Genter Julie Anne: Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeGenter Julie Anne: Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 16 May 2013. Volume:690;Page:10344. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): I rise to speak on Part 1 of the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill. What clause 4 of Part 1 of this bill does is it says that petrol tax will be going up 3c a litre every year for the next 3 years starting this year. Essentially what I would like to focus on in this part of the bill are the reasons why the Government has to put up the petrol tax.It is very clear from the regulatory impact statement that the Government has to put up the petrol tax because people are driving less. They have not been driving as much for over 5 years now and that is due to a number of factors. It is due to oil prices being much higher. It is due to the fact that we have not seen the anticipated level of economic growth. It is due to the demographic factors like younger generations who are waiting longer to get their driver’s licence and who are less interested in owning a car. They are much more interested in owning a smartphone connecting with people in other ways living in vibrant towns and cities and urban areas where they can walk and cycle and take public transport and not being forced into spending thousands of dollars a year on owning a car maintaining it and taking it in for a WOF. They would like smarter transport options.What has been happening over the past few years we know from data from the Ministry of Transport is that public transport boardings are up. So I would like to explain to the Minister of Transport based on his comments earlier how it is that an economic instrument works. What the Minister said during his speech was that back when petrol was very expensive lots of people took public transport. So would we not expect that given that petrol has become much more expensive—the price of it has doubled in the last decade and the International Monetary Fund has said that we can quite realistically expect it to double again in the next 10 years—even more New Zealanders are going to want to take public transport and are going to want to walk and cycle and leave the car at home if they can? Would we not want to put most of the transport budget into infrastructure that gives New Zealanders the choice—that gives them the ability to avoid paying huge amounts of money on petrol? Would we not want to give them those choices?That is not what the Government is doing. What it is doing is putting up the petrol tax and then saying it is going to put the vast majority of this money that it raises—the revenue that it raises through the petrol tax—into a few motorways that carry a relatively small percentage of vehicle trips about 4 percent of daily vehicle trips collectively on all the roads of national significance that remain to be built. We are putting all that money into a few very expensive solutions that do not actually solve a problem because vehicle trips are down. There are smarter ways to deal with congestion and part of the way that we deal with congestion and safety is actually investing in alternatives so that New Zealanders can take public transport—and walk and cycle—which is a safer way of getting around. It reduces road accidents it reduces the cost of road maintenance and it reduces the need to expand road capacity because it moves more people at peak time for a lower cost. Would that not be a rational economic approach to the future of our transport investment for New Zealand?There are lots of good things about putting up petrol tax. You see the great thing about an economic instrument is that it encourages efficiency. So we could expect if New Zealanders get enough advanced warning that petrol is going to be more expensive in the future and that petrol tax is going to be higher that therefore when they look at buying a new car they will consider that and they might buy more fuel-efficient cars. But the other behaviour that we can expect them to respond with is to drive even less. So why would we be spending the vast majority of the money on a few new motorways when we know that putting up the price of the petrol tax and the oil price increasing anyway is going to lead to fewer people using the road and more people wanting to use public transport?The Minister claims that his Government is spending money on new infrastructure for public transport but if you look at the Government policy statement for that budget it is very very clear. All of the money—85 percent of the money on new infrastructure—is going on a few new motorways. There is a tiny percentage going on local roads. Local roads by the way carry more than 50 percent of all the vehicle trips. It concerns me that the Minister of Transport does not know how money is raised to spend on the transport network—that 50 percent of all the funding that goes to local roads to walking and cycling and to public transport is paid for by ratepayers. So we have got over 50 percent of the traffic going on local roads which are half paid for by ratepayers. There are ratepayers who might decide if they were not going to pay directly that they would rather walk and cycle and take public transport. But they do not have that option because central government is controlling the way all of the money is spent. It is saying to local councils: “We don’t want you to spend money on walking and cycling even though it’s cost-effective. We don’t want you to spend money on local roads because we don’t want you to raise rates but we’re going to put all thismoney into a few new roads.” which do not go by the way from the farm gate to the port. It is a very very bad analogy to say that somehow because you are spending all of the money on a few new motorways that that is going to help freight. Actually a lot of our exporters are moving their freight by rail already and they could do so even more. A lot of freight is on local roads and yet the money available to local roads has been reduced because all of the money is being put into three very expensive duplications of existing motorways that are going to have a very limited marginal return.What we see is the Government putting up the petrol tax and then not providing New Zealanders with options. Normally when you are going to approach a tax like an economic instrument you would say: “OK well we want to encourage efficiency in our oil use. We want to future-proof our economy and our transport system against higher oil prices so we’re going to slowly but steadily increase the petrol tax and we’re going to put all of that money or most of it into alternatives so that people have the option to leave their car at home.” That is going to cost New Zealand Inc a whole lot less money. Although I often hear that roads are paid for by users and therefore it is OK to be spending most of the petrol tax on a few motorways they are not the projects that are going to benefit most road users. They are not the projects that are going to benefit New Zealand’s economy. We know this from the economic studies that have been done on them which were completed nearly a year after the projects were announced. All of the roads of national significance have never been subjected to Treasury’sBetter Business Cases for Capital Proposals guidelines. Why is that? Because if they were it would become very obvious that you could achieve 90 percent of the benefits at a tiny fraction of the cost of building a flash new motorway rather than by just upgrading the existing road and getting some of the commuters off the roads.What National is doing is akin to putting up the tobacco excise tax and then spending all of that money on advertising for cigarettes and cigarette stores. What it is doing is instead of giving people the option to avoid taking the car and to reduce their oil use it is putting up the petrol tax and spending all of the money on projects that increase New Zealand’s oil dependence. It is not a smart approach particularly given our current account deficit problem. Last year New Zealand spent $8 billion importing oil to put in our cars and trucks. New Zealand households and businesses spent over $3 billion on vehicles. We are still importing the same quantity of oil we were importing 10 years ago but we are paying twice as much for it. Our current account deficit which is somewhere around $10 billion is actually quite close to the amount—it is slightly less than the amount—that we are spending importing vehicles and oil which is about $11 billion last year. That amount could increase rapidly if we see another oil price spike. The National Government is really missing an opportunity to reduce the oil dependence of our transport sector by investing in smart alternatives that would have longer-lasting benefits.The Minister put out a press release yesterday I think it was saying that some of the new investment in roads is resulting in travel time savings. Well that is a very short-term approach to it. I mean yes of course as soon you initially build the road it seems like people are able to get there faster. What happens after 3 or 4 years? As the Minister said if you build it they will come. So more people are going to move further away and put more pressure on those roads. Their travel time savings are not there 3 or 4 years after the project is built and it remains to be seen whether or not that traffic would have even happened if you had not built the road. Of course if you make it cheaper and easier to drive more people will drive. That does not mean it is an economically efficient outcome for the economy as a whole. Interestingly there are centrist Governments across the world even right-wing Governments which see the economicopportunity of smart transport and that is what they are investing in. There are cities all over the United States that are investing in walking and cycling because it is good for business and it is good for the economy.