Shirley Ken: Urgent Debates — Electricity Industry 
Shirley Ken: Urgent Debates — Electricity Industry 
[Volume:608;Page:5843] 
Hon KEN SHIRLEY (Deputy Leader—ACT NZ) 
: 
 There speaks the Prince of Darkness— 
King Lear 
 Shakespeare. That is what we have just heard from Minister Hodgson in this Labour Government. We know that Nero fiddled while Rome burned; Hodgson fiddles while New Zealand freezes. That is the recipe for this coming year and the next year and nothing in this Government’s announcement today does anything to address that basic fact. 
This Labour Government has been in office now for nearly 4 long cold years. I invite the Minister to read the briefing papers to the incoming Minister in 1999 that made all the predictions about what needed to be done. That Minister has done absolutely nothing in 4 years. We are in the middle of a crisis and what has the Government done? It has set up another bureaucratic committee—the Electricity Commission—with the power to levy over $200 million a year from New Zealanders. Who believes that that will address the basic problems? I invite this Government to read the briefing papers to the incoming Government that identified the problem but it has done nothing. 
The Government set up the Caygill committee 2 years ago. That committee finally reported last Friday but the Government had already gazumped it. The Caygill committee’s thinking was to have a voluntary regulatory framework and use the market but the Government did not want that. The Prime Minister’s announcement that she would go with the command-control regulatory framework really pulled the plug before that committee could report and we see that in this announcement today. By the Government’s own admission that does not address the problem. In the Government’s own press release at noon today it said it will be 3 years before it can build up the necessary portfolio of reserve generation. I am sorry but that is not good enough. The productive sector is stopping production closing down factories and laying people off. People have to go home to cold houses and cold showers because this Government has absolutely failed to address the predictable energy crisis. 
There are a number of problems in the energy sector. Perhaps the biggest problem is the dominance— 
David Benson-Pope 
: Give us the ACT policy! 
Hon KEN SHIRLEY 
: I raise a point of order Mr Speaker. Yet again the Government whip is chirping continuously. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I take the point. We should not have running commentaries. Brief and intelligent interjections are fine. 
Hon KEN SHIRLEY 
: If we look at the energy sector in New Zealand we can see that it is not a market-driven sector at all. That is the problem—we need more market and less Government. If we look at generation we see that 70 percent of it is controlled by Government-owned monopolies. What have those monopolies done under this Government? They have further entrenched their monopolies by buying up the consumer base—the energy companies—to match their production. There is no incentive for them to offer attractive contracts to those companies to take hedges against the volatile stock market. They have entrenched their regional monopolies. Is transmission a market? I do not think so—it is 100 percent owned by Government. The domestic consumer uses 40 or 50 percent of the total demand but there are no pricing signals because of our lack of application of new metering technologies. We still have 1930s technology in metering. It is simply not good enough. 
We then look at the broad macro-policies of this Government and the Kyoto Protocol it so enthusiastically rushed in to sign up to. New Zealand is the only country in the Southern Hemisphere that has ratified the Kyoto Protocol. The United States has not— 
Peter Brown 
: Chile? 
Hon KEN SHIRLEY 
: No Chile has not signed up to it. No Southern Hemisphere country has ratified the Kyoto Protocol—that is no annexe one country that has binding commitments. There are plenty of non - annexe one countries that have no obligation to do anything and they are only too happy to sign up. However no annexe one country with commitments and obligations has signed up to that protocol except dear old New Zealand. This Government tripped over itself in its rush to sign up. 
What does it mean? It means that one puts a big tax on coal then confiscates the carbon sequestration right to the forest and nationalises that—that is pinches it off the forest owners. Let me assure the House that the forestry sector of this country is outraged by that. I was at the Forest Research Institute last Friday where all the heads of New Zealand forestry were gathered. They said: “Investment will not take place in this country. Why would people invest in added value processing in New Zealand when they can go offshore? Firstly the Government will confiscate people’s property rights by taking their carbon for growing the trees; secondly it will whack people with a great big tax on processing their added value which would have created jobs here. We would rather invest somewhere else.” That is coming from the big international corporates of the New Zealand forestry sector. 
What does the Government do with that money? It taxes coal and subsidises windmills then says that windmills are far more price-effective than coal. When the Government taxes one and gives the subsidy to the other of course they are! Unfortunately the socialists do not see that. They do not understand the market and how that might work. 
Let us look at hydro. In a recent publication Kerry McDonald the former head of Comalco identified 20000 megawatts of untapped hydro potential development in this country. Of that 10000 megawatts is totally acceptable in an economic sense and stacks up in an environmental sense. We have not had any investment in hydro in this country for over 20 years. This Government is denying access to those who are struggling to try to set it up—like the Arnold River scheme on the West Coast which Mr Damien O’Connor knows all about. It is denying people access to that prime site by getting the Department of Conservation to say: “No you can’t flood that small valley of broom and gorse because that would be unacceptable to this ecologically minded country.” The Government cannot have it both ways. That Arnold River scheme is an excellent proposal. It increases generation from 15 megawatts to 65 megawatts and it makes the West Coast and Nelson self-sufficient. This Government is totally blocking that scheme and that is an outrage. 
We have prime coal reserves in this country but just try to get access to them! The Pike River coal development on the West Coast which is also in Mr Damien O’Connor’s electorate has been struggling to get access from the Department of Conservation for about 8 years. It has been stonewalled every which way it wants to go. What are we doing instead? This year we are to import 600000 tons of coal from Indonesia and Australia to try to get sufficient fuel for the Huntly power station. 
All of those problems were totally predictable. This Government sat on its hands dragged its feet did nothing for 4 years then in a panic in the middle of a crisis has operated in a most inappropriate way. By the Government’s own admission that initiative will not have any effect for 3 years. My prediction is that it will make the problem worse because it does not address the basic problems. We need more competition between generators and retailers and we are not getting that under State monopolies. We need to ensure that our national grid is operating in an optimum way rather than in the interests of a dividend payment from a State-owned enterprise. We need to send clearer pricing signals to consumers amongst other reasons to encourage appropriate energy conservation. That is far better than running an advertisement on television about saving energy. Sending a pricing signal is a far more effective way of getting the message to consumers than engaging in public education although I accept that there is a role for public education. A pricing signal is far more effective; it always has been and always will be. 
King Canute tried to turn back the tide. By signing up to the Kyoto Protocol this Government is trying to change the climate. That is a bizarre and very foolish claim. Those macro-policies and the Government’s total failure to confront the pressing needs of our energy sector and the basic infrastructure of this country will do New Zealand huge damage.