Foster Andy; Tuiono TeanauANDY FOSTER (NZ First): I'm pleased to rise to support this Road User Charges (Light Electric RUC Vehicles) Amendment Bill. Actually I would note that this is the first bill to come from the 54th Parliament and be reported back to the 54th Parliament so I'm quite pleased to have been involved in that process.It's about road-user charge (RUC)—what is RUC? RUC effectively is a charge for the access to and the use of the roading system. What it is not is a charge for carbon emissions and we've seen the sort of interplay between them. That is dealt with in another way through the emissions trading scheme (ETS) cost that is applied to fuels. Light electric vehicles (EVs) and plug-in hybrid vehicles (PHVs) were always liable for RUC. What has been happened though is they haven't been paying RUC because there's been a specific exemption. Why was that exemption there? That exemption was there to incentivise the uptake of those vehicles until they got to about 2 percent and that's where we've got to. We're at 2 percent now so now that is coming off. This has been signalled for a long time. It has been signalled that it was going to drop off at the end of next week—31 March that the charge would start to apply and the exemption would end. So if this bill were not introduced what would happen is that EVs and PHVs—light EVs light PHVs—would all be paying the full RUC right from the beginning so we had to do something about that if we weren't going to apply that. Look it was done at pace and we've heard from the member opposite from the Hon Julie Anne Genter that it was done at pace and maybe we should have taken six months. Well I don't think either side can really beat each other up too much about that. You could say that the last Government should have done something about it because if you're going to do it in six months if I count back six months it would have been September which by my calculation is before the election. That wasn't done.You could say Well this side of the House could have done it quicker." but by crikey we've been doing all kinds of different pieces of work and it's been a very very busy schedule. So look we were left in this situation where this had to be done at pace and it was. Since the first reading on Tuesday a fortnight ago—so a fortnight ago today—it was reported back to the House on Thursday last week.You will note the dissenting views from Labour and the Greens around that timing issue but look that's the reality of it. We were put with the work we had to do and we did it. The timetable was tight. We heard from submitters Friday before last. We dealt with the officials' feedback drafting and final decisions by Zoom because the House wasn't sitting. That did cause us to make one slight whoopsie there but that's OK; we've ended up in the right place I think.Look I want to thank everybody for the work done in a tight timetable. It involved some late hours. I want to thank the members and the alternate members from both sides of the House for their participation. I want to thank the Office of the Clerk who worked very very hard on this and the parliamentary drafting office and also the Ministry of Transport and the New Zealand Transport Agency (NZTA) who provided us with some great information and worked very very hard.Hon Mark Patterson: Well chaired too.ANDY FOSTER: Oh thank you very much. Thank you very much Mark Patterson. Look I especially want to thank the 518 people and organisations that made submissions in a very short period of time. They had less than 48 hours to make submissions but they did it. I was really really impressed they did it and they were quality submissions too. We had 19 who appeared the following day on that Friday.Submitters were almost entirely owners of electric vehicles PHVs or industry organisations so it wasn't like the people who own petrol vehicles were making submissions. It was the owners of PHVs and EVs who were making submissions and almost without exception—certainly those that we heard—they all said "We should be paying a share. We should be paying towards the use and maintenance of the roads." The only argument was about how much.The EVs—I'll deal with that one first. Several submitters noted that the RUC per distance travelled—and you've heard that again from across the House there—would actually be while it's the same as the light diesel vehicle it's actually higher than the average light petrol vehicle. The reason for that is that since the RUC level was set petrol vehicles have got more efficient. So that's a good thing but what it does mean is that the petrol vehicle is actually going to be paying slightly less on average than the RUC. And if the RUC is applied to EVs they're paying slightly more than that for the moment for the same distance travelled.So you could consider that to be a good thing because it means we've got less emissions less petrol being used by our petrol fleet which of course is the bulk of the fleet. We did consider this. The advice we got from officials was that this would have been within the legislative scope but not within the policy scope of what we were presented with. Despite the Greens in particular here—the alternative view that they've put in the report back—when we talked about whether we would actually advance this idea within the Transport and Infrastructure Committee deliberations nobody wanted to do so—nobody wanted to do so. So the opportunity was there to raise it—probably not to win it but the opportunity was there and it was not taken not by the red party not by the Green Party. So I think that is important that you know that.So moving on to PHVs: we're talking here about a very small proportion of the vehicle fleet—about 30000 to 40000 vehicles out of 4.5 million vehicles in the fleet. That's about two-thirds of 1 percent of the entire vehicle fleet. The rate that we applied to them—the discount rate that we applied to them—was a specific issue that the Minister asked us to consider and we've had pointed out to us across the House that we should have considered it and we did. We thought very carefully about it. The issue is that PHVs of course use both petrol so they pay the fuel excise duty and they will pay RUC through the battery use. The question we've got there is we didn't—and this is the important part of the bill—want them to be ending up essentially being double-taxed paying for both at the full rate for the full distance that they travelled. That would have been unfair to PHV vehicles. So the question then is: what is the discount rate? We heard lots of submitters and they were all arguing for all kinds of different ways of administering it because every single vehicle is going to be different and used in a different way. There'll be vehicles which are used in urban environments which are largely using battery. There'll be vehicles which are older so their batteries have lower capacity so they're more likely to be using petrol more often. So how do you end up with a fair system? Some people argue for doing it on the basis of the age of the vehicle. Some people went even further and said you should do it by the individual circumstances of the vehicle but you've got to make it administratively efficient; you can't do it in any other way. So really what it came down to is what is a fair balanced approach in terms of the discount rate that we chose. Well that was I think well reflected in our select committee commentary although the select committee commentary—and as we've heard the actual rate that was applied is slightly different because we didn't get everything 100 percent right there but never mind.Labour started consulting a couple of years ago on a 20 percent discount. The bill as introduced said a 30 percent discount and that really was saying that we think it's 20 but because of the variation of the fleet maybe we'll be conservative; we'll make it 30. We kind of reported back somewhat accidentally at 50 percent and that is what Cabinet has agreed at 50 percent and I think it's a very very good outcome. I think you could argue for anything between 30 percent and 50 percent. But the really interesting bit that we found when we asked officials about this they found a European study and that European study of 9000 PHVs indicated an average of 4.1 to 4.4 litres of petrol per 100 kilometres and that's equivalent to a 50 percent discount so that doesn't seem an unfair outcome.So I think the other point to make in terms of RUC is that whatever you do it's going to be unfair to somebody and we need to make sure that we move to something which is fairer and that is a RUC system right across the board.I want to finish by addressing a couple of other issues which arose in the bill or during submissions and consideration. First of all you've already heard from the Minister that there's a two-month transition period. That is going to be quite challenging because a lot of people—EV owners PHV owners—are not going to be familiar with the RUC system; I acknowledge I've not ever been involved directly in the RUC system and I'd imagine most of those vehicle owners won't have been and they're going to need to be educated to get involved in that system and to know what they're supposed to do.The next point to make is that the bill exempts light EVs under 1000 kilograms. If you look at the vehicles that are around virtually there is no car that I can see that's a proper-looking car that actually is under 1000 kilograms so you're talking about motorbikes and light vehicles of that nature. It also makes clear that light all-terrain vehicles are also going to be exempt because they're generally used off road. We've heard from some of the submitters that the RUC level might disincentivise the uptake of EVs and in the short term that may be true but if we move to RUC relatively quickly it's not going to be a big issue. The issue is much more the rate that you apply through the ETS for the ETS charge on fuel petrol or diesel. Also there are other more significant issues there not only the ETS running costs environmental outcomes and of course the cost of buying the vehicle in the first place.We had a bit of discussion about weight but it's very clear that under 3.5 tonnes the impact of weight on the road is not particularly significant and that only 1 percent of the cost of fuel actually relates to weight. The rest is all about access and about the use of the roads and so on.The final point I want to make in the last few seconds that I've got available is those issues which the Hon Damien O'Connor raised around RUC administrative costs—those are really important ones and that is something which we think is really really important that NZTA and the Government pays a lot of attention to dealing with. Those costs are too high especially if you buy your RUC in small parcels. They're going to be likely to be regressive. They're largely made up of bank charges and NZTA overheads and so they do need to be addressed and got down.Again I want to thank everybody who's been involved in bringing the bill to this point and to commend the bill to the House.ASSISTANT SPEAKER (Teanau Tuiono): The next call is a split call I understand—Scott Willis."