Land Transport (Clean Vehicle Standard) Amendment Bill (No 2)

I present a legislative statement on the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2).

ASSISTANT SPEAKER (Teanau Tuiono): That statement is published under the authority of the House and can be found on the Parliament website.

Hon CHRIS BISHOP: I move, That the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2) be now read a second time.

The Government wants the clean vehicle standard to lower the cost of living, not raise it. This bill makes it cheaper and easier for vehicle importers to meet the clean vehicle standards so New Zealanders can benefit. I think members know that the standard is about fuel efficiency. It does help lower the cost of living by making it easier to buy cars that use less fuel and cost less to run, and the standard also contributes to our emissions reduction targets—but the standard is having the opposite effect at the moment. It’s actually making it harder and more expensive for people to upgrade to better vehicles. There are four changes in this bill as reported back. The Government intends to move an Amendment Paper, which I think has been well signalled, and we will do that in the committee of the whole House stage. My understanding is that that Amendment Paper has been tabled for members to have a look at.

Returning to the four changes: the bill lets the Minister of Transport recommend uniform carbon dioxide targets for vehicles. This will be quite important, actually, when weight-adjusted targets, which currently give heavier vehicles easier targets, are no longer fair or justified as more low-emissions vehicle options become available. The second change is to extend the life of emissions credits from three years to four to give importers more time to use the credits they earn from exceeding targets. This is about rewarding good performance and keeping costs down. The third change is that it keeps the option for importers to borrow credits from future years, so if they fall short one year, they can make up for it in the next year. It’s a common-sense way to avoid charges that would otherwise be passed on to consumers. It allows credit trading between new- and used-vehicle importers. Currently, new-vehicle importers can only trade credits with other new-vehicle importers, and used-vehicle importers can only trade with used-vehicle importers. This change will give importers of both types greater options to offset chargers. Ultimately, it will make it easier for them to meet the standard.

The bill is a short bill. I want to thank everyone who took the time to share their views during the select committee stage. I also want to acknowledge the work of the Transport and Infrastructure Committee. The committee, as I understand it, received 25 submissions—not a large number—but the range of views was wide, and the depths of insights were valuable. It is fair to say that this bill and the changes that that Government intends to move during the committee of the whole House stage reflect the submissions that industry have made to the Government and the select committee around meeting the clean vehicle standard. With that in mind, I want to acknowledge the input of the Motor Industry Association and the Imported Motor Vehicle Industry Association. The feedback has made it clear that there are changes required to the standard if it is going to work and lower the cost of living for New Zealanders and, ultimately, green our fleet over time.

The Government intends to conduct a full review of the standard in the first six months of next year. We’ve now had two goes as a Parliament at getting in place a workable standard; the 2023 regime, which I think everyone acknowledges was deficient, and the changes made last year, in 2024, to bring the scheme in line with Australia. That also has not worked. We do need to kind of go back to almost basics and first principles and work out exactly what we are going to do in terms of making the scheme work. Anyway, that’s all for another day. In the meantime, this bill provides sensible, useful changes, and, of course, we’ve got an amendment coming to lower the carbon dioxide amounts that are charged, which will come at the committee of the whole House stage. That Amendment Paper is on the floor of the House for members to have a look at. I commend the bill to the House.

DEPUTY SPEAKER: The question is that the motion be agreed to.

Kia orana, Madam Speaker. Look, the Labour Party will not be supporting this bill this evening. That shouldn’t come as any surprise to members opposite, given our different view has been published in the select committee’s report.

I’ll come to the specifics as to why, at this stage, we are not prepared to support this bill, but before I do that, I do want to just make some comments on the select committee process that was undertaken. Much has always been referred to the fact that the Transport and Infrastructure Committee is a hard-working committee, and I do want to acknowledge the submitters that did take time to engage with the committee. The Minister’s correct: there weren’t many—25—and we heard from a handful of those. I also want to acknowledge the officials who advised and supported the committee through its work, as well.

It’s really interesting that this bill has been reported back quite early in the piece. It was meant to be no later than 22 December, and there were steps taken to expedite things—and, of course, it’s just about 11.10 p.m. on a Wednesday evening while the House is in urgency because, really, the Government is up against the clock in terms of trying to appease some of the concerns that have been raised directly with them.

I do have a question for the Minister—that’ll be in committee—but I am signalling the regulatory impact statement that has been tabled, whether it’s relevant in terms of this bill or not, because it seems to reference all of the previous pieces of work that was done with, I guess, bill No. 1. So just signalling that for the Minister.

But we are not supporting this bill, because it is yet another example of this Government who are stepping back from leadership in the climate space, who are watering down policies that have a real impact on our environment, our economy, and our communities. Let’s be very clear: the reason that the Government are pursuing this is because they made a decision to take some action in cancelling a Clean Car Discount opportunity alongside the Clean Car Standard, and they have failed to do anything since they took that course of action.

That is the real reason why we are here under urgency progressing this: because the Government have been lobbied by industry participants and they simply have failed to actually do what was expected of them. That is exactly what the committee did hear from industry players and participants: that the Government have basically made an absolute shambles over this. These were the very issues that we raised last year when Simeon Brown was the transport Minister and was progressing changes, which is why this bill is called the “Land Transport (Clean Vehicle Standard) Amendment Bill (No 2)”, because we had a No. 1 and the Government had failed to actually sort out the issues at that point in time, and they’re coming back to say, “Actually, we don’t care about the environment, we don’t care about community—about engagement in that space—and actually, what we’re going to do is we are just going to make things easier, change it, and actually set this country back at the same time.”

This is entirely over the actions taken by the Government, and they need to take responsibility in their failure in that particular regard. The genesis of this is about trying to ensure that whatever the framework, whatever the structure, whatever the threshold is when it comes to tackling emissions, we are actually preparing for the future. What we want in the Labour Party—and this is why we introduced the Clean Car Standard in the first place, let’s not forget about that; the former Government—is because we actually believe in a future where transport is cleaner, it’s safer, and it’s more affordable, and it also actually tackles the issues around low emissions.

We all know that when we step back and look at the profile in terms of transportation, the emissions component is a huge contributor in terms of what this country does provide, in turn, as a community, and how we go about the things that we do. However, this bill is a backwards step. It really does weaken the integrity of the standard, and it really also delays the progress that this country needs. We need a Government that is going to be leading in this space, not seeking to continue to weaken the standard and other opportunities each day in the week.

This bill does a number of things, and I’m sure colleagues will touch on them specifically. The first one I want to speak about is it extends the lifespan of the carbon credits from three years to four years. This is, effectively, late in the piece as we head towards the end of the year, to say, “Well, actually, we’re going to not stick to the three-year time frame now because it’s getting too—well, it’s not just getting too hard; actually, the time frame is coming up pretty quickly.” That is a very clear step that has been taken by the Government, as opposed to try and identify possibilities around incentivisation or working with industry in a different frame to try and reduce the change that is needed there.

The other significant change is the ability to—as it stands currently, there are restrictions on the ability for industry participants to effectively transfer their credits. While players will hold a certain number of credits in the bank, so to speak, there is currently an inability for those credits to be transferred between used vehicles and new vehicles across the fleet. This, again, is another example of the Government simply weakening the standard by adding to—yes—the delay in terms of three to four years, but also more flexibility to basically offset what is currently held across used and new vehicles. Further, in terms of time frames, this is a bill that seeks to extend the borrowing of future credits beyond the end of this year, as well—and so, yet again, this is painting a picture where this is a Government bill under urgency, where they’re up against the clock and they’re not interested in addressing and tackling some of the real issues that are so important in this country.

The final change, which did come a little bit late in the piece, was—we all know, generally, that heavier vehicles take a little bit more fuel or juice to get them around, whether that’s electric or whether that’s a bit more traditional, and so this will be a bill that will remove the weight-adjusted targets. They’re not going to just sort of tinker with them; they’re going to just wipe them all together so that there are not going to be any weight-adjusted targets that will provide differentiation between heavier vehicles and lighter vehicles.

In tandem—well, the four of them together, I guess, indicates a real change in direction in terms of where the country is heading around really tackling issues around climate change, taking seriously our ability as a country and our desire as a country to be reducing our emissions when it comes to transport, as well. Now, on the surface, one could be excused for thinking that, actually, these changes that we’ve just talked through could be technical in nature—perhaps even harmless, some might suggest. But the reality is that these changes will simply make it easier for importers to delay compliance. That is the bottom line. It is loosening the standard by giving more flexibility to importers to simply delay what is expected, what has been asked of them, what has been signalled for quite some time.

I recall this House, with the former transport Minister spending a lot of time looking at the comparability with Australia in terms of targets and getting some assurances from the Minister of Transport at the time that these were able to be delivered. It’s very clear that we’re in a very different situation because—even though he’s no longer the Minister, thank goodness—he has failed to be able to deliver in that respect, as well. Every single day, we must turn our minds to how all participants in terms of the transport sector are able to play their part and do what they can to ensure that we are effectively dealing with issues around emissions and the like.

The Labour Party continues to oppose this bill. It is a perhaps a small bill, but a very, very important one in terms of the impact that that will deliver for the sector. We have a number of Amendment Papers that we intend to progress and speak to as we work through the committee of the whole House stage, but it seems unless there is a complete U-turn by the Government at this late stage in the piece, our opposition will continue to stand. However, that will not mitigate the desire of the Opposition to continue to hold the Government to account as we progress this piece of legislation.

The amazing thing about electric vehicles and low-emission vehicles is that they are so great for New Zealand. It means we spend less money on imported fossil fuels just to get around. And yet New Zealand has lagged behind other countries because we had no fuel efficiency standard, no fuel economy standard, on vehicle imports, until a few years ago. At that point, we were almost the last country in the OECD to get a fuel economy standard. The only country now in the OECD who doesn’t have a fuel economy standard is Russia. But, of course, a fuel economy standard by itself was never going to be enough to get the transformation that we needed in our vehicle fleet.

Let me just go back—I’m just going to repeat this one more time, because members opposite, the Government parties, say they care about productivity. One of the simplest, easiest things we could do to improve productivity is to improve the efficiency of our vehicle fleet. There are direct gains from that, immediately. Importing fewer fossil fuels, using less energy to get around—just switching to electric vehicles, or even just more efficient vehicles, is a direct gain to New Zealand households.

The people who don’t benefit from fuel efficiency as much are the polluting vehicle industry. The polluting vehicle industry don’t want fuel economy standards. Why? Because it’s more profitable for them. So, of course, like every other industry that has lobbied Government successfully—like the tobacco industry, one that Minister Bishop will know a lot about—they’ve had this playbook where they come out and say that Government regulation is going to hurt consumers, that they’re going to pay the high price, when, in reality, it is the vehicle manufacturers who simply don’t want to have to sell more fuel-efficient vehicles.

There are vehicle companies now who are here in New Zealand because we brought in the Clean Car Standard and the Clean Car Discount—BYD probably wouldn’t be here. I know for a fact that back in 2021, my friends were trying to buy an electric Hyundai. They couldn’t get it and they were told it was going to be six months, at least, for them to be able to get this car.

Then the Government made its announcement about the Clean Car Discount, and they got a phone call from the dealer saying they could get it in a month. So the reality is that these policies shape the choices that consumers have, and the whole point of those two policies is to make it easier for New Zealanders to access efficient, low-emissions vehicles. And it’s fair—it’s fair. It’s fair that polluters pay. It’s fair that they pay a little extra, because there’s no way we as a country are going to reduce the fossil fuel emissions from our vehicle fleet unless some people are incentivised to drop emissions faster.

Simon Court: What about the ETS?

Hon JULIE ANNE GENTER: The emissions trading scheme (ETS) doesn’t work on fuel, and that’s why—fuel is not in the European ETS, and there’s a really simple reason for this. It’s because people don’t make their decisions about which vehicle they’re going to buy based on what the fuel economy is, what the price of petrol is. It’s a small component of the price of petrol, the ETS. And, by the way, this Government just crashed the ETS price. So it’s a total joke. And we know who that member is really in here to represent, and it’s not ordinary New Zealanders and it’s not people who want action on climate change; it is the fossil fuel industry that funds people like the ACT Party—to come in and mess up—

DEPUTY SPEAKER: Just be careful with some of those accusations.

Hon JULIE ANNE GENTER: But this is the playbook—this is the playbook. Industry lobbies Government, claims that consumers will miss out, and who actually misses out? New Zealanders. New Zealanders who don’t get access to more fuel efficient vehicles will now have more polluting vehicles, which cost them more money to run, which makes the air dirtier, which means we pay higher health bills. They’re in total denial.

Let’s just see what’s happening in the rest of the world, because, actually, with this bill, the Government is caving to a polluting industry one more time. No one’s going to be surprised about that, because that’s literally been the last two years of this Government: caving to polluting industries that are reducing our chances of having a livable, thriving future, and every time they claim it’s going to save New Zealanders money, it’s actually going to cost New Zealanders more money.

Grant McCallum: To buy their vehicles, yes.

Hon JULIE ANNE GENTER: It’s going to cost them more money because they’re going to be spending more money to run their vehicles.

Grant McCallum: To buy them.

Hon JULIE ANNE GENTER: Grant McCallum, I know I’m never ever going to be successful in explaining basic economics to you, my friend.

The funniest thing—I do have to refer to this—that happened at the select committee, and I’m sure all those members who weren’t at the select committee would love to hear this, is Isuzu New Zealand came in and said they were opposed to the bill because they’re opposed to the Clean Car Standard. I don’t think he understood that the bill was actually making the standard weaker, but the person who was submitting held up this graph, which I know no one’s going to able to see, because it’s on my computer—oh, maybe you can—but, anyway, he thought this graph was evidence: “We didn’t need a tax to achieve this.” Now, let me describe what the graph shows. It shows the incredibly high proportion of passenger and SUV imports from 2015 to 2021 that are an internal combustion engine, and the tiny, tiny percentage that are electric vehicles or hybrid electric vehicles.

Then, suddenly, in 2021, something happened—something happened—and it had nothing to do with Government except it had everything to do with Government and it had everything to do with an evidence-based policy, which was the Clean Car Discount. Suddenly, there’s a dramatic increase in electric vehicles and hybrid electric vehicles and plug-in hybrids. And then, suddenly, at the end of 2023, it stops and it bounces back up.

So, look, you’ve got all the evidence right here, thanks to Isuzu New Zealand, who have no idea what they’re talking about when they come and present to the select committee. But the Government has torn away a policy that was the envy of many other countries in the world. I spoke to a car manufacturer today who said that a few years ago, everyone was saying, “How do we copy what New Zealand is doing? This is great. They have one of the highest rates of EV uptake in the entire world thanks to the Clean Car Discount.” With that, the industry was overshooting its targets. So, actually, that’s why the targets in the Clean Car Standard were set at the rate they were: because we actually do have to reduce emissions from the fleet and we’re basically becoming a dumping ground for the world’s polluting vehicles with a weak, ineffective standard that will continue.

That’s not good for New Zealand: it means dirtier air, higher fuel bills, more fossil fuel imports—it’s stupid; it’s stupid. I will say it again: this is stupid and unnecessary. If the members opposite were actually committed to helping New Zealanders achieve a more productive economy with a more productive transport system, with lower costs for everyone, they would support evidence-based policies that would mean we wouldn’t be the laughing stock of the world—which we are, because look at this—oh, again, unfortunately, I don’t think I’m going to be able to show you the whole graph—from 2023 to 2024, we were second to last in the entire world for the change in EV sales.

For the change in EV sales—you can’t really read that—we are second to last in the world, and yet here we are, a country with high renewable electricity production. We have high car dependency because the Government keeps wasting money on roads and not investing in rail. There was going to be one thing we were going to do that would benefit the economy and put us in a better position with respect to climate change: that would be to electrify our vehicle fleet, which this Government is comprehensively failing to do. It’s because they are in the pocket of polluting industry. They don’t listen to the evidence; they listen to the people who benefit the most, which is a tiny percentage of New Zealanders, because they can sell more highly polluting vehicles which have a higher margin for them. That’s it—they get a higher margin. Are we better off? Is the country better off? Absolutely not. We’re importing more fossil fuels as a result of it, and apparently they can’t understand that.

Again, it’s embarrassing for them. I say that every day. How embarrassing for this Government that their entire fossil fuel reduction strategy when it comes to transport is EVs, and they absolutely tanked EV sales, and now they’re caving to industry rather than doing something effective. The industry came to the select committee and said, “There’s nothing we can do to influence consumer demand.”, never minding the tens or maybe hundreds of millions of dollars the vehicle industry is spending on advertising on high emissions, utes, and SUVs to create the demand. OK, so that’s where we’re at. It’s stupid. It’s stupid and unnecessary, and it’s very embarrassing for them. Embarrassing—they don’t understand economics, they don’t understand how to get EVs in this country—

Hon Members: Ha, ha!

Hon JULIE ANNE GENTER: —and they laugh because they’re so unaware of their own mediocrity.

Just before I call Simon Court for the next speech, I’m just going to say to the National Party backbench that when you all talk at once, no one’s got a clue what anybody is saying, so maybe one at a time might be a better idea. Simon Court.

Thank you, Madam Speaker. Firstly, I want to acknowledge the previous speaker, Julie Anne Genter, and her passion for transport planning, for the environment, and for actually standing by and standing up for her values and principles. Now, I disagree with her on many issues, but I do agree with her on what she says, or what the Green Party of Aotearoa New Zealand says, in their differing view: improving the fuel efficiency of private vehicles imported to New Zealand has huge benefits. I know it does.

My first car was a Holden Commodore V8 station wagon—a V8 station wagon—it was a two-litre. I reckon it used about three times as much gas every week, or per kilometre, as my modern Subaru does. What that shows you is that over time, those vehicle manufacturers, making cars that are then imported, delivered to New Zealand, have actually improved fuel efficiency; they’ve improved their emissions; they’ve reduced the toxicity of their emissions to something that is negligible with catalytic converters. We have low-sulphur diesel; we’ve removed lead in petrol; and yet, it’s not enough for Julie Anne Genter and for the Green Party. But the ACT Party, we’re practical people. We’re here in Parliament, and we’re in Government to fix what matters. That’s why I’m proud, as an ACT MP, somebody who has recently sat on the Transport and Infrastructure Committee for a short time to consider this legislation, along with my colleague Cameron Luxton, who was a permanent member on the committee.

I want to acknowledge Cameron Luxton for the hard work that he did on this report, along with the chair, Andy Foster, who graciously gave me the opportunity to ask a few questions of submitters during the committee stage. Cameron Luxton has made, like I said, a great effort. He, also, has suffered from having to drive high-emissions, low-efficiency vehicles for many years, but he won’t give it up. Cameron Luxton is taking me around Tauranga in his V6 Suzuki Vitara four-wheel drive, and I tell you what: there’s a guy who knows how to get every last kilometre out of his vehicle. He ain’t giving that thing up. He ain’t giving that thing up until Suzuki come back around with a new Vitara, and so we’re holding on, probably until towards the end of this century.

I just want to speak to some of the matters the previous speaker, Julie Anne Genter, raised. Firstly, her conspiracy theory—and that’s what it was—about members on this side of the House being somehow beholden to or under the influence of what she called the “fossil-fuel industry”.

Dan Bidois: Shameful.

SIMON COURT: That is an outrageous claim, isn’t it, Dan Bidois? It’s an outrageous claim, and it also ignores the fact that every single New Zealander is dependent on fuel suppliers, on energy suppliers, on the private sector to supply the energy we need: liquid fuels, solid fuels, gaseous fuels.

When Julie Anne Genter and her friends in the Green Party fly around the country or go to overseas conferences, like in the jungle in Brazil to COP30, they had to bulldoze a road through the jungle, through the rainforest to this remote city, apparently, for thousands of people to go and have a big, kind of, seance about the climate. You know, all of those fuels—for the benefit of the member Julie Anne Genter—are supplied by the private sector, and they help you get where you need to go. Madam Speaker, I didn’t mean to bring you into the debate, I was just referring to all of us; we depend on it.

Now, coming back to electric vehicles, the member Julie Anne Genter made a good point. EVs are great. I mean, I have rented one occasionally, when I’ve been going around the country on parliamentary business. Firstly, I just want to say they’re very difficult to work out how to start them, because when they’re electric, I’m looking firstly for the button and then with a key. Really, I mean, they’re actually quite technically challenging for somebody from West Auckland who is used to driving a petrol- or diesel-powered vehicle. So they are very advanced, and I do welcome this step change in technology into New Zealand.

But one of the challenges we have in New Zealand is that we are already using more electricity on some days than we can produce from our existing generation capacity. That is why we have to keep a million-tonne stockpile of coal at Huntley to make sure that the lights don’t go out. So while it’s laudable that many New Zealanders have invested in EVs and drive them, we do have these actual structural changes in the amount of electricity we can deliver to those people who want to charge them at home or charge them at their business. That’s only going to become more of a challenge as we move towards the much more digital-, data-, and energy-hungry world that we are moving towards, whether it’s data centres or whether it’s entire fleet transitions to hybrid or plug-in electric vehicles, as many commercial fleets are doing.

But I want to come to the issues of this bill. The reason this bill was at select committee was because a previous Government—a Labour-Green Government—introduced not only the ute tax—the “clean vehicle discount”, they called it; put a nice little unicorn sticker on it—but it was going to be about five to eight grand more for a van or a ute, the kinds of vehicles that tradies and farmers needed—

Cameron Luxton: I could only afford a Vitara.

SIMON COURT: Well, that’s why the former dairy farmer, and current licensed building practitioner, Cameron Luxton, probably couldn’t afford to upgrade from his Vitara.

The clean vehicle discount and this green vehicle standard was a double tax on actually getting the vehicles that Kiwis needed. If you think about the point I made—my interjection to Julie Anne Genter’s speech—about the emissions trading scheme (ETS), Kiwis already pay for their emissions through the ETS. They pay, typically, when the ETS is running at about 50 bucks a tonne of carbon, as it is now, somewhere between $9 and $11 every time they fill their vehicle up with petrol, and a similar amount in diesel. So what that means is for somebody who drives, you know, maybe 400 or 500 kilometres a week, like a lot of people do around town, if they’re going from one side of town to the other, like a tradie, like a parent, running kids to gymnastics or swimming after school and sports games on the other side of town. If your kids are playing sport, you’re probably paying your fair share—$10, $11 a week, maybe more—for your carbon emissions. So when you had the clean vehicle discount—the “dirty ute tax”, which is gone—you’re paying once, paying the clean vehicle standard, if you replaced your family vehicle with a new one, and paying twice—well, that’s almost gone—and again, the emissions trading scheme is all we need.

I just want to come back to some of the submissions that were made. The manufacturers: I was actually really concerned. Many of them had made the point in the 53rd Parliament, when the legislation that the previous Labour-Green Government brought in to put this clean car standard in place came through the Transport and Infrastructure Committee, which I sat on at the time, the manufacturers said it’s not necessary. All the vehicle manufacturers in Japan and Europe, they make vehicles that have a very low-emissions standard already. Any standard that New Zealand might like to stick on it just to feel good about itself isn’t going to shift the dial at all from an international or even a local emissions profile point of view. It’s not going to reduce emissions at all, because guess what, Julie Anne Genter? Japan and Europe are not making special cars just for New Zealand to meet our standard. Who knew?

The importers and the manufacturers told this previous Parliament—the 53rd Parliament—that. They predicted and they forecast exactly the situation we’re in now, where there is a huge deficit built up in trading accounts of importers and manufacturers, who have continued to deliver Kiwis the vehicles they need, taking the risk on this cost, that it’s going to land on their balance sheets and have to be passed on to motorists. Yet all of this prediction, all of this foresight, the previous Government ignored it. That’s why this Government is cleaning it up. That’s why we’re here to fix what matters tonight.

Now, it’s heartening to hear the Minister Chris Bishop say that there’s a paper on the Table where he’s proposing to reduce the amount of actual emissions charges per unit of carbon by about 80 percent. That’s going to save Kiwis tens of millions of dollars a year. But in the long term, what we do know is that the clean vehicle standard is unnecessary when we already have the emissions trading scheme. You’re already paying for your emissions every time you put fuel in the tank. There are already plenty of options out there, when it comes to EVs and hybrids. The Government does not need to be involved in this. The ACT Party welcomes this change, but we want it to go further.

Thanks, Madam Speaker. I want to start off just by saying some thanks as chair of the Transport and Infrastructure Committee, because this is also reporting back from the select committee. Thanks to the submitters. There weren’t many of them, but they were very good submissions. Thanks to the officials and thanks also to the committee. In this one, we haven’t agreed with each other, but it’s still really important that we had some good discussion on it.

We had to report it back quickly, or we decided we would report it back quickly in response to the Minister’s request.

Glen Bennett: Who decided?

ANDY FOSTER: Now, the reason for that actually—and the Opposition is asking why? I think the reason for that was made very clear by the Minister in public, which we don’t always get, but the Minister made it very clear in public that he regarded the scheme as it is as broken. The majority of the committee actually agree: the scheme is fundamentally broken.

Now, how does the scheme work? Well, in simple terms, basically if you’ve got a low-emitting vehicle, you’re going to end up likely having credits. If you have a high emitting vehicle, you’re likely to end up essentially having debits and you’re trying to manage the two together. The idea was that there should be those two should marry. But the reality is that the two of them are not marrying. We have far, far more high-emitting vehicles and much fewer low-emitting vehicles.

Why is that? What we heard quite clearly from submitters is that submitters don’t want to buy the vehicles that are being imported to try and meet the clean vehicle standard. So importers, manufacturers are bringing in a certain collection of vehicles and the public of New Zealand—so it’s not the Government choosing, it’s not anybody being paid, you know, or, say, the fuel industry paying us to persuade people to buy particular cars. It is New Zealanders who are choosing to buy a particular set of cars.

What we heard from the industry was that that hits them in two ways.

Hon Julie Anne Genter: From the industry. That’s who you listen to.

ANDY FOSTER: One is—the industry who talked to us said that hits them in two ways. One is that they end up with a deficit, and that is a very significant deficit. They will have to buy credits which they have to pay for, ultimately. So, effectively, that is a tax. The second one is that they end up, effectively, stockpiling a very substantial number of vehicles which they can’t sell. So they get hit twice.

As a select committee, we were tasked to consider three things. We were tasked to consider the way in which the credit system worked and how long the credits will be able to be used. Secondly, we were tasked to look at the weight comparison situation, and thirdly, about the conversion rate between new and used vehicles. But the reality is that whatever we did with those things, and we did make improvements to those things, really, it’s deck chairs on the Titanic for the industry, because none of those things—you do all of those things, it still does not make the system viable and workable.

The industry told us that they are bringing in cars to offset each other, but the Kiwis, as I said, don’t want to buy that particular mix of vehicles. Now, Julie Anne Genter said that this is caving to the polluting car industry. No, it’s not. What this is is New Zealanders who are choosing to buy particular vehicles because the vehicles that they assumed that New Zealanders would want to buy when the system was set up, New Zealanders, funnily enough, have said “Actually, those are not the vehicles that we want to buy.”

What you need to do is to look at the assumptions behind the scheme. What the regulatory impact statement quite clearly says is that the assumptions behind the scheme when it was set up, basically, are wrong. That’s the fundamental thing that we need to be stepping back and actually reviewing the scheme and setting the fundamentals right and the assumption’s right, because we’ve got that wrong right from the beginning.

The industry actually, surprisingly to me, supports the idea of a clean vehicle scheme, but it doesn’t support the way in which it’s set up. So we do need to take a step back and try and make sure it’s done properly, because if we don’t do it properly, there will be really significant implications, not just for the vehicle industry, but also for New Zealanders who want to buy vehicles. I understand Julie Anne Genter said that we started off being way behind the rest of the world or much of the world. One of the problems with that is the last Government tried to catch us up very quickly. So where the rest of the world, by and large, had done this over 15 years, in New Zealand we tried to do it over five—over five.

The second thing we did is the industry has said the last Government did not engage with the industry. Now, they have regularly complained about this side of the House not consulting with whoever it is that they want us to consult with. In this instance they didn’t do that either. They did not consult with the industry. [Knocks over glass] Guess what that means!

Hon Member: Woah!

ANDY FOSTER: They did not—there was no water in it, thankfully. Guess what! That means that they did not get the settings right.

The other issue we have which comes in there that Simon Court has actually highlighted is when you buy a vehicle, you’re paying the emissions trading scheme (ETS)—when you operate a vehicle, you’re paying the ETS—and that should pay for those, you know, pesky emissions. But not only are they being taxed once, they were, under the last administration, being taxed under this clean vehicle discount scheme.

Thirdly, we had not only the Clean Car Discount; we also had the flip side of that, which wasn’t even funded because the Clean Car Discount actually costs more than the Ute tax, which we all remember as well. So it was a triple taxation. There’s an absolute lack of faith in the systems that were there. I agree, Julie Anne Genter, that, you know, it’s fair that polluters pay. It’s fair that polluters pay once, but it’s not fair that they pay twice and then three times. That is completely unfair. That is the system which was set up under the last Government.

As I said, I was surprised that the companies didn’t actually want to abolish the scheme entirely. I had some meetings outside of this as well. Julie Anne Genter, you said that you spoke to a car manufacturer this week. Well, I spoke to some big car manufacturers this week and they basically said if we didn’t fix this, they will be out of the country and those whole ranges of vehicles would not be available for New Zealanders to buy. I don’t think that that would do New Zealand any good whatsoever.

Hon Member: Greens don’t care.

ANDY FOSTER: The Greens don’t care about a lot of these things. They talk about evidence-based decision-making, but when it’s evidence they don’t like—when it’s evidence they don’t like—no, that’s not evidence at all.

The reason that these companies said that they still supported the idea of a scheme, but make sure that it is set properly, is because they don’t trust that some future Government—on the left wing side of the House—wouldn’t impose some completely new scheme, some completely new random scheme, that would be utterly unviable and unsustainable for them. They would rather have something that actually makes some sense. That is the important thing that we need to do. That is where, I think, the Minister is going. That is one of the reasons that the select committee was already keen to support the early report back of this—[Interruption]—by majority. If we don’t fix this, what it will result in is more expensive vehicles for New Zealanders and less brands available for New Zealanders.

Just to finish off with, what the industry is saying is the industry may meet the standards in time, but they cannot meet it now. As we’ve already heard, New Zealand doesn’t make a whole lot of cars. We get those vehicles from other countries in the world, so we cannot drive what they produce. We have to receive what they produce, and we need to set our standards somewhere based on reality.

Hon Julie Anne Genter: A dumping ground for polluting vehicles, and we all pay for it—we all pay for it.

ANDY FOSTER: Yeah, thank you—thank you. I think what I’ll do is I’ll leave it there. But the key thing is that we do need to reset the system, because if we don’t reset the system, New Zealand consumers will suffer and there will be no great benefit to the climate either. I commend the bill to the House.

DEPUTY SPEAKER: The next call is a split call. Scott Willis.

Thank you, Madam Speaker.

DEPUTY SPEAKER: You nearly missed it.

SCOTT WILLIS: That would be a pity. That would be a pity, given that we have, now, the fantastic recognition of being the fossil of the day. The fossils opposite must appreciate that. We have global news that is not very happy. The world is dangerously close to overshooting the 1.5 degree climate target. Temperature records continue to be broken. We saw, in the Deep South, our farmers cut off from electricity, with storms running through it recently, having to rely on the wind farms, the solar, the battery storage that was there, and generators. Those extreme storms, the fires, the floods are happening more and more again. We know that scientists say that the window for stabilising the climate is closing really, really fast.

What we need is stronger action now, not policies that will slow or weaken our emissions reductions. New Zealand’s 2026 target is laxer than the targets of China, the United Kingdom, the USA, Canada, and South Korea. Let’s question what this bill does. It gives vehicle importers more flexibility to meet the Clean Car Standard by extending carbon credit lifespan from three to four years. It allows credit transfers between new and used vehicle importers with a two to one ratio. It extends the ability to borrow against future overachievement beyond 2025. These are presented as just technical or administrative fixes, but they have real climate implications.

Why is this bill being introduced? We hear that importers are struggling to meet targets because the Government cancelled the Clean Car Discount. Low-emission vehicle demand has plummeted. Electric vehicle importers were caught short when they cancelled the Clean Car Discount and had to sell them at a serious discount. We’re seeing compliance becoming harder because of the lack of a Clean Car Discount. This bill, effectively, lets importers stretch their old credits further, bank past credit achievements, and cover the current slump in clean vehicle imports.

Let me tell you why we oppose this bill. I think it’s pretty obvious really. Weakening our climate action when the urgency is on us to take every action we can now is not just stupid; it is dangerous. Greater flexibility usually means delayed emissions reduction. Near-term cuts are critical. We need cuts to our emissions to stay close to the 1.5 degree pathway, and we should be accelerating reductions, not slowing them. Furthermore, it is fixing the wrong problem. The problem, as has been discussed, was the removal of the Clean Car Discount, not the standard itself. Instead of reinstating an effective policy, the bill compensates. That’s what this Government is doing. It’s trying to compensate for their lack. It compensates for its absence by weakening the rules.

Furthermore, it risks undermining the integrity of the clean vehicle standard. The standard already has built-in flexibility, credits, transfers, and deferrals, and a standard with too much elasticity simply loses its climate purpose. What’s more, it’s going to cost more for those people who buy the dirtier cars, because they’ll be paying more for dirty fuel, not for the electricity that they could have off peak.

Our transport policy is guided by ecological wisdom. We’re at a point where the world is breaching climate thresholds. We can’t afford climate denial legislation that dilutes climate action. We oppose this bill.

It’s time we get back to Earth on this bill and, in particular, the select committee process. We heard very clearly from submitters two bits of feedback. The first is around the supply and demand mismatch for electric vehicles, and the second, and equally important, is that most importers are not going to meet the target and that will basically impose a hell of a lot of charges on the sector.

The changes that the Minister proposed in the select committee stage—and amendments in the committee of the whole House stage—aim to address this. I think it will, and I commend the select committee for recommending a review of the scheme. I think that will be timely, and I welcome the Minister’s review. I commend this bill to the House.

Thank you, Madam Speaker. I’m just looking at the time; it’s approaching 12 a.m., but given I have 10 minutes, I fully intend to take that full 10 minutes. [Interruption]

Hon Member: Just give us four and a half and it will be sweet.

Dr TRACEY McLELLAN: Ha! We’ll see what happens; we’ll see what happens. I may be regaled with such witty interjections that I change my mind. Who knows? [Interruption]

I can’t hear the member!

Dr TRACEY McLELLAN: Labour will be opposing this bill, not because we don’t support, obviously, a strong practical path, ultimately, for cleaner transport but because, quite frankly, this bill does the exact opposite of that and certainly isn’t what we need.

Through the select committee process, we heard directly from officials—and I agree with the member that’s just resumed his seat—and we heard directly from industry, and from environmental groups which we failed to mention. What struck me was that no one could point to a single piece of evidence showing that this bill would reduce emissions faster or make life easier for families in the long term. Ultimately, that’s what we should be aiming for.

What they did say very openly, however, is that parts of industry—a very specific part of industry—fundamentally wanted weaker rules and the Government, quite frankly, was just happy to oblige. So that feels a bit lame. We find ourselves, here, just before midnight on a Wednesday evening in November still, when it should be sometime in December, reporting back on this bill because all of a sudden it had to be reported back to the House in a rush because the Minister essentially instructed the Transport and Infrastructure Committee to do so. We think that was a pretty shoddy process. We’re disappointed in the select committee for doing that. It’s a pretty fundamental thing to expect that that doesn’t happen, but here we find ourselves.

The fact is that the committee’s own report, which is by definition a majority report, reads almost like an admission. The changes certainly aren’t about better policy; they’re about relaxing rules, because they’re essentially helpful to a handful of importers who asked for it. When the submitters pointed out that EV demand had fallen, which several members of the Government have pointed out—EV demand had fallen after the Clean Car Discount was scrapped. You know, that’s not rocket science; that’s incentives at play. It’s pretty straightforward, it’s a correlation, it’s all sorts of X and Y graphs; it’s pretty straightforward.

The Clean Car Discount was scrapped, and the Government majority simply brushed that off. Instead of finding another way to fix what was essentially a looming problem, the solution was just to give in, give up, and just go, “Nah, we’ll just have dirtier cars. What harm could that be?” So we’re left with this bill, which slows down progress, weakens accountability, and, quite frankly, just creates loopholes. The Transport and Infrastructure Committee itself couldn’t justify any of that with any reason or any data.

Labour believes that, quite frankly, New Zealand just deserves better. We should have higher ambitions, we should be setting ourselves better goals. We’ve already been incredibly slow in adopting any kind of standard whatsoever, and when we finally get something to be proud of, we just scrap it at the first hurdle, after the first quarter, when a certain sector of the industry complain that they’ve got too many cars that other people don’t want. There are several other ways to have fixed that problem.

The Transport and Infrastructure Committee confirmed, I think, via its majority report, that the bill weakens the clean vehicle standards. Officials told the committee that the current targets were achievable if policy settings continued to support EV uptake, as I said, which the Government removed. The majority report didn’t dispute that the bill responds to importer pressure, and I think that’s quite telling, as well. Several submitters pointed out that loosening the rules now means we simply push costs and emissions on to those future households, which is a shame. The bill isn’t evidence-based, and this Government often claims that’s a priority for them. This is the opposite of an evidence-based bill; it’s a concession package for industry.

Secondly, extending carbon credit lifespans, there’s no other way to describe it: it just weakens annual accountability. Credits were deliberately time limited when the standard was designed, obviously. Officials confirmed that time limits are essential. They’re an essential part of that package to ensure year-on-year progress, and the Government again provided no real analysis showing how a four-year lifespan would achieve the same reductions. If you give importers more time to comply, they’re going to take more time to comply. That’s essentially human nature, and the committee heard nothing to suggest otherwise. Essentially, a four-year credit life lets importers meet yesterday’s targets tomorrow, which is not how decarbonisation works, which is a real shame.

The other point that I wanted to make was about removing weight adjustments without strengthening the actual targets, which we just believe, on this side of the House, is irresponsible. Weight adjustments were transitional—agreed—but their removal was always intended to coincide with stronger targets, not weaker targets. Several importers admitted that they would meet targets more easily now because of this bill, and absolutely no analysis was provided on how the change affects heavy vehicle emissions, despite those emissions rising fastest. So the Government essentially removed the stabilisers and loosened the rules, all to make compliance easier, particularly for heavy vehicles.

When it comes to slowing decarbonisation, this bill slows that journey and gives nothing back to households. That’s a really important point because the other part of this argument is that, ultimately, we want a fleet of cars that are not only just ambitious but practically, on a day-to-day level, able to relieve the pressure on fuel costs for households, for real families. Submitters emphasised that National’s previous repeal of the Clean Car Discount was a key driver in slowing down EV uptake, and it wasn’t the standard itself; officials made it clear that delaying compliance simply shifts those costs on to future consumers—and taxpayers ultimately.

On this side of the House, we absolutely believe that New Zealanders want a cleaner, cheaper-to-run vehicle fleet and they want lower emissions. They also want a Government that, quite frankly, takes climate change seriously. Time and time again, this Government has provided copious amounts of examples where you can watch them being more and more flippant with the concept of doing something about this really important issue. We don’t believe that New Zealanders want a Government that just simply caves in to any kind of pressure just when the going starts getting a bit tough.

This bill slows things down. It’s, you know—the Minister described it as a small bill. But my colleague Tangi Utikere said that whilst small, it’s incredibly important. It’s just really disappointing. It’s a missed opportunity to actually strengthen the standards and speed up transition. As I said, we’re already incredibly slow off the mark by introducing any kind of fuel standards whatsoever in the first place. It just means that we’re going to be in receipt of a bigger, more polluting, and more costly vehicle fleet in the future, and leaving it for someone else to deal with later.

This debate is interrupted and is set down for resumption this morning. The House is suspended until 9.00 a.m. today.

Debate interrupted.

Sitting suspended from 12.01 a.m. to 9. a.m. (Thursday)