Parker David: Climate Change Response (Moderated Emissions Trading) Amendment Bill — Procedure Second Reading In Committee 
Text is incorporated into the Bound Volume 
Parker David: Climate Change Response (Moderated Emissions Trading) Amendment Bill — Procedure Second Reading In Committee 
[Sitting date: 24 November 2009. Volume:659;Page:7908. Text is incorporated into the Bound Volume.] 
Hon DAVID PARKER (Labour) 
: 
 “Sometimes a picture paints a thousand words” is the saying and this Climate Change Response (Moderated Emissions Trading) Amendment Bill is no exception to that. There have been some wonderful cartoons in the paper in the last few weeks on this issue. My particular favourite is one of Tom Scott’s a few weeks ago. In it there is a great big very overweight industrialist sitting in very plush surroundings in his gentlemen’s club. He is saying to himself in the little bubble of his speech: “Oh New Zealand is a great country—all those punters paying for my greenhouse gas emissions.” Then he looks around at the waiter who is over in the corner and is drawn like Manuel out of  
Fawlty Towers  
and he says “Waiter another gin and tonic please and make sure it is an organic lemon. We all have to do our bit for the environment.” 
Well that is it exactly is it not? What has happened here is that the punters out there the taxpayers the mums and dads and their children are to pay for the emissions of the big emitters. They are to pay $50 billion more for emissions under this new scheme than under the current one. The effect of that by 2050 is that Government debt will go up by $110 billion. That is what Treasury says and it is correct: $50 billion excluding interest; $110 billion including interest. 
These numbers are so astronomically large that people find them hard to comprehend but there is a very good comparison to be made between the long-term effects of this policy and those of some of the mistakes that have been made by earlier National Governments that have populated this place. One of those mistake was introducing supplementary minimum prices. There was a fiction in New Zealand that supplementary minimum prices were affordable that the subsidy to the agriculture sector could be sustained and that New Zealand would be wealthier as a consequence of that subsidy to agriculture. Of course we all know how that ended. It ended in tears because the country could not afford it. Government debt got too high and as a consequence the subsidy was withdrawn. That is what will eventually happen under this new scheme in agriculture; it has to because this is unsustainable with $50 billion of emission allocation rights and $110 billion of debt. Farm prices will go down by a large amount and a lot of people who have invested their money in the intervening period will lose money because they have been given the wrong signal by the economy. 
Climate change is a very very serious problem but at its heart the way to cure it is obvious. There is only one solution: we have to reduce our greenhouse gas emissions. We sometimes lose sight of that. We know that the pricing of emissions is absolutely fundamental to causing businesses to have a financial interest in reducing emissions. Otherwise it is in their financial interest to make as much money as they can by increasing emissions. So the objective of an emissions trading scheme or of a carbon tax if one goes down that route is to reduce emissions by giving a financial incentive to do so to those that produce the emissions. 
We have heard the Government try to justify its changes by saying it is aligning the scheme with Australia’s. Well the first reality is that it is not in our interest to do so. Australia’s economy is fundamentally different from New Zealand’s when it comes to emissions. More than half of Australia’s emissions come from coal; half of our emissions come from agriculture. Would it make sense for the Australian emissions trading scheme which is called the Carbon Pollution Reduction Scheme to exclude coal? Of course it would not. Has it excluded coal? No it has not. Should New Zealand exclude agriculture because we would be aligning ourselves with Australia? That is a ridiculous suggestion. It is as stupid for New Zealand to exclude agriculture as it would be stupid for Australia to exclude coal. The suggestion that we should align our scheme with Australia’s makes no sense. And anyway we are not doing that because eventually we are including agriculture. We are just not doing it properly and we are doing it too late. So we are not having a real alignment with Australia but the alignment that we are having is not in our interests. 
I am not the only one who says that. The Parliamentary Commissioner for the Environment has said it. The specialist adviser to the Finance and Expenditure Committee said it. I want to mention her—Dr Suzi Kerr. Where is Dr Suzi Kerr at the moment? She is a world expert. She is currently a visiting professor of economics at Stanford University in the United States one of the United States’ leading universities and indeed one of the leading universities in the world. Dr Suzi Kerr from New Zealand is currently lecturing there in emissions pricing. We had the benefit of one of the world’s leading experts on emissions pricing giving advice to the select committee. Could we take into account her advice properly? No because the process was so fast that we got her advice only on the last day. Notwithstanding the fact that on the last day it turned out that the cost in terms of Government debt had gone up to $110 billion the National Government would still not slow down the process to enable us to properly consider the implications of that. So we could not consider Dr Kerr’s advice properly. 
Dr Kerr said the phase-out under the existing scheme which phases out the free allocation to major industries at 8 percent per annum was if anything too slow and would lead to economically inefficient outcomes for our economy. So what do members think she thought of a 1.3 percent abatement of free allocations which is so slow as to virtually not happen? She thought that it was nonsense. She thought that it would make New Zealand poorer not wealthier. She thought that we were setting up a system that will encourage an increase in emissions in New Zealand rather than a decrease—a scheme that will do the opposite of what it is meant to do. 
I want to mention also that the media are on to it. Editorials from Auckland to the bottom of New Zealand are now saying that the proposed changes to the scheme are wrong. So are the commentators. We have heard the borax being poked at some of New Zealand’s leading commentators. We have had criticisms of Brian Fallow today; we have had people writing off Rod Oram as a sycophant or non-entity. In addition to those people we have had Richard Long former chief of staff for National being highly critical of the changes. He has been written off. We have had Fran O’Sullivan being very critical of what is being done and no doubt National will write off her criticisms as well. That is on top of Treasury criticising the changes the Parliamentary Commissioner for the Environment criticising them and the Ministry of Economic Development another arm of the Government saying the phase-out of the free allocation is far too slow and not warranted. 
Still the Government proceeds remorselessly on. As a consequence our country will get poorer. Our economy will not adjust. We will not take advantage of the opportunities that will arise for those who move into this new world with appropriate speed. 
I also want to touch on the deal that has been done with the Maori Party. Only a matter of months ago the Maori Party said the existing emissions trading scheme was too weak and if anything it should be strengthened and it would prefer to go down a carbon tax route rather than an emissions trading route. The Maori Party is here today to vote for the opposite of that. It is voting for an emissions trading scheme that no longer works that will increase emissions and that does the opposite of what Rahui Katene in her minority report said at the Emissions Trading Scheme Review Committee some months ago should not be done. 
Further than that a fundamental principle is being breached by the deal that is being done. The Maori Party and the National Government might like to characterise some of the criticisms that are coming from lots of people as coming from a race agenda. It is not. Once people receive a Treaty settlement so long as there has been no withholding of information and no misrepresentation by the Crown then those assets are in the same position as any other assets owned by any other group in New Zealand. The owners must be bound by the same laws whether it is the Resource Management Act the Income Tax Act or the emissions trading scheme legislation. There is no basis for having separate rules. The  
New Zealand Herald  
put it very well in its editorial saying there are things that we do not know when we enter into a Treaty settlement; there is an upside and there is a downside. It pointed out that at the time of the Treaty settlement with Ngai Tahu the boom in prices that would be occasioned by the free-trade agreement with China had not been thought of. Should the Crown go back and take value off Ngai Tahu as a consequence of not predicting that or not disclosing that? Of course it should not. Conversely Ngai Tahu should not expect to receive some additional compensation over and above what is being paid to other owners in society for emissions pricing. There is no justification for that. It actually undermines the principle of full and final settlement and it creates different asset classes in New Zealand according to the ethnicity of their owners which is wrong.