SpeechROAD USER CHARGES (TEMPORARY RUC REDUCTION SCHEME) AMENDMENT BILL (NO 2)First ReadingHon MICHAEL WOOD (Minister of Transport): I present a legislative statement on the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill (No 2) 2023.ASSISTANT SPEAKER (Hon Jacqui Dean): Could the Minister just try that again? According to my notes there is no 2023 and we'll just go by with what I've got.Hon MICHAEL WOOD: OK. Thank you Madam Speaker. I present a legislative statement on the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill (No 2).ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon MICHAEL WOOD: I move That the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill (No 2) be now read a first time. As the Prime Minister has outlined in his statement to this House this week our Government's top priority continues to be addressing the cost of living pressures that many New Zealand households face. And one of the most important steps that we took to address those pressures last year was the temporary reductions in rates of fuel excise duty and road-user charges (RUCs) alongside half-price public transport. These measures provided a direct way of providing significant and ongoing financial support to nearly all Kiwi households as they have been dealing with cost of living pressures. Fuel excise duty was reduced by 25c per litre of fuel reduced and to ensure a comparable reduction in rates of road-user charges those rates were reduced by 36 percent and that ensured that drivers of diesel vehicles both private and commercial received the same level of support as those driving petrol vehicles. That support has been extremely important for families between March of last year and this time. The estimates that we can apply to the reductions that people receive—if we take someone filling up with petrol a 60-litre tank that person will save approximately $17 every time they fill up their tank with petrol. And the same proportionate reduction in costs would apply to someone filling up their tank with diesel as well. Public transport users—someone taking two trips per day to get to and from work with a $5 bus fare would be saving approximately $25 per week. So while we acknowledge that there are still real pressures on many families this policy has made a tangible difference and is an example of our Government's commitment to doing practical things to help Kiwi families at this time. While New Zealand has seen sustained reductions in petrol prices over recent months due to international factors which are the fundamental drivers of the increases that we have seen in recent times—such as the war in Ukraine and strained post-COVID supply chains—we do know that those cost of living pressures do continue to persist. And the Government has made the decision that as a way of providing further practical support a further extension of this policy is a good and helpful step for us to take. For this reason we have extended the cut to fuel excise duty and now is a time through this legislative process to reinstate road-user charge rates to that reduced rate of 36 percent lower than the ordinary rates. Road-user charges as I think most members of the House will be aware largely apply to diesel vehicles and they're paid by the kilometre in advance of travel. So it's quite a different system from the fuel excise duty that is effectively built in to the price that you pay at the pump if a person is going to get petrol for their vehicle. The system works by drivers purchasing a set number of kilometres and displaying that licence on their windshield or electronically via an E-RUC licence and the number on the vehicle's hubometer or odometer must be within the range that is stated on that displayed RUC licence. The particular complexity with road-user charges as compared to fuel excise duty is that there are over 200 different rates of road-user charges and these relate to different weights of vehicles and different axle loads. Broadly speaking heavier vehicles pay a higher rate of road-user charge to take into account the greater degree of damage that they cause to the road and therefore the greater cost in maintaining that road. And if that weight is spread out over a greater axle load that is also calculated as well.So the simplest way of this change being made is through a piece of regulation that simply instructs the road-user charge collector—that is Waka Kotahi—to reduce the rates across the board by 36 percent. The previous reduction expired on 1 February and so this piece of legislation being pursued through urgency ensures that we are able to reinstate that reduction to the benefit of Kiwi motorists as soon as we can.The bill is straightforward as I've outlined. It puts in place a second temporary reduction period for road-user charge rates which will run between 1 March 2023 and 30 June 2023 and the rate of reduction—that 36 percent—will simply be the same as a rate of reduction which has been in place previously. Importantly this bill will also create an ability to extend the road-user charge reductions beyond 30 June by Order in Council. That means that if that is deemed to be an appropriate thing to do at that time it will create some flexibility to do so through a more simple and more streamlined process. One of the other processes that we have built in and will continue to build in to this reduction are some controls to ensure that we manage against the possibility of excessive purchasing. Because the nature of the road-user charge system is that people purchase the licence in advance of using it we do not want to have a situation in which people over-purchase at the reduced rate and effectively take advantage of a temporary scheme. The vast majority of people of course won't do that but a small number might and out of fairness for all payers into the system we need to protect against that. And so there are two ways in which we manage that risk. Firstly to discourage bulk purchasing what we put in place was a process whereby the reduced rates expire one month after the end of the period of temporary reduction. And this is built out of procedures that are already in the Road User Charges Act that apply to purchases of road-user charges for heavy vehicles. So that means that people can purchase for the period and there's a little period beyond that but purchasing that goes beyond that is not permissible. Secondly to address and prevent road users from bulk purchasing amounts the Road User Charges Act does give Waka Kotahi the power to issue assessments for invoice where they believe that that purchasing has been excessive unreasonable or abusive of the scheme's intent. Now Waka Kotahi has been monitoring purchasing behaviour since the reductions were put in place and has found a small number of cases where they believe that has been the case and they have undertaken enforcement action. So the Government does want to send the message clearly that this is a policy which is there to support Kiwi households and businesses at a difficult time but we won't tolerate people who take advantage of the scheme in those small number of cases and the agency has the tools they need to follow up on that. It's anticipated that most road users will seek to purchase road-user charges at the reduced rate either through Waka Kotahi's website or at an approved road-user charges agent. Local AA branches are a common place that people do that. So that will be available for people to do during February 2023 at standard rates. To ensure that they can benefit from the reduced rate vehicle owners will be able to purchase what is known as an overlap licence. With an overlap licence the licence begins on the current odometer or hubometer reading at the time of purchase and the unused distance on an existing licence will be automatically credited to offset the new licence cost. That effectively means that those people get the benefit of the reduced rate from the time at which it is applicable.The final thing that I wish to comment on for the benefit of the House is the way in which this programme of reductions will be funded. Across reductions for both fuel excise duty and road-user charges the estimated total reduction in revenue into the National Land Transport Fund for this period will be in the order of $700 to $750 million. So it is a significant investment that has been made. That amount of money is effectively coming off the fuel bills of Kiwi households and the Government is absorbing that cost so it is a significant investment to relieve cost of living pressures. Now it is important that we do continue to invest across the transport programme. We see that obviously in the huge amount of work that is ahead of us in cleaning up after the floods and the cyclone. So it's important for people to understand that the Government will refund the reduced revenue into the National Land Transport Fund with direct funding from the Crown. So there is no reduction in the transport spend across New Zealand as a result of this policy and I think that is something that people will want to know as a part of this piece of legislation. In finishing this is obviously an important and practical way of addressing cost of living pressures. There have been other proposals—for example around changes to tax rates—that would not deliver anything near the benefit of this policy to Kiwi households. Once again a Kiwi family filling up a 60-litre tank of petrol on a weekly basis saves 17 bucks. A public transport user in the associated part of this policy potentially saves $20 to $25 a week. So it's a tangible difference to Kiwi households; it speaks to our commitment to focusing on those bread and butter issues of cost of living. I commend the bill to the House and look forward to the debate to come. Thank you Madam Speaker.ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.