The purpose of emissions testing is not primarily to remove "smoking" cars from the road. Existing laws cover that -- as I'm sure is also the case in New Zealand. The testing is so invisible polluters can be identified and forced to be repaired.

Remember that a 1972 Datsun 1200 in good condition with perfectly working emissions controls pollutes about 50 times more than a new vehicle.

The laws in the states I'm familiar with also have exemptions, primarily to help poor drivers: If more than so many dollars are spent on repairing the engine, and it still doesn't pass, the owner gets a waiver until the next year. For example, $250 dollars.