Norman Russel: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Norman Russel: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 24 November 2009. Volume:659;Page:7883. Text is incorporated into the Bound Volume.] 
2.  
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister for Climate Change Issues 
: Does he agree with Dr Rhys Jones of Ngati Kahungunu a senior lecturer at Auckland University who stated yesterday that the proposed emissions trading scheme will “do nothing to incentivise reductions in emissions but will instead give powerful and vocal corporate emitters a licence to threaten the future for our tamariki and mokopuna.”; if not why not? 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 No I do not. The scheme will incentivise emissions reductions with a price on carbon from 1 July next year across the industrial transport and energy sectors. I also think it is quite misleading to refer to the allocations under the scheme as “a licence for vocal corporate emitters to pollute” when in fact 80 percent of the allocations are for farmers. A disproportionate amount of our farm land is owned by Maori and we should be concerned about the economic as well as the environmental future of our mokopuna. 
Dr Russel Norman 
: Is it not the case that his changes to the emissions trading scheme will result in a lower price for greenhouse emissions and is he of the view that a lower price for greenhouse emissions will result in more emissions or fewer? 
Hon Dr NICK SMITH 
: This scheme is a balance between price and how much progress we want to make on climate change. We have made a decision that a 10 percent increase in power price next year is too much. We have made a decision that a $400 million extra cost on business next year would result in a loss of jobs. We are saying that we will halve the cost in the transition. The contradiction I find from members opposite is that only on the weekend a Labour MP was saying that he was concerned about power price increases. If so he should vote for our bill. 
Dr Russel Norman 
: The question was quite specific. 
Mr SPEAKER 
: Is this a point of order? 
Dr Russel Norman 
: The point of order is that the Minister did not address the question which was about whether it would result in more emissions or fewer. It is a simple question. 
Mr SPEAKER 
: The thing is that with a question like that there might not be a simple yes or no answer. I think the Minister reasonably comprehensively attempted to answer the member’s question. If that is the crucial matter the member has a number of further supplementary questions with which to pursue it further. 
Metiria Turei 
: Does the Minister share the concerns of Dr Jones that the impact of this deeply flawed legislation will be felt most sharply by Maori communities and the concerns of OraTaiao: New Zealand Climate and Health that the proposed emissions trading scheme will threaten funding for critical health and social services that are relied on by Maori communities which are the most vulnerable? 
Hon Dr NICK SMITH 
: There is absolutely no doubt in my mind that the amendments we are making and the sensible emissions trading scheme we are putting in place recognise that for Maori as for other New Zealanders we need to carefully balance our economic and environmental policies. That is what this scheme does. The great difficulty is that if we want to go ahead and impose higher costs on New Zealanders we will add substantially to the incentive for industries to be exported taking jobs with them and doing absolutely nothing for the important challenge around climate change. 
Aaron Gilmore 
: What advice has the Minister received on the claim by some that “this deal will cost Kiwi families $110 billion in payments to big corporate polluters”? 
Hon Dr NICK SMITH 
: That statement is a gross distortion of officials’ advice in three respects. First these numbers are based on the existing emissions trading scheme’s generating surplus profits of $50 billion between 2018 and 2050. We campaigned on amending the emissions trading scheme to make it fiscally neutral. These changes mean a loss of revenue to Government rather than a cost to families. Second $60 billion is added to this figure by assuming the super-profits of about $2 billion each year are invested and earn compound interest. This assumption contradicts the previous Government’s policy that the revenues would be spent on other climate change initiatives. We cannot both earn interest and spend the money at the same time. The last point I make is that far from being big corporate polluters 80 percent of this figure is with regard to farmers— 
Mr SPEAKER 
: I apologise to the honourable member. I cannot hear the Minister’s answer. Members have asked a number of questions around this particular issue of the $110 billion figure. The Minister is giving the House some information on it. I think the House might be interested. I want to hear the rest of the Minister’s answer. 
Hon Dr NICK SMITH 
: The third distortion is claims of big corporate polluters in respect of the $50 billion. I say that 80 percent of this figure is derived from farmers. Members opposite are really saying that they would take $40 billion more from farmers—New Zealand’s most important export industry. 
Dr Kennedy Graham 
: Does the Minister share the concerns of respected economic commentator Brian Fallow that his proposed emissions trading scheme “pretty much guarantees that the peak in emissions will be higher and come later than would otherwise be the case.” under the existing legislation? 
Hon Dr NICK SMITH 
: That question comes to the core issue of balance. It is this Government’s view that the existing emissions trading scheme bears too big a cost relative to New Zealand’s fair share. National campaigned on a policy not of New Zealand being a world leader— 
Mr SPEAKER 
: I supported the Minister a moment ago when he was giving a clear answer to a question. The member just asked a very specific question about whether the Minister agreed with Mr Brian Fallow about when the peak in carbon emissions might arise given the legislation that the Minister is promoting. The Minister is ignoring the question and is explaining why he believes his legislation is good. I ask him to actually answer the question that he has been asked. 
Hon Dr NICK SMITH 
: It is true that there is a direct link between the costs that we impose and how much incentive there is to reduce emissions. 
Dr Russel Norman 
: Still not giving a clear answer. 
Hon Dr NICK SMITH 
: Let me finish. 
Dr Russel Norman 
: How about “Yes.”? 
Hon Dr NICK SMITH 
: No because the answer is not yes. I do not agree and I will tell members why. Over the first 10 years of the scheme to 2018 the costs that are being imposed under this scheme are actually about the same as those of the existing scheme. 
John Boscawen 
: Was the Minister of Maori Affairs correct when he told the Wellington chamber of commerce breakfast this morning that the Treaty clause was agreed on just 18 minutes before the deal was announced; if not how many minutes was it? 
Hon Dr NICK SMITH 
: I have always made it quite clear that there are ongoing discussions with the Maori Party. We have been working on alternative Treaty clauses for several weeks and I believe that the Treaty clause we have agreed on with the Maori Party provides an appropriate balance. 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I was sitting between the Minister and the member who asked the question. Because of the noise I could not hear the answer on whether 18 minutes was right. I ask your permission for the Minister to answer the question without the noise. 
Mr SPEAKER 
: The member has made a perfectly fair point of order; I could not hear the Minister’s answer either. I ask the Minister please to answer the question. 
Hon Dr NICK SMITH 
: The Maori Party put a proposition to us. We sought Crown Law advice. We finally came back to the Maori Party after receiving Crown Law advice to agree on the Treaty clause that is included in the Maori Party’s Supplementary Order Paper. 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I have now heard the answer and it is very clear that the Minister has not addressed the question. He said that there was a negotiation and they had an agreement but the specific question asked whether the Minister of Maori Affairs was correct when he said that the Treaty clause was agreed on 18 minutes before it was made public. 
Hon Dr NICK SMITH 
: Mr Speaker— 
Mr SPEAKER 
: Is the Minister speaking to the point of order? 
Hon Dr NICK SMITH 
: I am happy to clarify. 
Mr SPEAKER 
: I think a fair question has been asked and I accept that the Minister did not actually answer the question. It may be the Minister’s judgment that it is not in the public interest but it is up to the Minister to answer the question. 
Hon Dr NICK SMITH 
: I understand that the agreement was reached at about 1 o’clock. The Treaty clause was not released publicly until this morning. 
Jeanette Fitzsimons 
: Why did he misinform New Zealanders on  
Checkpoint 
 yesterday claiming that the Warm Up New Zealand: Heat Smart home insulation scheme is not reaching enough low-income families when the latest statistics released last week by Minister Brownlee indicate that some 75 percent of the money spent so far has gone to community services cardholders which means that the extra $24 million in this package will make no difference at all to the rate at which low-income homes can be insulated? [ 
Interruption 
] 
Mr SPEAKER 
: Before I call the Minister I say that I accept that all these questions are in the general area of the emissions trading scheme but this question is an awfully long stretch from the primary question. However in the interests of advancing question time I am happy for the Minister to answer it. 
Hon Dr NICK SMITH 
: This will be the very first time in the House that I have heard the Green Party argue that spending an extra $24 million— 
Metiria Turei 
: It’s the same money! 
Hon Dr NICK SMITH 
: No it is not. I assure the Green Party that this is an additional appropriation over and above the $323 million which will see an additional 8000 low-income households insulated. I am surprised the Green Party would be against that. 
John Boscawen 
: Can he confirm as correct the Minister of Maori Affairs’ statement to the Wellington Regional Chamber of Commerce that the Treaty clause was important to the Maori Party because most of the detail for the deal with Maori is to be implemented through regulation rather than the bill and therefore is still up in the air and not subject to any parliamentary or public scrutiny? 
Hon Dr NICK SMITH 
: The agreement—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise to the Minister but I want to hear the answer. I ask for interjections to be reasonable. 
Hon Dr NICK SMITH 
: National agreed to a Treaty clause being included in the legislation at the time of the first reading of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. The legislation has processes for regulations for all New Zealanders that require consultation. It is true that some of the most important decisions on the emissions trading scheme are in those regulations. This Government has committed to consulting Maori on those regulations; that is right and proper. 
Dr Russel Norman 
: Will the proposed changes to the emissions trading scheme result in New Zealand’s greenhouse emissions increasing or decreasing between now and 2050? 
Hon Dr NICK SMITH 
: This Government has a target of reducing our net emissions to 50 percent of our 1990 levels by 2050. This emissions trading scheme will contribute to that important objective. I note though that reducing emissions is incredibly challenging given that in the 9 years of the previous Government which was supported by the Green Party emissions went up every single year. 
Dr Russel Norman 
: I raise a point of order Mr Speaker. You asked me to ask a very direct question. I asked as direct a question as one could possibly imagine but the Minister has not answered it. He talked about the target which is fine but I asked whether the changes to the emissions trading scheme would increase or decrease emissions. 
Mr SPEAKER 
: I hear the honourable member. His question was commendably to the point. He asked whether the changes to the emissions trading scheme would likely result in an increase or decrease of emissions to 2050. That was the question and the Minister did not actually answer it. 
Hon Dr NICK SMITH 
: The emissions trading scheme will see New Zealand’s emissions reduce over time. The advice that I have received applies only as far as 2020. My advice is that by 2020 the emissions trading scheme will result in New Zealand’s net emissions being 10 million tonne less than they would be without the emissions trading scheme. 
Dr Russel Norman 
: I raise a point of order Mr Speaker. My question was very specific. It asked about the proposed changes to the emissions trading scheme. The Minister is trying to avoid the question by talking about just the emissions trading scheme. That was not the question. 
Mr SPEAKER 
: I hear the honourable member. He is absolutely correct. The question asked about whether the proposed changes to the emissions trading scheme that is currently in law will result in an increase or a decrease in estimated emissions through to 2050. That was the question asked and I think the member asking the question has a reasonable right to have an answer. 
Hon Dr NICK SMITH 
: For the period that can reasonably be projected the amended emissions trading scheme will make as much progress in reducing emissions as the existing scheme. 
Charles Chauvel 
: Has the Minister seen the opinion piece in the  
Sunday Star-Times  
from Rod Oram entitled “A costly exercise in hypocrisy”; if so is the endangered species referred to in the caption the panda or him? 
Hon Dr NICK SMITH 
: I simply note that this Parliament has been arguing for 15 years trying to get a pricing tool to make New Zealand’s climate change policy credible. I have worked hard to introduce a carbon price next year. I will be the first climate change Minister to achieve that and it will be a substantive step forward. 
Hon David Parker 
: I raise a point of order Mr Speaker. The Speaker will have heard reference in question No. 2 to a Treaty clause in the emissions trading scheme legislation which we will move on to immediately after question time. I have looked again at all of the Supplementary Order Papers from both sides of the House and I cannot see that amendment. I was wondering whether I could be informed as to whether one has been tabled. 
Mr SPEAKER 
: That is not a valid point of order for question time. I am sure the matter will be dealt with in due course.