Fuel Industry Act regulations
The Ministry of Business, Innovation & Employment consulted on the form of the regulations that underpin the Fuel Industry Act. This included specifying which fuels should be included in the new Terminal Gate Pricing regime, and specifications for the mandatory display of fuel prices on roadside boards. The AA’s submission agreed that 100 octane petrol and biofuels could be excluded from the TGP because of their limited availability, and we supported all fuel retailers complying with the signage requirements except for truckstops that don’t cater to motorists. We also said the form and manner of the sign should not be overly prescriptive, so that retailers could comply by using their existing sign formats.
EECA 2021/22 levy funding proposal
Every year, EECA consults on how it spends revenue it earns from levies, including the Petroleum & Fuel Monitoring Levy on petrol and diesel, which mostly funds its Low-Emission Vehicles Contestable Fund and publicity campaign for low-emission vehicles. The AA’s submission noted that there is also a role for EECA to undertake programmes that aim to reduce emissions from the existing internal combustion engine (ICE) fleet, which makes up some 4 million vehicles. We said this could include things like biofuels, which EECA was previously responsible for. The AA said there needs to be a joined-up government and industry strategy for reducing fleet emissions.
Download the submission on the EECA levy funding proposal
Driver Licensing Amendment Rule
This amendment Rule was proposed as a result of Covid-19, and proposes to extend the standard 12-month exemption during which temporary visa holders can drive on their overseas licence or permit. This is an international standard. But with travel restrictions, temporary visa holders have been unable to return home, but due to demand to convert to NZ licences, they may not be able to do so before the 12-month exemption will expire, rendering them unable to legally drive. The proposal aims to extend the exemption for up to 12 months, giving them more time to convert their licence. The AA supported this proposal – but suggested changing the new expiry date to avoid a busy holiday season – recognising that rendering temporary visa holders unable to drive may create unintended enforcement and insurance issues whilst not posing a safety risk. We also suggested the amendment Rule should clarify that they can continued to drive on their overseas licence or permit after they have applied to convert their licence, but before they have obtained a NZ licence.
Regulatory Stewardship (Omnibus) Amendment Rule
This cover-all Rule proposes a number of minor amendments to a variety of Rules, often in technical in nature or to bring the rule up-to-date. The AA submission commented on two proposals: updating the Glazing Rule to allow camera systems to meet the definition of ‘mirror’, and updating the PSV Rule to allow the emergency door button to be deactivated when the bus is stationary. Our submission supported both, but on the proviso that camera systems were manufacturer-fitted, and that stationary buses must not be in operation i.e. with engines switched off.
Fuel Industry Bill
This Bill introduces changes to the fuel market to increase wholesale market competition, which reflect the recommendations of the 2019 Commerce Commission market study into the retail fuel sector. Many of the clauses in the Bill are subject to supporting regulations which were not included in the Bill as they are still being developed. The AA’s short submission on the Bill supported the proposals and focussed on the section of the Bill relating to consumer information requirements, which will regulate the display of fuel prices. The AA has advocated for many years to mandate the display of premium fuel prices which are mostly absent and thus hinder competition and has contributed in our view to a large price differential between regular and premium grades. Thus we supported this clause, but recommended the supporting regulations should simply specify that all service stations be required to display the price of all fuels retailed. The AA’s submission also recommended that the Bill should require the octane number to be displayed, as it is common for retailers to refer to premium-grade petrol by a brand name instead of octane number which can be confusing, particularly for motorists to distinguish between 95 and more expensive 98 octane.
Covid-19 Recovery (Fast-track Consenting) Bill
The Government developed a Bill to establish temporary fast-track consenting processes to enable infrastructure projects to get underway more quickly; ultimately aimed at creating jobs and supporting New Zealand to recover from the economic and social impacts of Covid-19.
The AA supports the intent of the legislation. We primarily used our submission to outline our view that the AA should be added to the list of parties from which comments must be invited when expert consenting Panels are considering projects. Given the Government is aiming to speed-up consenting largely by limiting opportunities for the public to have a say, we consider that given our interest and expertise in transport issues, along with the fact that we are New Zealand’s largest membership organisation and we regularly survey our Members to understand their views, we should be invited to provide comment on transport-related projects that are being considered for delivery.
Proposal to toll the Puhoi to Warkworth highway
The NZ Transport Agency sought public feedback on a proposal to place a toll on the Puhoi to Warkworth highway, which is currently under construction.
The AA’s submission outlined that while we are comfortable with the principle of tolling new roads (when certain conditions are met) the AA does not support this proposal. We consider it unacceptable that public consultation on tolling is taking place at such a late stage in the project; the decision to toll (or not) should be woven into the decision to build (or not). We are also concerned about the cumulative impact that multiple tolls would have on users of this corridor (the Northern Gateway toll road is located immediately south of this project, and further planned upgrades of the corridor between Warkworth and Whangarei will also be candidates for tolling).
Further, we believe there needs to be greater clarity of the Government’s approach to tolling nationally. Specifically this should cover the likes of: a position on the role that tolling should play in funding and delivery of projects; how issues, such as regional equity, will be managed; and how tolling aligns with potential future transport funding tools.
Auckland Council’s emergency budget 2020/21
In June, Auckland Council consulted Aucklanders on an ‘emergency budget’ for 2020/21, due to the impacts that the Covid-19 pandemic is expected to have on Council revenue. The AA’s submission drew on the results of a survey of 443 Auckland AA Members, and highlighted Members’ views on: rates increases; potential mechanisms to help fill the funding gap; and possible cuts to council services.
Regulations under a Fuel Industry Bill
The Ministry of Business, Innovation & Employment consulted on the proposed content of regulations to support a new Fuel Industry Bill, to be introduced following the Commerce Commission’s 2019 market study into the retail fuel sector. The regulations focus on the market study’s main recommendations: improving wholesale market competition; improving information transparency for consumers; and fuel company information disclosure and monitoring. The AA’s submission supports the reform of the wholesale market and the introduction of terminal gate pricing (TGP), and recommended that TGP include 95 octane petrol, but has the ability to expand to include other retail fuels in future, like biofuels, if the product mix changes.
The AA’s submission also suggested the regulations require service stations to display the price of all fuels they sell on roadside boards, including listing the octane number, as this would cover the Commerce Commission’s recommendation to display the price of premium petrol, but would also future-proof the regulations for future fuels (e.g. biofuels, hydrogen). We did not support exemptions from the signage requirement for service stations with low turnover, as price transparency is also important in remote areas as it will give travellers the option of choosing to continue onto another location to fill up. We also said the signage requirements should not be too prescriptive, other than prices being in order from 91 octane, 95 (or 98) and then diesel, and any optional prices (like loyalty discounts) under that.
Accessible Streets Regulatory Package
This is a comprehensive package of Rule amendments, which focus mainly on cyclists and micro-mobility device users, and includes allowing cycles on footpaths, and scooters on cycle paths and cycle lanes. The AA submission noted a member survey did not support cycles on footpaths except for primary children, but we did support transport devices like scooters being able to use cycle paths and cycle lanes as it takes them off the road we’re they’re more vulnerable. We also supported proposals allowing cycles to ride straight ahead from a left-turn lane and to ‘undertake’ slow-moving vehicles, and the introduction of a minimum gap when passing cyclists, as these codify common behaviour and what is promoted as safe practice.
The AA’s submission did not support a proposal to give pedestrians right-of-way when crossing a side street marked with two white lines as we believe this may be difficult to interpret, and we had similar reservations about a proposal requiring road users to give way to buses exiting a bus stop. We also opposed a proposal to allow councils to ban parking on berms without using signs to notify the public because this could result in many residents being fined unawares.
Government Policy Statement on Land Transport (2021/22 – 30/31)
The Government policy statement outlines how road taxes will be spent. The AA’s submission was written before implications of the Covid-19 pandemic and its impact on transport funding was clear.
Our submission focused on areas of particular concern regarding the funding approach:
- A need for clarity on what the Government will deliver given funding allocations exceed revenue anticipated by over $1 billion between 2021-24. This raises questions about what trade-offs will be made.
- The addition of non-road capital expenditure (e.g. rapid transit, rail and coastal shipping) into the National Land Transport Programme, which complicates the user-pays model for road transport. While the recent introduction of ad-hoc new funding sources for roads make it difficult to plan investments.
- The road safety (Road to Zero) programme doesn’t comprehensively account for the importance of improving road infrastructure and road surface maintenance (major determinants of road safety).
- The AA does not support motorists subsidising the national rail network because it comes at the expense of spending motorists’ money on direct road safety initiatives. In general however, the AA does support mode shift initiatives where rigorous assessment shows another mode is best for the task.
- The AA supports no further increases in road taxes, which have risen significantly in recent years.
NZAA response to Infrastructure Industry Reference Group
The AA supports the formation of the Infrastructure Industry Reference Group, and the Government’s commitment to using infrastructure investment to support economic recovery in the wake of Covid-19. We appreciate the opportunity to share our views on the projects that could form part of the Government’s list.
Our submission highlights some priority transport infrastructure projects in regions around New Zealand that we believe should be fast-tracked, and also proposes two complementary national programmes:
- A five-pronged road safety programme
- A super-charged road maintenance upgrade
These areas are of critical concern to the AA and its membership. With additional funding, we believe there is an excellent opportunity to quickly and effectively deliver benefits to transport users, and deliver on the Government’s transport policy objectives.
Infrastructure Funding and Financing Bill
The Infrastructure Funding and Financing Bill allows for Councils to recover the costs of new transport infrastructure for major urban housing developments from the people buying or living in the vicinity through levies on greenfield developments or targeted rates. We understand the impact of this Bill would be limited to main centres.
The AA’s submission conditionally supported the intent of the Bill because it provides a mechanism for funding transport infrastructure other then continued reliance on fuel tax. In the case of major public transport projects this would allow more funding to come from those who benefit most from them.
ETS Proposed Settings
The AA’s submission on the Emissions Trading Scheme Proposed Settings focused on the credibility of the 80mT CO2e “budget” for emissions in the 2021-2025 period. It pointed out that given current growth rates, transport emissions alone would be 14mT greater than the emissions budget. It said the MFE’s anticipated savings of 0.5mT CO2e per year from transport (equivalent to removing about 210,000 cars from the road each year) was not credible. Our analysis of the EV data and the Clean Car standard concluded that neither would make any impact on current emissions and would in fact only curb the growth. Our submission also proposed that ETS revenue be used to fund research that could reduce emissions. We outlined two prospects, one being the research AA Research Foundation has begun into a 4-day commute and the second the Forest Research Institutes Biofuel Roadmap which (in the light of the 1 billion tree project) proposes developing processes to convert forest waste into synthetic biofuel that does not require blending.
Land Transport (NZTA) Legislation Amendment Bill
This Bill aims to strengthen the regulatory oversight of the NZ Transport Agency, including introducing a new, independent, Director of Land Transport, and permitting road-user revenue from the National Land Transport Fund to be used for regulatory functions. The AA’s submission did not support the regulatory functions to be funded directly from the National Land Transport Fund, and instead proposed that these should be directly funded by the Crown (as other government departments are). We also suggested the Bill should explicitly require that the NZTA’s functions, including regulatory functions, should provide value for money. In addition, we suggested providing greater clarity around the appointment and resourcing of the Director role, including whether it be for a fixed term.
Land Transport (Rail) Legislation Bill
This Bill sets out a very different model for transport funding than we have had in New Zealand since 2008 – i.e. it integrates the planning and funding of all rail into the Land Transport Management Act framework. Until now, rail has largely been funded through general taxation and the Land Transport Fund has been used primarily to fund road building and maintenance, the rationale being that money in the Land Transport Fund comes from road user taxes (Fuel Excise Duty and diesel Road User Charges). Our submission expressed concern the Bill as drafted places motorists at risk of being charged for rail services that are more reasonably funded from other sources, and risks diverting planning and investment away from road safety. We also said the Bill will not achieve its goal to improve co-ordinating of planning because the Minister of Transport approves rail projects and the NZTA Board approves road projects. The AA has suggested the Bill would create more issues than it would solve, and that at a minimum it should be amended to ensure road user taxes are used primarily for investments that directly benefit road users and improve road safety.