Biofuel Bill — In Committee 
Text is incorporated into the Bound Volume 
Biofuel Bill — In Committee 
[Sitting date: 02 September 2008. Volume:649;Page:18272. Text is incorporated into the Bound Volume.] 
Biofuel Bill 
In Committee 
Part 1Amendments to Energy (Fuels Levies and References) Act 1989  
The CHAIRPERSON (H V Ross Robertson) 
: Part 1 includes clauses 3 to 17. The debate on Part 1 includes debate on schedules 1 and 1A. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 The great disappointment with this Biofuel Bill is that this Clark-Peters Government is ignoring all of the international evidence in respect of concern about biofuels. We are asked to believe that the OECD is wrong that the United Nations is wrong that the World Health Organization is wrong that the British House of Commons is wrong that New Zealand’s own Parliamentary Commissioner for the Environment is wrong and that the only one who has it right is David Parker. Well the Government is mistaken. Rushing through under urgency this flawed bill which will impose significant extra costs on New Zealand consumers at a time when they can least afford it and for very little environmental gain is flawed bad public policy. 
The first key question I have for the Government is this: why impose a compulsion a nanny State “you must do” before putting in place a sustainability standard? Why on earth compel every person who buys liquid fuels to include in his or her purchase a component of biofuel when the Government has not sorted out its biofuels sustainability standard? I think I know exactly why. It is because after 9 years of this Government our greenhouse gas emissions have gone up in every single one of those years. New Zealand has one of the worst records in the world in terms of increased greenhouse gas emissions and in a desperate last-minute bid a few weeks before the election the Government wants to try to get some climate change policy on the record in a hurry. 
Hon Pete Hodgson 
: Oh Nick. 
Hon Dr NICK SMITH 
: That is it I say to Pete Hodgson. That is it. 
Hon Member 
: Where’s the rest of it? 
Hon Dr NICK SMITH 
: Well the thing on which I would challenge Mr Pete Hodgson—the guy who went around New Zealand saying we should ratify the Kyoto Protocol because we would make a billion dollars—[ 
Interruption 
] I say to Mr Hodgson that I have spoken to the officials and he misled Parliament; he knew that New Zealand did not have a surplus and he fibbed and he told porkies— 
Hon Pete Hodgson 
: I raise a point of order Mr Chairperson. Dr Nick Smith has just advised Parliament that he knows that I misled Parliament. 
Hon Dr NICK SMITH 
: That is right. 
Hon Pete Hodgson 
: And he has just said that is right. Not only is that remark out of order but it is flat wrong and I invite him to withdraw and apologise for it. It is entirely out of order. 
The CHAIRPERSON (Hon Clem Simich) 
: The member has requested that the member withdraw and apologise and I would ask him to do that please. 
Hon Dr NICK SMITH 
: I withdraw and apologise. It is a matter of record that for 12 months before Minister Pete Hodgson came clean about the mess this Government had made around Kyoto policy Ministry for the Environment officials advised him that the numbers that he was telling the public were untrue—were false. I would be happy to table the emails and the facts to back up my assertion about that scandal involving Pete Hodgson. 
Coming back to the Biofuel Bill— 
Hon Pete Hodgson 
: Go right ahead. You’re just making it up. 
Hon Dr NICK SMITH 
: Well did the member claim that New Zealand stood to make a billion dollars from Kyoto? 
Hon Members 
: Yes. 
Hon Dr NICK SMITH 
: Yes he did. He got it awfully wrong and officials advised him at least 12 months before he came clean that he was continuing to express a view that we had a surplus when we did not. That is the sort of snaky behaviour I say to Pete Hodgson that we have come to expect from this Government. Whether it is Owen Glenn and his donations to this Government or whether it is Kyoto the dishonesty that this Clark-Peters Government now displays is a tragedy for New Zealand and is one of the reasons there will be a change of Government in a few weeks’ time. 
The Government says we should not worry about the big global debate around sustainability because the Government has put some principles in Part 1. But what is the use of principles if they do not result in regulation? The real flaw in this bill is this: why should we compel people to use biofuels before the sustainability standard comes into place? Can any member of the Government or any of the parties that are supporting this bill answer that very basic question? Why compel the use of biofuels before one has a sustainability standard? 
Moana Mackey 
: Because they told us in their submissions that they wanted to know what would be in those sustainability standards so that they could plan ahead. 
Hon Dr NICK SMITH 
: The Minister in the chair the Hon David Parker is silent but we have the chair of the Local Government and Environment Committee commenting. The officials have said that it will take till 2011 to get a sustainability standard. That is what they advised us in their papers to the committee. So I ask the chairperson of the committee and the Minister why on earth they would want to compel people to use biofuels before then. This is nanny State saying we must do something without it being really sure that there will be an environmental benefit. 
What is really ridiculous about this provision is that there will be a substantive cost—the select committee heard it is about $130 million—in that the fuel companies will have to put in place the infrastructure to be able to deal with the different types of biofuels. Whether it is bio-diesel which has particular technical issues around it being cold so there is a need to avoid blockages or whether it is ethanol in terms of it being water absorbent an investment of about $130 million in infrastructure will be required. But before one invested in that infrastructure would not one want to know which biofuels are OK and which ones are not? The madness the absolute madness is that the Government is going to require the introduction of biofuels before the standard is in place. That is unforgivable; it is mad public policy. 
A further issue is this. Why is the Government providing a huge skewing of the scrum towards ethanol over bio-diesel? The Government says that yes it acknowledges there is a problem. There is no logic to it providing a 42c a litre advantage to the importing of ethanol from Brazil compared with bio-diesel made in New Zealand out of tallow—no good reason at all. The Government accepts that but it says it will put off sorting out that issue until 2012. What nonsense! Why would one introduce a compulsory biofuels requirement today when one acknowledges that the tax rules significantly advantage ethanol over bio-diesel for no good environmental reason and then say: “Oh we can’t sort that out now; we’ll put it off until 2012.”? I tell the Minister that that is not good enough. He should sort out the tax issues and the sustainability issues now before introducing the compulsory requirement. 
I will be asking the Committee to support a very simple straightforward amendment to put the sustainability standard before the compulsory requirement. I want any member of the Committee to please advise why Parliament would not want to do that. Why would we not want to put the standard before the compulsion? The silence is deafening; the silence is absolutely deafening. I tell members that there is only one reason for not doing that and it is political—straight politics. It is because this Clark-Peters Government continually puts its own political interests ahead of what is right for New Zealand. It is desperate to pass any sort of climate change legislation even flawed legislation before the election rather than do what is right for New Zealand. I invite the Committee to support that amendment to ensure that we sort out the sustainability standard and the tax issues before we introduce compulsion. 
The last point I would make is this. Every party in this Parliament agrees that a carbon price and an emissions trading system is the sensible way to respond across the economy to climate change. The problem with the Minister is that in terms of getting an emissions trading scheme he immediately says we need some extra regulation. If biofuels cannot stack up economically why are we going to compel their use? That is the million-dollar question. In respect of the illogical ban that this Government wants to put on thermal generation and in respect of the Biofuels Bill the Government is being a busybody. It cannot help reverting to a nanny State attitude. It wants to tell people how to live their lives rather than just give a price signal. 
Where members on this side of the Chamber differ significantly from the Government on environmental issues is this: we say that we should provide a price incentive and not have a nanny State. We should provide an incentive and provide the right sorts of price signals and let people get on and live their own lives rather than having the nanny State dictates that we get in Part 1 of this bill. This Clark-Peters Government believes that it knows best and National says otherwise. 
MOANA MACKEY (Labour) 
: 
 I just want to take a short call to respond to the previous speech. I sometimes wonder whether Dr Nick Smith and I were sitting in the same select committee when listening to the submissions because what he is relaying to the Committee is certainly not what we were told during those submissions. And if he had listened then the submitters would have answered a lot of questions for him. 
Hon Dr Nick Smith 
: What did the Parliamentary Commissioner for the Environment say? 
MOANA MACKEY 
: Well I tell Dr Smith that the Parliamentary Commissioner for the Environment submitted on the original bill not the bill as reported back to the House after the Local Government and Environment Committee had done its work. In fact all the international organisations that Dr Smith quoted were the reason why the select committee worked so many extra hours through all the adjournments and I acknowledge the hard work that Dr Smith himself put into coming along to the select committee and working on the bill. We did it because we listened to those international organisations and because we listened to the reports out there. We recognised as a committee that the bill needed to change from the original format that came to us which was the format that the Parliamentary Commissioner for the Environment spoke on when she came to our select committee and gave that report. Dr Smith knows that just as well as everyone else. 
I want to say of Dr Smith’s amendment which he brought up that it is a very handy way of never having to do anything. If we simply do not ever develop standards and if we do not have a time line in the bill as we have now where the Minister has to come back with the methodology then we never have to do anything—that is true. I tell Dr Smith that if we never come up with standards then his amendment says we never have to have a biofuel obligation—yes? 
Hon Dr Nick Smith 
: That’s right. 
MOANA MACKEY 
: Dr Smith says “That’s right.” Well we say that that is not good enough. 
We were told by submitters that they wanted to know the kind of biofuels that the select committee and this House believe should be exempt. That is why we put in those three sustainability standards that we developed in conjunction with the Greens—to make it clear. Oil companies do not go into 3-week contracts when they are looking at biofuels; they want to know up front what this Parliament might smack on them part-way through their obligation. And we have told them. So they know that some biofuels out there are absolutely never going to be allowed regardless of what the Minister comes back with after he has done the methodologies and the things the bill requires him to do. 
We have been up front about it. We know that that is what biofuel producers want because they need some certainty. We will never have a domestic biofuel industry in this country if we cannot provide some form of certainty like a biofuel obligation so that producers know they will have some kind of industry to provide to here. That is why we are doing it. I do not know how many times Dr Smith needs to be told but if he had listened at the select committee then I would not have to be telling him again and again. 
JOHN CARTER (National—Northland) 
: 
 I have been listening to this debate and it is just amazing listening to the reasons why the smaller parties are supporting this legislation. This Government is foisting a Mad Hatter’s experiment on this country and if we listen to the debates by first of all the Greens by New Zealand First and by Peter Dunne we hear them all saying: “Yep we know there are some problems. Yep we know some issues need to be debated. But nevertheless let us be first let us give it a go and let us lead the world on this whole issue.”  
One of the things that absolutely astonished me was what Peter Brown said. He went through three reasons three things that he was concerned about and that really worried New Zealand First with the last reason being an issue about food security and the impact it might have on other countries. But he said in the end that those members can accept it because it will happen anyway so it does not matter. That is exactly what he said and the  
Hansard 
 will prove it. He said it does not matter because it will happen like that anyway so let us not worry about it. Well we need to be worried about those very things.  
Peter Dunne said exactly the same thing. He said there are real worries about this whole bill and we should be concerned about it but if we do not get started we will never get going. Well it is all very well to say we should get on the bike but I say that if it is going downhill at a great rate of knots and one cannot control it then one does not want to get on it. That is what Peter Dunne is saying.  
I listened to Jeanette Fitzsimons. She said that although we know there are a whole lot of issues around the world that we need to be concerned about and that all sorts of reports are telling us this is a real problem we need not worry because we will put this sort of ring around New Zealand. She said we will make sure that it is New Zealand - generated and that the rest of the world does not matter because we will do our own little bit. Well if we are to try to contain ourselves then we will be going back to the good old days when we had all the borders shut people could not come and trade and we were not allowed to do things overseas. If we wanted to buy a pound of butter or margarine we had to go to the doctor to get a prescription! Are we going back to those days? Obviously that is what the Government wants and those parties are supporting the Clark-Peters Government in making the sorts of policies that take us backwards at a great rate of knots. I have to say that is just crazy.  
Mr Chairman you are indicating that I should come back to the bill but I am pointing out that this is a crazy silly bill. All of Part 1 is just dopey and New Zealand will end up being worse off.  
The Minister of Finance has come down to the Chamber to listen to my speech and I can understand why he would do that. He is worried about the financial impact this bill will have on the country. He should be concerned. He knows that at this time when New Zealanders are struggling when New Zealanders have their backs to the wall and when lots of people are struggling to put food in the mouths of their children his Government wants to put more costs on to those families. This whole bill will add more on to their fuel costs and it will add more on to their living costs. He might laugh about it but that is the impact it will have.  
Not one person who came before the Local Government and Environment Committee said: “Please do this because it will be advantageous financially to New Zealanders.” Not one! Everyone said that yes there will be a cost. Even the Minister’s own officials said that and I ask the Minister of Finance to have a look at this paper. The officials said there is an issue around the cost. Surely to goodness should we not be listening to the officials and listening to the submitters?  
The only people who seem to think that it does not matter is the Labour Government and New Zealand First. The Greens do not seem to worry about these costs. Peter Dunne does not seem to be worried about them. Surely to goodness somewhere along the line we have to take into account what the public think about more costs being put on to them by this House. Is that not an issue we should be worried about? Maybe the Minister of Finance does not care. Maybe it does not matter.  
Moana Mackey 
: What if it works out cheaper? 
JOHN CARTER 
: Cheaper than what?  
Hon Dr Nick Smith 
: Why make it compulsory? 
JOHN CARTER 
: That is a good question. If it could be cheaper as the chairperson of the select committee says then surely to goodness it will just happen will it not?  
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
: 
 Given that Mr John Carter for the first time in about 5 years deigned to speak in the Chamber in some detail about a bill although it was not clear that he knew which bill he was talking about—I can help him in that case; it is the Biofuel Bill—let me just respond to a couple of points he makes. The first point very clearly following upon the rational guidance from Dr Nick Smith is that Mr Carter has joined the brigade of those who believe that one can save the planet at no cost and that it is possible to actually deal with global warming with nobody changing his or her behaviour with no relative cost changes at all and with nobody doing anything differently; all anybody needs to do is—what? It was not clear.  
We heard from Dr Nick Smith that every party supports the emissions trading scheme. That is not true actually. The ACT party does not. The ACT party now supports having a carbon charge but of course when the Government proposed a carbon charge the ACT party opposed a carbon charge. The Business Roundtable is being followed faithfully by the ACT party in that respect. But ACT supports the emissions trading scheme as long as there is no cost to anybody and nothing has to change.  
So what is the cost in this bill? Well the best estimate we have been told is 0.2c to 0.4c per litre. Petrol prices go up and down 3c or 4c a litre a day at the present time. They went down US$10 a barrel overnight. Dr Norman was almost in tears this morning thinking about the price of oil coming down. That is not supposed to happen. It went down by US$10 a barrel! That is equivalent to something like 6c a litre at the pump in New Zealand. So this bill will make a tiny difference on costs but unless there is a requirement to start moving we will never build the infrastructure for alternative fuels because that is where the cost occurs.  
The larger the usage of alternative fuels then the lower the cost per litre to use those alternative fuels because the infrastructure is being better used in that respect. And yes there are some problems with some alternative fuels but this bill lays out the method by which we address those matters to ensure— 
Hon Dr Nick Smith 
: After it’s compulsory. 
Hon Dr MICHAEL CULLEN 
: Oh after a period of months or so we will lay out those rules! So what Dr Smith says is that for the sake of 9 months we should do nothing. I wish his parents had said the same thing at a certain key moment in the past. We would all have been saved this kind of irrationality on matters of this sort.  
I say: “Get with the programme National!”. There is a real need to address the issues before us. When National members promote themselves as young and vigorous and a brighter future but on everything they are timid unable to move and afraid of change then this is not the brighter future that National is pointing to. 
Hon TAU HENARE (National) 
: 
 Let me just respond to the comments of the Minister of Finance. The issue about costs is that they will be an impost on those who are involved in the transportation industry. So it will be a cost on them; and if it is a cost on them then surely to goodness it will be a cost on the mums and dads out there. Even the transportation of a budget loaf of bread will result in an impost a cost to the mums and dads. So that is where the issue of costs arises I say to the Minister who has gone now.  
The CHAIRPERSON (Hon Clem Simich) 
: Order! 
Hon TAU HENARE 
: The whole thing about coming up with a standard is that if we develop a standard everybody in New Zealand knows the standard and that is what they have to do to make their business work. But there is nothing of the sort in the bill. There is no standard whatsoever.  
Moana Mackey 
: Read the bill. 
Hon TAU HENARE 
: So there is a standard? So the standards have been sorted out in somebody’s feeble mind—for the future. John Harrison of Harrison Motors the transport company up in the mid-north has to think: “That’s right. The standards are there in the feeble mind of the Government but it’s not going to tell us.” So how can they run a business; how can people possibly operate on an idea of standards? What are the standards? 
Moana Mackey 
: Read the bill. 
Hon TAU HENARE 
: So there are standards? The standards have been sorted out? That is what list member No. 43 is saying—no sorry that is not the member’s number. That is Louisa Wall’s number.  
Allan Peachey 
: What’s the number then 48? 
Hon TAU HENARE 
: Well if she is not No. 48 she should not be there anyway. I want to set out that the bill creates an obligation for fuel companies to blend diesel and petrol with 0.5 percent biofuel on 1 October with the requirement increasing by 0.5 percent each year to 2.5 percent in 2012. We couple that with the bill’s stated intention that requires a person subject to the biofuel sales obligation to file an annual return. What have we heard over the last 2 or 3 years from businesses? We have heard that the impact of red tape is huge on that 90 percent making up small to medium sized enterprises in this country. It is a huge impost and has a huge impact on their day-to-day business. Because they have just been told that the fuel companies will have to file a return every year—it is another piece of paper they have to fill out—then that is an impost. It has an impact not only on the transport companies and on the fuel companies but also on mums and dads. At the end of the day when they toddle off to Woolworths to Countdown or to Foodtown that is where they get it. Who pays for it? The mums and dads do. So on the one hand we get a tax cut from the great Labour Government but it gets taken away with all these other little add-ons. In the end they do not see anything. 
Hon Pete Hodgson 
: Have a talk to Maurice. He will tell you about it. 
Hon TAU HENARE 
: Leave it until tomorrow? Well we could leave it until tomorrow. We might leave it until tomorrow. If the Minister wants to leave it until tomorrow if that is his philosophy then it is no wonder he is no longer the Minister of Health.  
Let me say this. It would have been all right for the House to accept no standards if the Government had been here for only 6 months. We could have forgiven the fact that there was only a small amount of time in which to figure out what the standards were to be and to put them in place after the compulsion bit. But let us not forget the Government has been in office for 9 years. 
Eric Roy 
: How long? 
Hon TAU HENARE 
: For 9 long years. What has the Government been doing for the last 8 years? Has there been anything on standards? No. Has there been anything on listening to other nations and organisations from around the world? No. The Government has gone ahead and thought it knew everything; and all it has done and all it will do on the passage of this bill is put an impost on mums and dads. That is where it will happen. Mums and dads will pay for the Government’s weird ideas about saving the planet because that is all it is. It is the weird ideas from the Labour Government and the nanny State supported by the Greens over there. For goodness’ sake! Talk about putting the cart before the horse! My goodness me! The next thing we will know is that we will be riding around in a horse and cart. Mind you there is nothing wrong with that I suppose if we are on holiday down in the South Island somewhere. But if we have to get to work from west Auckland out to South Auckland and there is no highway because the Government could not afford to look forward on the transportation—[ 
Interruption 
] Absolutely Mr Chairman.  
I want to finish by coining the phrase that Moana Mackey used in this House not so long ago—get with the programme. Absolutely! We have to say “Get with the programme.” What is that programme? The programme is to get rid of this Government.  
I feel sorry for my colleagues on the other side of the Chamber. Half of them will not be back here after the election and they might need some biofuels. Where they are going they will need our help. In all seriousness this is nothing more than a cost on mum and dad. Mums and dads in these times cannot afford another tax another impost on their meagre wages. 
Hon DAVID PARKER (Minister of Energy) 
: 
 One particular part of Mr Henare’s contribution does need to be repeated. It is his complaint that the compliance cost of an annual return on biofuel blends is a compliance cost on small business. There are approximately five oil companies in New Zealand. Those companies have a combined turnover that is measured in billions of dollars—[ 
Interruption 
] An annual return for companies that have a turnover of many hundreds of millions of dollars is not an onerous compliance cost. If that is the sort of hurdle that can never be overcome by a National Government as we move towards sustainability measures it is no wonder National members never do anything to advance sustainability issues. 
The reality is that oil companies will not introduce biofuels without there being a mandatory obligation for them to do so except for the occasional exception like Gull Petroleum. Probably even that company is introducing them only because it knew that a biofuels obligation was coming. When they do introduce biofuels because of this obligation they will be helping New Zealand to take a small step towards sustainability—not a large step. But that small step towards sustainability has to be taken before the subsequent larger steps can be taken. 
We have to update our infrastructure. In terms of the cost of that the advice from the officials to the select committee—on which the National Party was represented and its members did not accuse the officials of misrepresenting the facts—was clear that the infrastructural cost will be between 0.2c and 0.4c per litre of fuel if that cost is recovered over 4 years. It will probably be recovered over a longer period because as sure as anything it will last more than 4 years. The cost is minimal. In terms of the fuel itself it is not yet clear what the impact on price will be. Some of the tallow producers say that at current oil prices—at prices under US$100 a barrel—bio-diesel from tallow could be cost competitive with or indeed slightly cheaper than petrol. 
There is nothing wrong with this bill. The sustainability standards are world leading. That is not good enough for the National Party but of course it is not willing to lead on anything. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I am here to speak briefly on the bill. I am one of the few people in the House who has been very actively campaigning against palm oil - based biofuels over a long time. Of course palm oil is one of the really problematic biofuels. It has resulted in massive deforestation in South-east Asia; 20 percent of all greenhouse gas emissions are now as a result of tropical forest deforestation which is being driven in part by the palm oil industry. 
It should also be noted that New Zealand has a connection to the palm oil industry. One of the by-products of the palm oil industry palm kernel is now imported into New Zealand in vast quantities. Last year alone 400000 tonnes of palm kernel were imported into New Zealand largely to feed dairy cattle. One of the secondary drivers of the destruction of rainforest is the palm kernel industry and the palm oil companies are on the public record as saying that palm kernel is now one of the significant factors in their profit stream. Biofuels are a major issue and they are linked to the palm oil industry. 
The Greens would not be supporting this bill had we not negotiated clauses around sustainability. Listening to the National Party members talking about sustainability reminds me of the saying that “A little bit of knowledge is a dangerous thing.” Clearly if we are going to make some progress on these issues we need to encourage particularly the domestic production of biofuels. I do not know how many members have been to look at some of the projects happening around Taupo and elsewhere around biofuels and woody biomass. Woody biomass offers a real opportunity in a country like ours to develop second-generation biofuels. I would have thought we would be supporting it because it seems to me that it is real progress. 
It is also worth saying in terms of the amendment that has been put by Nick Smith that the member has not discussed it with the member in charge of the bill from the Green Party’s side Jeanette Fitzsimons. If National were serious about that amendment I am sure it would have discussed it with us earlier. We will not be supporting the amendment because it has not been discussed with us. If it had been we obviously would have considered it and looked at it. 
I shall respond to the discussion around regulation and leaving it up to the price to determine. It is certainly true that in the transition we need to make towards sustainability price and price signals are an essential part. But by themselves they will not be sufficient. We also need to use regulatory mechanisms and regulatory mechanisms need to work alongside price mechanisms. It is also true that we need to reach out to the community and win people over to the idea of our moving towards sustainability. We have if you like three levers that we can use in this transition: one is price signals one is regulation and one is what we might call consciousness raising or winning the community over to our ideas. Green members believe that we need to use all three levers. 
Finally in response to the increase in price that is involved—the very small increase—I say that the long-term trend of oil prices in spite of what the Minister of Finance was saying earlier is up. Anyone who has read the International Energy Agency’s reports on this matter will be aware that even that agency is now saying that the long-term trend of oil prices is up and that we need to look at alternatives. Biofuels may be a small part of that but they are certainly not a part that we should rule out. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I stand and agree entirely with my colleagues from the National Party and with what they have been saying about the Biofuel Bill. This bill as introduced requires petrol and diesel suppliers to also supply biofuels with an initial level of 0.53 percent in 2008 increasing—as we have heard—to an upper level of 2.5 percent by 2012. Here we have more dopey legislation being introduced in this urgency motion. Why after 9 long years of a Labour Government is this bill suddenly being rushed through in the death throes of this Government? The reason is that it wants to leave its mark on the world and show that it cares. Well if it really cared it would look not just at the costs which it is having difficulty quantifying anyway—or describing accurately—but also at the hidden costs this bill will bring to not just New Zealand but elsewhere.  
The environmental benefits of biofuels are arguable at best. Before we embark here in New Zealand on a campaign of changing our fuel source let us look at what is happening abroad. I contend that other countries are now exhibiting very serious lessons that we should be paying some attention to. In the United States the leading source of biofuels is corn or maize. Nobel Prize - winning atmospheric chemist Paul Crutzen a man not known for his climate change scepticism found in 2007 that biofuels made from corn and rapeseed—something that Jeanette Fitzsimons stood in this House and propounded the benefits of—contribute more to global warming than fossil fuels. Biofuels made from corn and rapeseed contribute more to global warming than fossil fuels; there is a lesson there.  
While we are on the topic of emissions we should note that biofuels emit a significantly higher level of nitrous oxide into the air. Before Mr Anderton gets too excited I should point out that nitrous oxides are the principal cause of smog—something that people in Christchurch are well aware of or at least they should be. So I ask the Labour members of this House from Christchurch to explain to their constituents why they are supporting this bill.  
While we are talking about overseas examples I ask: what about Brazil? It is the second largest producer of biofuels in the world. How has it achieved this honour? Through having a large-scale slash and burn of the country’s native rainforest. As if the rainforest was not diminishing at a rapid enough rate as it is Brazil has now embarked on an unprecedented campaign of cutting down rainforest to plant sugar cane for biofuel production. That is something I thought the Greens and possibly some of the more conservation-minded members of the Labour Party might have thought was important.  
The loss of Brazil’s rainforest though is potentially not the worst impact of biofuels. The worst impacts may well be seen in Africa. In May 2008 Olivier de Schutter the United Nations food adviser stated: “The ambitious goals for biofuel production set by the United States and the European Union are irresponsible … I am calling for a freeze on all investment in this sector.” Why did he call for that? The reasons are twofold. Firstly food that was once used for its intended purpose is now being turned into biofuels. The very poor in the world are now starving because they can no longer afford what was very cheap food that made them sustainable—it actually kept them alive. Again the Greens and Labour once upon a time actually believed in helping out the poor of the world.  
Secondly land once used for intensive food production is now being converted to biofuel production. The cause is the latest fascination of the West and the victims are those in poverty—those in poverty in Asia and Africa. Sadly those who are in poverty in New Zealand will now have more costs imposed upon them. Pushing food prices up will hurt most those who are least able to afford it and all so that Helen Clark Michael Cullen and the Labour Cabinet can feel that they are doing something positive for the environment when they drive around in their new BMW ministerial fleet. Legislation that diverts food supply into fuel for those least able to afford it is dopey legislation and the ACT party will be opposing it. 
ERIC ROY (National—Invercargill) 
: 
 I want to make a contribution. I am fascinated intrigued and a little disturbed by the Biofuel Bill. I think for a start it is wrongly named but we are not having the title debate. I am inclined to think that it is the “Placebo Climate Change Bill’. 
The Minister of Energy said this measure would be a small step. Well it is not even a step; it is barely a shuffle. You see if we look at what New Zealand is attributed to be contributing to the world’s discharge of carbon gases we see that we contribute 0.2 percent nationwide. Fifty percent of that is from agriculture. I do not know what the figure for transport is by— 
Peter Brown 
: About half of that. 
ERIC ROY 
: Well no. I say to Mr Brown that it is less than half of that because there is coal consumption in a whole lot of furnaces coal is used in electricity generation and quite a bit is used in thermal energy. So transport contributes a long way less than one-half of 0.2 percent. 
Peter Brown 
: No no—half. 
ERIC ROY 
: Let us not get into that. It is minuscule. Yet we are here in the dead of night arguing about 0.5 percent of an element of fuel. It is not even a small step. It is so small that it is not even a perceptible shuffle. 
I am a bit alarmed because I actually believe that the consumption of fossil fuels is a serious issue. I do not believe that from here on in we can combust and release 6 billion tonnes of greenhouse gases into the atmosphere every year without it having an impact. My point is this: the energy and the effort that we are putting into this debate will have zero impact. If there is an issue out there our focus should be on doing some serious work on looking at alternatives in the whole transport arena—hydrogen-powered vehicles and that sort of thing. That is where the focus must be—to find an alternative. 
The Minister may well argue that this measure should be a focus. My argument would be that it is more of a placebo. It actually will not make one whit of difference. Well it will make a difference because the world has embraced biofuels and that has created some huge distortions in other areas. Dr Norman referred to this issue. When biofuels are picked up in the wrong way there is quite often destruction of ecosystems that actually make a contribution to reducing greenhouse gas emissions. For example in tropical areas palm oil and sugar cane are replacing rainforests. In a lot of places in the world particularly in Europe and the United States crops that have high fertiliser and water requirements are being grown to produce biofuels and they have a negative impact. 
What does that mean in terms of the world? Well let us look at the world supply of food on a consumption basis. For at least the last two decades the time frame between harvesting food and consumption has been between 100 and 120 days. If we grow and harvest lettuces they are not going to last 120 days but for baked beans ice cream frozen mutton or milk powder that is what the time frame has been—between 100 and 120 days. We are seeing food shortages in countries that have never had food shortages before. One of the drivers of those food shortages is the shift of arable land to biofuels. I am told—and I am gullible so I believe it—that the current time frame in terms of the food chain between harvest and consumption is around 50 days. At times it has been down to as low as 47 days. That is simply because we are misusing arable potential to create biofuels that will not make one whit of difference in terms of dealing with the issue of fossil fuel - generated carbon gases. 
I say that yes we have a responsibility but as for dealing with a bill such as this in urgency well that is why I call it the “Placebo Climate Change Bill”. There are a whole range of other issues. We talk about sustainability— 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I will start by responding to John Carter’s comments in regard to my earlier contribution. I outlined the concerns New Zealand First had with this kind of legislation at the time of the first reading and I outlined the solutions that had been put to us by various experts in the field of biofuels. We are quite happy with that. The growing of crops in Africa to sell to the global market is a concern but it is not a concern that New Zealand can address. If we can I would like to know how. If they are growing crops in Africa to produce ethanol to sell in America that is a concern but I am not sure how New Zealand can stop that. I would like to stop it but I do not know how we could. 
I do have a legitimate concern and I invite the Minister of Energy to respond to it. I understand that ethanol absorbs water. I see the Minister’s attention is taken elsewhere but I trust he is listening with his other ear. Ethanol absorbs water. The aviation industry and particularly the leisure boat and maritime industries use fuels that I think would be more effective if they did not contain ethanol because water can get in the fuel tanks of airplanes and it can certainly get into the fuel tank of the outboard motor of a leisure boat. It concerns me that if we are putting ethanol into these products and an airplane or a leisure boat fills its tanks with it there is a high risk that something will go astray—there will be water in the tank the ethanol will absorb it and the engine will stop. That is not too good an experience when one is a pilot in the sky and it is not particularly pleasant when one is in or outside the harbour in a small boat powered by an outboard motor. I invite the Minister to address my concern and tell us how this bill will prevent that problem from occurring. It is a genuine concern. I am an ex-mariner and my son is a pilot so I would like to know exactly how this bill will address that concern. 
Hon DAVID PARKER (Minister of Energy) 
: 
 Before I respond to Mr Brown’s query in respect of Eric Roy’s contribution I contrast that with the position he took in the first reading as recorded in  
Hansard 
 when he said he believed that biofuels are a part of our response to the whole issue of climate change—which seems a little inconsistent with the position Mr Roy has articulated now.  
In terms of Peter Brown’s question the member is correct that ethanol does mix with water so we can get water in ethanol in a way that we cannot with petrol because petrol would float on top of the water. There are issues that ethanol also cannot be used in some transport applications for reasons of safety—for example we do not want it in aircraft because of the propensity of water with ethanol to freeze. How is that avoided? These biofuel blends will not be taken down the lines that are used to deliver jet fuel and the like from the refinery to the major airports so there will not be cross-contamination there. How will it be handled at service stations for people who are filling up for example their outboard motor for a pleasure craft? It is likely that one pump will have a biofuel blend and one will not and there will be some labelling to ensure that people know which choice they are making.  
There are biofuels that are suitable for use in the fishing industry. Indeed I read an article recently about a vessel that has been specially built to run on bio-diesel. It was a fishing vessel that was launched recently in the Lyttelton region so there are some biofuel solutions there too. 
ALLAN PEACHEY (National—Tamaki) 
: 
 I appreciate the opportunity to make a contribution to the debate on Part 1 of the Biofuel Bill. The people of New Zealand heard it here first when the Minister who is the Deputy Prime Minister and Minister of Finance in the disintegrating Clark-Peters coalition came down to this Chamber and told us that this bill will cost New Zealanders money. I do not know why the Minister of Finance did not go the next step and admit that the way in which this bill is structured amounts to nothing more than stealing food from the mouths of the poor. That is what that crowd opposite and its coalition partners to my left are engaged in. 
I listened with a good degree of interest to the contribution made by the list member Moana Mackey. This Government with contributions such as that member’s is ignoring some of the best international evidence on this subject. Does anybody in this Chamber in this debate on Part 1 of the Biofuel Bill find compelling the suggestion that Moana Mackey list MP who is not capable of holding a seat herself has greater wisdom than the chief scientist of the United Kingdom? For that matter do the members of the Green Party have any greater wisdom than the secretaries general of the United Nations the Royal Society or the World Bank? And surely nobody in this House will suggest there is greater wisdom in the New Zealand First Party—in particular in the New Zealand First member who spoke a few moments ago—than for example the G8 conference of legislators the House of Commons Environmental Audit Committee report or the OECD Round Table on Sustainable Development. 
It will not be lost on the people of New Zealand as we debate Part 1 that that Government over there the disintegrating Clark-Peters coalition is putting forward legislation for this country and trying to rush it through under urgency in the dying days of this tired Parliament. I ask the Minister in the chair the Hon David Parker what the hurry is. I invite the Minister to explain what the hurry is. Does anybody in New Zealand seriously think that this bill is good for the country? I invite the Minister to get up be up front and explain to this House—and through this House to the citizens of New Zealand—why this is so urgent. What are the compelling political forces that are driving the Clark-Peters coalition to bring this legislation—Part 1 of the Biofuel Bill—before this House under urgency in its dying days? The Minister must answer that question. 
The Minister must also answer the question as to why there is a mandatory sales obligation. Why is a mandatory sales obligation coming into effect before the regulations to define sustainable biofuels? Why is that? Is this just another example of a nanny State a disintegrating Government and a Parliament in the last days of its life telling New Zealanders what is better for them? 
Hon PETE HODGSON (Minister for Economic Development) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 6; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 6; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Part 1 agreed to. 
Part 2Miscellaneous amendments  
COLIN KING (National—Kaikoura) 
: 
 It is indeed interesting to have been part of the audience during the first part of the biofuels debate. It is worthwhile to connect Part 1 and Part 2 together because this bill really comes from the basis that we are endeavouring here to set up a framework whereby we can grow an industry that will eventually give certainty for investors and that framework is part of a tax regime. We know that that in itself should not only give certainty but allay a lot of fears for those people who would be strong-spirited enough to consider setting up a biofuels industry in New Zealand.  
There is just one thing I want to draw the Chairman’s attention to. We had a speech from the chairperson of the Local Government and Environment Committee and it made very little sense around the urgency of why we have to implement this bill. My mind went back to a number of the other bills that have been pushed through under urgency and it worries me terribly to think about the regulations that will be worked out under this bill should it ever be passed into law.  
When we look back on the track record of this particular Government we see that we have had the Electoral Finance Act and the debate on the emissions trading system the other night in the Committee of the whole House. It really worries me that we have seen a lot of work done in this Chamber on bills such as this Biofuel Bill—we are on Part 2 here—that really when the work mutates into its application on the ground is quite untenable and unworkable and has to be brought back to Parliament for a number of rewrites.  
With regard to our science around biofuels I suppose that it could be quite clearly said that this bill has had a very quick gestation period. It went to the select committee in 2007—I think it was in October—and it has come back now. Yet that is probably an indication of how quickly this science is moving. The conversations and the science have clearly shown that the perverse effects of biofuels have become very clear. We know clearly now that Government incentives to stimulate biofuels within the economy—whether as a tax incentive or tax write-offs in whatever way is referred to in Part 2—have created such perverse effects as those we have seen in the mid-west of America: less food being produced to be available for sale on the world market and the subsequent rise and hike in fuel prices.  
I imagine too in listening to a comment before about what Dr Norman the Green member was saying that if we went far enough back in  
Hansard 
 we would find that the very gestation of this bill would have emanated from the Greens with a plea very similar to what the Minister said originally—that this was a panacea to many of our problems. However with the quick passing of time and the perverse effects of taxation incentives we find that we are confronted with harsh realities. This bill is headed in much the same way. It has unintended consequences bearing in mind the comments made by Dr Cullen when he came to the Chamber to rescue his chairperson Moana Mackey who was unable to rebut the scientific arguments. 
Sitting suspended from 6 p.m. to 7 p.m. 
COLIN KING 
: Mr Chair I seek your indulgence to raise one question to the Minister.  
The CHAIRPERSON (H V Ross Robertson) 
: You have 32 seconds—go.  
COLIN KING 
: I draw attention to a further mess in this policy—the incentive that gives ethanol an advantage over biofuels. I ask the Minister to explain to me the logic of why in schedule 2 “Amendments to Schedule 3 of Customs and Excise Act 1996” ethanol is given a 42.524c advantage over bio-diesel. I would welcome hearing the Minister explain why to the Committee. 
ALLAN PEACHEY (National—Tamaki) 
: 
 In the debate on Part 1 of the Biofuel Bill a number of questions were put to the Minister of Energy that he chose more or less to slip over and not answer. That is fine but one thing I wanted to know applies equally to Part 2—although when I look at Part 2 I see some of the answer. What political imperative of the disintegrating Clark-Peters coalition is driving this sort of legislation through the House in the dying days of this Parliament? That question is as valid in the debate on Part 2 as it was in the debate on Part 1. What is the political imperative? What is the urgency? What emergency is this country facing that means that Part 2 has to be driven through Parliament tonight under urgency? What is the imperative? 
Let us look at Part 2. We see definitions of gasoline petrol and goodness knows what else. Then there it is straight in front of us: tax. We see clause 27 “Powers of component authorities to levy petroleum tax” and reference within it to local authorities’ fuel tax. We see clauses headed: “Assessment of tax” “Tax recoverable as a debt” “Penalty for late payment of tax” and “Effect on agreements of imposition or alteration of tax”. We first heard the answer in this Chamber when the Deputy Prime Minister—the Minister of Finance in the disintegrating Clark-Peters coalition—said that this legislation would cost New Zealanders money. At the end of the day is that not what it is all about? It is all about the rush of a Government that has taxed New Zealanders for 9 years to take the opportunity to throw some more taxes at the hard-working people of New Zealand. 
The Deputy Prime Minister did not even have the good grace—nor has the Minister—at least to acknowledge that the impact of Part 2 if passed in its current form will be no more than to steal food from the poor of the world. 
Hon Members 
: Ah! 
ALLAN PEACHEY 
: The socialist members of the failing Clark-Peters Government can sneer and shout. [ 
Interruption 
] The Minister for whatever from Christchurch can bellow out but it makes no difference. Part 2 will have two impacts. One will be to gather revenue for the Government—tax tax tax. I would have thought that members opposite rather than sneer and bellow across the Chamber would at least be respectful of the impact that this sort of legislation will have on the poor of the world. Some respect at least needs to be shown. 
Let us think about how much Part 2 will cost New Zealand. Officials have told us that an additional $60 million a year will be imposed on New Zealanders through the 1c per litre levy on fuel. 
John Carter 
: That’s just 1c. What about when it goes up to 4c?  
ALLAN PEACHEY 
: That is right I say to Mr Carter. This Labour Government and its coalition partners need to be very very sure that these additional costs are justified and I ask the Minister to address that question.  
JOHN CARTER (National—Northland) 
: 
 One of the interesting things about this debate is finding out whether people genuinely believe in and support the Biofuel Bill or whether they oppose it. It is fair to say that the National Party has made it quite clear that it opposes the bill for a whole number of reasons which my colleagues have already communicated. It is probably fair to say that the Greens are genuine in their belief that the introduction of a bill of this nature may well have some benefit to New Zealand and from their perspective to the world. It is also fair to say that Peter Dunne probably thinks that Part 2 will have some positive impact from a New Zealand perspective and maybe even make a positive contribution to the world. Even New Zealand First members—although their arguments were pretty spurious I have to say—probably have genuinely reflected on the bill and think that it is worthy of support although I must say I was disturbed by Peter Brown’s explanation. But I cannot accept that the Government’s reason for supporting this bill is genuine. If the Government were genuine then we could have expected it to bring forward this bill 2 5 or a number of years ago. We might have thought that that was fair enough—that the Government had taken some time to study the topic. If the Government were 5 years or 3 years into its term of office maybe it would be reasonable to say that it was genuine in what it was doing. But when the Government is bringing forward this bill 9 years after it came to power just before the finish of this session and is asking Parliament to pass the bill under urgency we just cannot accept that it is genuine. We cannot believe that it is doing this for the right reasons. 
It is obvious that the Government is pushing this bill through for political reasons. The Prime Minister said to New Zealanders that she would pour some fuel into the tank—she did not quite know how to do that properly but it was a photo opportunity for her—and then the officials— 
Jill Pettis 
: What about Don Brash walking the plank or trying to get into that stock car? 
JOHN CARTER 
: The member over there who lost her seat and will soon go out of Parliament goes on about a lot of things. 
Allan Peachey 
: Is this her farewell speech? 
JOHN CARTER 
: Well that may well be so. [ 
Interruption 
] I am not denying that of course. Parliamentarians all take photo opportunities. But the member has just accepted and acknowledged that this bill is being passed for the photo opportunity for the Prime Minister and not for genuine reasons at all. She has just confirmed my argument. Sadly what this means is that when we look at Part 2 and talk about taxes it will just put more cost on to the people of this country and the reason is that it gives the Prime Minister and the Clark-Peters Government another photo opportunity. 
Jill Pettis 
: Doesn’t that word “Government” have a lovely ring to it? 
JOHN CARTER 
: I have to say to the member over there who keeps interjecting that that is not accepted— 
Allan Peachey 
: Her farewell speech. 
JOHN CARTER 
: That was her valedictory—the interjection. The fact is that whether or not we like it not even the Minister in the chair the Hon David Parker has come up tonight and put forward any lucid argument about which we could say that we might reflect on it and have to accept that the Minister has a valid argument. 
You know it is all very well for all the parties to say that we have to start somewhere. We accept that. No one is arguing that there should not be a debate and an argument around biofuels. What we are saying which is the opposite of what the Government and its supporters are saying and have not yet put forward lucid arguments for is that we should question whether this bill will achieve what should be achieved by introducing biofuels to New Zealand. That is the unfortunate thing about this debate—it has become hollow. All that has happened all night throughout this whole debate is that the National Party has been attacked for the fact that we do not support the bill. No Government members have argued that they do not accept the National Party’s arguments but that nevertheless they will consider this point this point and this point because those are the valid reasons for this bill. 
I have not yet heard the Minister the chairman of the Local Government and Environment Committee or anyone from New Zealand First put forward a lucid argument that we could sit here as the National Party in Opposition and say there may be a valid argument in it. The Minister could take a call and stand up and say: “Listen John Carter. You need to understand that you have missed the point. You need to understand that there are valid reasons why we are doing this. You need to understand that this will bring this benefit to New Zealand. It will have this benefit for households and car-owners in this country. It will mean this much from a New Zealand perspective on the world stage.” If the Minister had put forward those arguments then maybe we would have had to sit back and think about it. But I am afraid that the Minister has never put forward those arguments. He has never done that in the select committee. Indeed if you have looked Mr Chairman—and I am sure you have because you are a very erstwhile member of this Parliament—you would have read— 
Jill Pettis 
: “Erstwhile”? 
JOHN CARTER 
: He is. He is a very earnest member of our— 
Jill Pettis 
: But you said “erstwhile”. 
JOHN CARTER 
: Well he is both. I mean that is a double compliment. The point is that at least he is coming back to this Parliament. Anyway we should not bring the Chairman into the debate. 
Jill Pettis 
: But erstwhile means former. 
JOHN CARTER 
: Oh well then it is that member whom I am referring to. I am sorry; I got the direction wrong. I beg the member’s pardon. The point is this. If the members of Parliament had read this statement from the Ministry of Economic Development then they would see that it is against this legislation. Ministry officials make it quite clear. They are saying that this legislation will not work and that it will put costs on to this country. They know it will increase taxes and they know it will increase costs for motorists. The Parliamentary Commissioner for the Environment a person whom one would think would want to support this sort of legislation has said in her statement that she opposes this legislation for the way it is drafted. She does not oppose the concept; she supports the concept. So does the National Party. No one is arguing against the concept of biofuels; what we are arguing against is the way in which this Government is implementing their use. The timing of it is bad and on top of that the bill itself is flawed. It does not allow sufficient time for the whole issue around standards to be established before people have to compulsorily get on and implement it. That is seriously bad. 
The fact is that this Minister has failed this Parliament. Mind you he has done it before in many other things. He has not done anything with regard to energy. We have serious problems with regard to a whole number of issues in areas where he has been the Minister and this is just another example of where this Minister has been found to be deficient in his ability to contribute to this Parliament and to this country. 
Nick Smith put forward a very good amendment—which unfortunately was defeated I assume—and the point now is that we should be considering this bill and opposing it. I would like to think that the Minister would stand up take a call and explain to members why this Opposition should be supporting this bill because he has not done so yet. I say to the likes of Dail Jones who is here on behalf of New Zealand First and I say even to the member from the Greens that maybe they need to reconsider. They were opposed to this bill in its original form. 
Sue Bradford 
: You didn’t mention Jeanette Fitzsimons speaking before. 
JOHN CARTER 
: Yes I did; I mentioned Jeanette. She made a contribution. I made the very point earlier that when I listened to her contribution it was all about the fact that we were putting borders round New Zealand. We were not worried what was happening worldwide. Well I say that that is the problem. This Minister has now tried to shut us out from the rest of the world. He is saying that this legislation will all be New Zealand - focused it will be all about our country and it will be all about us. The sad fact is that this legislation will be to the detriment of New Zealand and it will certainly be to the detriment of the people in this country and all because this Minister has not done his homework. He has not set some standards that we can all apply. This legislation certainly has not allowed us a convincing argument. 
COLIN KING (National—Kaikoura) 
: 
 Speaking to Part 2 of the Biofuel Bill I say that it is quite appropriate that we direct attention to schedule 1 which contains the new schedule 5 “Biofuel percentage” to be added to the Energy (Fuels Levies and References) Act by clause 16 of this bill. I make the point that when we look at when this legislation would become law—should it pass—we see that it is 1 October 2008. There is an indication based on that date that there is an anomaly and that there will be a perverse effect. I would like the Minister in the chair the Hon David Parker to explain why it was acceptable to wait until 1 July 2009 before a standard would be put in place to fulfil the requirement put in at the very beginning of the bill that it was to be sustainable. That is why we on this side of the Chamber are saying that the bill in its present state is perverse in the sense that it is following the notion that biofuels are a panacea for all our global warming problems. However time has moved on so quickly that we now understand the full extent of the issue. Forests are being cut down and the equivalent percentage on which our biofuels are produced is far and away outweighed by the carbon footprint so there is quite a perverse effect. Yet we have set this standard that is coming in on 1 July 2009 and National members are saying effectively that doing that is no better than everybody else’s perverse effects which are driving Third World countries towards poverty and starvation.  
I just draw the Minister’s attention to the fact that a lot of the international commentary is saying that countries will not be able to arrive at a standard until 2011 so this Clark-Peters Government in its last dying days is to introduce that type of legislation into this House. I seek the indulgence of the chair of the Local Government and Environment Committee to allow me to mention what we were saying when we had a very brief discussion about this matter before the dinner break. We were talking about creating a biofuel industry in New Zealand and about using some of the growth within the dairy industry and using the whey to produce biofuels or maybe tallow and things like that. Of course in Marlborough some people have been working on sewage so from that point of view some very very creative thinking is going on. 
May I put it to members in the context of where biofuels have replaced a lot of the food basket would it not have been far better to in actual fact have thought beyond just the confines of biofuel and looked at ways of incentivising research because in my view that would have been a far more effective way than picking winners with ethanol over bio-diesel? I am still waiting for the answer to my questions that I raised earlier as to the logic of that 42.5c preference of ethanol over bio-diesel.  
So when we stop and look at it all here we have this bill in front of us and we do not have a sustainable standard. We are actually seeing the perverse effects of a bill for virtually the next 12 months whereby continued burning and cutting down of forests and Government incentivised tax-benefited biofuels will be produced and we know even from the Green member if my memory serves me right that 20 percent of the carbon emissions at the moment are coming from the perverse effects of cutting down forests planting crops and endeavouring to produce biofuels. I would like that question answered because schedule 1 talks about the percentages of biofuel. In the first year it will be 0.5 percent year 2 will be 1 percent year 3 will be 1.5 percent year 4 will be 2 percent and year 5 onwards will be 2.5 percent. To me it all looks rather strained—very much just a structure and a framework with very very little substance. This Government has a track record of this sort of thought to containing global climate change as part of a suite of actions taken by a Government that is in desperation. 
Hon Maurice Williamson 
: In the dying throes of the Government. 
COLIN KING 
: In the dying throes of the Government as my colleague here mentions. Part 2 talks very much about the taxation and when one thinks of the tax one thinks about a pretty structured regime with a well-fleshed up body to it. Unfortunately the debate being put forward on this side of the Chamber indicates that we are so light on substance. This bill is all about form and it is a tragedy to see that it is all form without substance when we look at the sustainability standards. Schedule 1A “Consequential amendments to other enactments” talks about the far-reaching effects and it may be interesting from that point of view. Could the Minister also take a call because I am finding these schedules incredibly complex and I think they need to be explained. It is fascinating to me that it has an implication on such Acts as the Building Act 2004 and the Injury Prevention Rehabilitation and Compensation Act 2001. It also affects international agreements: the International Energy Agreement Act 1976—that is going back to last century—international energy agreements land transport rules and the Local Government Acts. [ 
Interruption 
] It is all written down here in black and white. It will be so very very difficult for the members on the opposite side to make head or tail of that let alone from this side of the Chamber.  
I would like to take the opportunity to get some answers on those two questions—the one I asked first about why the advantage of 42.5c for ethanol and secondly why it is so urgent to put this Act in place that the Minister will not even wait until July 2009 when officials are saying there will be a standard put forward as referred to in Part 2. I ask the Minister why he has not deferred this bill until such a time as there is the possibility of a sustainable standard. Is it because they know that this Clark-Peters Government is in its last days? Is there another reason for it? In the form it is in today it is not a very positive bill. It is just one of those other bills that will be following in the footsteps of the Electoral Finance Act and the emissions trading scheme that we are still debating at the moment. Basically as I hear it this Government has stopped listening to the nation—the citizens of New Zealand.  
We have so many unintended consequences that emanate out of this bill. Sadly this bill appears to me to be born out of a notion that biofuels would be the panacea to all our problems going forward. In actual fact the substance of this bill when it materialises into regulations will not do one thing to stimulate the development of biofuels in a sustainable way or any other way. It will just be a very very complex morass of regulations—a spaghetti bowl of regulations—that will be just as purposeful as this Government in its last dying days.  
Thank you Mr Chair for allowing me to speak on this bill. It is rather complex. It is certainly a very new area. I would encourage the Government though to think outside the square because if we have a global issue in finding alternative fuels I would have thought that it would be very important to be able to identify those people who are doing like research and get alongside those so we multiply the effect of the dollar that we have here and in that multiplier effect find some true solutions going forward. At the moment with the bill the way it is it will not stimulate sustain or promote the production of biofuels.  
NATHAN GUY (National) 
: 
 I wish to make a contribution to the debate this evening on the Biofuel Bill. I tell those who are listening that we are sitting in urgency—13 hours of urgency today right through to midnight. This bill is obviously a priority for this Government. It is in its urgency motion. It obviously wants to get it through the House. When reading the bill—some 100 pages; no it is 97 pages; I knew that it was close to 100 pages—one realises that it is all about the Government’s political survival. 
Those listening and those in the House will recall that the Prime Minister’s statement to the nation last year was all about sustainability. In her speech she mentioned it 17 times. Then she said that the Government will sell all the Ford Fairlane Crown cars because it wants to have less of a carbon footprint. Well lo and behold they have been replaced by BMW 7 Series cars and the former Ford Fairlane Crown cars are now being driven around Auckland. In terms of the Government reducing our carbon footprint and in terms of the Prime Minister’s statement about the Government wanting New Zealand to be more sustainable well it has not happened at all. It was yet another political stunt. 
I am interested to see that the legislators are still struggling to define what sustainability really means. The important point about Part 2 is that it is all about taxes and regulations. We have seen that over the last 9 years—more and more taxes and regulations. They affect hard-working people and families in New Zealand. There have been 2000 regulations passed in the last 9 years under this Government. This Biofuel Bill requires only 0.5 percent of biofuels in the first year. The environmental benefits of this legislation can be debated until the cows come home. Members should just think about it. The figure I hold in my head is 230 kilograms of corn to produce enough ethanol to fill up the family car for one trip but 236 kilograms of corn produces enough bread on the table to feed mum and dad and two kids for the whole year. How can ethanol be sustainable when we analyse those facts? That is the important thing. This is a case of the Government wanting more regulation. 
On this side of the Chamber we say that yes we want a more sustainable environment and yes the public will determine where they want to go with biofuels but they do not need the Government and nanny State legislation to tell them they shall have biofuels—but by the way they are only half a percent. It is a bit like telling mum and dad and the kids in the morning after they wake up and go to spread butter on their toast: “Oh by the way half a percent has to be margarine.” We have some real concerns about these regulations and the costs they will impose on hard-working families that are currently struggling with mortgage rates. Fuel is actually starting to come down in price in terms of the price per barrel in US dollars. That is a positive sign. 
I think New Zealanders now as we go into the election will think hard about this Labour Government and all the legislation it has passed. We are in the dying days of this Clark-Peters Government. It is starting to be incredibly fragile. Today we are sitting for 13 hours under urgency we are sitting until midnight tonight to pass a bill and even those on the other side of the Chamber do not know how it will be implemented. 
The important point about this bill that I also want to take particular note of is that the standards will not have been set so the fuel companies will have to invest considerable amounts of money before they actually know the rules about specific biofuels. Will it be bio-diesel? Will it be ethanol? The list goes on and on. Tallow is another example. National has some concerns about this bill in its current form and that is why we are opposing it. 
MOANA MACKEY (Labour) 
: 
 I move  
That the question be now put 
. 
ERIC ROY (National—Invercargill) 
: 
 I have had to break an important occasion to get back here to take part in this debate. [ 
Interruption 
] Yes it is commendable. I was involved in a carbon-neutral activity to get here—I walked. 
Part 2 deals with miscellaneous amendments. National members aired a number of issues that are of concern to us during the debate on Part 1 and similarly this part raises a huge number of questions for us. 
The first issue is that I have never seen a bill before Parliament with so many delegated responsibilities in it. There will be more than one Order in Council; there will be Orders in Council to change set amend and modify issue after issue. That in itself might not be bad except that there is a vagueness around a whole lot of these issues—the setting of levies the setting of taxes and deeming whether something is sustainable. Being a member of the august Regulations Review Committee I have to say that I see troubled times ahead when it has to determine for example whether an ethanol-based biofuel has come from sustainably harvested sugar cane. Those are the sorts of decisions that are delegated responsibilities. As I said in a previous debate on this bill the focus is in the wrong place. The focus should be on finding alternative fuels that are sustainable and will solve the issue of our significant consumption of fossil fuels and this bill simply will not do that. The delegated responsibilities are a significant issue. 
Another issue that National members have a number of concerns about is what the cost will be. We are principally an exporting nation. That is where we earn the wealth that drives this economy. If we are imposing upon ourselves a series of levies taxes and costs that our competitors do not have the impact is that we will not have investment in that part of our industry and significant sections of our industrial base will head off overseas. Already a number of people who have been investing on a continuing basis in the dairy industry are now heading to South America. They are doing that because opportunities exist over there but also because they will not be bound by the various regimes that are incorporated in this bill. 
One need only read clause after clause. There is clause 29 “Assessment of tax”; clause 30 “Assessment presumed to be correct”; clause 31 “Tax recoverable as a debt”; clause 32 “Penalty for late payment of tax”; clause 33 “Separate bank account to be kept by distribution authority”—for storing the money—and on it goes. Those provisions would not be in this bill if there were not significant costs associated with the implementation of it. We want a quantification of those costs. We are not saying we want to abrogate our responsibilities in terms of dealing with climate change; we need to know some of the specifics of the costs but all we have are the words “set by Order in Council” which are embraced within the bill time after time. Having spent some time on the Regulations Review Committee which has the responsibility of reviewing such orders I can see inquiry after inquiry. I can see a dearth of knowledge of how to make the astute decisions that will have to be made about issues of sustainability and where to strike those taxes. That will be the responsibility of the Regulations Review Committee. It will have to make sure that those impositions of cost stand where they fit. 
The other issue I want to raise—and no other member has raised this issue that I know of—is we talk about sustainability in terms of the supply of fuel—  
DARIEN FENTON (Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Part 2 agreed to. 
Schedule 1  
A party vote was called for on the question  
That schedule 1 be agreed to. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Schedule 1 agreed to. 
Schedule 1A  
A party vote was called for on the question  
That schedule 1A be agreed to. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Schedule 1A agreed to. 
Schedule 2  
A party vote was called for on the question  
That schedule 2 be agreed to. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Schedule 2 agreed to. 
Schedule 3  
A party vote was called for on the question  
That schedule 3 be agreed to. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Schedule 3 agreed to. 
Schedule 4  
A party vote was called for on the question  
That schedule 4 be agreed to. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Schedule 4 agreed to. 
Clauses 1 and 2  
Hon Dr NICK SMITH (National—Nelson) 
: 
 I want to make two important points in this part of the debate on the Biofuel Bill. The first is in relation to costs. We have no idea of the cost we will be imposing on New Zealand households with this bill. We know that households are under enormous cost pressures—food prices going up electricity prices going up—and what we know from this Government is that it is completely out of touch with the struggle that is going on in ordinary New Zealand homes as they put their family budgets together. I was just astonished to hear the contribution from Dr Michael Cullen the Deputy Prime Minister in this Clark-Peters Government. What Dr Cullen said was this: “The price of gas sometimes goes up and down by 10c overnight. So why would we give a bother if this is 1c or 2c?”. Why would we bother if this bill poses an increase of anything from—depending on the advice—somewhere between 3c or 7c a litre? Well let me tell members what 3c a litre means. Every cent a litre costs New Zealanders $60 million—$60 million. So tonight this Parliament is looking at whacking another $180 million of costs on to families and businesses for very questionable environmental gain.  
We believe that if we have an emissions trading scheme there will be an incentive for biofuels. Biofuels should be able to stand or fall on their merit rather than our having this nanny State bill where the Minister is going to define the exact percentage of biofuels for the next 6 years. That is my first point. The second point is—and it comes down to the amendment in my name in respect of the commencement date—that every member of this Committee knows there is enormous international debate about the sustainability of biofuels. There is not a publication in the world that has not talked about the awful problems that other countries have got themselves into with their biofuel regulations. And what does this bill do? It says we are going to make biofuels compulsory on 1 October this year but we are not going to sort out the sustainability standard for some time in the future. So if I bowl a tropical rainforest over grow palm oil and export it to New Zealand it will meet the compulsory requirement of this bill on 1 October. If I go and bowl over some Amazonian forests if I steal food from the poorest people in the world and produce biofuels on 1 October that is all OK. And the Green Party New Zealand First and Labour are saying they do not care.  
They do not care! Have they not listened to the submissions from Oxfam—a reputable organisation? Have they not listened to the Parliamentary Commissioner for the Environment whom the Government appointed and who opposes this bill and says that it is damaging to New Zealand’s environmental reputation? My amendment is very simple and says simply this: do not introduce the compulsory requirement until we have the sustainability standard in place—put the cart after the horse not before. Have members ever heard of anything so common-sense?  
Now the Green Party members were interesting. They did not want to argue for introducing this compulsion before some sustainability standard comes into place into the never-never. They just simply said: “We can’t vote for Nick’s amendment because we haven’t yet seen it.” Well that is not a very good argument. We moved it at the Local Government and Environment Committee. We gave notice that it was one of the most important issues in this bill and for members in this Committee to proclaim that this bill is about sustainable biofuels when the sustainability standards do not come into place for some long time down the track—officials say it may be as late as 2011—is reckless and irresponsible.  
I could refer to the Secretary-General of the United Nations pleading with countries not to put biofuel requirements in place without sustainability standards. I could refer to the reports of the OECD and to the United Kingdom House of Commons. I could refer to the reports from the World Food and Agriculture Organisation and to all of that international advice and still the Government blindly proceeds with this bill and this compulsory requirement that is so foolhardy. 
Hon DAVID PARKER (Minister of Energy) 
: 
 I would like to respond to some of the misinterpretation of information that was provided to members of the Local Government and Environment Committee including Dr Nick Smith by officials from the Ministry of Economic Development. The cost estimates that Dr Smith continues to recount to this Parliament are as he knows not the figures that were given to him by the Ministry of Economic Development. 
Hon Dr Nick Smith 
: Give us its figure. 
Hon DAVID PARKER 
: The figure is the figure that I gave earlier and the member has heard it on numerous occasions before. It is shown on this piece of paper here which is a briefing on the Biofuel Bill given by the Ministry of Economic Development on 18 June 2008 when that member was on the committee. 
Hon Dr Nick Smith 
: What does it say about costs? 
Hon DAVID PARKER 
: The advice was that the cost of the additional blending infrastructure and the like that the oil companies will have to have would be the equivalent of 0.2c to 0.4c per litre of fuel sold assuming that the— 
Hon Dr Nick Smith 
: For the infrastructure. What about the fuel? 
Hon DAVID PARKER 
: For the infrastructure assuming that the cost is recovered over a 4-year period. They will probably recover it over a longer period. 
Hon Dr Nick Smith 
: $20 million. 
Hon DAVID PARKER 
: It is 0.2c to 0.4c per litre. The overall cost to consumers is estimated at being in the range of a net benefit of 4c per litre to a net cost of 1.3c per litre. With higher oil prices biofuels could in fact save New Zealanders money. 
Hon Dr Nick Smith 
: So you don’t need regulation. 
Hon DAVID PARKER 
: We have Dr Smith chipping away there saying we do not need regulation. His other stated concern is the sustainability of biofuels. At the moment one can sell biofuels in New Zealand they are sold in New Zealand and there are no sustainability criteria. Whichever way one looks at it this bill improves the status quo because it immediately introduces reporting obligations in respect of biofuels and it promises to have fully articulated sustainability criteria by about the middle of next year. In the meantime it sets out the principles that have to be applied in respect of those sustainability criteria. 
Can I just demolish a couple of other things that have been spuriously put up by the National Party. An example was given of corn-to-ethanol. We agree that that is a bad thing. Corn-to-ethanol could be produced and sold in New Zealand at the moment; this legislation because of the sustainability criteria will prevent it from occurring in the future. It would not meet the sustainability criteria because the criterion of a 35 percent reduction in greenhouse gas emissions would not be met. It would fail on that one. In addition it would fail to meet the criterion that biofuels not be grown on land of high productive value. 
Finally on the issue of cost as I said the cost might go down or it might go up by 1c a litre. We hear National members shed crocodile tears about that whilst their transport spokesperson who has not taken a call in this debate is proposing tolls in Auckland of $5 a day each way—50 bucks a week! 
ERIC ROY (National—Invercargill) 
: 
 I just know Mr Chairperson that you are dying to hear the rest of the bit at which I got cut off on when I was debating a previous part and it does fit neatly into the title of the debate—trust me. The title is I guess the principal part of the debate we are having and as I said in an earlier debate this is largely a placebo bill. Certainly one of the reasons I oppose it is that it does not encompass those things that are really going to make a difference. I would have much preferred this bill to have in its title and to include “alternatives to fossil fuels” because in my humble view if there is to be some resolution to the consumption of fossil fuels then we have to look at the big picture at the hydrogen options and at some of those other things—dare I say electric; I am not sure whether that is a fuel or not—including solar power. That is why this bill is so narrow and will make such a minuscule difference to what actually happens. That is my first point. The bill is too narrow to actually resolve the issues confronting humanity. I put that out there to be considered.  
The other thing I was about to raise in the previous debate in terms of sustainability is that we have a dearth of knowledge—a lack of knowledge—about the impact on existing plant and machinery in New Zealand. When we start mandatorily making regulations about what fuel mixes are to be I am not sure what the implications of that are going to be. In my modest operations at Te Tipua I have a tractor. It is an old tractor but it is about 140 horsepower. The replacement value of a tractor today is about $1000 per horsepower so members can do the sums. If this tractor which probably has an engine life of somewhere in the 12000 to 18000 hours—it has done about 4500—does not like what it is mandatorily being asked to consume under this bill which is a 5 percent mixture of a biofuel into the additive and it dies the implications are going to be quite serious on the kind of revenue flows that are in my modest operation I can tell you.  
So when we talk about sustainability there is a certain sustainability of the plant and machinery that we do actually have currently in New Zealand and nobody has actually raised that issue. If we are seriously talking about the title then it might include the words “and killing off obsolete machinery”. So that is an issue I want to put before the Committee as well.  
There is another issue about sustainability. Whilst I acknowledge what the Minister said about the corn-to-ethanol argument there is a sustainability issue too surrounding the use of our farmland. We talked earlier in the debate about the pressures on feeding the world and food chain compaction in terms of the food now being consumed. One or two members in this series of debates have talked about rape or granola or some of those other oil-bearing fruit alternatives that we can actually grow. The economics are that the current price of wheat is about $500 a tonne and most good operators are getting yields in excess of 8 tonnes. Some of them are getting over 10 tonnes per hectare. Members can do the sums on that—$5000-odd a hectare gross. With the current price of canola at about $800 a tonne and somewhere about 2.5 to 3.5 tonnes per hectare one is sort of saying that the pressures then come on to sustainably farming one’s arable land.  
Whilst the bill talks up the benefits of rape in a crop rotation most people involved in arable farming in New Zealand have been around long enough to have worked out what grain crops suit them and where they have pulse crops brassicas and all that. To actually impose a crop that is not as viable as current arable use puts certain other implications on arable farmers.  
The absolute contrast in this is that the current price of wheat at $500 a tonne makes the growing of the oil-seed crops less viable and less preferable. But the more of a move there is to the oil-based crops the less there will be of the grain crops and that price goes up further and that margin just gets wider and wider. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 I apologise to my colleague; I have a meeting I need to go to and I want to make a further contribution. I have noticed that not a single member in the Committee has been able to refute the core argument around the amendment that National has put. 
Moana Mackey 
: Because it is not doing anything. 
Hon Dr NICK SMITH 
: Well let us go through it. Does the member accept as the Minister of Energy does that there are a large number of unsustainable biofuels around the world and that that is cause for serious concern? 
Colin King 
: He’s nodding. 
Hon Dr NICK SMITH 
: He is nodding as is the member. In every other area of public policy before we make something compulsory we want to have the standard in place. Have members ever heard of anything as ridiculous as what the member for Rotorua wants? She is the temporary member for Rotorua; she is a goner the National candidate is on his way here and we are looking forward to welcoming him. One of the reasons Steve Chadwick will go is she does not seem to give a hoot about the costs imposed on people in Rotorua on low and middle incomes. She is prepared to pass any sort of politically correct legislation that imposes costs on her constituents and that is one of the reasons she will go down the gurgler in a few weeks time when we have a general election. 
I come back to the core point: why will this Parliament not support having the sustainability standard in place before making biofuels compulsory? The Government says that that would just delay them. 
Moana Mackey 
: Of course it is. 
Hon Dr NICK SMITH 
: Well is it a bad thing to delay making unsustainable biofuels compulsory? I ask those ladies opposite why we would want to compel people to use biofuels made from palm oil from Indonesia. Labour is making biofuels compulsory before it introduces a sustainability standard and not a single member of the Government including Steve Chadwick can give me a reason why. 
Hon Steve Chadwick 
: It will stimulate biomass. 
Hon Dr NICK SMITH 
: Oh she says it will stimulate the biofuels industry. Well let us try to stimulate a sustainable biofuels industry. There is absolutely no logic in the Government bringing this provision into effect on 1 October. 
There is a reason for it. Labour has been in Government for 9 years and New Zealand has the worst increase in emissions of any of the 42 Kyoto-obligated countries—an awful record. We have lost record numbers of trees. We have had a constant decline in the amount of renewable electricity. Basically the Government is going into the election on the issue of sustainability with one of the worst records on climate change that any Government could have. It wants a little photo opportunity on 1 October so that its members are able to say: “Hey guys we know that climate change is in trouble we know that emissions have gone through the roof but hey we’ve got the Biofuel Act.” 
What the Government is not telling the public is that the sustainability standard is miles down the track. I do not think a single member of this House believes that it will be provided by the due date of 1 July next year. The Government says it wants to get in early with this legislation in order to get the benefit of it. Sorry? In order to get the benefit of biofuels making up half a percent of fuel in the first year it will go ahead with it without the sustainability standard! 
National members on the select committee struggled for 6 months to get a sustainability standard and could not do it. We have given a hospital pass to the officials to try to work it out. The Government knows that they are not going to meet the timetable for the sustainability standard but it is passing this bill without that most basic component. I have a simple challenge for members of the Government: if they want compulsory biofuels they should put in place the sustainability standard that will deal with the risk of food being taken from the poorest in the world that will deal with the risk of biodiversity being bowled over and that will ensure that there actually is some climate change benefit before rushing ahead and introducing compulsion. 
The last point I will make to the Minister of Energy is this. He says we need this bill to stop unsustainable biofuels. Well whenever we get the standard it still will not prohibit unsustainable biofuels. 
COLIN KING (National—Kaikoura) 
: 
 It is indeed a pleasure to follow my colleague Nick Smith who would have to be the most knowledgable member in this House on this subject. I would like to refer to the title of the bill and to cover about six issues very very briefly: what the Minister of Energy said previously; the behaviour of the various parties in this Chamber; what true leaders would do when confronted with the challenges that this Government has scored own goals on; the comments that Nick Smith drew to the Committee’s attention; and the record of this Clark-Peters Government on the Kyoto Protocol. 
If we were to listen to and believe what the Minister said before we could only draw the conclusion that this bill in actual fact is not required because everything is rosy. But we know that that is not the case. This Biofuel Bill is a lot deeper and more complex than that. 
When I heard the contributions from New Zealand First United Future and the Greens I drew the conclusion that a lot of members are voting in support of this bill for the wrong reasons and I have seen that happen in this House far too many times. Biofuels have a little bit of a notion around them that they will be the panacea for all our problems. However the science has caught up with them and that attitude seems to be very very perverse. Yet the politicians in this House will support this bill because there has been an amendment around sustainability. 
Nick Smith very eloquently highlighted how senseless the speedy process of this bill through the House is. In actual fact it makes the whole thing quite unprincipled. 
In terms of talk about principles and sustainability we heard from the chairperson of the Local Government and Environment Committee who got up before and gave a contribution. She spoke about the principles. She could not talk about the standards. I put it to members that if they are talking about the principles around a sustainability standard then why are they pushing this bill through the House before they have that sustainability standard? Why would they continue to go down the pathway of the perverse effects of the production of biofuels: the total demolishing of forests for the purpose of reaping Government-subsidised taxation benefits; rising food prices; and the taking of food from the mouths of the poor? It defies logic. 
Another point I would like to make—time is running away on me—is that I have the sense that a very dumb thing is being done by this House. Accepting those perverse effects a true leader would go further afield instead of trying to fence off New Zealand and make it a solution inside itself. A true leader would actually go further afield and seek collaborative partners to identify long-term global solutions. Is the Clark-Peters Government doing that? Not at all. One has to seriously challenge the motive for it introducing this measure. The Biofuel Bill is damaged because it is being rushed through the House. National members recognise the potential of it but it is hugely risky if one does not get the principles right. 
In terms of the cost when we look at the overall context of things we see that regardless of what the Minister says a lot more money is being spent on this novel bill than is being spent on the substantive game of addressing climate change. Regardless of how one wishes to quote it the cost-benefit ratio of this bill does not stack up. 
Coming from Marlborough I recognise that a lot of the growth in that area in recent years has come from the change of land use. It has come from the use of automotive engines such as tractors which burn fuels. Again this bill will impact upon the competitiveness of our region. 
Probably the point I am most disappointed about is that in asking the Minister to give me an explanation— 
RODNEY HIDE (Leader—ACT) 
: 
 I have to say this bill is a shocking bill. No one here knows how to drill for oil distribute it refine it and put it together but a bunch of politicians who have never done any of those things sit around a select committee table and decide to mandate how it will be made here in New Zealand. No one here has ever made fuel or refined it but no a bunch of politicians a bunch of elected representatives on a select committee are so so clever that they can decide and debate in Parliament whether in the year 2012 the level of biofuels in our fuel should be 3.4 percent or 3.35 percent or 2.4 percent. Those are things that our politicians have spent their time debating and considering. Where on earth does the expertise or the knowledge come from? 
Those politicians are so clever; they can sit around in this Parliament and decide not only the financial cost but the environmental cost. I promise that no member of the Committee knows whether adding that percentage of biofuel is a plus or a minus in terms of environmental outcomes. Members have no mechanism to account for it. That is what is so extraordinary. We cannot trace all the work all the resources all the effort; we cannot trace the sources of all the compounds and chemicals that go into a litre of fuel. We cannot even trace the mechanisms by which biofuel is manufactured and made but a bunch of bureaucrats and politicians sitting around in a committee meeting in Parliament say they think the figure for 2012 should be 3.35 percent. They have no idea. They know nothing. It is the conceit that bothers me. The socialists have given up trying to run an economy. 
Darien Fenton 
: Ha ha! 
RODNEY HIDE 
: They think it is funny. 
Darien Fenton 
: No we think you’re funny. 
RODNEY HIDE 
: At least I would get higher up the Labour list than poor old Darien Fenton has if I put my name up. What is tragic about this bill is what it means to New Zealanders. It will put up the price of fuel for no environmental purpose; it is just so I guess some madcap members of Parliament and politicians who think they know something about the environment who think they know something about an economy who think they know something about the refining and manufacture of petrol can go around and say “Look what we did!”. 
All they are doing by the way is helping a couple of businesses in New Zealand get rich. They cannot sell their product commercially so they come to Parliament they get their product legislated for and they get it into the market place. How mad is that? The next time I hear Steve Chadwick worry about the effect of rising costs on middle-income workers and low-income workers I will tell her she is shedding crocodile tears. I would have included Darien Fenton but I do not think she actually cares; I think Steve Chadwick does. It is this legislation aided and abetted by the crooked New Zealand First Party that will add costs on to New Zealanders. It is a disgrace and David Parker should hang his head in shame. What sort of command and control kind of commissioner of petrol and fuel does he think he is that he can sit in Parliament and dictate the composition of the nation’s fuel? 
Clause 1 agreed to. 
The question was put that the following amendment in the name of the Hon Dr Nick Smith to clause 2 be agreed to: 
to add the words “except section 34K which shall not come into effect until the regulations under 34GA have been gazetted by Order in Council”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Noes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Clause 2 agreed to. 
Hon DAVID PARKER (Minister of Energy) 
: 
 I move  
That the Committee divide the bill into the Energy (Fuels Levies and References) Amendment Bill the Customs and Excise Amendment Bill (No 5) the Tariff Amendment Bill (No 2) and the Local Government Act 1974 Amendment Bill (No 2)  
pursuant to Supplementary Order Paper 245 
. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
Bill reported without amendment. 
Report adopted.