so—

CAMILLA BELICH: OK, thank you, Madam Chair; I just wanted to clarify for the committee that it was—because it appeared to us that you were saying that you were unable to take that call even though Mr Utikere was on his feet when you were taking that vote. So that’s my point of order, Madam Chair.

Thank you. I did use my discretion, and I was about three or four words into the vote when Mr Utikere stood to take a call. OK, clause 2.

Thank you, Madam Chair. Clause 2 is the commencement: “(1) This Act comes into force on 1 July 2024. (2) However, section 5 comes into force on 1 July 2025.” Section 5 is the clauses in relation to cost recovery, and that allows for time for the cost recovery mechanism to be determined and for consultation with the sector in regard to how that cost recovery will be undertaken and for that to then be put in place from 1 July 2025.

Thank you, Madam Chair. I’m happy to take a call on clause 2 of this bill, which is the commencement clause. Now, there are some pieces of legislation where the commencement clause is more material than others, and this is one of those pieces of legislation, because what this amendment in the Land Transport (Clean Vehicle Standard) Amendment Bill is doing is bringing forward the dates on which the Minister can make changes to the substance of the Act by regulation, rather than it being prescribed in the legislation. So, as the original legislation stands, those emission standards for 2025, 2026, and 2027 are prescribed in the Act, but the amendment we have and the commencement clause is pulling all of that forward so that the Minister can set those by regulation.

One of the things that I’m keen to understand from the Minister is in terms of how the phasing and the dates are going to work, because, of course, under the original Act, where we had it prescribed in the legislation, the ratcheting of the emissions targets was embedded within the principal legislation. Now that that is moving to having the Minister being able to change that by regulation, will he also be putting in that ratcheting of the emissions targets? I think that it is absolutely critical that we understand that in terms of the way in which the dates work.

The other question I have for the Minister is this. Of course, dates matter when it comes to this stuff because what we have is a series of pieces of legislation that are around reducing our emissions and how we reduce our emissions. These correspond to emissions budgets and emissions reduction plans (ERPs). Emissions reduction plan 1, I imagine, won’t be impacted at all by any changes here, but, certainly, there is the potential for emissions reduction plan 2 and emissions reduction plan 3 to be impacted by any changes; by regulation coming forward—as the commencement clause is allowing it to do—and having an impact on what the transport emissions targets look like within ERP 2 and ERP 3. I’d like to know from the Minister what, in terms of tonnes of carbon dioxide, the impact could possibly be, and what he will be doing to mitigate that in terms of making sure of the phasing in terms of the commencement of the legislation, and the timing of those emissions reduction plans and how they sit together.

The other thing that I think the committee would be keen to hear from the Minister on, in terms of the commencement date of this legislation, of course, is that we have had some suggestions for amendments from the parliamentary commissioner which actually are around changing dates. Obviously, everything in this bill is really around the amendments that will be made to section 175A of the principal legislation, but the Parliamentary Commissioner for the Environment, in his letter to the Minister that was sent this week—as there was no opportunity for there to be submissions at select committee, the parliamentary commissioner had set out for the Minister some suggestions, which we really have yet to hear the Minister respond to.

I reiterate that this is an Officer of Parliament who is offering advice to the Minister. I think it is disrespectful of this House for the Minister to not respond in a substantive way to substantive suggestions that have been made by an Officer of Parliament on a piece of legislation that is going through under urgency. So I think that it is simply untenable for the Minister to continue to not respond to these sensible suggestions. He doesn’t have to agree with them; obviously, that is his prerogative—he is the Minister. But what is untenable is that we have a Minister who is either unwilling or unable to respond to the complexity of the suggestions that have been made by the Parliamentary Commissioner for the Environment. There are many, but the one I’d draw the Minister’s attention to as we’re debating the commencement clause is the one around shifting the dates. He’s made that one in terms of what could be replaced under “not later than June 2025”.

There are three quite detailed and specific questions I’ve set out for the Minister in regard to commencement, and I look forward to hearing some substance from the Minister on that.

I thank the member for the questions. This is in relation to the commencement of the legislation. The member is asking questions which are more in relation to the review. The Act requires a review to be taken, and that review is under way.

In relation to the Parliamentary Commissioner for the Environment’s letter: effectively, those questions also relate to the review and the certainty. This Government is committed to a clean-car standard, and that is a point we have made consistently. We are undertaking a review of it in line with what the legislation requires. The Act prescribes the matters that must be considered. But those are all questions for the review; they’re not questions which relate to the bill and the clause.

This clause is simply to do with the commencement of the bill, which will start on 1 July, and in relation to the cost recovery, from 1 July 2025. That is what this clause is about. Those questions are relating to wider policy considerations which are being dealt with through an appropriate process.

Thank you, Madam Chair. Look, I acknowledge the Minister’s response there but, with respect, I think that he is incorrect in relation to his most recent contribution around what the Parliamentary Commissioner for the Environment is seeking.

Last night, it was known to the committee that this open letter had been sent to the Minister. I have to say that, just after midnight last night, I received an email that sought some confirmation as to where this letter was, and I was happy to pass that on. The letter itself actually does identify a number of points. We note that, as an Officer of Parliament—one of three—the Rt Hon Simon Upton has, I think the word I used was, bevvied him into this particular process, which it seems extraordinary that an Officer of Parliament would, effectively, send something to a Government Minister, without a request to do so. He has done so, one assumes, because there is no select committee process. The commissioner himself in his letter here—

James Meager: What date did he suggest to commence?

TANGI UTIKERE: —says that he understands that it would be—what was that?

James Meager: What date did he suggest to commence the bill?

TANGI UTIKERE: What date?

James Meager: For the commencement, what date?

TANGI UTIKERE: No, no. So in the letter, I don’t know if Mr Meager has read the letter or not, for the benefit of those—

James Meager: No, you didn’t email it to me, you’re rude.

TANGI UTIKERE: Oh, he emails you? He emailed it to you, did he?

James Meager: No, you didn’t email it to me. You’re very rude.

TANGI UTIKERE: Oh, I didn’t. Well, I’ll tell you what: you obviously haven’t read it. So I’m very happy to email it to Mr Meager. Perhaps a colleague could send that to Mr Meager.

Hon Members: Read it out.

TANGI UTIKERE: Well, actually, I think that’s probably appropriate. Mr Meager opposite has asked questions, Madam Chair. I’m responding to the questions that he has asked. As a result, I feel as though I need to read the letter out. That is in direct response to requests that have been made by members opposite.

CHAIRPERSON (Barbara Kuriger): The member could also request that the document be tabled so that—but that is up to the member.

TANGI UTIKERE: Thank you very much. I understand that this is an open letter and it is publicly available. It’s to Simeon Brown, Minister of Transport, dated 24 June 2024:

“Dear Minister, I note that on 30 May, you introduced the Land Transport (Clean Vehicle Standard) Amendment Bill. I understand that this bill could be passed under urgency in the coming weeks, thereby precluding the opportunity for comment through the normal process of having bills scrutinised by a select committee. Given that possibility, I am taking the liberty of providing some feedback.

“The amendment bill changes the date specified in the regulation-making power under section 167C(1)(j)(iv) to bring forward by three years the ability of the Minister to prescribe the targets by way of regulations.

“It will also cancel the currently legislated ratchet of emission standards for 2025, 2026, and 2027, anticipating that these will be instead set by regulations. Emission standards will have an important impact in helping New Zealand meet its statutory emissions reduction targets. How much of a role they should have is a political choice. That is not a debate I wish to enter.

“However, policy certainly is crucial in ensuring an orderly transition for our economy. Given this, I would urge you to reflect on”—in italics—“how any changes to emissions standards are made and what precedent the process for making them may hold for the future.

“Once these amendments come into force, it is important that any changes to the targets made by regulation are prescribed on the basis of a robust, evidence-based, and transparent process. Section 175A of the Land Transport Act already acknowledges this in the requirement for targets set in both the Act and regulations to be provided. Section 175A also sets out the matters that the review must take into account. Parliament clearly intended that any regulations that are made to set targets would be subject to review.

“To ensure this is carried through in your amendment bill, I suggest you make a minor amendment to the drafting of Section 175(a) so that the text that follows—carbon dioxide emissions set out in section 175—is replaced with ‘and not later than 30 June 2025 for targets prescribed in any regulations section 167C(1)(j)(iv).’

“Alternatively, you could spell out in the legislation the criteria and methodology that will inform the Minister’s decisions around setting vehicle emission standards whenever they exercise the regulation-making power. An amendment of this nature could leverage the drafting of section 175A as the criteria to be applied to those directions. I appreciate that this drafting approach would be more complex than simply requiring a review.

“Such a change would help ensure the public can have confidence in the standard set, regardless of what the”—Madam Chair?

Hon Simeon Brown: Oh, Madam Chair.

CHAIRPERSON (Barbara Kuriger): There was interruption, I’m going to let the member.

TANGI UTIKERE: Thank you, Madam Chair. I’ll start that paragraph—it’s the final one—

Hon Member: Start it again!

TANGI UTIKERE: No, I won’t start the whole letter again. It’s the final paragraph.

CHAIRPERSON (Barbara Kuriger): No, don’t start the whole letter again.

TANGI UTIKERE: “Such a change would help ensure the public can have confidence in the standard set, regardless of what the political mix of the Government is that sets them. I would be happy to discuss the issue with you at greater length. Yours sincerely, the Parliamentary Commissioner.”

So, for the benefit largely of Mr Meager, on the record now is the Parliamentary Commissioner for the Environment, an Officer of Parliament’s letter. So I now invite the Minister, perhaps in a fulsome response, to reflect on the letter and provide an opportunity to address the Hon Dr Megan Woods’ question around this, particularly around how the changes might be made and how that relates to the commencement date.

I have a number of Amendment Papers in relation to clause 2. They are numbers 42, 43, 44, 45, and 46. I invite the Minister to respond to those—I mean, hopefully, he will respond to those. I think the commencement is obviously pretty important, but the question that I also have for the Minister is: is he satisfied that the date that is currently in the legislation is a date that will allow a smooth transition in terms of the process, and, if not, which of the alternative dates that have been identified in those Amendment Papers that are in my name—and I know that there are members who have other Amendment Papers who may wish to speak to theirs—might be an alternative?

Well, I thank the member for his reading comprehension skills. What I would say is that the issues raised in the letter by the Parliamentary Commissioner for the Environment would be best discussed in clause 7 because they relate to section 175 of the Act, which is being amended by clause 7. This clause, clause 2, simply amends the commencement of this bill, which is proposed to be 1 July 2024 and, except for clause 5, which will come into effect from 1 July. So whilst that’s very interesting what the member is raising in relation to that letter—and we can debate that in clause 7—the issue here is around the commencement of the bill.

I just note and I’ll take the liberty of discussing the amendments that the member has put forward. He suggested changing the date to 31 July 2024. We don’t agree with that. The advice is that if the bill passes this week, there’s no need to change the 1 July 2024 date. “In clause 2(1), replace ‘1 July 2024’ … with ‘2 October 2024’.”, we don’t agree with that. It’s inconsistent with Government policy. “In clause 2(1), replace ‘1 July 2024’ … with ‘2 October 2025’.” is also inconsistent with Government policy. Amendment Paper 45 is also inconsistent with Government policy, which is for the intended cost recovery to come in earlier. And Amendment Paper 45, “replace ‘1 July 2025 … with ‘1 July 2026’.” is also inconsistent with Government policy. So we will not be supporting any of those amendments.

Thank you, Madam Chair. My question about clause 2 is about the fact that clause 5 of the bill doesn’t come into force until 1 July 2025. I wondered why the Minister didn’t consider having at least a short select committee period to consider the provisions around setting up the cost recovery scheme.

I note that in this bill—obviously, with urgency he’s trying to change the ability for Government to change the standards for 2025, 2026, 2027; you know, next week. That will come into force so that the Government will be able to just completely change the standards that have been set out for several years and introduce a lot of uncertainty, because they could be higher or lower, as the Minister said last night. But given that the cost recovery scheme hasn’t yet been designed, that it’s not clear what the preferred option is for the design of that and how it will be done, why didn’t the Minister consider having at least a short select committee period so that the public and people affected could have a proper parliamentary oversight of that provision, given that it’s not going to come into force for a year anyway. We could have taken that part to select committee with a specific provision for the design of the scheme and could have had fulsome submissions.

It’s unclear to me why any of this is being done, because it’s actually just introducing a lot of uncertainty rather than the certainty that the Government claims it’s about. But given that the cost recovery scheme isn’t going to come into force for at least a year, why aren’t we seeing specific proposals and having that referred to us, at least a shortened select committee, if not a full select committee process?

This is an enabling clause. In terms of clause 5, in terms of when it comes into the force, it enables and there’s time between now and when it comes into force for that scheme, in terms of cost recovery, to be considered, developed, and appropriate consultation with the impacted parties to take place during that time period. So we have no intention to change the time periods in this particular clause, clause 2.

I’m going to call Arena Williams. Given that the Minister has just offered to have further debate on questions in further clauses down the line, we will keep this very strictly to “Commencement”, from here on in.

Madam Chair, I’m seeking to ask the Minister a series of questions in the way provided for in Speakers’ ruling 79/4, which offers and back a forth if they are brief. My first question to the Minister is: is the cost recovery system that will be enabled by this bill ready to go now? If the system is not ready to go now, when will it be ready to go? I ask that question because it’s relevant to the date when it will commence.

Madam Chair, as I said in the previous answer, this is an enabling provision, and so that is why those issues can be debated in clause 5, but this simply is about the commencement of it. Clause 5 deals with the provision around those enabling provisions, and I suggest that’s the best place to ask those questions.

I call Arena Williams—if it’s not about clause 5.

I understand the Minister has answered that it is an enabling provision. It’s relevant to the date it comes into force, though, because if that cost recovery system is ready to go now, then we could move that date forward, and surely that would be something that the Minister would be interested in. That’s why I’m asking. Further to that question but a different system, is the system that the Ministry of Transport has built to enforce the clean vehicle standard ready to go?

I move, That debate on this question now close.

The question is that

The question is that Tangi Utikere’s amendment to clause 2(1) set out in Amendment Paper 43 be agreed to.

The question is that

Arena Williams’ tabled amendments to clause 2 to replace “1 July 2024” with “31 July 2024”, “1 October 2024”, or “1 October 2025” are out of order as being the same in substance as a previous amendment that has not been agreed—Amendment Papers 42, 43, and 44.

The question is that Tangi Utikere’s amendment to clause 2(2) set out on Amendment Paper 45 be agreed to.

The question is that Tangi Utikere’s amendment to clause 2(2) set out on Amendment Paper 46 be agreed to.

Arena Williams’ tabled amendments to clause 2 to replace “1 July 2025” with either “1 July 2026” or “1 July 2027” are out of order as being the same in substance as a previous amendment that has not been agreed—Amendment Papers 45 and 46. The question is that clause 2 stand part.