Brown Simeon; Brownlee GerryROAD USER CHARGES (LIGHT ELECTRIC RUC VEHICLES) AMENDMENT BILLFirst ReadingHon SIMEON BROWN (Minister of Transport): I move that the Road User Charges (Light Electric RUC Vehicles) Amendment Bill be now read a first time. SPEAKER: I think you need to present a legislative statement.Hon SIMEON BROWN (Minister of Transport): Sorry. I present a legislative statement on the Road User Charges (Light Electric RUC Vehicles) Amendment Bill.SPEAKER: The legislative statement is published under the authority of the House and can be found on the Parliament website.Hon SIMEON BROWN (Minister of Transport): I move That the Road User Charges (Light Electric RUC Vehicles) Amendment Bill be now read a first time. I nominate the Transport and Infrastructure Committee to consider the bill.Hon Willow-Jean Prime: Oh those are some words we haven't heard much of!Hon SIMEON BROWN: At the appropriate time I intend to move the bill be reported to the House by 14 March 2024. The committee have authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 193 195 and 196. This piece of legislation is being brought to the House as a part of the Government's commitment to ensure that all vehicles that use our roads are paying their fair share and contributing towards the upkeep of our roads. In 2009 the previous National Government exempted electric vehicles (EVs) and plug-in hybrid vehicles from paying road-user charges (RUC) to encourage their uptake. This exemption was always planned to end when electric vehicles hit around 2 percent of the light vehicle fleet. We've now passed the 2 percent mark for electric vehicles in the light vehicle fleet and it is only fair that those vehicles now start paying their fair share to contribute towards maintaining our roads and the upkeep of our roads. Transitioning electric vehicles and plug-in hybrids to road-user charges is also the first step as part of the National Party and ACT Party coalition agreements to bring all vehicles into the road-user charges system. This transition is about fairness and equity ensuring that all road users are contributing to the upkeep and maintenance of our roads irrespective of the types of vehicles that they choose to drive. With the increasing uptake of electric vehicles and plug-in hybrids being brought into the road-user charges system this transition to road-user charges means that these vehicles will now be contributing towards the maintenance of our roading system like all other road users. This supports the coalition Government's commitment and priority of building and maintaining our roading network and we've also outlined those priorities in the draft Government policy statement on transport which we released yesterday. This bill smooths the way for the entry of light vehicles into the road-user charges system when the current exemption expires at the end of March. It brings light electric vehicles into the road-user charges system as it was going to be a large and complex task for the New Zealand Transport Agency (NZTA). To ensure that this integration proceeds smoothly I'm proposing a set of legislative amendments to the Road User Charges Act 2012 and a range of regulations that sit under it: the Land Transport (Road User) Rule 2004 and Land Transport Management Act (Apportionment and Refund of Excise Duty and Excise-Equivalent Duty) Regulations 2004. These amendments will also ensure that all light electric vehicle owners are paying a fair and comparable amount for the use of our roads.When electric vehicles are brought into the road-user charge system owners of plug-in hybrids could potentially be taxed twice if we didn't make this change and that's why we're making sure that there's also a lower rate for plug-in hybrids than the full RUC rate which will apply to electric vehicles. Whether you drive a plug-in hybrid or are an electric vehicle owner at the moment you're currently exempted from paying road-user charges and this means that there's a fair transition for those vehicles. So for light electric vehicles they'll be paying a cost of $76 per 1000 kilometres but there will be a lower rate for plug-in hybrids acknowledging the fact that they also use petrol or diesel as they travel on our roads. This is to ensure that we compensate for that difference to ensure that they're not paying twice as part of the system. This bill addresses this issue by creating the ability to set a reduced road-user charge rate for plug-in hybrid electric vehicles. A reduced rate as I said reflects that they already contribute towards the National Land Transport Fund through fuel taxes on petrol. The Government has decided that the reduced rate should be set at $53 per 1000 kilometres. The rate offers plug-in hybrid EV owners a 30 percent discount on the standard light vehicle rate of $76 per 1000 kilometres to account for the petrol consumption that they use. The last Government consulted back in 2022 with the public on a rate for plug-in hybrid EVs. They proposed as part of their consultation a 20 percent reduction of the full rate for EVs. We think it's fair and equitable to increase that to 30 percent acknowledging that the 20 percent was based on the average of those vehicles—on what the manufacturers estimate their fuel consumption to be. But when you look at what they actually use we've taken a more conservative approach and that is why we've increased that to a 30 percent reduction based on the light road-user charge rate. Setting the reduced rate at this level may incentivise some plug-in hybrid owners to change the way that they use those vehicles—operate more based on the battery less based on petrol—and those will be decisions that users of those vehicles will make.The reason we needed to also put in place this reduced rate was if we hadn't the reality for plug-in hybrid EV owners is that they would have to go and seek a refund from the New Zealand Transport Agency for any petrol excise that they used. So they'd have to pay because they effectively use two fuels motoring those cars—they have a plug-in battery which fuels that vehicle and they're considered an electric vehicle so would be required to pay a road-user charge under the legislation; they also pay for petrol. So if we hadn't made this change they would have to pay the full road-user charge and then they would be able to recover their petrol excise by putting a claim in to the New Zealand Transport Agency.This process of applying for and obtaining a refund would be time consuming there would be risks in terms of how accurate it would be and there would be a huge amount of time and additional resource required at the New Zealand Transport Agency by effectively doubling the number of refunds that NZTA would have to process per year. Therefore the Government believes it is a fairer way to reduce the required RUC rate for those vehicles to 30 percent of the full RUC rate. The bill also exempts very light electric vehicles from road-user charges. Those are vehicles under 1000 kilograms. There are only a few of these vehicles on the roads. We don't think that it's necessary to put a road-user charge on those vehicles but at the same time the Government has outlined our intention to move all vehicles to a road-user charge over time. One of the things that this debate has highlighted is the variance in terms of what different types of vehicles pay based on the type of fuel that they use. If you drive an electric vehicle a plug-in hybrid a diesel car a petrol vehicle or hybrid the system is based currently on the type of fuel that motors the vehicle rather than how many kilometres that vehicle operates on our roads. So at the same time as progressing this bill through the House we acknowledge that there are variances and that we need to move all vehicles to a road-user charge where they are paying the same amount based on the kilometres they travel and the weight of those vehicles rather than the type of fuel that they use. We see this as a temporary measure that we're bringing in now while we also undertake the significant piece of work necessary in order to move all vehicles to a road-user charge. This bill will go to a select committee and whilst I acknowledge it will be a short select committee I think it is important that the particular issue around whether or not the plug-in hybrid rate has been set at the right rate is examined by that select committee and whether the additional discount over and above what the last Government proposed is the right place for that to sit. So I look forward to seeing what the select committee advises us based on that.To support the transition the Government is also giving those owners of light electric vehicles and plug-in hybrid owners a two-month transition period by which they will have to buy their first RUC license and that period begins on 1 April 2024. So this is an example of a piece of legislation that we're bringing to the House due to the fact that the last Government did not deal with this problem. Prior to the election we said all vehicles should be paying for the use of the roads. The last Government acknowledged it but did not make any preparations for this transition. So here we are in this House putting this legislation to Parliament. We believe it's a fair way to deal with this challenge but also we believe that there is further reform that is needed to make sure that there is a fair and equitable way for all vehicles to be paying their fair share. I commend the bill to the House.