Sitting date: 15 October 2025

LAND TRANSPORT MANAGEMENT (TIME OF USE CHARGING) AMENDMENT BILL

Second Reading

Hon CHRIS BISHOP (Minister of Transport): I present a legislative statement on the Land Transport Management (Time of Use Charging) Amendment Bill.

ASSISTANT SPEAKER (Maureen Pugh): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon CHRIS BISHOP: I move, That the Land Transport Management (Time of Use Charging) Amendment Bill be now read a second time.

This bill is a key step towards modernising our transport system by introducing time and location based charges. The key point is this: sitting in traffic is not just a nuisance, it is a drain on productivity, and our road taxes at the moment do not reflect when or where roads are used, meaning they fail to address actual demand and network performance. This disconnect contributes towards costly congestion. A recent estimate—and there's been a range—suggests Auckland could face an annual cost of $2.6 billion by 2026. So there is a need for more sophisticated demand-based pricing to ensure our system remains fair and efficient. Congestion is a tax on productivity.

I was in New York a couple of months ago, which has just introduced congestion pricing. After years of scepticism, they introduced it in early 2025. Traffic dropped by 7 percent—over 7 percent. Travel times improved by up to 40 percent in peak hours. Speeds increased across the network, even outside the charging zone. And the people I talked to in New York said that actually the streets were a lot nicer to be on. Road pricing can deliver real benefits when done well.

Now, there's been plenty of talk about this over the years, but this is a bill that actually gets on with it. It enables a flexible framework designed to suit a wide range of situations and adapt to future needs, but with controls and safety features to protect motorists and the community. It empowers local authorities working with New Zealand Transport Agency (NZTA) to introduce charges for road use during peak times. It provides a clear structure for how central and local government can partner on time of use charging schemes.

A central component of the bill—this is the second point—is a clear purpose for all schemes to improve traffic flow and network productivity, not just collecting revenue. Getting this objective clear is important for public support. International experience shows that social licence matters, and this legislation puts the purpose at the front and centre of the reform. It's the backbone of the entire framework.

Thirdly, the bill has strong protections to ensure transparency and foster public trust. Every scheme has to go through public consultation, impact assessments, and meet national consistency and oversight requirements. The bill contains the nuts and bolts, sets up the compliance framework, allows for adjustments to charges within limits, and lays out the processes to get schemes off the ground.

The bill has been considered by the Transport and Infrastructure Committee, and I do want to thank them for their hard work on this, particularly the chair, the indefatigable Andy Foster. It's an excellent committee, I'm told they work in quite a bipartisan and cross-party way, which is the way select committees should work at their best. The committee's recommendations on the changes to the bill were unanimous, which is not always the case, but it's good when they can be unanimous, and that's really good. So there is a hope—what's that?

Hon Julie Anne Genter: I have a differing view in the report.

Hon CHRIS BISHOP: Yeah, but no one really cares what you think, so let's set it up.

Hon Members: Ha, ha!

Hon CHRIS BISHOP: That's a bit rude.

Hon Willie Jackson: That's not very prime ministerial.

Hon CHRIS BISHOP: Well, it's—

DEPUTY SPEAKER: They all smiled. We'll take it as jest tonight.

Hon CHRIS BISHOP: It certainly wasn't very nice. I withdraw and apologise to the Hon Julie Anne Genter. It certainly wasn't very nice. I wasn't aware that you'd dissented. You put a minority report in, but the recommendations were unanimous, right? Is that right? The recommendations were unanimous, but the minority report—

Hon Julie Anne Genter: Yeah—yeah.

Hon CHRIS BISHOP: Oh, that's OK. Well, it's OK. So I was right; the recommendations were unanimous. That's OK—that's OK. That's fine. OK. Well, I'm looking forward to hearing what will no doubt be a very passionate contribution from the Hon Julie Anne Genter, because, if nothing else, there's always enthusiasm. But anyway, I think I'm right in saying that there is cross-party support for this.

It will be a momentous day when that happens, because the first economic study into congestion charging, or time of use pricing, whatever you want to call it—I think I'm right in saying—was in 1994. That's now 31 years ago. So we've known about this for a long time and finally we're at least going to legislate to have the framework to do it.

I do want to thank everyone who made a submission. There were 218 submissions, a really diverse range of perspectives, and quite a lot of contributions from local government, because ultimately they're the ones who are going to have to implement this alongside central government. So I do thank them for all of their submissions.

The committee has recommended further refinements to the bill and the Government will be supporting the report back and the amendments proposed by the select committee. We welcome the recommendations to strengthen local government influence and scheme decision-making. The reported back bill gives local authorities approval rights for key decisions made by scheme boards that will be set up to establish and implement time of use charging. We support that. The committee has also recommended that scheme boards have an independent chair. We support that. I believe these changes will address concerns expressed by some in their submissions on the bill.

The committee has also recommended that any revenue left over after the scheme establishment and operational costs, should there be any, are prioritised on initiatives that improve the ability of people to move around the area affected by time of use charging scheme. We support that. The committee has also recommended scheme boards be able to propose exemptions for large public transport and school buses, reflecting the need to incentivise the use of this alternative to private cars. This change does not involve opening up the bill to allow a broad approach to exemptions.

There was, I understand, a bit of debate at select committee about this. It's a bit like Swiss cheese—you know, once you put one hole in place, you can't stop. We're not in favour of broad exemptions, which some people have argued for. We are going to have some narrow exemptions, but the whole point at some level is to make sure that people actually face a price signal. The more people you exempt, the less effectiveness there is of the price signal. So by definition it's not as effective and we do want to make the scheme effective.

There were some submissions around privacy as a key matter. The bill contains several privacy safeguards, but to strengthen these the reported back bill requires scheme proposals to include privacy impact assessments. NZTA and enforcement authorities must also consult the Privacy Commissioner and publish their privacy policies to ensure transparency and accountability. We support that. There's a range of other improvements around the legal foundations of the boards which we support as well.

The select committee's done a really good job on this. I want to thank Andy Foster and the team on the Transport and Infrastructure Committee. They've done an excellent job. The Government's going to support this. I'm genuine in my desire to try and make sure we get some bipartisan cross-party support on this. I think, from a productivity point of view, it's just really clear now, after years and years of international experience, that this is the right thing to do for our cities to try and reduce congestion and make sure that we're making more efficient and effective use of our roading network. Ultimately, that's what it is all about.

Our intention is to try and proceed with the legislation and get it through Parliament by Christmas so that we can work with Auckland Council as a starting point in 2026 and get a scheme in place after that, but it would be good to get it done by Christmas. Thank you, Madam Speaker.

DEPUTY SPEAKER: The question is that the motion be agreed to. We've had an agreed change of order here. I call on the Hon Julie Anne Genter.

Hon JULIE ANNE GENTER (Green—Rongotai): Madam Speaker, I'm very grateful to be able to take this call, because I could see I wasn't going to be able to before the end of this evening if I didn't take the call now. Very graciously, Labour has allowed me to take the second call so I can speak in this debate.

The Green Party has long supported investigation of time of use charging, so we were very pleased—I think we might have been the first party in this Parliament to have it officially as policy many, many years ago. I did mention that, although the Transport and Infrastructure Committee agreed the changes and the amendments unanimously, the Green Party still put in a differing view, with just some other concerns where—we rightfully understood that the Government wasn't going to address the concerns, but, were the Green Party to be in Government, we would like to see these concerns addressed.

The first thing is that there are many opportunities to have a better and more balanced transportation system here in Aotearoa. In our largest cities—in Auckland, but it could apply in other cities; I know Wellington has been in support, at a local level, of wanting to be able to use a tool like congestion charging. We know that, where it has been implemented overseas, it has been very, very successful. But, in all of those cities overseas where it has been implemented, other things have been true as well. The first cities to pioneer road-use charging or time of use charging were Singapore, Stockholm, the City of London, and a few other cities such as Gothenburg in Sweden, and, most recently, of course, New York City. All of those cities had a few other conditions as well, which the Green Party has policies to support. Those are: greater employment and residential density in their city centres; far greater provision of public transport services and lower charges for those; far higher charges for car parking.

When all of those things are true, then time of use charging can be very effective. That is because, here in Aotearoa, we don't actually charge for parking, in most places, what the value of the land is. When you have those more direct charges, people make different choices. When they're forced with the choice of paying upfront, they might decide to do something different. You can get much more extensive and comprehensive public transport services that enable people to get around without having to rely on a car, and those who are using private motor vehicles, for whatever reason they may be, are willing to pay the price to use them—and that's useful.

Our concerns—I'll lay out three of them, and I have proposed some amendments that I hope the Minister will consider at the committee of the whole House stage. If other parties would like to look at those amendments, they're already on the Table there.

Low-emissions zones: in the last term of Parliament, the Transport and Infrastructure Committee conducted an inquiry into congestion pricing, and it heard from many expert submitters that we should be designing legislation to allow for low-emissions zones as well, using the framework that is used in a congestion pricing bill to be able to achieve other outcomes—not just reducing congestion but also reducing emissions by targeting high-emissions vehicles with fees, for example. That was an expert recommendation from other jurisdictions that have implemented either congestion charging or low-emissions zones, or both.

Low-emissions zones work slightly differently to congestion charging, so we wanted to ensure that this legislation was broad enough to enable local authorities to implement something like low-emissions zones. That's really, really important because air pollution from motor vehicles has a huge impact on health; it has a huge impact on productivity and on our health system. It causes approximately $10 billion in social costs each year, including 3,000 cases of childhood asthma. When cities are able to have tools to manage those externalities, they often choose to do so, and that's really good to enable those local councils to be able to do things like that. This legislation, unfortunately, is very narrowly targeted to congestion charging.

Our second concern has to do with local representation and decision making. We were very happy that the Transport and Infrastructure Committee did recommend a change that ensured that there would be an independent chair of the scheme boards. We generally thought that Waka Kotahi was going to have disproportionate weight on the scheme boards for deciding really important things and that there wouldn't be sufficient representation by territorial authorities. But then there's another kind of confusing thing that would not apply in Auckland, which is that, if there are multiple territorial authorities who are choosing to join a scheme board, it could end up reducing the representation quite significantly from the territorial authority in which the scheme is actually operating.

In Auckland, this isn't an issue because you have an amalgamated super city, so there's really just the one territorial authority, which is a unitary authority. But, in Wellington, for example, we have quite a few smaller councils who could choose to join the scheme board, and who could argue that some of their constituents will be paying the price of the congestion charge, and yet the congestion charging area will not be within those territorial authorities. They way the legislation is written could have a perverse effect of giving significantly more power to a scheme board as to whether a scheme is adopted, how it is designed, what the revenue is used for, and to a much smaller percentage of the population that resides very far from where the congestion charging scheme is. Maybe that's a worst case scenario, but I do think we do want to think about those hypotheticals and make sure that we're not accidentally setting up a system where outlying areas are determining where the revenue is going. There are 200,000 people in Wellington City, and how many tens of thousands in the Wairarapa? Significantly less.

Andy Foster: About 55,000.

Hon JULIE ANNE GENTER: Yeah, 55,000, but they could have three representatives on a scheme board, and Wellington City with 200,000 people could have one. That would be a very perverse outcome, and, arguably, in the case of Wellington wanting to put in place a scheme, you would hope that multiple representatives could be chosen on behalf of just Wellington City to represent the different parts of the city and not have it disproportionately dominated by territorial authorities far away.

The final concern was about the use of revenue. I have proposed some really specific amendments that we can debate in the committee of the whole House stage if the Minister has a change of heart. When congestion pricing schemes have been put in place overseas, the vast majority of surplus revenue has gone into additional public transport services, to reducing fares for those services, and to improving active transportation options. In the City of London, for example, I think it was 80 percent of the revenue initially was just going into additional bus operations. There will be a certain proportion of the revenue that has to go to administering the scheme, and you want that to be as little as possible, but it could be 10 or 20 percent—it could be more, obviously. But any additional revenue has to go into improving transportation options so that people can avoid having to pay the charge. That's how it achieves the congestion reduction.

There are two ways you can avoid the charge. One is not travelling at all, and one is changing your mode of travel or carpooling—doing something different—to reduce the impact of the charge. If we don't want people to be stuck and not able to move around, we are going to have to significantly step up our public transport services, which, as I think everyone in Aotearoa knows, have been lagging behind other parts of the world. We have higher fares, on average, than every city in Autstralia for public transport. In Brisbane, they set up a 50c fare to anywhere recently. Public transportation is very expensive; it's got more expensive under this Government because of the policies of Simeon Brown, and I'm hoping that the current Minister will see fit to ensure that more of the budget can be used for transportation fares.

It doesn't make sense to use revenue from a congestion charging scheme to build additional capacity on a motorway. That completely defeats the purpose, because, when you put the congestion charge in place, that reduces the demand for the roads, and it increases the demand for the other forms of transportation. That's why, everywhere where this works, they have very, very efficient, effective, and very well used public transportation systems. The Green Party is supporting the bill; we're happy with the overall direction, but we do think there are further improvements that can be made and look forward to debating those in the committee of the whole House stage. Kia ora.

DEPUTY SPEAKER: This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow.

Debate interrupted.

The House adjourned at 10.01 p.m.

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