Tirikatene Rino: Energy (Fuels Levies and References) Amendment Bill — First ReadingText is incorporated into the Bound VolumeTirikatene Rino: Energy (Fuels Levies and References) Amendment Bill — First Reading[Sitting date: 05 March 2014. Volume:696;Page:16379. Text is incorporated into the Bound Volume.]RINO TIRIKATENE (Labour—Te Tai Tonga): Kia ora Mr Deputy Speaker. I am pleased to make a contribution at the first reading of the Energy (Fuels Levies and References) Amendment Bill. As previous speakers have noted this bill is only a fewpages long. It does not have a big subject matter but it does have quite an impact on New Zealand families. As Mr David Shearer mentioned in his contribution on this side of the House we have no issue with New Zealand meeting its international treaty obligations. Our reputation internationally is very important so maintaining 90 days of oil supplies to our country primarily through ticket contracts is something we must uphold as a country. We have no issue with that. We do have an issue with the targeted approach in this piece of legislation. It will be targeting families. Ultimately it will lead to increased costs for families at the pump. I know from travelling around my vast electorate that if you go to places like Kaikōura or Mr Deputy Speaker down to Invercargill in Southland the cost of filling up is a significant cost for already stretched household budgets. This legislation unfortunately will add to that cost because the oil companies which are the importers of petroleum of our fuel will be paying an increased levy through to the Customs Service.I want to focus on the actual appropriation for maintaining our treaty obligations. That is currently around $3 million a year and I think that the projections through to outer years over the next 3 4 or 5 years are that it will go up to about $10 million a year. So there is a big shortfall there. There is a big shortfall and that is largely due to the forecast decline in our domestic oil production. To meet that shortfall the Government has decided to go for this targeted approach but based on those predictions the levy rate which can be modified by Order in Council can be modified at whim and who knows how big this liability will be to actually maintain our obligations through the purchase of these ticket contracts. I was fascinated to learn that of course maintaining 90 days of oil supply for the country in case there was a disruption worldwide to oil supplies is a means of securing that for our economy. We know that our whole economy is dependent upon the power that drives everything. Although we want to see a transition to more renewable sources of energy we know that at the moment fossil fuels are the primary source of fuel that powers our primary production our export sector our tradable sector. So it is very important that should these shocks eventuate—and we certainly hope they do not—our country through its agreement with its partners is able to open up those supply lines and cash in our ticket options so we can get those supply lines secure. We can keep the fuel pumping hopefully not for as long as 90 days so that we can keep our economy moving.The point I want to make is that the Government had a choice. The Government had a choice to have a targeted levy to target the motor vehicle users people who actually fill up at the pump or to stick to the status quo and raise the relevant appropriation from general taxation. The Government chose the former but here on this side of the House we think it is fair that it should continue to come out of general taxation because it is a public good. It is a public good that everyone benefits from that we comply with our international obligations. We certainly hope a worldwide disruption to oil supplies does not eventuate but we certainly hope that if it does arise that we need to call in our emergency supplies and make sure that we can get those 90 days of fuel then those supply lines are available to us. So yes we regret that the Government chose to take the targeted route. I know that the Government consulted various stakeholders in the industry principally the oil companies. I guess they already pay their levies to the Customs Service in terms of importation duties and the like and so this probably will not upset their business in a way. It will just add an additional cost that we know they will immediately pass on to the end consumer.I return to the point that from Invercargill up to the folks in South Auckland and right throughout the country this is going to mean an increase at the pump. Families have seen that significantly over the past year and in years prior and it is definitely not going to be a shot in the arm but a strain on the household budgets particularly for thosefamilies out there. We know that a significant number of our population are doing it tough. Whether they are a working family or one of the non-working beneficiary-type families who are out there everyone is doing it tough. It is a luxury for many people to have a vehicle but again they will be thinking twice about whether they will be able to afford to fill it up. So in one sense yes sure we want to encourage more use of public transport and other greener ways of getting around but ultimately we do not want this to impact on our economy. Who knows—this is going to mean increased costs right the way through the supply chain of all our industries and ultimately it is going to be an increased cost. We know that fuel cost is a significant cost on every business so it will be interesting to see what the ultimate impact will be and whether maintaining our obligations in this way will impact on our business performance particularly across those sectors that are highly dependent on fuel costs.Another final issue I want to raise is that the Government has spoken a lot about New Zealand adhering to its international energy agreement obligations and that it is our reputation that is at stake. But I think it is quite ironic that the Government is so concerned about our international obligation to maintain emergency supplies of oil. I guess that is an international obligation but I would not think that it really rated in terms of other international obligation that we have particularly around climate change. I just find it ironic that the Government is so preoccupied and is going to all this great expense and effort to bring about this piece of legislation to introduce this targeted levy when it has done nothing about our international reputation for our clean green image and also about action on climate change.I know I have got other colleagues who will be adding more contributions in that area but I wanted to just make that final point that it seems that the Government is focusing on what are perceived to be little things. In the scheme of things it is a $3 million cost at the moment. We are going through all of this to basically load on to the end consumer an increased cost of fuel for what is only a few million dollars. I think that when you look at the grand scheme of things our international energy agreement obligations do not really rank up there. I know that Australia has not met its obligations. It is about to get a rap over the knuckles but it is not the end of the world. So we oppose this bill.