Submission to the Productivity Commission Low Emissions Economy

This is the submission that SIVANZ sent to the Productivity Commission Low Emissions Economy. Of the 267 submissions presented to the Commission, only one other directly presents a position on the special interest vehicle fraternity. This is important to anyone that is involved in Special Interest Vehicles.

Introduction

The Special Interest Vehicle Association of New Zealand (Ltd) (SIVANZ) is the only special interest vehicle organisation in NZ that represents individual owners of special interest vehicles (SIV’s). SIVANZ, through members, represents all categories of SIV’s as opposed to a specific heritage or collector class of vehicle.

SIVANZ is also in the development phase of a SIV industry platform.

Depending on sources and including heritage, vintage and collector categories of vehicles, the combined membership of all SIV national organisations is in excess of 75,000 individuals. The combined value of SIV’s owned by this membership is estimated to be between $4 – $6 billion dollars.

There is an accompanying SIV industry developed over decades that provides manufacturing, repair, parts and other services to restore and maintain these vehicles to a high standard of performance, reliability and safety as is applicable to the class, style, use and year of vehicle. The industry includes the manufacture of complete SIV’s (kit cars). The small, medium and large size of businesses is estimated to contribute $5+ billion dollars to the NZ economy and employ approximately 15,000-20,000 people.

Indirect business activities and beneficiaries of SIV owners’ activities includes magazine publishers, event organisers (including a significant number of charity organisatons) the accommodation sector and other beneficiaries of the domestic travel industry; restaurants etc. NZ has a small but growing SIV tourism opportunity.

 Discussion

The submission below is focused on the Transport aspect of the report and the probable impacts on 75,000 + SIV owners, SIV industry business owners and their 15,000- 20,000 employees. The Special Interest Vehicle (SIV) fleet is almost 100% fossil fuelled.

The Commission report mentions ‘old economy’ or ‘new economy’ or other terms such as ‘green/clean jobs’ or brown/dirty jobs’. The terminology is not useful if we are to genuinely consider and plan for the transition of our current social and economic platforms to a low emission economy. In our view terms like “old economy” or “dirty jobs” present an unintended phsycological weighting against the fossil fuel transport fraternity. They are not helpful terms.

By contrast we note the frequency and range of positive terminology when discussing the electric vehicle fleet from the report writers and a high number of submitters. There is no doubt that EV’s will play a significant role in reducing emissions in the coming years and SIVANZ fully supports the direction.

The discussion on Feebates (incentives to purchasers of EV’s over purchasers of other vehicle fuel types), continued government investment in charging stations and EV promotion is positive investment if we are to meet emission targets by 2030 and 2050.

We note from the report that the manufacture of an EV (specifically ion batteries) produces much higher levels of CO2 when compared to the manufacture of a fossil fuelled vehicle. To say that those pollutants are not an issue for NZ because they are produced overseas at best makes a mockery of the globe protection discussion and at worst gives the EV industry an unfair emissions advantage over every other vehicle type. When government investment in the EV arena is also considered, it becomes apparent that the playing field is not level. The Commission’s position statement rates an EV at an emissions level far ahead of anything else. This is not a true comparison and weights against existing transport related businesses and individual vehicle (fossil fuelled) owners.

What is alarming is that the report does not consider the social and economic impact of the 75,000 SIV owners or the SIV industry; $10 billion of value and economic contribution is being ignored. These businesses and SIV owners contribute to the social and economic success of a large number of New Zealanders.

The scope of the Commission’s report may have precluded specific transition strategies but there are a good number of discussions on the EV technologies and what is required to introduce more EV’s to the fleet. This includes recognition that the existing electricity infrastructure is not sufficient to cope with a massive increase in EV’s nationwide. There are no discussion points on how we are to transition SIV industries and employees to a low emission economy nor how government may invest in these industries (EG business owner or employee retraining) to ensure minimal social and economic disruption on a highly trained and technologically savvy industry and employee base.

Change as indicated in the report will be driven by government policy so the impact and phasing out of the SIV industries is likely to be at a faster rate than would otherwise be expected, say, through normal business attrition. Business owners have an obligation to plan and manage their business direction and sustainability. The issue facing the SIV industry is the lack of upfront and strategic discussion and clear government direction. This means that the SIV industry and owners expect to have a reduced change opportunity lead-time. This has the potential to leave a large group of economic contributors and society behind.

We agree that the issue for the aging fossil fuelled fleet has to be discussed and managed in order to achieve lower emissions targets. What we propose is that the wider SIV fleet be considered a separate category or differentiated in some way from the aged fossil fuelled fleet. SIV’s travel on average between 3000-8000 Km’s per year. Depending on vehicle insurance type, this distance is further reduced to 5000 Km’s per year. They are generally highly maintained and are operated at the highest level of manufacturers recommendations dependant on the prevailing technology at time of manufacture. These vehicles travel low Km’s per year.

SIVANZ agrees with the report that focus on decongesting roads will have a significant positive impact on emission reduction. Improved road design and routes would advance emission reductions. Vehicle emission testing may be part of a emission reduction regime but as a standalone tool it would need to be fair, consistent and results compared genuinely against the full emissions contribution of all other vehicle types, including EV’s. The same can be said of a reviewed and revamped ETS program. It appears that a future ETS plan would involve adding further cost (tax) onto motorists. The danger is that a good scheme introduced or manged in isolation of other emission reduction initiatives may fail to deliver on expected results.

The challenge for our political parties is to agree a strategy and timelines through to 2050 that present business and the motoring public a clear understanding of what the targets are accompanied by transition policies and initiatives that are robust enough to provide a high level of certainty. This is not to say everything is locked in stone until 2030 or 2050. The statement is aimed at ensuring good plans have an opportunity to deliver the gains over the time line as prescribed and be protected from political influence through election periods.

Also government and or political parties cannot be seen to be supportive of certain technologies over others. Investment into R&D for more efficient fossil fuel or bio-fuel technology and infrastructure is equally as important as EV technologies. We cannot expect to meet transport emissions targets in the time available via a single silver (EV) bullet. R&D into improved fossil and bio fuel technologies will enable a balanced strategy and engagement with highly skilled and competent industry groups.

Summary

• The special interest vehicle fleet and associated special interest vehicle related industries
• have an estimated value of $10 billion dollars
• There are an estimated 75,000 + special interest vehicle owners in NZ
• The SIV industry employs an estimated 15,000- 20,000 employees
• SIV business owners and employees are highly trained and technically savvy
• SIV’s travel low Km’s per year and are well maintained.
• SIVANZ proposes that the wider SIV fleet be categorised or differentiated in some way from
• the aged fossil fuelled fleet.
• Language in future reports needs to be balanced and not “weighted” for or against a
• competing topic or view.
• The true emissions levels attributed to EV’s are much higher than are being publicly
• represented
• The government is investing heavily in EV’s and EV technology. It recognises that larger
• investment levels will be required to deliver an electricity infrastructure capable of
• supporting increased EV numbers.
• The government is not investing to the same extent into R&D for fossil or bio fuel
• technologies as a parallel strategy to EV promotion to meet 2030 and 2050 emission targets
• Proposed Feebate, revamped ETS and emission testing initiatives must be fair, balanced and
• honest when comparisons are made between all transport types.
• There is no clear and defined strategy for transitioning fossil fuel-based transport businesses
• into the low emission economy.
• Decongestion of transport routes will reduce emission levels
• There is no discussion on retraining or re-alignment for SIV business owners or employees to assist them in the transition into a low emission economy.