Court SimonSIMON COURT (ACT): Thank you Mr Chair and Minister thank you for coming to the Chamber to engage in this discussion around the proposed amendments. I've already stated clearly that ACT won't be supporting this proposed amendment because we fundamentally disagree with the premise of the original bill which is that it won't be possible to reduce New Zealand's carbon dioxide emissions any further with this policy or with this regulation because all of our emissions are already capped under the emissions trading scheme Minister. So that leads me to a number of questions that I have.We've heard you articulate that vehicle importers—because New Zealand only imports vehicles we don't make cars here. We're entirely reliant on motor vehicles manufactured in the European Union Great Britain Japan Korea and other places around South-east Asia and to a limited extent the United States which actually makes some fantastic petrol and diesel vehicles particularly the Dodge Ram and some of those other really really big utes that people who have big tools and need to carry their big tools around in.But Minister I want to ask you about the unders and overs first. So if for example I'm importing say just Dodge Rams a very large petrol or diesel vehicle and that's my specialist market I only import those vehicles. Or say for example I'm an importer and I specialise in importing used utes and selling them to tradies and farmers. A one-year-old or even a three-month-old ute that was first registered say in Japan or Thailand like a Toyota Hilux registered in Thailand is regarded as used when it comes to New Zealand even though it might have the same kilometres on the clock as say a dealer demonstrator model that's been imported as a new vehicle. So when we're thinking about used vehicles if I just specialise in importing say utes to sell to farmer and tradie customers I'll only have overs. I'll only be liable for cost. I won't have any unders. I won't have any savings. So that'll be all cost that gets passed on to my customer.Then we think about the opposite. Say I'm a motor vehicle importer new or used and I specialise exclusively in low-emissions vehicles. Of course that would help to reduce New Zealand's carbon profile not the world's though because once that car's left the factory gate it doesn't really matter where it's driven. It's a low-emissions vehicle. Imagine if I've got credits under this scheme. So we're talking about the unders and overs component. Now if I want to as you pointed out sell those credits to another dealer say my alter ego that wants to import Dodge Rams will those trades in these carbon credits under the schemes be subject to GST to income tax and to the anti - money-laundering requirements? Because there has been some concern expressed by industry representatives that actually while this sounds good in principle if you import tens of thousands of vehicles a year and you can balance it because you're a big importer that's fine but if you're importing say just tens or a few hundred vehicles a year this is going to be very difficult to administer and there is an opportunity for potentially big tax liabilities or even the risk of money-laundering through the way that these credits are managed.Then I want to ask you a further question about the delay in the time that this bill allows for the payment of the charges that might be incurred by an importer. Minister you've stated that importers will—they know there's a schedule of carbon dioxide emissions and they will know which vehicles accrue certain costs. So I understand from that that you expect the importers to account for their own liabilities. But my second question that I would like you potentially to seek advice from officials on is: will the New Zealand Transport Agency (NZTA) or the organisation administering the scheme be sending out an accrual or a statement on a monthly basis even though it's not liable for payment until that six-month delay? Because there is considerable concern from importers that many of the smaller importers do not understand the scheme sufficiently well to carry out their own assessment of the costs they'll be liable to pay. So they would desperately like if there's going to be a scheme that they understand what NZTA or the agency administering it thinks they'll be liable to pay for even if there are some unders and overs and wash up. So will these importers get a statement monthly starting in January or February? Then I just want to come back to some of the other issues raised in the regulatory impact statement which I'm assuming applies to the initial clean vehicle standard regulations as much as it does to this amendment because it's voluminous. In fact it's a much more significant document than the three-page amendment bill that was tabled. So I just want to come to the regulatory impact statement and ask you some questions about the costs and benefits of this policy Minister. Because it's not clear who gets the benefit but it's certainly clear with the clean vehicle standard who will pay the costs and that will be people who import petrol and diesel vehicles and those costs will be faced by individuals who import petrol or diesel vehicles or importers motor vehicle dealers who import mainly petrol or diesel vehicles.But let's look at the benefits. So what criteria—3.2 of the regulatory impact statement—in addition to monetary costs and benefits have been used to assess the likely impact of the options under consideration the options which produced this piece of legislation which we're now proposing to amend. Number one is leadership at home and internationally this includes placing primary reliance on domestic measures to reduce emissions. Now leadership at home and internationally the advice we got at select committee last year was that the imposition of the Clean Car Standard at the wharf was years ahead of when the same standards would apply in the European Union and Japan. The motor vehicle manufacturers like what you call your original equipment manufacturers said This doesn't make any sense to us because the standards in the home country where we actually make these vehicles won't apply for some years and yet you're telling us we have to comply with them from 2023?" That makes absolutely no sense. That's just going to be a tax a tax on people who purchase or need these vehicles because we can't do anything about it. Like the standards we manufacture to if there's going to be a standard should at the very least simply be a cut and paste from the standard where the vehicles that are imported to New Zealand are made. So Minister I'd like you to respond to that. Why on earth wasn't the standard and the time frame of the countries where these vehicles are manufactured simply adopted?Because the ACT Party's proposed—when it comes to building products for example—we just adopt standards from other countries instead of making up our own. So Minister would you please respond to that? Because the leadership we expect from Government when it comes to climate change or any other policy is not to be leading in a way that is completely irrational based on the advice of people who actually make cars for example.Then I just want to come to the next item which is leadership at home and internationally. Sorry it's just expanded—CHAIRPERSON (Greg O'Connor): OK Mr Court we've been pretty generous. The bill now. This section please. You're very very broad. The Chair has been very generous. So back to the part please.SIMON COURT: So now with respect to the carbon dioxide accounts I just want to bring your attention to item one extent to which the initiative reduces emissions; this is page 34 of the regulatory impact statement. By what amount will this policy or this regulation amended or not reduce emissions? Because it's not clear. It's not clear if we look at the parallel legislation the Clean Car Discount how much that will actually reduce emissions by on an annualised basis. In response to written questions that I've posed to you you've suggested somewhere between 5 million and 6 million tonnes of CO2 equivalent by 2050. I mean by 2050—I mean we could have flying cars by then Minister to be honest. So look what the ACT Party wants to know will this policy reduce emissions; if so by how much? What will the cost per tonne be to reduce emissions given that it looks like all of the costs at the moment are simply being applied to petrol and diesel vehicles like utes and vans and people movers for large families which are still being manufactured in Japan and other countries still required by New Zealanders in order to you know take their families places and do business? So will this actually reduce emissions; if so by how much and at what cost per tonne Minister? Thank you."