Road User Charges Bill — Third Reading 
Text is incorporated into the Bound Volume 
Road User Charges Bill — Third Reading 
[Sitting date: 09 February 2012. Volume:677;Page:300. Text is incorporated into the Bound Volume.] 
Road User Charges Bill 
Third Reading 
Hon GERRY BROWNLEE (Minister of Transport) 
: 
 I move  
That the Road User Charges Bill be now read a third time 
. This bill has undergone a rigorous examination both in the Transport and Industrial Relations Committee and here on the floor of the House. The amendments to the bill have resulted in a good bill becoming I think even better. I thank members in particular those on the Transport and Industrial Relations Committee of the last Parliament who did all of the work to prepare this bill and I would also like to acknowledge the work of the Road User Charges Review Group in conducting the initial review of the system.  
The background to this bill sees the Road User Charges Act 1977 replaced. The review of the road-user charges system identified a range of shortcomings within the system which can be summed up in two words: outdated and complicated. This bill is designed to modernise and simplify the road-user charges system reduce compliance costs for both industry and Government and reduce road-user charge evasion.  
In the contents of the bill there are a number of changes. The 1977 Act was passed when paper records were the practice—there was no other opportunity to record the information required. Mechanical hubodometers were used to measure distance travelled by vehicles. Electronic registries and electronic technologies are now the norm and the legislation has to reflect this reality. The Government supports the adoption of new technology and the bill enables this to occur. The bill will allow for further integration of new and emerging technology while ensuring that those providing these services are subject to a consistent statutory framework. In addition the bill contains provisions to safeguard electronic information.  
Industry has expressed concern that the road-user charges system is subject to evasion as it currently exists. The Government naturally shares this concern. Loss of revenue and the subsidising of the reluctant payer by the honest person brings the system into disrepute and deprives the National Land Transport Fund of revenue. When the bill comes into force we will see a new era in the management of road-user charges. Replacing the existing system of operator nominated weights with a system where all road-user charged vehicles will have a permanent road-user charge weight will help reduce the administrative burden on both operators and Government. It was interesting when we were in the Committee stage of the bill to see how that new charge will in fact advantage many users. The change will see the weight-based evasion of road-user charges virtually disappear.  
The bill will also look to further improve road-user charge compliance by introducing more stringent record-keeping requirements for transport operators. It will give the New Zealand Transport Agency more effective assessment powers to recover outstanding road-user charges. One of the consequences of having electronic registries is that it is no longer necessary to impose heavy penalties for forgetful behaviour—the occasions when people do not meet a date because they have simply forgotten to do so. However the new road-user charges system will have infringement fees for forgetfulness that are considerably less than the current system. That said for situations where there are deliberate attempts to defraud the system penalties have been increased.  
This bill lays the groundwork for developing a forward-thinking system that will continue to serve New Zealanders well for years to come. Although the bill contains the general framework for how the new system will function much of the practical detail will be covered off in the regulations. I am confident that the Government and industry will continue to work closely together on the regulations in order to make the most of the opportunities that this piece of legislation presents. I am confident that the bill will help to improve modernise and simplify a system that has been in place for almost 35 years. I commend this bill to the House. 
PHIL TWYFORD (Labour—Te Atatu) 
:  
I rise on behalf of Labour in this third reading to express our support for the Road User Charges Bill. We have found the select committee process in the Transport and Industrial Relations Committee to be constructive and we are supporting this bill because we share the Government’s view that this is a long-overdue modernisation of the legislative framework for road-user charges. They are a critically important part of our transport system and a source of revenue for our roading and other transport infrastructures. We support this bill but I want to use my time in this debate to just really reiterate some of the concerns that Labour still has about aspects of the bill that we do not believe have been adequately addressed—concerns that were raised by many submitters during the select committee process.  
 The purpose of this bill as the Minister of Transport has said is to modernise and simplify the road-user charges system; to improve compliance with and the recovery of road-user charges; and to establish a framework for electronic management of road-user charges. There has been throughout this process the assertion that there is a significant amount of evasion that goes on with road-user charges. I am not aware of any hard evidence that has been presented by the Government to substantiate the claim that there is evasion so we are being asked to take that as read. The bill gives effect to the Government’s decisions arising from the recommendations of the  
Independent Review of the New Zealand Road User Charging System.  
Students of politics listening to this debate will remember that that independent review was a result of the trucking strike if you like that was sparked by an attempt by the previous Labour Government under Annette King’s stewardship as the Minister of Transport at the time to update the system for road-user charges. So it has an interesting provenance.  
I do not think there is any difference or dissent over the need to modernise and to bring the system of road-user charges up to date with new electronic technologies. Nor is there any dissent from our side about the need for a consistent statutory framework. That is all well and good. But I want to comment briefly about two objections that remain on the table from our point of view.  
The first—I think it is in Part 2 of the bill and it is probably our most fundamental concern—is the shift from nominated weights to gross weights. As I said before we do not believe that the case has been made that that hard evidence has been put on the table by the Government to show problems with the current system of nominated weights where a truck driver or a firm will fill out the forms for their road-user charges based on the actual weights—an estimation of the actual weights—that a vehicle will be carrying. We do not believe that the case has been proved that that system is performing badly or that there is significant evasion.  
Many sectors in the industry are disgruntled. They do not feel they have been consulted properly about this change. They feel they have been kept in the dark over these changes and the impacts they will have and as we heard during the Committee stage quite a number of submitters gave testimony that the impact of the shift to gross weights to the maximum potential laden weight of the vehicle will result in substantial increases in road-user charges. As we know in our transport sector there are many many small businesses and small firms that believe that under these changes they will be adversely affected. So we think there should have been much more analysis and consultation and it is a shame that that did not happen. There were a few bodies within the industry that supported the change but by no means was that view representative of the transport fleet as a whole. The impression we were left with was that the existing system overall in terms of the use of nominated weights was felt to be working quite well.  
Another factor that was raised and that we think is worth noting is that there will be a considerable need to refit many trucks in the existing fleet and certification costs will be faced by operators in order to comply with the new system. Make no mistake about it—this change will impose very significant costs on small businesses which will be particularly vulnerable to it in our transport fleet. There will be we believe less flexibility within truck fleets than is currently provided for with the nominated weights system with smaller trucks on the road as operators seek to reduce the gross weights. And arguably that could increase roading congestion and carbon emissions. Having flexibility within the current system of nominated weights could mean that the national fleet is actually more efficient and better able to deal with changing loads. I know that one of the intents behind the change is to incentivise more efficiency so we will have vehicles carrying loads that are closer to their capacity the whole time but there are also some negative and possibly unintended consequences of that as well.  
We heard at the select committee about a case study presented by one operator that revealed an additional average cost of $18000 per vehicle per annum and a total projected cost to the firm of $137000 per year. This is obviously a very large firm but still that is a substantial cost to be borne. One of the groups that feels they will be particularly badly hit is the New Zealand Motor Caravan Association. It has about 22000 paid-up members and some 40000-odd individuals who are associated with that organisation. These are people who travel the country in motor caravans. They reported—and I know the Minister challenged some of these figures in the Committee stage—increases of up to 270 percent as a result. I have subsequently spoken to the Motor Caravan Association. It stands by its figures and feels that the very nature of motor caravans is that they are often large vehicles that are almost never loaded up to their carrying capacity.  
We have another concern that we want to just note at this stage acknowledging that we are in support of and voting for this bill for the broad reasons outlined. The second point we think is worth noting is that one of the features of this bill as the Minister said is that much of the practical detail will be covered off by regulations. We think the balance is not quite right to be passing legislation when so much of its force and intent is actually going to be delivered by regulations. A number of submitters made the point that they felt that it broke the basic democratic principle that there should not be taxation without representation. No final numbers were available for proper scrutiny before the bill proceeded this far. The actual charges are going to be dealt with by officials through the process of making regulations. One of the risks is that this will be a complicated process and open to legal challenge.  
I look forward to hearing the rest of the contributions. Thank you.  
DAVID BENNETT (National—Hamilton East) 
: 
 I would just like to thank the new Minister of Transport and congratulate him on taking up the responsibility of the Road User Charges Bill. I look forward to it progressing and look forward to the many transport initiatives that he will bring to this House. They will be good for the New Zealand economy and the New Zealand transport sector. I would like to thank the Labour Party as well for its support during the Transport and Industrial Relations Committee consideration. I thank the Green Party and all the other parties that were part of that process.  
Michael Woodhouse 
: They’re not here; you’ll have to write to them. 
DAVID BENNETT 
: Yes. The committee approached this issue in a very constructive manner. It looked at the issues from the perspective not only of the Government needing to reform but also of the industry and the wider transport sector. I think we came to a pretty good solution in the sense that as has been said there was need for some decent change in this area. If that change had not been accommodated through this process then we would get to the results that Labour found when it tried to make some changes without full consultation. There were a lot of protests and I do not think the trucking industry or anyone else necessarily wants to go through that again. 
Labour members have made a few comments about supporting the bill but having some reservations. I would just like to cover off some of those reservations. With the movements to the gross weights the Labour members indicated they did not feel they had sufficient evidence. Well I think they need to go out into the real world and see how it works out there. If you are in the trucking industry and you have to first identify those weights every time then that makes it particularly difficult. Second if you have got a lot of staff involved in that process then that puts a lot of responsibility on to them and can make it very difficult when you have got high fines that are the result of making mistakes there. A third issue is that in an industry or any business you want to get the most productivity out of your vehicle and you will want to do the best you can. So sometimes you will push the boundaries and that is human nature I guess. We see that through all our laws in regard to the roads. The laws are pretty strict. So in essence there are a lot of reasons why it can happen and it does happen out there. To put your head in the sand and say there was no problem—really that is not the case. People need some certainty. This bill gives that certainty and gives it in a manner that is in the best interests of the industry. 
Another issue that Labour raised was the environmental aspect. Well this will actually encourage people to make sure because they are paying to the gross weight of that vehicle that they utilise the full vehicle weight. So it should actually be more environmentally friendly contrary to Labour contentions because people will try to utilize that full weight because they are paying for it. There are ways of getting that back but essentially they are going to pay so they will use the full weight. That will not mean that we will have a lot more smaller trucks on the road; it will actually mean that the trucks on the road are as efficient and as well utilised as possible. 
The other area that Labour brought to our attention just before is in regard to regulations covering the detail. Well simply we cannot as this Parliament do all that detail here. I know that Labour likes to have a situation where the Government controls everything in this country out of this room but we actually need to give the industry—[ 
Interruption 
] Labour’s caucus room would not be able to control much at the moment! The thing is that it cannot necessarily be set here. We need regulation and that is the fit and proper process to do that so that we have got that flexibility within it and it also gives the ability for change if it is necessary rather than having to come through this Parliament every 5 minutes to do a new road-user charges bill. I think that the Minister and the officials have come to the right decision and the right balance in how they are using regulation to achieve the purpose of giving that flexibility in the system. So it is good to hear that members of the major Opposition party are supporting it but their contentions of why they have problems with it are not valid. This is a good bill and it will achieve its purposes and deliver the results we need for the transport sector. Thank you. 
DARIEN FENTON (Labour) 
: 
 I am pleased to take the opportunity to make a contribution on the third reading of the Road User Charges Bill. I have been through the process of the Transport and Industrial Relations Committee with the chair David Bennett and he is back—he is back! Actually I did note a very conciliatory approach to the committee this morning which I thought was very welcome. We look forward to a much more inclusive approach to concerns from the major party of the Opposition. So I am looking forward to this year actually; I think you know that we have got work to do—there is no doubt about that.  
But on the Road User Charges Bill Labour has repeatedly raised our concerns about this bill. We raised them in the select committee. We voted against two parts of the bill in the select committee. We have raised them in all of the readings of the bill including the Committee stage and it is fair to say that we still continue with those concerns even though we are intending to vote in favour of this bill because we believe that the good things in the bill outweigh the concerns that we have. 
 Now my colleague Phil Twyford talked quite a lot about our first concern which is about the shift from nominated weights to gross weights as the basis for charging road-user charges so I will not go into that too much. But I wanted to address our second concern which is the one about regulations being signed off without public debate or consultation. The concern from the industry was first of all that there had been very little consultation about this bill itself when it came in. That was reflected in all of the submissions that we heard. The second concern was that it is going into this whole new regime in the dark. The industry has no idea—very poor indications—of what it might mean. That is why we have seen concerns from some of the major players like the—what are they called? 
Phil Twyford 
: Motor Caravan Association. 
DARIEN FENTON 
: —the Motor Caravan Association. But also I do not think that David Bennett can tell the Labour Party to get into the real world when we have similar concerns from companies like Fonterra. Fonterra one of our most successful companies in New Zealand and Toll New Zealand have expressed similar concerns and a range of small to medium trucking firms. Also in the submissions concerns were expressed by some of those who are trying to work in the industry to modernise it through using new technology. I think it is a bit poor to write them off as not being important and saying that Labour is not in the real world. In fact Labour did go and speak to many of these organisations. We took the trouble—and I am not sure that the Government did—to go and visit Toll New Zealand Fonterra A One Movers and a whole range of organisations and I must say that my education about road-user charges— 
Michael Woodhouse 
: That’s fantastic.  
DARIEN FENTON 
: Yes it is fantastic is it not? It is really good but you know their concerns have continued Michael Woodhouse. They continue and I do not think that we have reached resolution in this bill in its third reading that allays those concerns.  
I also found it really interesting that the member David Bennett—I nearly said “David Benefit” I am sorry—[ 
Interruption 
] I know I know that is right it is the wrong committee but I also found it a bit rich that the member David Bennett was talking about you know how the Parliament cannot set the rates and so on. When we think back to what happened in 2008 which was the big truckie strike which was really political actually—it was driven by the Road Transport Forum and it was obviously designed to destabilise Labour in the period coming up to the election—the then Minister of Transport the formidable Annette King had made a decision that she would not advertise and consult on the changes to the road-user charges because if she did there would be upfront buying and the Crown would lose I think it was around $17 million. [ 
Interruption 
] Yes it is interesting. She made that decision and she made it in the interests of New Zealand taxpayers so there could not be that sort of thing happening.  
Now what we have got is a Government that is justifying increasing road-user charges and changing road-user charges through regulation without—oh there may well be consultation but it is not clear in the bill how that public consultation will take place. Certainly the submissions that we had from the industry what we have heard from the industry and the discussions that we have had with it is that it is very concerned about the breaking of the basic democratic principle that there should be no taxation without representation. So it is ironic that we went through all of this in 2008 and the National Party took the moral high ground and here we are in 2012 passing a bill that actually does away with the right to consultation for changes in road-user charges. I hope that the Hon Annette King will have a chance and I am sure she will to make a contribution on this bill because I think she will have some things to say about that because she was actually in the forefront of that. She was in the firing line at the time. We know these things are complicated. Labour is a much more understanding party of the Government than the National Party was when we were in Government so we tend to try to be cooperative about it. But I think the fear is still there in the industry which is about what these charges actually mean. It does not know. So then you get the various examples that we have been given in this debate from various organisations: real concern about the increased cost to small business but medium-sized businesses as well—real concerns about that—and leaving the industry in the dark.  
Here we are passing a bill in its third reading where the industry still has no idea what the change in these charges is going to mean. I think it is as I said pretty rich of the Government to now say “We can’t possibly do any of this stuff because it is too difficult; we can’t pass it in Parliament.” when National was right there boots and all encouraging the industry in 2008 because it saw a political advantage. In fact now it is justifying it so it will be interesting I think to see exactly how the industry responds. I think there will be winners and losers. I fear that the winners are those who are in the big trucks and the losers will be in the small parts of the industry who are just trying to get on with business and make a living. I think that there will be concerns that start to be raised.  
I think the other thing that underlies this whole thing is that we are very supportive of road-user charges. It is a very unique system in the world. It is a system that we should be proud of and in fact it is being adopted by other countries now as they realise that tax on diesel and petrol is not actually going to deliver the income needed— 
Debate interrupted.