SpeechROAD USER CHARGES (TEMPORARY RUC REDUCTION SCHEME) AMENDMENT BILLFirst ReadingHon MICHAEL WOOD (Minister of Transport): I present a legislative statement on the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill.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 be now read a first time. Well we've just witnessed what I believe they call a bold move. That is the Opposition—or certainly the National Party Opposition—attempting to slow down the Government's efforts to ensure that we provide relief to motorists who are facing increased transport costs as a result of international pressures. I do acknowledge other parties across the House for their support in according urgency and am very surprised that the National Party wants to delay that relief going to those people who pay road-user charges (RUCs). I'm sure that they'll be up to explaining that to the heavy vehicles sector and other diesel users who might be a little bit surprised by that bold move by the National Party and their new transport spokesperson. But good on them; I wish them luck.On 14 March the Government moved swiftly and announced reductions to petrol excise duty by 25c per litre. This was in response to significant increases in fuel prices that have been experienced here in New Zealand and around the world. These pressures have been experienced internationally for two significant reasons. The very first is well known to members of the House and people across the country and that is Russia's invasion of Ukraine which has put serious pressure on international fuel prices. We saw them spike extremely quickly following the development of tensions and then Russia's illegal and abhorrent actions in that country. That conflict is likely to persist for some time and we see that those pressures will therefore persist for some time for people who use petrol across our economy and our society.But secondly the global recovery from the COVID-19 pandemic has generally speaking seen demand for petrol around the world exceed what was expected at this time. So the combination of both increased demand and a shock to supply has seen those petrol prices really shoot up all around the world and we have seen Governments around the world look to address this in a range of ways. Our Government of course has been very focused on the broader set of issues that New Zealanders face around cost increases. That's why some of our recent decisions around increases to the minimum wage the 1 April increases to a range of Working for Families payments and other payments have been really helpful in terms of helping to take the edge off some of those pressures that people are facing. But we have been acutely aware of the sharp increase in transport costs in particular.The 25c reduction to fuel excise duty that we put into effect—and I think the date from memory was 14 March—we decided at Cabinet that day I signed off the regulation that afternoon Her Excellency the Governor-General then confirmed it through Order in Council and it took effect from midnight that night. It was turned around very quickly indeed and it has seen the biggest fall in petrol prices that the Ministry of Business Innovation and Employment has ever observed in their monitoring of petrol prices. I've had some incredibly good feedback from New Zealanders right across the country about how that has helped. It hasn't taken away all of the cost pressures that New Zealanders face but they've seen the Government responding and making a positive change that has really helped people with some of those back-pocket costs that we know they're facing. It's worth noting—I'll come back to the cost a little bit later but that has had a real impact for someone for example filling up their tank a 60-litre tank once a week that's a $15 saving immediately.At the same time of course we also moved to reduce public transport costs. They've been halved for that three-month period as well. And again there's fantastic feedback about that; it's making a difference. It's reducing the cost pressures and giving people a really great opportunity to give public transport a go. This bill complements those measures and brings in reductions to road-user charges.It is just worth confirming—for people who don't spend as much time in the minutiae of how these things work—the difference between fuel excise duty and road-user charges. For people who do purchase diesel the road-user charge is not effectively built into the petrol charge like a fuel excise duty that people who fill up with 91 or 96 have—you know when you fill up your tank with 91 or 96 the cost of the fuel excise duty is effectively built into that and it's a charge per litre of petrol that that person purchases. For those people who use diesel the road-user charge is purchased in advance. It's not a part of the diesel price and it's not a per litre price so it's much more complicated. It's set based on distance and weight and there are in fact about 200 different rates of road-user charge that apply to different vehicles depending on their weight and sometimes on the way that axel load is distributed. So it's a much more complex process to be able to apply a reduction across road-user charges. The decision that Cabinet made was to apply an equivalent reduction in those road-user charges for people who do have to purchase RUC. Effectively when you do the maths the 25c reduction on fuel excise duty works out to about a 36 percent reduction. So what is reflected in the piece of legislation that is before the House is a 36 percent reduction that applies across those 200 or so rates of road-user charge. So there'll be a proportionate reduction no matter what kind of road-user charge licence a person purchases whether it's a light vehicle a heavy vehicle a bus or whatever it is.It's also the case that as compared to fuel excise duty which can just be changed through Order in Council it is not as simple for the road-user charge and that's why this piece of legislation is before the House. There was a protection that's built into the Road User Charges Act which sees that before any change is made to a road-user charge rate there must be 42 days of notice that is provided. Now primarily that is provided to protect the sector and give notice where there might be increases to the rate of road-user charges. It wasn't particularly contemplated I don't think at that time that there might be a significant decrease of this kind. So if we want to provide the benefit of the reduction in road-user charge we do need this legislative intervention if we want to bring it in as soon as possible—and certainly earlier than that 42 days of notice that we have to provide under the current Act.So effectively what the bill will do is it will shortcut that 42 days of notice that I've just outlined and it also includes provisions which allow us to apply that 36 percent reduction across the whole suite of rates that are otherwise set in regulations. It is just worth commenting on what the quantum of reduction is here and how it will benefit New Zealanders. For someone who purchases 1000 kilometres of road-user charge for a typical light vehicle the cost will go down from $76 to $49—that's a $27 saving. For a person who was purchasing 5000 kilometres it would be a $135 saving so that is a real contribution to assisting people and tackling some of those pressures.What is also built into the bill are safeguards in order to prevent unreasonable and excessive purchasing of road-user charges at the reduced rate that will apply for the three-month period. The three-month period described in the bill kicks in from 21 April and the intention of this legislation is that people are able to purchase at the reduced rate for a three-month period. The intention is not that people can load up and purchase at the increased rate for a longer period. Now we do not expect that New Zealanders would be likely to do that but it is important that we do have some basic safeguard that is put into the bill.So firstly modelled on an existing provision in the Road User Charges Act the bill does include a provision that any road-user charges for a heavy vehicle that is purchased while the reduced rate is in place become invalid one month after the temporary reduction period. So that's a provision that's already in the Road User Charges Act that continues to apply to this reduced rate for the purposes of heavy vehicles. That's quite a strong safeguard. That means that the heavy sector is not able to effectively load up at the lower rate. I wouldn't expect that to happen but there's the protection that's in place there.Secondly the bill draws on the existing assessment provisions in the Road User Charges Act giving Waka Kotahi as the collector the power to issue assessments and invoices for purchases that they deem to be excessive or unreasonable or abusive of the scheme's intent. This is really important in terms of the integrity. It will mean that Waka Kotahi can review those purchases and—taking reasonable factors into account if they do believe that there's been excessive or unreasonable purchasing—they'll be able to issue an invoice so that that person does not receive the benefit of that unreasonable or excessive purchasing.I'm very pleased that the Government is able to bring this bill to the House. It is part of our response to the cost of living pressures that New Zealanders are facing. We are moving forward quickly to provide that relief. We have already through a range of measures to fuel excise duty reduced public transport and a range of other supports that we've provided. This will be an important complement to that and I look forward to its swift passage through the House.