Volume 651 Week 2 - Tuesday 16 December 2008(continued on Wednesday 17 December 2008) 
Volume 651 Week 2 - Tuesday 16 December 2008(continued on Wednesday 17 December 2008) 
[Volume:651;Page:789] 
Tuesday 16 December 2008 
( 
continued on Wednesday 17 December 2008 
) 
Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill 
Second Reading 
Debate resumed. 
Hon PANSY WONG (Associate Minister of Energy and Resources) 
: 
 Good morning to you Mr Assistant Speaker Barker and to my fellow parliamentarians; and good morning to all the listeners and viewers. 
I remind everybody that we are debating under urgency the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill. This bill is a clear indication that John Key’s National-led Government is fulfilling its election promises. During the lead-up to the election National campaigned on dumping the Labour Government’s Biofuel Bill. We intend to apply a consistent tax incentive for sustainable biofuels exempting ethanol and bio-diesel from excise and road-user charges in proportion to the blend. We are also committed to developing a process for approving the tax exemption of sustainable biofuel taking into account the impact of the net reduction of greenhouse gas emissions on biodiversity and food supply. 
National is committed to encouraging the development of the biofuel industry but unlike the previous Labour Government we listen to and trust New Zealanders. We know that New Zealanders will make informed choices. We are not like the Labour Government which believed in compulsion and did not place any trust in New Zealanders to make the right choices. Even before the introduction of compulsion in relation to the sale of biofuel New Zealanders could purchase biofuel. 
We all know the negative impact of rushing into new territory. We know that the first generation of biofuel sources had a devastating effect on many economies when people turned food crops into biofuel. We also understand and have seen the impact on deforestation of rushing headlong into pushing biofuels. We believe that in order to encourage development and place trust in New Zealanders to make those choices it is important to dump this last piece of compulsion. I congratulate the Hon Gerry Brownlee on diligently putting the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill before the House. 
Hon DAVID PARKER (Labour) 
: 
 There is a saying that it is an ill wind that blows no good. It gives me no pleasure to rise in this debate and reflect on what is going down in New Zealand at the moment under this National-led Government. I think it should send a chill down the spines of all New Zealanders that New Zealand is now backtracking on sustainability initiatives across the ambit of the environment whether it is through changes to the Resource Management Act or measures to deal with climate change or water quality. We will see New Zealand’s environment going backwards at a time when most of us accept that the world has serious environmental problems. 
I have long had a strong environmental ethic and I think that most New Zealanders do. About one-third of our country is in national parks. We are one of the first countries in the world to do something about truly trying to make our fishing sustainable in the deep seas and our inshore fisheries. I personally did a lot of work around water protection and trying to stop the degradation of waterways over many years was part of my work. I was not one of the first in the world to come to the conclusion that climate change is a serious problem that must be addressed. Others in this House like Pete Hodgson Jeanette Fitzsimons and Simon Upton were ahead of me in that regard but eventually I got there. 
I became convinced—like the National Government pretends to be—by the scientists who overwhelmingly tell us that climate change is a real and pressing problem that could change the world as we know it. It is not an exaggeration to say that climate change could change the world as we know it and this has been proven to such an extent that it is now the responsibility of politicians and Parliaments like ours to do something about it and to moderate emissions so as to not let climate change get as bad as it could get. 
I personally see climate change as an indication of a wider ill. I am personally convinced that we on this planet are living in a way that is beyond the environmental means of our ecosystems to cope. Our planet is filling up with greenhouse gases in a way that is unsustainable. There is undue pressure on our waterways; there are dropping aquifers; there are collapsing fisheries; there are dying coral reefs; there is desertification not just in Africa but also in Asia and in large parts of Australia; there is pressure on food production; and there are rising sea levels that are starting to threaten atolls. If there is even a metre of sea-level rise there will be 30 million people on the move in Bangladesh. 
These are serious problems. What worries most of us about what is happening is the truth that the world is living beyond its environmental means. More than that an international response is required in order to do something about it. Underneath that international response action by individual countries is required. It saddens me to realise that if New Zealand cannot get these problems under control then the world is doomed to a future that is not as good as it could be. 
If we look at our country with our wealth of natural resources our environmental ethic and our wealth—and we might not be as wealthy as our Australian cousins across the ditch but by God we are very wealthy compared with the world average—our low population density our climatic advantages that we already have and our richness in renewable energy we see that it is probably one of the wealthiest countries in the world when it comes to renewable energy sources. If New Zealand cannot get this right then the conclusion to draw is that the world will not. We really are to that extent the canary in the cage. We should reflect on this reality: if New Zealand does not get these issues right then the world will not. That is a very very sad conclusion to reach because that will affect our children and their children. Millions and millions of desperately poor people in developing countries will be more affected than most and it will make their futures even bleaker than they currently are. For people in developing countries who are poor their future is already bleak. 
Against that background I think it is very very sad—and I am somewhat ashamed—to be in a country that is turning its back on those problems when we can fix them or our share of them comparatively easily. That is where this bill fits in. To deal with climate change we have to reduce greenhouse gas emissions. Half of our emissions come from agriculture. It is pretty hard in that space. Things can be done to reduce agricultural emissions—I am not letting agriculture off free because some things can be done—but they cannot be reduced by a lot. The rest of our emissions come from the use of energy and from process emissions from things like smelters that use coal in the production of metals. 
If we cannot do much in the agricultural space we have to do our fair share in the area of energy. Our energy emissions come from two main sources: electricity production and transport. Transport in New Zealand has a big share in that; we are already pretty green in our electricity production and we are starting to do even better. However in transport we can do only three things: first improve the efficiency of vehicles; second change the modes of transport to more efficient modes such as more freight on rail and more freight on bigger trucks which sometimes is a good idea; and third substitute out the existing fossil fuels that we burn to produce greenhouse gases for new sources of fuel that are carbon neutral and do not produce greenhouse gas emissions. 
 The two most likely candidates in that field for New Zealand are electricity substitution and biofuels. This bill deals with biofuels. Other people have talked about the terrible injustices that have been done by this bill to Mr McNicholl and others—the job losses and the multimillion dollar losses that have been caused to industry. I am not going to focus on those things in this contribution; I am going to focus on the environmental aspects. 
Every country in the world has a problem with transport emissions; they are very hard to fix. But given that we pour billions and billions of tonnes of carbon dioxide into the atmosphere from the burning of fossil fuels for transport we have to do something about it. If we do not do anything about it we may as well give up on the ambition to reduce emissions because it will not work. Transport emissions are such a big part of the problem and that is where biofuels come in. They are not a universal panacea and they are not the answer to everything but they are an important part of the solution. They are something we can use now they make economic sense as well as environmental sense for the country they are affordable and they are achievable. 
We have heard the Minister of Energy and Resources the Hon Gerry Brownlee saying in this House and on the radio that the Government is putting forward this legislation because of sustainability concerns. The Government is actually taking out of the legislation the sustainability controls that control the import of unsustainable biofuels. Already the legislation requires the oil companies to now report the source of their biofuels. So if they are importing unsustainable biofuels they get dinged now because the public sees that and the companies will not want to risk their brand value by doing something silly during this short intervening period while more detailed and prescriptive standards are worked out. 
On top of that the Act—which this bill repeals the relevant part of—already includes more than the normal amount of detail seen in primary legislation concerning sustainability principles. It sets out three principles relating to greenhouse gas reductions on a life-cycle basis including competition with food—because of course we do not want to put up the price of tortillas in Mexico City by turning corn into ethanol—and it addresses biodiversity concerns so that people cannot knock over rainforests and orang-utan habitats in Indonesia for example to produce palm oil for New Zealand biofuels. That is not allowed under New Zealand legislation. The Minister is stripping out those environmental protections by the repeal of this part of the Act. I think that might be a mistake on his part and he does not realise it. I will be promoting amendments at the Committee stage to fix that particular omission in this bill. 
More fundamentally the Minister knows—and the National Government knows—that the biofuels that are starting to be produced in New Zealand from tallow are the most sustainable sources of biofuel in the world according to the United Nations and he is killing that industry. Not only do we have the loss of jobs and the loss of money for those people who have invested their life fortune and done the right thing—and I feel very sorry for those people—we see that the Minister is ruining the environment and that should be on his conscience. It is the wrong thing to do and it sends a chill down my back. 
CHRIS AUCHINVOLE (National—West Coast-Tasman) 
: 
 This is just a brief call. I was most interested to hear the previous speaker because he covered a range of discussion that probably we should have started this debate with because it includes very important features. I suggest though that the weak part of the Opposition’s argument is the compulsive nature of the regulation; that is the bit that is being changed. The previous speaker ended on the subject of tallow and how efficient it is at making biofuels. Tallow is a by-product in many cases but I wonder what happens to those products that would normally be made of tallow. We cannot introduce— 
Hon Darren Hughes 
: That’s not a serious point! 
CHRIS AUCHINVOLE 
: It is a serious point. It is just as serious as biofuel’s taking away food production from Mexicans is a serious point. For those who use tallow the matter of tallow production is a serious point if suddenly those people do not have that base product any more. 
However the previous speaker concentrated on the sustainability aspect and the standards that are being torn out by this bill going through. The reality is that they are not: the standards will continue to be developed they will be developed by the officials and that will be done in exactly the same time frame as or even sooner than would have been possible through the legislation that is now being changed. Therefore the central objection to this bill is void because the standards will be made they will be achieved and furthermore they will be produced by people who actually want to produce them. The whole business will not be based on the compulsive negative aspect and it will benefit from the change. 
Hon DARREN HUGHES (Labour) 
: 
 This bill the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill is in its second reading before the House. It is a very sad bill from a sad Government on this very important topic of climate change. Our country as the Hon David Parker has said has to take some pretty firm measures in response to climate change because we have so little influence over the profile of our greenhouse gas emissions. That means that every measure we take has to be thoughtful has to be resolute and has to actually mean something and do something. But this repeal bill takes away the real chance for New Zealand to be able to do something constructive with regard to climate change and it is a huge shame and a wasted opportunity that this Government has brought this bill before Parliament for debate today. 
It makes one wonder what the Government now says New Zealand is doing at all with regard to climate change. For a while after a movie called  
An Inconvenient Truth 
 came out the National Party decided that climate change was a popular topic and so there was a bit of a flurry of activity. That led to a very brief period of time when Dr Nick Smith thought he was relevant again and he was allowed to put out a Bluegreens discussion document. 
Hon Trevor Mallard 
: And where did that go? 
Hon DARREN HUGHES 
: Actually just about the only thing that National stands for in terms of recycling was putting every copy of the Bluegreens vision document into the green wheelie bins around Parliament. That is the only thing those members have done in terms of the environment since the general election. We know that that document now is out of vogue and out of step because the National Party has moved on to something else. The new buzzword is that everything must be “balanced”. We must have balance with everything. So if one does nothing on the one hand one ought to do nothing on the other. That is the new balanced approach that National is bringing to New Zealand’s response on climate change. National has decided that it is no longer a sexy topic but the problem for National is that the science has not gone away. Of course there is a question mark over that because the whole world now waits with bated breath for the New Zealand select committee of Parliament— 
Moana Mackey 
: High-level. 
Hon DARREN HUGHES 
: —which was elevated yesterday to a high-level select committee of course. I mean how anything can be high-level without the Hon Gerry Brownlee’s intellectual firepower on it is beyond me! In fact at the General Assembly of the United Nations they must be standing around the espresso machine saying that it is good of New Zealanders to decide for them what is happening about the science of climate change but that it is a pity that Mr Brownlee is not involved. That is what they are saying while they wait for the high-level committee to report back on the balanced approach of how one can do nothing on the one hand and less on the other. 
We will now have a ridiculous situation. People used to look at a little country like New Zealand—4 million people at the bottom of the earth—and see it as a bit of an honest broker. We have always punched above our weight on foreign policy; people have looked at what we have done and said that we have had a principled stand on things. They have said that we have always had good examples to back up our rhetoric on things. We have not just gone along and given the flash speeches heard at some international forums where countries with dubious records on things have got up and lectured everyone else. New Zealand has always been one of those countries that have been able to get up and say hand on heart that “This is the stand we are taking this is the reason for it and this is what we are actually going to do about it in our country to give effect to what we are saying.” 
Everything National has done since the election takes away from all of that. I can now see why it was so dismissive of and derisive towards the previous Labour Government’s ambitious goal of carbon neutrality for our country which was a vision statement of where we could actually try to go. National poured scorn on that—I thought it was just for political reasons. I thought it was just attacking the Labour Government of the day which is a fair cop in politics. Actually though it goes to something deeper than that. National does not want to do a blind thing about climate change and this biofuels repeal bill is a classic example of that. 
The problem is that this bill is not only bad for our response to climate change but it is also bad for jobs. This bill actually costs jobs in our economy at the very time the economy is in recession and job security is one of the things New Zealanders are worried about first and foremost. 
Hon Trevor Mallard 
: Who’s the member for Waharoa? 
Hon DARREN HUGHES 
: My colleague Trevor Mallard makes the point: who represents the people of Waharoa in Parliament? Do National members know? Does the Minister know who the local MP for Waharoa is? There is a lot of silence. The Minister would not have a clue of course. I want to hear from the local member of Parliament about what he will do to stick up for jobs in his electorate because that is such a critical thing at this time. The National Government not only is weakening New Zealand’s reputation and taking us down a path that is very disappointing in terms of what we are able to do on climate change but also is stopping and cutting the feet from under New Zealand - based industry. 
We know that this Minister loves to cut the base from under New Zealand industry because one of his first bold moves was to cancel the Buy Kiwi Made Campaign which is one of the small things we tried to do to give New Zealand manufacturers a chance to say there was something decent about what they did. There are jobs for hundreds of thousands of New Zealanders in that sector and we wanted to show our support for it. The campaign cost very little for the good it did for New Zealand manufacturers but the Minister has got rid of it. Now he is bringing this bill to the House. We know that Mr Tom McNicholl has put $10 million of his money behind the biofuels industry. He wanted to create jobs—47 jobs I think as a start. If that industry had got under way there would have been more and more jobs but the Government’s very clear message is that it sees no future for biofuels. That is what this bill is about. 
Hon Gerry Brownlee 
: Rubbish! 
Hon DARREN HUGHES 
: The Minister says “Rubbish!” but where are his details on tax incentives? [ 
Interruption 
] That was not the question. Gerry Brownlee is barking away over there. That was not the question he was asked. I asked him why he does not have any details on tax incentives if he is genuinely in favour of biofuels. Where is that information? 
Hon Gerry Brownlee 
: Just wait! 
Hon DARREN HUGHES 
: The point is that that is the Government’s policy on climate change—“Just wait!”. The point about climate change is that we cannot wait. We cannot have that luxury of laziness that conservative attitude of “She’ll be right; don’t worry about it. We’ll wait until Labour gets back in and fixes it up”. 
This is bigger than being just a New Zealand problem; this is a world problem that requires leadership from the Government. The only leadership that the Government has given is to say first and foremost let us cancel everything that was put there by the previous Government and let us talk about nothing that replaces it. The emissions trading scheme has been suspended even though the Prime Minister could not tell the House yesterday exactly what part is suspended. The biofuel legislation is now being repealed which will ruin any chance of a biofuels industry for New Zealand; it will ruin not only the jobs in that industry but also the chance for that industry to make a positive contribution to our economy in a clean and green way. 
Of course there is National’s disgraceful treatment of the forestry sector. We remember Dr Nick Smith coming into Parliament question time after question time screaming and ranting—that was just during the parliamentary prayer actually—as he does about the forestry sector and about his concerns about forestry. Yet National’s first thing here has meant that the new Labour Opposition’s first lobbyist friend is Dr Roger Dickie from the Kyoto Forestry Association. He is not somebody who normally sought meetings with Labour when we were in Government but he has been knocking on the door to ask us what on earth National is doing. 
In this climate change space the Government is very very disappointing; its getting rid of the biofuel legislation that is currently on the books is such a wasted opportunity for our country. I cannot understand why more members of the National Party are not motivated to ask Cabinet Ministers and the leaders of their party exactly what they will do now. When Labour was in Government its members wanted to be leaders in climate change. We were out there boldly saying that Labour thought New Zealand had a real role to be a leader in that area. The National Party disagreed with that because it never likes leading on anything. Those members said that they want to be fast followers. It was not actually their line; they waited for the New Zealand Institute to say that and then they decided that it was their slogan. They wanted us to turbo-charge our way to a balanced approach by being fast followers. It turns out that the engine on the turbo has been turned off completely and we now will not be fast followers; we will be people who just trot along. What will happen is that New Zealand will be completely overtaken in the climate change debate. 
We are a country whose economy is hugely dependent on primary industry and we require a stable climate in order to run this economy—not that we heard about agriculture science or exporting in the Speech from the Throne. National might like to work out that agriculture is the basis of the New Zealand economy; so much comes from it. We should be acting on climate change for selfish reasons. We should say that as an agriculture-dependent economy we should selfishly be worried about climate change because our economy is one of the ones that has the most at risk if we do not get it right—not only in agriculture but in horticulture in viticulture and in all the areas of our economy that rely so strongly on a stable climate. The world’s planet is so important to the basis of our economy that we should be acting selfishly if that is to be the only motivation. If that is the only way we can connect emotionally with National we should plead for it to act selfishly: “Please act selfishly on climate change.” That kind of language might get those members to do something about it. We were always motivated by saying not only that New Zealand had a role to play in the world that was bigger than just our own interests which were huge but also that we were able to lead in this field. This is just another example of National needlessly taking us backwards. 
Hon Dr Jonathan Coleman 
: Talk about the food crisis. 
Hon DARREN HUGHES 
: The Minister of Immigration mentions the food crisis and I am very interested that he does so. With the obligation on the books right now New Zealand has the ability to be self-sustaining in this area. We could now already use all the tallow that is generated in New Zealand and we could meet our obligations today from that. If the Minister does not know that then it shows that not only has he not read the bill that is before the House but also he clearly did not pay any attention during the Cabinet committee or the Cabinet process. 
Hon Dr Jonathan Coleman 
: What about the deforestation in Brazil? 
Hon DARREN HUGHES 
: The member asked about Brazil. I am glad he has asked about the Brazilians because National has not always been known for its open-minded foreign policy. If the Minister had read the legislation he would know that all of the concerns he is now yelling across the Chamber are covered by the legislation. Jacqui Dean shakes her head but in terms of her worrying about the resources of the planet I say that that was kind of put in the box when she said she wanted water to be banned and that she is the leading light of the National Party in that particular regard. 
This is a bad bill. The Labour Opposition strongly opposes it. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 The Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill is probably the saddest thing that has occurred here and we have seen the National Party approach to it in the way its members are concerned about it: they are not even prepared to get up on their feet to take a call in order to be involved in the debate. What is very very clear to me is that National members have not spent their time getting their heads around this issue. They got themselves into a position probably cajoled by the oil companies’ position of a couple of years ago and lined up by Nick Smith trying to be pragmatic but in the end they have not logically reasoned through what is necessary in this particular area. 
People should think very carefully about the comments that David Parker made. I absolutely agree with him. We have a spectacular advantage in being a small isolated country and a country in which experiments can occur. We can be a leader and some of those experiments will be successful; we have to accept that some of them will not be successful. What has been made very very clear is that in the area of tallow the research work has been done the plant development work has been done and we will be in a position to meet the obligations under this bill from July given what had occurred. 
I am very surprised that I have not yet heard Lindsay Tisch take a call in this debate. I think he needs to get up on his feet to say whether he thinks that jobs in his electorate are important. I know that if his opponent in the Waikato electorate Jacinda Ardern who made a brilliant maiden speech yesterday was the member for Waikato then she would be making some comments and she would be standing up for Waharoa. It is not a place where there are thousands of easy jobs to get. It is a rural area and a place where clearly there is quite a lot of dairy still going on but there is not a factory and not a lot of jobs in the area. 
Shane Ardern 
: Open Country Cheese is there. 
Hon TREVOR MALLARD 
: Waharoa? OK I apologise. I have my little towns out in the east Waikato mixed up. But the point that I am making is— 
Hon Dr Jonathan Coleman 
: You probably closed a school there. 
Hon TREVOR MALLARD 
: No I did not. I tell the member what I did: I had more guts than any National Party Minister. If I was closing a school I went there and I knew exactly where it was. I do apologise; I lived in Hamilton and I went through Waharoa occasionally. The point is that if I was the local member then I would have the backbone to stand up in this House and defend Waharoa against Gerry Brownlee who is stripping it of jobs. 
The decision of Gerry Brownlee and the National Party is to say that jobs in Waharoa do not matter. That is what he is saying. He is also saying to Tom McNicholl that he does not care that he is 75 years old. He does not care that he has put 10 years of investment into this project that he has lined it up following the international signals following the signals from Government and following the signals of what is possible. Tom McNicholl has done the right thing and National is to take $10 million from him. National members are going to cause him to mothball his $10 million investment—the $10 million investment that can make an enormous difference to New Zealand’s reputation. I just ask how the next time John Key meets Gordon Brown if it ever happens again he will be able to look him in the eye and say that he—Mr Key—not only is a climate change denier but also wants Mr Brown to take off his tax on people travelling to New Zealand. Not only is Mr Key denying climate change but also he is closing down plants that could make a difference. John Key is closing down a plant that could make a real difference to climate change in New Zealand—a $10 million plant; one that will employ over 40 people. It will make an enormous difference— 
Hon Gerry Brownlee 
: I bet it’s still there this time next year. 
Hon TREVOR MALLARD 
: I bet it will still be there and it will be mothballed. It will not happen. I believe Sue Wood. I do not believe Gerry Brownlee; I believe Sue Wood. 
Hon Gerry Brownlee 
: Where are they selling the stuff now? 
Hon TREVOR MALLARD 
: They are selling it raw to China for methane-producing chickens. It goes to methane-producing chickens now or it could be used to cut fuel emissions in New Zealand. That is the choice. 
Hon Gerry Brownlee 
: It’s the same outcome. 
Hon TREVOR MALLARD 
: Gerry Brownlee says that eating a chicken is the same as driving a car. He probably does both. He probably has a chicken from KFC on the seat beside him. He probably cannot drive without that on the seat beside him. He looks like he cannot go anywhere without it. I tell members that it is a major pity that the member does not live in Wainuiomata. The Wainuiomata KFC has just closed. If Gerry Brownlee lived in Wainuiomata I am sure that not only would we be driving decent fuel but also KFC would have survived because it— 
Hon Dr Michael Cullen 
: What came first—the chicken or the Gerry? 
Hon TREVOR MALLARD 
: We will not even get a “Gerry-can” of biofuel as a result of this bill. 
I go back to the point that I was making. How can New Zealand hold up its head internationally? How can we argue against the outrageous things that—I agree—the Brits are planning to do? I do not think it is on for John Key to call Gordon Brown a hypocrite as he did in the House yesterday. I think that is not conducive to good diplomatic relations. It is not conducive to good diplomatic relations to call the British Prime Minister a hypocrite. It will not help John Key as Minister of Tourism to get the next meeting in an attempt to wind back—and I agree with our Prime Minister—Mr Brown’s misguided approach in the tourism area. 
National says that it cares about jobs. We are expecting later this week an enormous package from National; an enormous job stimulus package. I would just ask what those members are doing when in this area their policy is costing jobs in the forestry sector when their policy of throwing the emissions trading scheme to the wolves is costing jobs in the carbon market and now they are taking out jobs in the biofuel industry. I cannot think of anything much better than the existing legislation. It is a win-win. It means jobs for Kiwis and less money spent overseas on importing fuels which helps the balance of payments. It reduces our emissions and helps us with our Kyoto liabilities. I ask Government members what is wrong with any of that. 
Hon Dr Michael Cullen 
: I don’t think it was a donation from Shell. 
Hon TREVOR MALLARD 
: Well I think it does get to that in the end. However I say to Dr Cullen that I have driven up and down the North Island a couple of times in recent months and stopped at Bulls where there is now 10 percent biofuel in the higher octane petrol at the Mobil service station. I do not know where else it is happening around the country. It is not happening in my local area yet but I to say to members opposite that it is already happening. It is a good thing. It is a bit like a golden egg. Why kill the goose? 
AARON GILMORE (National) 
:  
I rise to support the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill and unlike the previous speaker I will not talk about “our enormous package”. I know a little bit about the biofuels and bio-gas industry. I have been a director and entrepreneur in this industry for a number of years. I have sat here for the last day or so listening to some of the ridicule from members opposite who have been talking about how National is dead against jobs in this industry and dead against issues that would prevent people going out of business. In fact that is entirely incorrect. We are dead against the obligations that exist under the current Energy (Fuels Levies and References) Act. My own experience is that there has been a gold rush of businesses seeking tallow and other fuels to use for biofuel and bio-gas in New Zealand. A lot of work has been done on the so-called standards that were in the existing Act. When we look at them we see that there are a lot of problems with those standards and that they are essentially unworkable. 
I come from a perspective as a former entrepreneur in the sector in talking about some of those things. My own experience is that it has been possible to be successful in setting up bio-gas or biofuel businesses—these things are largely interchangeable because vehicles can run on liquefied petroleum gas that has come from bio-gas or from bio-diesel. We have done that with no help from the Government no obligations and no subsidies—and it works. Equally the international evidence from organisations like the Royal Society is such that— 
Metiria Turei 
: Why the subsidies for big companies then? 
AARON GILMORE 
: Well the member would know that as I just mentioned the companies I am involved with have no subsidies at all. 
Metiria Turei 
: Why the subsidies for the big companies then? That’s your policy. 
Hon Gerry Brownlee 
: That’s exactly what was in the law! That’s what the obligations are all about.  
AARON GILMORE 
: That is exactly what I am saying. That is what the obligations are all about—absolutely. The Royal Society in Britain has talked a lot about the issue of biofuels and the fact that many biofuels may actually cause an increase in climate change. That work has been released by the learned Royal Society of the UK. The use of specific percentages in the short run will only move to increase imports of biofuels from some of these places that we have talked about previously. Yes there is a very good opportunity to create a biofuel and bio-gas industry here in New Zealand. 
Hon Darren Hughes 
: Does this bill help? 
AARON GILMORE 
: Well the current Act does not help at all. That is for sure. All we can say is that there are many smarter ways to deliver what both sides want. We do want to deliver a biofuel or bio-gas industry in New Zealand. It does provide sustainable fuels but what is quite clear is that the current Act with its obligations does not and will not deliver that in time. As I say the current standards are unworkable and we need to make a change by introducing this bill to allow smaller companies with innovative technologies to not be obligated to operate under a system that is unworkable under the existing Act. 
A party vote was called for on the question  
That the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill be now read a second time. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Bill read a second time. 
In Committee 
Part 1 Repeal of biofuel obligation 
Hon DAVID PARKER (Labour) 
: 
 This is the most important and worst part of the Energy (Fuels Levies and References) Biofuel Obligations Repeal Bill. It repeals the biofuels mandatory obligation an obligation that was put in place to cause oil companies to start with modest levels of biofuels being blended into the fuel they sell—0.5 percent of the fuel by calorific value had to be biofuel this year rising to 2.5 percent by 2012. These were not large quantities but enough to cause the oil industry to develop the blending infrastructure and to take product from those who were willing sellers of the product in order that we start to bring forward biofuels to reduce our greenhouse gas emissions. 
It has a number of other benefits including slowly weaning us off our oil dependency. New Zealand’s biggest import cost is oil products. We spend literally billions of dollars every year on oil imports and this was a start towards substitution of some of that oil product primarily for environmental reasons but with economic benefits. 
The Minister in the chair the Hon Gerry Brownlee has been on national radio and in all of the media claiming that his justification for doing this was sustainability issues. He claimed he was repealing the biofuels legislation because he had concerns about the importation of unsustainably sourced biofuels. It is somewhat ironic that in doing that his legislation is so ham-fisted so ill-considered that he strips out of the law the only protection in law—in any law—against the importation of unsustainably produced biofuels. 
There was a view a couple of years ago—a view that I never held—that all biofuels were good. It was arrant nonsense. There are some biofuels that are bad. Some cause the cutting down of rainforests the loss of habitats for endangered species degradation of water and loss of whole ecosystems. We do not want those biofuels. The legislation we currently have in New Zealand creates standards that prevent that outcome. Other biofuels— 
Jacqui Dean 
: But no sustainability standards. That’s the problem. 
Hon DAVID PARKER 
: The legislation includes three sustainability principles that are detailed to a greater degree of specificity than is normally found in primary legislation. And I have to thank the Hon Nick Smith for his involvement in this in the select committee; he made a credible contribution to some of the drafting of that. He seems to be involved in the killing of the whole thing now but he actually made a credible effort in the select committee and I thank him for that. Metiria Turei from the Greens made a fundamental contribution to it and Moana Mackey from Labour was also influential. 
As a consequence we had three sustainability principles in the legislation. The first was the protection against loss of biodiversity because of the logging of rainforests and that sort of thing. The second was the competition with food production. We do not want to put up the cost of food because of producing a petrol or diesel alternative that competes with food production. So that principle is enshrined in there as well. The third was that there had to be a substantial reduction in greenhouse gas emissions. The minimum reduction was 35 percent from memory. 
Metiria Turei 
: It was. 
Hon DAVID PARKER 
: I thank the member for confirming that. Those principles can be articulated only in regulation. The whole detail cannot be put in the Act. So the principles were set out in detail but the fine detail that sits behind it is in regulation. That regulation was to be promulgated by the middle of next year and would have been. I know that that was achievable because I was the relevant Minister at the time and officials assured me that it could be done. It was a lot of work to do in that time but it could have been done. 
In the meantime all sellers of biofuels—that is the major oil companies meeting their mandatory obligation—had to report their source of biofuels. They were not going to put at risk their brand with accusations that they were going to be selling biofuels produced by knocking over rainforests in Indonesia. Of course they were not going to do that. More important though the myth about sustainability is exposed by the fact that those sustainability criteria that sit in the Act and will still be needed even if one does not have a mandatory biofuel sales obligation get ditched from the legislation by this one clause in this part of the bill which takes out all the relevant sections that impose sustainability criteria. So rather than making the problem better if Mr Brownlee and his Government were really concerned about sustainability issues it makes it worse. According to what we have heard from some of the interjections from Jacqui Dean they need more sustainability provisions. By repealing the provisions they do not have more; they are taking them out and leaving it worse not making it better. 
I have amendments that I will be proposing during the Committee stage because that can be fixed. One can remove the mandatory sales obligation and still keep protections against the importation of unsustainable sources of biofuels but this bill does not do it currently so I am proposing amendments which I hope the Committee will support that do achieve that. I would encourage ACT to read those because I am really trying to convince the Committee that that particular amendment does not run against the provision that repeals the mandatory obligation but it does keep the sustainability criteria for imports of biofuels. 
The second issue that Mr Brownlee says he was worried about during the election was that there was an “un-level playing field” I think was the phrase used—one of those hackneyed phrases now—to say that somehow because there was a tax break for ethanol and no tax break for bio-diesel it was wrong. Well the advice was that we needed both bio-diesel and ethanol and that was the view of the then Government—we wanted a bit of ethanol so that oil companies started updating petrol infrastructure and bio-diesel so that they update diesel infrastructure; we needed a bit of both. In order to bring ethanol on we actually needed to have that subsidy but we did not need the subsidy for bio-diesel because the mandatory obligation would be enough. So why have a subsidy when one does not need it? It seems nonsense that we are now going to talk about a subsidy for bio-diesel. But be that as it may— 
Hon Gerry Brownlee 
: No we’re not. 
Hon DAVID PARKER 
: The Government is now not going to give a subsidy for bio-diesel? 
Hon Gerry Brownlee 
: No tax equalisation. 
Hon DAVID PARKER 
: Tax equalisation is what? A subsidy for bio-diesel the same tax break that ethanol currently gets; is that effectively what the Minister wants? 
Hon Gerry Brownlee 
: That’s what is likely to be— 
Hon DAVID PARKER 
: Well this legislation does not do it. So the Government wants to protect the biofuels industry by giving it that same tax treatment that ethanol gets but the bill does not do it. Now I am promoting another Supplementary Order Paper that goes some way to doing that because I am really worried for those people who have lost their life fortune in appropriate investments in what is the world’s most sustainable source of biofuel which is tallow. I am worried for the workers who are going to lose their jobs— 
Hon Tau Henare 
: Oh whatever! 
Hon DAVID PARKER 
: Tau Henare does not care about unemployment. This will be a continuing theme from this Opposition because the Government is already causing rising unemployment not just in the biofuels industry but also in forests. 
Hon Tau Henare 
: Rubbish. 
Hon DAVID PARKER 
: I have a letter that I am going to table from the former president of the National Party complaining about the injustice that the Government is causing to Mr McNicholl who is losing his life fortune—more than 46 full-time jobs will be lost from one employer alone to say nothing of the rest and Tau Henare and the rest of the National Party say “whatever”. That is absolutely outrageous. 
 Not only is this bill environmental vandalism but it is economic lunacy and it is doing an injustice. If the Government wanted to do away with the mandatory obligation and replace it with other policy it could do so but it should do it through a select committee. It should not ride roughshod over the rights of people and do this under urgency. It should bring forward the whole of its new policy not just the dirty little bit that cuts off the mandatory obligation and kills business. It should say what it will do in its place to support biofuels. But the Government is not doing that. This bill is part of an outrageous array of policy that is to the detriment of the environment to the detriment of our economy and to the detriment of our reputation of being a good people. That reputation is something that is valuable to me. I do not do these things just for money; money is important and I am not saying we should do silly things in a money sense. This bill certainly is not just about money but the ethics of it should be brought to head too. 
I seek leave to table a letter from the former president of the National Party Sue Wood. 
The CHAIRPERSON (Hon Rick Barker) 
: Leave is sought to table the letter. Is there any objection to that course of action being followed? There is none. Leave is granted. 
Document by leave laid on the Table of the House. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Part 1 is the more important part of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill and is a part about which my colleague David Parker has asked serious questions of the Minister in the chair the Hon Gerry Brownlee. I acknowledge that the Minister attempted to reply by way of interjection but it is getting close to the time when he should take a call in order to put the National Party’s view on the record. 
A couple of major points have been made. The first regards the timing of this bill versus the timing of the introduction of the tax incentive or subsidy and the extension of the tax exemption from ethanol to biofuels and what happens in the dead period in between. I accept the Minister’s word that he intends to move in the direction of tax incentives; that could well be a logical move. That approach could well make a difference or at least neutralise the situation. What I do not accept is the chilling effect in the interim whereby a biofuel factory that is nearly built will be mothballed. The appropriate approach is to make the two changes together—to put in place the replacement provisions and then take the current provisions out—if that is in fact the direction that people want to go. I do not think that that is good policy by the Government or that it is the right approach but if the Government is heading down the path of effectively a taxpayer subsidy of biofuels for a taxation equalisation scheme then that is the approach that should be taken. 
The second point regards whether the Minister is deliberately taking the sustainability principles out of the Energy (Fuels Levies and References) Act. Every now and again Ministers make mistakes especially when legislation is slightly rushed as this legislation is. I can see no reason whatsoever to remove the principles unless it is in order to fulfil the Government’s obligation to the oil companies—or whatever we are doing at the moment. The Government probably has an obligation to the oil companies as a result of commitments made maybe a year or two ago. I am making the point that there is no need whatsoever to take the sustainability principles out of the Act in order to fulfil the policy intent of this bill. 
The principles were not in the Energy (Fuels Levies and References) Amendment Act 2008 when it originally came before the House as a bill from the Labour Government. An enormous amount of multipartisan work was done to get the principles agreed to and I acknowledge that Dr Nick Smith took a role in that work. I know that members of the Green Party and Moana Mackey were actively involved in it as well. It was quite a good example of members of Parliament working together positively in a select committee. When that occurs it is good for New Zealand’s international reputation; it was logical and coherent. Even if we go back to the old Ruth Richardson approach we should still ask what mischief we are trying to fix here. The mischief that we are trying to fix is not the sustainability principles. 
The National Party has a different view as to the proper approach to this issue and as to whether there should be regulation as far as quantities of biofuels are concerned. I think it is fair to say that it is not part of a secret agenda. National members were clear about that before the election—they were wrong but they were clear. They won the election and they have the right to bring in legislation in order to fulfil their election commitments. But as they are doing that we have to keep considering what the best way of doing it is that does the least harm. 
It is becoming increasingly clear that the approach National is taking is not well reasoned. I point to the ACT Party and in particular to Rodney Hide who has responsibility for regulatory matters. Rodney Hide has responsibility for regulatory impact statements; this bill does not even have a poor excuse for one. There are a couple of explanations for that. One is that it was so rushed that even a vague attempt at an unsatisfactory report could not be made. Last week a couple of bills before the House included very poor regulatory impact statements. They stated that a narrow group of Government departments had been consulted. In a couple of cases they gave their views—I think only where it suited the Government. I think that the Ministry of Economic Development stated that the 90-day legislation did not go far enough; that was included in the regulatory impact statement of the Employment Relations Amendment Bill. 
Why is there not a regulatory impact statement in this bill? It is because if there were such a statement then the National Party would have to put on record in the bill the effect of the legislation on Mr McNicholl. A clear effect of this legislation is the confiscation of Mr McNicholl’s investment. The Government is saying to Mr McNicholl in a way that is pretty unusual for the National Party that although he has made a big private investment and he has put a lot of his family money—the vast majority of his family money I understand—into this investment it does not care. The Government is saying that that is not important that it does not respect private investment and that it does not believe in the principles of regulatory certainty. 
I think the New Zealand Parliament has got a lot better at regulatory certainty over the years. There was a period of time with Sir Robert Muldoon—and probably to be fair Sir Roger Douglas—when there was not a lot of regulatory certainty. They went off in different directions with their regulation—or lack thereof—but both of them destroyed a lot of wealth in New Zealand as a result of their lack of commitment to regulatory certainty. This bill takes away certainty for people who have made a very big investment. 
This bill will do us enormous harm internationally. The suspension of the emissions trading scheme is just an embarrassment. Maybe it is fair to set up the Emissions Trading Scheme Review Committee—a committee that at least some people claim will go into the science of whether climate change exists—because John Key has had two positions: believer and non-believer. Maybe he really does want a committee to tell us whether climate changes exists and whether global warming is important. If that is the case why can he not be honest about it? If he is really still a doubter about climate change—if the Prime Minister of New Zealand is standing almost alone amongst world leaders in doubting climate change—why can he not front up and say that that is the case? That would be a better explanation for this legislation and for National’s pandering to ACT in the setting up of the Emissions Trading Scheme Review Committee. The Prime Minister says it is a high-level select committee. Is that not embarrassing for every other select committee in Parliament? It is not a high-level committee at all; it is a committee of members of Parliament nominated by their parties in a very normal way. I do not think there is an excess—other than from the Labour and Greens side—of intellectual power on that particular committee. 
The point I am trying to make is that that select committee along with this bill and along with the suspension of the emissions trading scheme makes New Zealand look like a country that is absolutely in reverse on its climate change policy. 
Hon Member 
: And forestry. 
Hon TREVOR MALLARD 
: The forestry area is another area. 
We had the potential to lead the carbon markets in the world but John Key has stuffed that. This bill is a sad bill and we will suffer for it. 
METIRIA TUREI (Green) 
: 
 I was on the Local Government and Environment Committee which considered these provisions and worked very closely with Moana Mackey— 
Hon Member 
: And Nick Smith 
METIRIA TUREI 
: Yes and Nick Smith. He was very engaged in the discussion and the debate particularly on the sustainability clauses. In fact the Green Party is the architect of the sustainability clauses. There was some provision for them in the original Biofuel Bill but we redefined those clauses and the sustainability principles significantly in order to meet the growing concerns about the impact of unsustainably grown biofuels not just in terms of greenhouse gas emissions but in terms of their impacts on indigenous biodiversity indigenous communities and starvation around the world. It is certainly true that very large corporations particularly oil companies and others are looking at buying up millions and millions of hectares of land in places like Africa South America and the Pacific whether it is indigenous forest cover or other land that is used for food production in order to grow biofuels to feed the increasing market for alternatives to petrol and oil fuels. Western countries in particular are desperate to find ways to fill their gas-guzzling sport utility vehicles as opposed to developing countries which are desperate to fill the starving bellies of their people. 
The first principle that we fought for and which was included in the legislation was around the fact that a sustainable biofuel must emit significantly less greenhouse gas over its life cycle than obligation engine fuel emits. We were very clear to put in a principle that identified both the production of that biofuel as well as a percentage limit. It was a hard-fought-for discussion in the select committee. Many hours were spent on debating the wording of the principles to make sure that they were practical achievable and set an extremely high standard so that New Zealand would not contribute to starvation would not continue to contribute to greenhouse gas emissions where it was possible to avoid doing that and would not contribute to the elimination of indigenous biodiversity. So we were very pleased to see that we had a very strong principle around emitting fewer greenhouse gas emissions. There was no problem with that; the committee was OK with that. I do not remember Nick Smith having a big problem with it; maybe he did have one. It certainly seems very odd that he wants to get rid of that principle now. 
The second principle was very important to us. It was around food production: that sustainable biofuels should not compete with food production and should not be grown on land of high value for food production. That principle was put in place specifically to meet the concerns that Nick Smith expressed. He had very deeply held concerns about the destruction of indigenous rainforest in Brazil and he talked a lot at the select committee about how those communities were using food-growing land to make biofuels and then cutting down indigenous forests to feed themselves. He said it was terrible that poor people had to do that in order to sustain themselves in Brazil when it meant the destruction of the rainforest and that all of the really good food-producing land would be used for biofuels instead of food. I am sure he had a genuinely held concern that that should not happen. 
I was happy and the Green Party was happy to work through those issues and to find wording that would meet Nick Smith’s deeply held beliefs and concerns about Brazilian rainforests. So we came up with the words stating that the sustainable biofuels were not to “compete with food production” and would not be “grown on land of high value for food production”. That was specifically put in there to address the really deeply held concerns that Nick Smith had about biofuels. In the end the result was a very good one actually; it turned out that the standard is a very high one. We are talking about very poor communities in those countries. We are talking about indigenous communities in those countries and often about people who for example have the lowest incomes the highest rates of child mortality the highest rates of poverty and the highest rates of homelessness. The communities of those countries really are struggling and we wanted to make sure that we provided the best protection we could in New Zealand as far away as we are from them to make sure we did not contribute to those problems for them. 
So that is what we did; we put in the sustainability clause on food production specifically for the sake of Nick Smith. We did that so he would know when he was driving his car around with a biofuel blend—and I do not know what kind of car he drives—that he was not starving a poor Brazilian child and that he would know a poor Brazilian family was not having their home and livelihood wiped out because the land on which they were growing food to feed the family for the next 6 months or the next year was now to grow the biofuels that would feed his car while he travelled with his family around the country perhaps on their Christmas holiday a nice family trip or maybe even just a Sunday drive. Nick Smith could then therefore feel secure that he was not contributing to the poverty and the starvation of those poor people. 
But it turns out that an ideological gap of some kind some ideological lacuna in Nick Smith has driven him to argue—and he must have argued this in Cabinet—that the sustainability clause that he so wanted to see in the legislation and that he worked so hard to make sure was in it is now being taken out. His concerns about poor Brazilian children and poor indigenous communities—that they might starve as a result of land being used for biofuel production and that the indigenous forests from which they might gather their food or take their medicines or that they might have their cultural expression or engagement with would be destroyed in an effort to grow the food previously grown on the land now taken to grow biofuels—have all gone now. For some strange ideological reason Nick Smith has decided that when he drives his car around the country takes his family for a Sunday afternoon drive or maybe goes away for a weekend or perhaps even for his Christmas holidays he does not mind if his car is being fuelled by— 
Hon Darren Hughes 
: What changed? 
METIRIA TUREI 
: If Nick Smith does not now mind that unsustainable biofuels may be fuelling his car if he does not mind that a Brazilian child may perhaps starve to death because the land from which that child would otherwise have had food is now being used to grow biofuels and if he does not now mind that a poor Brazilian family may have lost their home lost their land and lost their forest to the large multinational corporations that will buy up indigenous forest and destroy it to grow biofuels on what did change? 
What happened to poor Nick Smith that meant he could feel so strongly about those people in one instance and then completely desert them in the next just as a result of the election? It is a disgraceful and very sad demise of the principles of Nick Smith that he could change his position so much and actually be in the end responsible for public subsidies going to the very international corporations that will buy up food-growing land for biofuel production and that will buy indigenous forest cover and destroy it—knock it down—in order to either grow more biofuels or provide food sources for those communities even though they were perfectly fine beforehand. The public subsidies will go towards impoverishing indigenous communities. The public subsidies will go towards destroying indigenous forest eliminating the habitat of precious rare indigenous species and even destroying the New Zealand industry in biofuels. 
I do not know how Nick Smith or even Gerry Brownlee could have possibly thought that it is a good idea to have a sustainable New Zealand biofuel industry taken out and jobs lost right at the time when we are most concerned in this Parliament about the economic insecurity of the community and when we are most concerned about increasing job losses. There have been massive job losses in the last year or two just as a result of the slowing down of the economy. Right at the very time when the local industry had a foot in the door and was able to compete with the multinational companies National now wants to subsidise and pump money into those multinational companies. Just at the time when the local industry had the opportunity to grow and to provide jobs for New Zealand workers and to support New Zealand families and their children Nick Smith has decided to take all that away and to provide public subsidies to cut New Zealand jobs destroy a New Zealand industry starve and impoverish indigenous communities and destroy indigenous forest. This is being done by the National Government which supposedly has such a commitment to sustainability and environmental principles. 
Moana Mackey 
: That’s right! 
METIRIA TUREI 
: Yeah that is right. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 We have had the first and second readings of this legislation and now the Committee stage. The second reading was a bit of a repeat of the first reading because of course there was no select committee in the interregnum. There was no report back from the select committee because there was no select committee. So we had a somewhat repetitive debate in the first two readings of this legislation which was characterised by a great deal of sophistry—by a great deal of pretence from the Government speakers. 
However through that pretence or sophistry a couple of threads emerged—for me anyway. One of them was that the technique of a mandatory sales obligation did not fit with the ideology of the new Government. That is a fair enough position—it is entitled to its ideology even if it does not make sense—but ideology it is. The second was to do with the fact that the Government was concerned—I think those concerns were manufactured—by the fact that there was no regulation in place to secure the sustainability aspects of biofuels. 
Let us take a look at these two issues. The first is the Government’s ideological resistance to a sales target. The sales target or a mandatory sales obligation is one tool that is used broadly to promote energy change. In the free market of the United States—in that great home of the greatest economy that the world has ever seen—mandatory sales obligations in energy are very widespread; they occur in many many states. It may even be that they occur in most states; I simply do not know enough detail. But it is common indeed for state Governments in the US to require mandatory sales for this or that—most particularly in renewable energy for the electricity sector. So there is nothing particularly ideologically blinkered about this or that American state but none the less we find that this Government has decided all by its little self that a mandatory sales obligation is somehow an ideologically impure act. 
The whole idea of a mandatory sales obligation is to ensure that the wholesalers—that is to say the oil companies—put in the infrastructure that they need where they want to in the parts of New Zealand they want to to begin to build a distribution system that we know this country will need sooner or later. That is what a mandatory sales obligation does; that is its function. 
But it is the second issue I want to concentrate on in this contribution. We are in Part 1 of the Committee stage and many speakers before me have pointed out that the Government cried crocodile tears over the fact that we are not fully paid up in terms of getting our regulation written for sustainability—that is correct; it is not due until 30 June next year—and that therefore we cannot do anything now. 
There are two different ways of approaching that and I would like to invite the Minister in the chair the Hon Gerry Brownlee to take a look at these two different ways. The first is to simply delay the legislation by say 6 or 12 months. A thing to do would be to come up to this Chamber with an amendment that said that because we do not have lock stock and barrel in respect of the sustainability regulations—even though we have more legislation in law than any other country in the world and even though we have mandatory transparency regulations making oil companies tell us where they get their biofuels from—because the door is still slightly ajar we could simply delay this legislation by say 6 or 12 months until that regulation is promulgated. The Minister may want to take a call and indicate why his Government is going for abolition instead of delay. The second thing however is this: the Minister’s position as I understand it—and again I would be grateful if he would clarify his position—is that the Government is of a view to promulgate sustainability regulations for the future in respect of biofuels anyway. I wonder whether the Minister could give some sort of body language indication as to whether that is the case. 
Hon Dr Michael Cullen 
: A wee wobble. 
Hon PETE HODGSON 
: A wee wobble. No we have wobbling going in all sorts of directions. Why do I not just repeat the question? My understanding is that the Government is of the view that this country will at some point need sustainability regulations as they affect biofuels— 
Hon Dr Michael Cullen 
: In the fullness of time. 
Hon PETE HODGSON 
: —in the fullness of time. I ask the Minister whether my understanding is correct. I have an affirmative ladies and gentlemen. I have an affirmative from the Minister and I thank him for that. That piece of body language tells me that the Government will promulgate sustainability regulations as they affect biofuels. It raises an interesting question: to which part of which primary legislation might these regulations attach? You see we have before us in Part 3 of the legislation that is being abolished the most advanced progress on defining sustainability for biofuels in Western legislation. And we are about to ditch it. What is sensible about that? 
Hon Dr Michael Cullen 
: We did it—that’s why. 
Hon PETE HODGSON 
: Oh it is because the previous Government did it—the naughty old Labour nanny State Government! Is that right? The legislation being abolished is really good. It is legislation that is particularly good and we know that because it was argued by none other than Nick Smith in the select committee. We know it is multiparty; we know the Greens were deeply involved; we know the National Party had its role to play; we know people like Moana Mackey from the Labour Party were actively involved; but it was all done during the time of the dirty rotten stinking Labour Government. I ask the Minister whether that might be the reason why we have to ditch this legislation. Oh we have a negatory response! We have a negatory response from Mr Minister. I am grateful for his forward communication but I want him to take the stand if he will and please give us some indication of when we might be getting some better-than-before regulation concerning the sustainability of biofuels and to which part of which primary legislation we will attach these regulations when we have them or whether we have to come back to the House and put back in that which we are today seeking to abolish. 
We have a negatory response there too. I am confused; I am bewildered! I need the assistance of the Minister. I need the assistance of the uber-Minister and the intellectual rigour that he can present to the Committee. 
Hon Gerry Brownlee 
: Read the bill. 
Hon PETE HODGSON 
: I am being told to read the bill. The bill says: “Let’s get rid of what we’ve got. Yours sincerely.” That is what the bill says. That is the beginning and end of it so one does not need such a long time to read the bill. 
I ask these questions seriously. First of all if the issue is that we have not locked and shuttered all of the regulations that officials have not got themselves to June 2009 and that therefore we have some sort of chink in the armour why not go for say a 6 or 12-month delay? Secondly if the Government’s intention is—and I am assured by the Minister’s body language that it is—to come up with very good sustainability regulations for biofuels then where will those very good sustainability regulations for biofuels sit in the architecture of the statute of the land? I ask whether the Minister would care to take a call and answer either or both of those questions. 
CHRIS TREMAIN (Junior Whip—National) 
: 
 I move  
That the question be now put 
. 
MOANA MACKEY (Labour) 
: 
 I point out to the member who just moved a closure motion Chris Tremain that Part 1 is the part of the bill that repeals the mandatory obligation for oil companies to provide biofuels. It repeals the sustainability standards. I think it shows the contempt in which National holds this Committee that it would move a closure motion so early on in the Committee stage. 
Hon Darren Hughes 
: Before the energetic Minister even had a chance. 
MOANA MACKEY 
: Before the Minister of Energy and Resources who is in the chair has even had a chance to get to his feet. I know he wants to respond; he has been itching to get up and I look forward to his contribution. 
I start by thanking the officials who worked on the original biofuels legislation. They worked incredibly hard to provide the select committee with advice under very tight time frames. I apologise to them that we are back in the Chamber undoing a lot of the good work they were involved in. 
I would like Mr Brownlee to take a call because he made a very interesting comment in either his first reading speech or his second reading speech—they were about half an hour apart so it is hard to differentiate between the two—that all the oil companies would come to him to ask to defer their first year’s obligation. I think that claim needs to be explored in the Committee. He did not of course mention that there is a 5 percent penalty for any oil company that wants to defer—it would have to add 5 percent on to the following year’s obligation. I genuinely would like the Minister to take a call to explain why he said that all the oil companies would ask to defer their first year’s obligation because I think that comment which he made in the House last night was important. 
This bill has not been to a select committee. Many members have made that point and it is important to make it again. The Minister in the chair does not seem to care about Mr McNicholl the jobs at that plant that will go and the loss of the $10 million investment. Mr Tau Henare said “So what?” I believe when that was raised. 
Hon Darren Hughes 
: He said “Whatever!” 
MOANA MACKEY 
: Oh “Whatever!”. I am sorry; I would hate to misquote the member. 
Hon Darren Hughes 
: He’s cool. 
MOANA MACKEY 
: Quite. I think it is important that the Minister who did not allow this legislation to go to a select committee takes some calls in the Committee stage. National should appreciate that the Committee stage is very important when a bill has not been to a select committee because it is the only opportunity that members on this side of the Chamber—and through us members of the public—get to question the Government on what is in this case a terrible piece of legislation. I would urge National to think seriously about this bill. 
I congratulate the Leader of the House Gerry Brownlee on his 100 percent success rate so far in not having bills go to a select committee under his watch—100 percent of bills have gone straight through the House with no select committee process and no public accountability. I am sure Mr Brownlee is very proud of that record. I note that even in the current urgency motion the only bills that he is sending to a select committee are the previous Labour Government’s bills that have been carried over from the previous Parliament. All the bright new ideas that National members have come up with themselves are just being forced through. I think they are a little bit scared of what the public might say if they got to have their say at a select committee. 
Labour members of the Local Government and Environment Committee worked very hard on Part 3A of the Energy (Fuels Levies and References) Act—the part that is now being repealed. It was at about the time that a lot of information was coming out from the United Nations from the OECD and from the Parliamentary Commissioner for the Environment about the dangers of biofuel. We took all that on board which is why Part 3A as enacted is considerably different from what was in the bill that was referred to the select committee. Members of the select committee worked incredibly hard to develop the sustainability standards that we now find in the legislation. One of the submitters told the select committee that that submitter had joined the United States federation of biofuel producers—or whatever it was called—which is predominantly made up of the oil companies and in the time that the submitter had been in that group it had spent US$118 million on discrediting biofuels. In comparison a much smaller amount had been spent by the groups that were trying to promote biofuels. That was something we as a select committee had to consider when we were looking at the information being put before us. 
There will always be reasons for not passing environmental legislation. It does not take a brainiac to sit down and work out an argument against doing something. That is the easy part. The harder part is to say we will not throw up our hands and say it is too hard; to say we will work to develop sustainability principles that are more advanced than those anywhere else in the world and then we will send our Minister away to do some work on those standards. One of the important parts of the part that is being repealed is the obligation for the Minister to go away and develop proper standards and regulations. Repealing Part 3A means that Mr Brownlee can do nothing. Under the current Act by the middle of next year he would need to report back to Parliament with details on those regulations or reasons why they had not been developed in the time frame set for developing them. By repealing this part of the Act the National Government is washing its hands of there being any requirement in law for it to do anything about sustainability standards. We simply have to take those members’ word that that is something they want to do. 
Well I say to members of this House that we should look at their record so far in their first 1.5 weeks in Government. Let us see how much we can trust National members to do what they say they will do on sustainability standards. We have seen a stalling of the emissions trading scheme—although we are not quite sure any more whether it is a stalling. 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
:  
It would be great if those opposing this Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill actually knew what we were talking about because quite clearly there is some confusion about the principal Act that this Labour Opposition believes we are dealing with. I will make it very very clear. Nothing in the bill that we are debating today will prevent the development and promulgation of sustainability standards. 
Mr Hodgson asked what will be the principal Act against which those regulations are set. It remains as it always has the Energy (Fuels Levies and References) Act 1989. Part 4 provides for a number of things. Section 35(1)(c) provides that sustainability standards for all fuels sold in New Zealand should be published. All I can say is that this section is not being repealed so the obligation in the sense of sustainability standards remains in place. 
Hon Members 
: It’s not an obligation. 
Hon GERRY BROWNLEE 
: Well it is actually. We think it is an obligation. We as the Government believe we are obligated to provide sustainability standards for those who want to sell biofuel in New Zealand and we will do that. The officials have started the work. They have indicated that under the previous Government’s work plan it might have taken them 3 or 4 years to get there. We have said that we want it much much sooner than that. We do appreciate though that no country in the world has developed those standards yet. The European Union has been at it for some 13 years and has not got there yet. But the National-led Government will make it sometime during next year. 
The other thing I would say to Moana Mackey is that section 35(1)(d) of the principal Act provides that there should be a statement at the pump regarding the sustainability of the fuel being sold. That section is also not being repealed today. What we have is simply a bill that takes out the obligation that says biofuel must be sold in New Zealand at particular percentages by the fuel companies—the ones that are selling fuel. 
It is the compulsion aspect that will kill sustainability in New Zealand: the short showers that New Zealanders were almost restricted to the types of light bulbs that people have to buy and also now the blend of fuel that people must put inside their fuel tanks. That is what was wrong with the approach of the previous Government and that is what is being changed. 
I will say it again. At the moment 20 million - plus litres of biofuel are produced in New Zealand each year. It is being sold somewhere and the development of further plant to produce biofuels will see those sales increase. 
Hon Dr MICHAEL CULLEN (Labour) 
: 
 Well that was the best that the Minister could do saying that the Government has the power under old Labour Government legislation from 1989 to make rules about sustainability. The problem with that argument is that the rules are not specific. They are not according to particular criteria as they are under sections 34G and 34H of the current Act—the Energy (Fuels Levies and References) Act—which is why my colleague Mr Parker has put forward an amendment to retain sections 34G and 34H. I suggest that the Minister look carefully at that because it will help him in the future. 
In section 34H there are particular principles around biofuels emitting less greenhouse gas biofuels not competing with food production or being grown on land of high value for food production and biodiversity and land with high conservation values being preserved. These are important issues. Under what the Minister is proposing to use he will not have those kinds of criteria necessarily at all but a very simple statement at the pump which will be just about as useful as most statements of a commercial variety telling people what is happening in terms of those kinds of things. 
The fact is that the real reason the National Government is repealing this legislation is that it is Labour Government legislation from the last year or two and therefore it must be wrong. It is a “Yah boo sucks—I get to play with the marbles!” kind of approach to sensible legislation. The legislation we are repealing was extremely carefully thought through with very considerable output from a wide range of experts who came before the select committee. What we are replacing it with is nothing of the same order of size or quality in that regard and there can be no reliance upon that. 
We then come to this extraordinary argument about the nanny State and this compulsion which is that if we are somehow compelled to have biofuels then we will have less biofuels than if we are not compelled to have biofuels. It is a very strange inverted logic. This is because the Government says it will have a tax incentive and that is a tax incentive where there will be no excise duty on biofuels. Well there is no excise duty now on ethanol the mix for petrol. 
Indeed as the Minister knows—and let us not have one of these “Oh my God is that what Labour’s secret plan was?” reactions because it was all publicly announced—the Labour Government was going to increase the excise duty on the petrol portion to keep the excise duty on the total litre of fuel at the same level. The gap between the duty on petrol and the duty on ethanol would have actually increased under what the Labour Government was going to do. So if there was an incentive then the incentive would have been bigger under the previous regime than it will be under this regime. There was not only a mandated minimum but also a larger incentive to go higher than that mandated minimum. The real problem is that because the National Government of the 1990s repealed excise duty on diesel there is no excise duty to give relief from for bio-diesel so what this Government is presumably planning is to give some kind of rebate to bio-diesel producers. 
Hon Member 
: But they’re not doing it. 
Hon Dr MICHAEL CULLEN 
: The Government is not planning to do that according to what we can find out so far. There are no specifics around that. And if it does that kind of thing then it has to be paid for from somewhere else in the system. There is no free lunch. 
Indeed Dr Smith’s extraordinary argument which was so economically illiterate was that if instead of charging people the full price we give them a subsidy out of taxation this somehow lowers the cost to them. It lowers only the cost that people see at the petrol pump; it does not lower the cost to them. They are paying the cost somewhere else within the system; they just do not see that specifically. It is just a complete smoke and mirrors trick and it is bad economics because it gets all the signals in the wrong place. The nanny State is replaced by this kind of au pair State which is what the National Party wants to have instead in that regard. 
In terms of the cost the argument is that it will cost more but the cost is only a few cents in any case. Either National wants to have biofuels or it does not. If it does then biofuels at low oil prices will cost more than oil. Those members cannot have it both ways. They cannot say: “It may cost more and we still want to do it but because it might have cost more under Labour that is bad. But if it costs more under National then somehow that is good and it will still happen in any case.” The illogicality of the arguments being put forward in this debate is appalling 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 I would like to celebrate that this Committee is having a huge debate around sustainability and that the key issue exercising people on both sides of the Chamber is how we can get the most sustainable biofuels in New Zealand and make sure that our fuel-purchasing policy does not contribute to world hunger does not destroy the rainforests of South-east Asia and does seriously reduce carbon emissions. But I am afraid that that is only the appearance of what is happening. What has actually happened is that very early on in the debate on biofuels the National Party found a line of attack because the bill as introduced did not say anything about sustainability and the information that was coming out internationally at that stage was about the serious effect that some biofuels were having on food supply and on biodiversity. Having latched on to this line of attack National members are determined to hold on to it regardless of the fact that the strongest sustainability clause in the world has been drafted by the Greens and the previous Minister and put in the legislation but National members are trying to pretend that it is not there. 
In fact what is happening here is that in order to ensure that we have sustainable biofuels the Government is proposing to remove the quite specific clause that indicates what sustainability standards have to achieve. There is nothing in the old Act the Government is planning to use to indicate what sustainability is or should be. The Minister’s press release that said there was going to be sustainability standards mentioned carbon reduction only; it did not even mention the problems with food security and biodiversity. So the Government is going to take away the quite clear direction that the regulations currently have to meet—that the sustainability standard will ensure that it does not compromise food security and biodiversity and does reduce carbon—and replace it with nothing but the word “sustainability”. Nobody who sees that could believe that National has any interest whatsoever in the sustainability of biofuels; it is simply a convenient line of attack on the previous Government. 
The Government is actually doing this because of the ideology that nothing that is mandatory can possibly be good and that the way to meet policy goals is to always give people choice and freedom but not compulsion. The previous National Government tried that with building standards with the building code and with the verification that houses were built to spec but what did we end up with? We ended up with leaky buildings precisely because it did not believe in having mandatory enforceable standards. So we got a whole lot of greedy developers poor design poor construction and poor local authority oversight which led to a massive headache that the previous Government never managed to solve and I suspect that this one will not either. It will be hanging around members’ necks for quite a while. 
The Government says that we cannot write sustainability regulations because the rest of the world has not quite done it yet. Well I want to know whether the Minister has called in the two very good officials who have been working on the regulations and whom David Parker and I talked to about just what could and could not be done. When we gave them a bit of a shove they agreed that yes of course they could do it by the middle of next year; it would not be 2011 but it would just have to come up their priority list a bit. They were quite enthusiastic and exercised about how to write those standards and I was really looking forward to them coming out. Has the Minister called them in and asked them whether they really can do this job whether they are worried they do not have a lot of international precedents to follow and how they are getting on with it? I do not believe he has. I think he is just saying that New Zealand bureaucrats are no good that New Zealand officials cannot do it and that we are not going to have standards in time. I think that shows a terrible lack of confidence in the people who are advising him. 
Hon Gerry Brownlee 
: What rubbish! 
JEANETTE FITZSIMONS 
: Well I really hope the Minister is going to take a call and say “Fitzsimons you are totally wrong. I did call those officials in and here is what they said.” 
JACQUI DEAN (National—Waitaki) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon David Parker to clause 4 be agreed to: 
to omit “Part 3A is repealed” and substitute “Sections 34B to 34F and 34I to 34ZA of Part 3A are repealed”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 62 
New Zealand National 57; ACT New Zealand 5. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Part 1 agreed to. 
Part 2 Consequential amendments to principal Act 
Hon DAVID PARKER (Labour) 
: 
 I have proposed an amendment to this part of the bill to give the tax break or the subsidy that National has said it wants to give to the bio-diesel industry in order to give it competitive neutrality with ethanol so as to bring forward bio-diesel but that National has not included in the bill. National finds it easy to draft a clause that completely ruins the biofuels industry in New Zealand a fledgling industry at the cost of scores of jobs. We know of one factory alone that will as a consequence of this legislation lose current jobs and jobs that are about to be created. It will lose at least 46 full-time jobs plus no doubt some part-timers and millions of dollars of capital investment. That is I emphasise but one biofuel producer and maybe just maybe a tax break on bio-diesel would be enough to save that company. I somehow doubt whether it will be enough to do that because the fundamental problem is that the oil companies do not want the bother of selling biofuels. They have their existing product streams that they buy. They import product from offshore and they do not want the hassle of having to blend in 0.5 percent of biofuels in the first year. It is easier for them not to do that so without compulsion they probably will not do it. 
But there is a chance that the oil companies might do so if the subsidy for bio-diesel—which National campaigned on and said was its policy—was put into place now. That might save those jobs. That might save the family fortune of Mr McNicholl. It might not do so but it might and National would at least be honouring its pre-election commitment that it would give a tax break equivalent to the tax break that ethanol gets. Ethanol gets a tax break of 42.524c per litre. That is the excise duty on petrol. Road-user charges are paid for diesel and it is not as easy to give a break on that but we can give the equivalent of the excise duty as a tax break to bio-diesel sellers—and National has been proposing that. 
That is what my amendment does in its proposed new clause 16. It takes only three lines to meet that promise. It states that the sellers of fuel will get a credit against the levies they have to pay under the Energy (Fuels Levies and References) Act “equivalent to 42.524 cents per litre of biodiesel sold by the levy payer.” It is very simple; why has National not done it? I am proposing an amendment that might protect the jobs I spoke about. It is less ideal than the mandatory sales obligation which is simpler gives some certainty to the producer and has a better environmental outcome as a consequence of that but as a second-line alternative that amendment is pretty good. 
I ask the Minister in the chair the Hon Gerry Brownlee whether the National-led Government will vote in favour of that amendment. It does only what he said the Government would do which is to give an effective tax incentive to bio-diesel equivalent to 42.524c per litre of bio-diesel that is sold. It does that by way of having a credit against the levies that would otherwise be paid by the sellers of ordinary fuel. It is very simple to understand. It might protect the jobs that I spoke about or it might not but it is more likely to do so than the current regime that is being pushed through under urgency by this National-led Government without any select committee process. I urge the Minister to consider that. 
The alternative is that the National Government will do to the biofuels market what it has already done to forestry. It has cost that industry over $300 million and probably $400 million of inward direct investment. It has killed scores of jobs in the forestry industry through the suspension of the emissions trading scheme and the uncertainty around it. This Government has killed jobs in the service sector. We had some of the largest companies in the world that trade in carbon rights coming to New Zealand to set up business. They were to open their New Zealand offices in the week that the National Government said it would suspend the emissions trading scheme. Those businesses cancelled that with the cost of jobs. The “Great White Trader” John Key—we are told that he was a trader to the world and has wonderful commercial skills—has killed the carbon market. 
MOANA MACKEY (Labour) 
: 
First of all I will just mention how disappointed I am in the member Jacqui Dean who sought to shut down this debate so quickly. This Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill has not been to a select committee. This is the only chance we are getting even to try to question the Government on why it is doing this and on parts of this bill. The Minister in the chair the Hon Gerry Brownlee seems particularly reticent to stand up and answer any of our questions. He has answered only the questions he has wanted to answer and then he has answered some questions we did not even ask. Well that is not particularly useful and I point out to the Minister once again that he is ramming this bill through under urgency. 
This bill should have gone to a select committee so that Mr McNicholl and other people who are adversely affected by the repeal of the mandatory biofuel obligation could have had the chance to have told us why. National members who believe that Mr McNicholl is lying and is just saying what he is saying for some competitive advantage would have had the opportunity to put those questions to him I say to Mr Brownlee and to challenge him at a select committee rather than to stand up in this Chamber where Mr McNicholl has no right of reply and no ability to defend himself and just call him a liar and a scaremonger. I do not think that that is good for the Parliament of New Zealand. I do not think that that is good enough for this Parliament. I think that if that is the way this National Government is to continue with 100 percent of bills so far being rammed through under urgency in this House with no select committee process then it will be a very long 3 years for the people of New Zealand. 
Jacqui Dean is probably worried about compulsion. She is the member who wanted to ban water so I find that concern slightly difficult to take from her. But I will support the amendment of the member David Parker. The relative tax treatment of different fuel types was something that the select committee did consider quite carefully. As the Minister will know in the explanatory note that accompanied the Biofuel Bill that came back from the Local Government and Environment Committee we recommended that a total review be made by 2010 in order to consider all fuel types. The review was to consider not just vehicles using biofuel and engine fuel but also electric vehicles—which we were told during the select committee process had to drive around with a sticker on them stating “diesel” I think because that was the category they fitted into most easily as current rules did not allow for them—and to consider LPG as well. Perhaps it is time to review the way in which we tax vehicles and to apply an environmental eye to that and not just to apply road-user charges and excise duty. 
When Gull Petroleum first wanted to blend ethanol into its fuel it wanted to know what the relative tax treatment of ethanol would be. Currently ethanol is brought into New Zealand for two reasons: as drinking alcohol or for use as a chemical. Ethanol as a chemical attracts no excise; ethanol as a drink obviously attracts alcohol excise duty. A decision was made at that time to allow the excise treatment of ethanol as a fuel to be treated as ethanol as a chemical which meant that it would attract no excise. The company was given a commitment that until 2012 that would be the case and that the decision would not be reviewed. We took that very seriously at the select committee. Gull Petroleum had made all this investment in its infrastructure and in bringing in blends and it had gone into a contract with Fonterra until 2012 to take ethanol from whey to blend into its fuels so we did not want to say to Gull Petroleum that we would take that away at that time through a select committee process that had been looking primarily at a mandatory biofuels obligation and not at the relative tax treatment. 
But the point was that we were putting in place a mandatory biofuels obligation that addressed a number of those issues; with that being taken away suddenly this becomes a far more pressing issue. That is why I urge the Minister in the chair Gerry Brownlee to support this amendment. It does what he has already said in this Chamber that he wants to do so I do not see any issue with that. But it provides some kind of incentive which he will be taking away with the repeal of this part of the existing legislation. 
Certainly a number of the bio-diesel producers who came before the select committee were concerned about the relative tax treatment. We know that the way in which we treat the excise on ethanol is an issue of great concern. We have seen the impact that the subsidies on ethanol in the United States have had on the world biofuel market. It has made it extraordinarily difficult and the “splash and dash” ethanol that we have seen produced out of the United States has distorted that market. It has made it a lot harder for our producers here to be able to compete. 
We believe that this is an issue that needs wider treatment than just being about ethanol and bio-diesel versus engine fuel; it needs to go beyond that. I would like the Minister in the chair to take a call on this part because it seems to me that we are entering a real no man’s land here and we are in real danger of ending up with absolutely nothing. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I rise to speak to Part 2 of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill and to support the amendments in the name of my colleague the Hon David Parker to insert a new clause 5A and a new clause 16. 
I ask the Minister in the chair the Hon Gerry Brownlee why this Government is determined not to listen to the very many strong voices on this issue and to push through this legislation under urgency. Only the National and ACT parties are supporting the bill in this House—it might be called the “Bio-fools Bill”. 
The bill is contrary in fact to past actions by a National Government. I acknowledge the courage that a previous National Government showed on alternative fuels in the 1980s. I think all of us can remember the installation of compressed natural gas (CNG) and liquefied petroleum gas (LPG) facilities around the country. LPG is still there; CNG sadly has gone. But that was the courage that a National Government showed in spite of some opposition from the oil industry. 
I also acknowledge the comments from the Hon Peter Dunne in expressing his disappointment that National is revisiting this legislation. When the Biofuel Bill came into Parliament earlier this year he expressed some concerns about the issue of sustainability—which the Government is promoting as it introduces this legislation—but he noted that as that bill progressed amendments were made to it that gave him satisfaction in terms of the final shape of it. He is now saying that this legislation will bury a tallow-based biofuel industry here in New Zealand. 
I also note that a couple of years ago the National list member Nicky Wagner issued a press statement saying that the biggest potential sources of bio-diesel in New Zealand were tallow and animal fat by-product. Yet it is already on the public record that the $10 million invested by Tom McNicholl whose firm Biodiesel Oils is the biggest producer of tallow-based bio-diesel is going down the drain as a consequence of this legislation. I ask where Maurice Williamson and Pansy Wong are. They represent seats adjoining Biodiesel Oils’ East Tamaki plant. I ask whether they are speaking out on this issue in support of their constituents whose jobs will be lost. Indeed I ask where the member for Waikato is because Biodiesel Oils’ Waharoa plant is being mothballed as a consequence of this legislation. That tallow-based bio-diesel industry will be going down the gurgler. 
I also note that the Government has made considerable reference to the issue of biofuels perhaps pushing up the price. In fact that is not the view of a former icon of the National Party one Barry Leay the secretary-general of the National Party for many years. He is a director of the Aquaflow Bionomic Corporation which is making fuel from algae growing in sewage works in Marlborough. In response to comments made by the Hon Nick Smith who said that biofuels would push up the price by perhaps 5c to 7c a litre Mr Leay said that people who were saying that were “making comments without a clue about what’s [actually] happening in the biofuel industry.” and that that sort of speculation was really just scare tactics by the National Party. That is an interesting commentary from somebody so closely associated with the National Party. 
Of course Sue Wood a representative of Biodiesel Oils has made commentary on behalf of her client Mr McNicholl as to the devastation this bill will mean to him. His $10 million investment in biofuels will be rendered absolutely useless if I may use that expression by this legislation. 
I also note commentary on the Labour Government’s biofuels legislation when it was brought in earlier this year. It was referred to as being a significant step forward in the task of reducing New Zealand’s reliance on imported fuels and as comprehensive and forward-thinking legislation. That commentary came from another producer of biofuels a company based in Canterbury that was not in support of the mandatory minimum biofuel requirement but in fact wanted no limit on blends. However it made very very clear that it thought the biofuels legislation was comprehensive forward-thinking legislation that therefore needed to be retained. I ask members opposite from Canterbury what they are doing to support that industry which I am sure will also be affected by this legislation. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I draw the attention of the Committee to two amendments both in the name of the Hon David Parker. The first of them is straightforwardly the new Government’s policy. It is the Government’s stated policy which is that there needs to be an equivalence between ethanol and bio-diesel in financial terms. That is the amendment that says “(5) A credit shall be allowed against the levies otherwise payable pursuant under this section”—section 24 of the principal Act—“equivalent to 42.524 cents per litre of biodiesel sold by the levy payer.” Clearly we would support such an amendment. It is not our preferred option. Our preferred option is that the entire Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill not proceed but if it is to proceed I say let us amend it to see whether we can save the people who are already involved in bio-diesel production by implementing stated Government policy. 
Does that mean that when the amendments are put the Government will vote against its own policy? I ask whether that will be the case or whether the Government may take a bit of advice to satisfy itself that the Hon David Parker’s wording is correct and decide on the floor of the Chamber that when its own policy is promoted by Her Majesty’s loyal Opposition it will support it. Those seem to me to be the two options: either a Government goes with its own policy when the Opposition has written it for the Government or it votes against its own policy because the Opposition has written it. Those seem to me to be the two propositions for the Government to decide between. 
The second amendment also in the name of the Hon David Parker is very straightforward. It simply requires the Minister of Energy and Resources by June of next year to table in Parliament a report on the financial and unemployment effects resulting from the enactment of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill. We remind ourselves that this Government came to office saying that it wanted to do some regulation-busting. It wanted to make sure that the steps taken by this new better-than-before Government would be ones that helped economic growth and put economic growth “front and centre”. That is what the Government said in the Speech from the Throne. 
But unfortunately because a decision was taken to pass this legislation in urgency there was no regulatory impact statement. There was none. 
Hon David Parker 
: And ACT voted for it. 
Hon PETE HODGSON 
: ACT’s leader “Mr Regulation-buster” voted for this legislation to proceed when the regulatory effects are known to be deleterious. They are known to be deleterious yet ACT will vote for it. It is one of only two parties that are doing that mind you. 
Hon David Parker 
: And it controls the votes. 
Hon PETE HODGSON 
: Indeed it does control the votes. ACT is the swing party on this particular legislation. The National Party is going for it. National stated its policy and it stated it before the election. It won the election; it has the mandate. So that is what we would expect from National but not from the ACT Party. The ACT Party is going to vote for legislation that it knows will be deleterious in an economic sense. It knows that. The regulatory impact statement if it had been produced would have shown that. That is why we have regulatory impact statements. 
The amendment in the name of the Hon David Parker suggests that because there was not time to do a regulatory impact statement—the legislation having to go through in urgency—then we had better make time to do one afterwards. That is not unreasonable. 
But I ask members to wait; there is more. The Minister asserts that his decision to repeal this legislation—and I think it is sophistry—will not be damaging. He says the use of bio-diesel and biofuels in general will double over the next few years and there will not be a loss of jobs. He keeps on asserting that. He keeps on asserting that by way of interjection and he says that in his speeches. Let us just test that. If the Minister is so pleased with his assertions that he will not be doing any damage then he will not mind reporting to Parliament to prove that will he? So let us have the Minister support this amendment so that he can come to Parliament—[ 
Interruption 
] The Minister is shaking his head. We have had another bit of body language. The Minister was shaking his head. He is asserting that there will be no damage. When invited to report to Parliament to prove there has been no damage he declines to do so. I wonder whether the Minister is as sure of his facts as he asserts or whether he is telling little white thingies. 
Hon DAVID PARKER (Labour) 
: 
 I want to take up the issue about what the effects will be on the biofuel industry and the broader effects of this legislation. Tallow is a low-value by-product of the livestock processing industry. Someone once quipped to me that New Zealand has the highest tallow-to-population ratio in the world. That is true because for a small country we raise a lot of livestock. We are rich in tallow resource—the cheapest most environmentally sustainable source of biofuels in the world. 
Chris Tremain 
: I raise a point of order Mr Chairperson. The member has risen to his feet to speak on Part 2 which is a reasonably tight part but he said quite clearly that he wants to speak to the broader effects of the legislation. I think he needs to be brought back into line in that regard. 
Hon DAVID PARKER 
: Speaking to the point of order Mr Chairperson I say that the effect of this part is to revoke the mandatory percentages that are set out in the schedule of the Act. What I am talking about is completely within the realms of this part of the Act. If the member does not understand that he should read the bill. 
The CHAIRPERSON (Lindsay Tisch) 
: Yes. 
Hon DAVID PARKER 
: The effect of this legislation is to take out the mandatory obligation for biofuels so there will no demand for tallow to be turned into bio-diesel. That surprises me. Tallow is a low-value by-product of the livestock processing industry in New Zealand and the National Government is stopping value being added to that by-product for the benefit of New Zealand farmers and the New Zealand economy—value that would have been added in New Zealand. It would also substitute for expensive oil that we import. Every year in New Zealand we spend billions of dollars on imported oil and some of that expenditure would be avoided because biofuels would be turned into bio-diesel that would be used instead. 
I have submitted two amendments to this part. The first is to give the tax break to bio-diesel producers and I have already talked about that. I have just tabled for your information Mr Chairperson and for that of your Clerk at the Table another version of the first amendment. This version takes out the word “pursuant” because there was a redundancy in the use of that word. It stated “pursuant under”. Both of those words are not needed so I have taken out the word “pursuant” leaving just the word “under”. Under this amendment bio-diesel producers would get a tax break of 42.524c per litre which is the excise duty relief we have already given to ethanol and that meets the policy objective of the National Government. National stands for that but did not include it in its own bill. 
In respect of the second amendment we have not had a regulatory impact statement and I think it is absolutely scurrilous that the votes of the ACT Party will pass this legislation. This is the party that says it stands for regulatory impact assessments of all bills that pass through this House. There is no regulatory impact assessment for this legislation. We have seen the letter from Sue Wood former president of the National Party on behalf of Tom McNicholl and he provided his own information to the Government on 2 December. I will also table that particular bit of information in a moment. It is known to the Government that this legislation will cause job losses and multimillion-dollar financial losses to the biofuel industry yet there is no regulatory impact statement. 
My other amendment requires the Minister to table in this House by the middle of next year a statement or an assessment of what the effects of this legislation are. It is not as good as having a regulatory impact statement available to the House before we determine whether legislation is passed but it is better than nothing. So I suggest that the Committee and particularly ACT should vote for that. If ACT votes for that amendment it will go through because except for National the other parties in this Chamber support it. If the ACT Party does not vote for the amendment then it will not proceed despite the fact that it does exactly the thing the ACT Party says is most important to it which is that we should be looking at the effect on business of changes to the law not just on business but also on unemployment. 
The ditching of this mandatory sales obligation will cause financial losses and injustice. I do not like this new Government causing injustice to anyone and there is clearly a multimillion-dollar injustice being caused to at least one biofuel producer and no doubt to many others as well. The banks of these producers may well walk in tomorrow—we do not know what level of indebtedness the producers have. I am not suggesting that the banks will walk in but they could do so if the producers are in debt in respect of these facilities. If it is not one biofuel producer in New Zealand that has levels of indebtedness it will not be able to service because of people not buying its product it will be another one. There will be insolvencies jobs lost and injustices caused to people who lose their family fortune. On top of all of that we will have an environment that is going backwards because of this legislation. 
MOANA MACKEY (Labour) 
: 
 I am happy to take another call on this part in support of the amendments proposed by my colleague the Hon David Parker. I urge the Minister to take a call and tell us his thoughts on these amendments. We are trying very hard to work with the Government to come up with a compromise. We appreciate that this is a policy that the National Party campaigned on during the election campaign and that that is why this bill is now before the House. We are trying to be constructive and bring forward amendments that minimise the damage this bill will reap not only on the biofuel sector but also on jobs. I urge the Minister to take a call. 
I reiterate that schedule 5 is important. The select committee did a lot of work on that year-by-year mandatory obligation. If I remember correctly the original bill had a top point of 3.4 percent of total fuel sales by energy. Again I reiterate that that is hardly an incredibly high difficult-to-reach mandatory target. A target of 3.4 percent is not exactly going to break the back of those who work in this area. The legislation was about getting a domestic industry in place and supporting the development of that industry whilst at the same time doing important work to bring down greenhouse gas emissions in our transport sector which is one of our largest areas of greenhouse gas emissions after agriculture. 
The amendments the Hon David Parker has proposed will help an industry that has been starting up while being assisted by the mandatory biofuels obligation introduced by the previous Government. It gave the industry certainty and allowed it to know what the obligations were going to be and what kinds of sustainability standards were eventually to be put in place. It also allowed the industry to make long-term investment decisions. 
 I reiterate once again how important this Committee stage of the whole House is. This bill has been rammed through with no select committee process and no opportunity for those who will be disadvantaged by this legislation to come and put their case. There is no opportunity for the National Government members who disagree with them to challenge them in public to their face rather than in this Committee where they have no right of reply and no right to correct some of the misinformation that has been spread about their position. 
When the select committee members originally looked at schedule 5 and at how the mandatory biofuel obligation was going to be implemented they saw there was a steep incline in that graph after the first few years. That was because we were expecting a large ethanol plant to come online. We had been told how much ethanol it was going to be able to produce to feed into the local domestic market and we made those obligation points accordingly along that line. During the course of the select committee process—and again this shows just how important these select committee processes are in responding to the reality of what is out there which might be quite different from the reality of the time at which the bill was drafted—it became clear that perhaps that information in schedule 5 did not take into account the reality which was that this large ethanol plant we had been expecting to come online was not now going to happen. 
If that points to anything it points to the need for certainty in that sector. One of the reasons given for the plant not coming online was that the company had not been given certainty early enough that it was actually going to be able to produce this product. As well as I pointed out before the subsidy in the United States market had led to a lot of uncertainty here at home with the “splash and dash” ethanol that was being produced out of the United States. It really did distort the market and make it more difficult for ethanol producers here at home. 
The select committee listened throughout that process and we changed the schedule. We reduced the top target from 3.4 percent to 2.5 percent. We asked officials to go away and do some work on what biofuel was already available in New Zealand and what was due to come online. They came back and told us that a 2.5 percent mandatory obligation required I think 5.5 petajoules of biofuel—the original 3.4 percent would have required 8 petajoules—and that already in New Zealand we had the capacity for 4 petajoules of tallow bio-diesel I think 2 petajoules of rape seed and other bio-diesel and I think 0.3 petajoules of ethanol. I do not know whether I have those figures exactly right but they are from memory at a select committee. 
During this process we were told at the select committee that people were making those investments because this bill was before the House and because they knew the mandatory obligation was coming on. We were told by one of the oil companies—which already had infrastructure for dealing with ethanol because the company sold it—that it was looking at bringing in the obligation earlier because that was a market advantage and as the company was going to have to do it anyway why not get the jump on the rest of them. 
CHRIS TREMAIN (Junior Whip—National) 
: 
 I move  
That the question be now put 
. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I stand to do two things; one is to support my colleague David Parker and his two amendments to Part 2 of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill. I note that we are yet to get a response from the Minister in charge of the bill the Hon Gerry Brownlee. We have not had the Minister on his feet in this part. It is really just a matter of politeness and tradition in Parliament that relatively early in each part—we are not saying that the Minister has to reply to every speech or to all points that are made—especially when there are amendments the Minister indicates whether the Government is going to support them and the reasons. It is not onerous; they are relatively simple matters and he has had advice from his advisers in case he was not sure of their effect. 
These are relatively simple amendments. One of them requires the Minister to report on the financial and unemployment effects of this bill on New Zealand’s tallow to biofuel industry. It is just a matter of coming back to the House before the end of June to report on how many jobs have been lost as a result and what the financial effects are on individuals. It might be called the honesty clause I think. If in fact the National Party does what it says it is going to do and does what it is going to be asked to do by way of the next amendment the Minister will be able to report positive effects—that jobs have grown within New Zealand and people have made money. That would be a good thing. 
The other amendment I think goes more directly to Government policy. I know generally Government is responsible for its own policy and implementing it but every now and again it needs a hand in turning it around. We from the Opposition are here to help as far as the Government is concerned. This amendment inserting new section 24(5) to the principal Act makes it clear that: “A credit shall be allowed against the levies otherwise payable pursuant under this section equivalent to 42.524 cents per litre of biodiesel sold by the levy payer.” This extends to bio-diesel the exemption from excise duty that is currently enjoyed by bio-ethanol. It is a levelling of the playing field. The Government says it is its policy and I think it is a matter of getting that implemented. 
The other question I want to ask and I will take a point of order at the end of my speech to table a letter is whether the Minister read the letter of 2 December from BioDiesel Oils (NZ) Ltd addressed to Joe Connell within the Energy and Communications Branch— 
Hon Gerry Brownlee 
: No. 
Hon TREVOR MALLARD 
: No he didn’t. 
Hon Gerry Brownlee 
: It was never given to me. 
Hon TREVOR MALLARD 
: That is an outrage. It is an absolute outrage that the letter from the person who has spent $10 million on biofuel was not given to the Minister. I do not want to criticise officials but I think the nicest thing I could say is that it is waiting in the pending tray within the Minister’s office. But he has not seen it. We have a letter here to a person who was a policy analyst in the fuels and Crown resources part of the branch outlining the job losses that will occur including 22 staff in Waharoa and 24 staff in East Tamaki. The letter is from Tom McNicholl—I will make it clear that I do not have a signed copy of the letter but I am informed by a past-president of the National Party Sue Wood that this is a letter— 
Hon Steve Chadwick 
: Sue Wood had it? 
Hon TREVOR MALLARD 
: Sue Wood is the person who supplied this letter. She says it is a copy of a letter to the Ministry of Economic Development outlining the case for this plant and the Minister tells us that he has not read it. That is almost unbelievable. It is an outrage that we have in this Committee a Minister who is too damn lazy to read the mail to his ministry on this. I am very rarely almost speechless in this Chamber and I am getting very close to saying that it beggars belief that a Minister could be so lazy so indolent that he does not read the file on this bill. It is a very short file. It is a file that—because the consultation was so restricted—is tiny. The idea that this Minister can come into this Committee with legislation that wrecks a family and wrecks an industry and tell us he has not even read their letter— 
Hon Gerry Brownlee 
: I haven’t received the letter. 
Hon TREVOR MALLARD 
: If the Minister has not looked in his pending file could I make a suggestion. I suggest to the Minister that we take leave to move on to the next bill and come back again to this to give him time to read the letter so that he understands the implications. Is the Minister prepared to do that? No he is not. He is not prepared to do that. I am not saying we should delay the passing of this bill; I am just saying we should deal with it later on today or tomorrow to give the Minister time to be fully informed. I could give him a copy of the letter which I know is sitting in his pending tray but he has not got off his big chuff wandered over to the tray to pick up the files that are sitting there and read them. If Helen Clark was Prime Minister he would be in her office by now explaining because that is a sign of absolute incompetence. The very first thing that Ministers do before they take a Cabinet committee paper on a bill to Cabinet especially when it does not have a regulatory impact report is ask— 
Hon Gerry Brownlee 
: What’s the date on the letter? 
Hon TREVOR MALLARD 
: 2 December. 
Hon Gerry Brownlee 
: Why didn’t they send it to me? 
Hon TREVOR MALLARD 
: The person who asked for it was one of that Minister’s officials. That is the way things are done. Officials send out for the information it comes back and the Minister reads it. This Minister should read it. 
Hon Gerry Brownlee 
: We were never given it. 
Hon TREVOR MALLARD 
: The Minister did not go to his file and read the letter. If he had asked like any decent Minister would ask for the file on this bill he would have read it. I do not know that particular official but I know that group of officials. They worked for me on I think three separate occasions: twice when I was Acting Minister for a period and once when I was Minister of Energy. 
Hon Pete Hodgson 
: Good officials. 
Hon TREVOR MALLARD 
: They are competent officials. That is a well-run section of the ministry. I wager they would have a file that indicates— 
Chris Tremain 
: That is nothing to do with Part 2 of the bill. 
Hon TREVOR MALLARD 
: The letter relates absolutely to Part 2. This letter refers to the factory in Waharoa; Part 2 wrecks that factory. 
The Minister of Energy and Resources has told us he has not had the energy to get off his backside and read the letter. If there is one letter that he should have read it is this letter. In the Cabinet committee discussing this bill John Key would have asked: “What do the people affected by this say?”. That is a standard question asked by Prime Ministers and chairs of policy committees. They asked that in my presence during the previous Labour Government—when Helen Clark was Prime Minister. They always asked those questions—and Gerry Brownlee would have had to answer. 
I seek leave to table the letter of 2 December from Tom McNicholl to the Ministry of Economic Development. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for that purpose. Is there any objection? There is no objection. The letter can be tabled. 
Document by leave laid on the Table of the House. 
CHESTER BORROWS (National—Whanganui) 
: 
 I move  
That the question be now put 
. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I rise to speak on Part 2 and to support the Hon David Parker’s amendments because although Opposition members would much rather we were not even debating this silly short-sighted bill we are here trying to improve it. In particular we are trying to help National keep one of its promises. That is quite a remarkable thing for Opposition members to do but we are here to help. We have all heard a lot about promises in the last couple of weeks. That is the main reason apparently that we are in urgency ramming through bill after bill because National claims it needs to keep its promises. In reality of course we know that National members are doing this because they do not want to hear from the public of New Zealand about some of the legislation that National is putting through. 
In particular they do not seem to want to hear about the impact of this bill on people such as Tom McNicholl who are making a concerted effort to build a new industry in this country. We would be able to help them do that if we kept in place the legislation that the previous Labour Government led through the House before the election. But no the National Government wants to take that legislation away. The Hon David Parker has put forward an amendment that will allow bio-diesel to be extended the same tax relief as bio-ethanol. 
Yesterday the Minister of Energy and Resources Mr Brownlee told the Committee that we would be hearing about tax relief about incentives to allow the industry to continue. We have seen nothing of that today. The industry will be in a vacuum when this legislation passes—a vacuum of Mr Brownlee’s making. But Labour can fill that vacuum by offering the opportunity to put in place a system whereby bio-diesel will have the same exemptions that bio-ethanol does. This is an opportunity for the Minister in the chair Mr Brownlee to take a call and let us know whether he is prepared to do something to honour National’s election promises. We say: honour the promise to keep this industry going. 
Mr Parker’s amendment to Part 2 gives the Minister that chance. It gives him a chance to help save the 46 families who will be affected if and when Mr McNicholl’s business is closed. That is the reality and that is what we have heard. If the Minister had received the correspondence from his ministry he would know that that is what Tom McNicholl is saying and that is what Sue Wood is saying. They are saying that the legislation the Minister is bringing to the House will affect those 46 families in East Tamaki and Waharoa. One would have thought National would be concerned about those areas. Mr Chairperson you might be concerned about them as well. We need to know whether the Minister is prepared to support this very good amendment from David Parker which will actually help secure that industry. 
Members on this side of the Chamber know that the mandatory obligations that Labour put in place are a far better way of ensuring that this industry continues to grow but there is now an opportunity for the Government to stand up and for the Minister in the chair to take a call and say that he will accept the amendment. There is also an opportunity for ACT Party members: we know that they believe in regulatory impact statements; they believe in making sure that things go through with proper scrutiny. They could vote for this amendment too. They could vote down the whole bill and send it away to a select committee so that we have a proper process—and goodness a regulatory impact statement! Would that not be novel to have a regulatory impact statement on a bill that is fundamentally changing an industry in this country—indeed a growing industry—and fundamentally compromising the lives of 46 families that were going to be employed and also other families in the future. 
Moana Mackey 
: One would think it would go to a select committee. 
GRANT ROBERTSON 
: One would think it would go to a select committee; but no this Government wants to ram this bill through under urgency. The Government it seems does not even want to take the opportunity to honour one of its own election promises. This opportunity was there for the Government to do that. Mr Brownlee has not taken a call on Part 2 and I urge him to take a call and let us know what he thinks about this amendment. This amendment would actually save his hide in the long run. He may not think that right now but that is what this amendment does. But much more important this amendment ensures that the industry has some kind of future. At the moment we have a vacuum in place because the Government has no plan to ensure that the bio-diesel industry can continue. It is an outrage to push this bill through the Parliament in a way whereby nobody who is affected out there in the community is getting an opportunity to comment on it. Part 2 is about putting in place everything that is required to repeal the very things that are needed to keep that industry going. It is an outrage. 
CHRIS TREMAIN (Junior Whip—National) 
: 
 I move  
That the question be now put 
. 
Hon PETE HODGSON (Labour—Dunedin North) 
:  
The revelation that the Minister has indicated that he has not seen the letter of 2 December raises two questions. The first of them goes to the Minister— 
Hon Gerry Brownlee 
: I raise a point of order Mr Chairperson. I want to make clear that my responses to the Hon Trevor Mallard were about what I thought was a new letter that was being provided to him. I have in fact received that letter referred to. A response to Mr McDonald is being prepared. 
Hon Trevor Mallard 
: That cannot possibly be true because I indicated to the member that the letter was dated 2 December. It cannot be a new letter. The member cannot have told the truth to the Committee. 
The CHAIRPERSON (Lindsay Tisch) 
: The member cannot make allegations about missing letters. We wish to move on— 
Hon Trevor Mallard 
: Mr Chairperson— 
The CHAIRPERSON (Lindsay Tisch) 
: The Minister has made a statement that he has received a letter. He has acknowledged that to the Committee. We wish to move on. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. I think there are two points. One is whether you are right to allow the Minister in the chair Gerry Brownlee to correct that statement by way of point of order. He should have taken a call. The other point is that the name he said was McDonald. The letter is from McNicholl. The letter that he did not read was a letter from McNicholl not McDonald. For the Minister to say that he has a letter from McDonald now does not help at all. It was clearly stated in the Committee before that it is a letter dated 2 December from McNicholl. 
The CHAIRPERSON (Lindsay Tisch) 
: There is a mistake in the naming of the person who wrote the letter. Mr Mallard has made the point very clear— 
Hon David Parker 
: Point of order— 
The CHAIRPERSON (Lindsay Tisch) 
: I am ruling at the moment. The points have been well made. The Minister has acknowledged that there is a letter. He has identified that and acknowledged it to the Committee. 
Hon David Parker 
: I raise a point of order Mr Chairperson. I am absolutely bemused as to how you know that a mistake was made by the Minister the Hon Gerry Brownlee because he has not taken a call to correct it. There is a proper procedure in this Chamber to be followed. It is not for members to cosy up to the Chairman particularly a Chairman who is in a difficult position as you are on this issue coming from the area in which this factory is located. 
The CHAIRPERSON (Lindsay Tisch) 
: Mr Parker you know that you cannot bring the Chair into this. The Minister said he has received a letter. He has acknowledged that to the Committee; he has explained it and we wish to move on. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. The Minister may have acknowledged a mistake privately to you. That is not on the record of the Committee and you cannot as the Chair put it on the record of the Committee. You especially cannot enter this debate when you Mr Chairperson should not be in the Chair anyway. 
The CHAIRPERSON (Lindsay Tisch) 
: The Minister has not made a private comment to me about this matter. He has acknowledged it to the Committee. He said so and that is where the matter lies. These are debating points—they can be brought up in debate. I wish to move on. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Lindsay Tisch) 
: Is this a new point of order Mr Mallard? 
Hon Trevor Mallard 
: It is Mr Chairperson. It relates to what you said. You indicated to the Committee that the Minister had made a correction to the Committee. He could not possibly have corrected the name “McDonald” to “McNicholl” because he did not get to his feet. It is not possible that he made a correction to the Committee and for you to say that he did is just wrong. 
The CHAIRPERSON (Lindsay Tisch) 
: The Minister made an interjection to that effect and that is what is before the Committee. 
Hon David Parker 
: I raise a point of order Mr Chairperson. I have been paying particular attention to this debate and particular attention to this error which I heard and pointed out to my colleague Mr Mallard. I heard no such interjection from Mr Brownlee. He has not been on his feet since he made that error. He is able to take a call at any time to correct that position. This mistake is very important given that scores of jobs are at stake and millions of dollars. It is in an area close to Matamata— 
The CHAIRPERSON (Lindsay Tisch) 
: These are debating points. 
Hon Dr Jonathan Coleman 
: I note Mr Chairperson that your authority is being consistently challenged by members opposite and it has included members making allegations about your unfitness to sit in the Chair. I do not think that adds anything to the debate or to the perception of the Chamber. I ask you to assert your authority Mr Chairperson because you have ruled. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Lindsay Tisch) 
: Is this a new point of order? 
Hon Trevor Mallard 
: Yes it is a new point of order. You indicated to the Committee in your last ruling that Mr Brownlee had corrected his position by way of interjection. He could not have done that in a parliamentary manner because for the entire period that we have been considering this we have been dealing with points of order. He cannot interject during a point of order and if he had interjected during a point of order I am sure that you as Chairperson would have reprimanded him for doing that and made him withdraw and apologise to the Committee. 
Chris Tremain 
: Point of order— 
Hon Trevor Mallard 
: I am still going. 
The CHAIRPERSON (Lindsay Tisch) 
: There is a point of order in progress. 
Hon Trevor Mallard 
: I am saying that despite the fact that I have indicated there is a conflict here I have confidence in you as the Chair and I know that you would not have let Mr Brownlee interject during a point of order. If he had done that you would have ruled him out of order and made him withdraw and apologise and that interjection would not be on the record of the Committee. 
The CHAIRPERSON (Lindsay Tisch) 
: Thank you Mr Mallard. The Minister is prepared to take a call. We are just waiting for the letter. The Hon Pete Hodgson has the call at the moment. We are just waiting for the letter. 
Hon Trevor Mallard 
: I have tabled the letter Mr Chairperson. 
The CHAIRPERSON (Lindsay Tisch) 
: Yes we are just getting it now. 
Hon PETE HODGSON 
: I raise a point of order Mr Chairperson. We have reached an unfortunate position in this debate. My recollection of events is that the Hon Trevor Mallard in his contributions to the debate got a series of responses from the Minister that were not on the record of the Committee because they were by way of interjection. The interjections were that the Minister had not received the letter that Mr Mallard was referring to. In the course of the interjections the Minister then asked what the date of the letter was and a number of us gave the Minister the date of the letter which was 2 December of this year. After that date was given the Minister continued to assert by way of interjection or by way of body language that he had not been in receipt of it. If it is OK for him to correct a person’s name by way of interjection to you Mr Chairperson then it is also OK for this Committee to say that it has been misled by the Minister who said that he had not received the letter when he knew the date but who then changed his mind when he raised a point of order as I got up to speak. I am saying to you Mr Chairperson that you have to make a decision as to whether the Minister in the chair misled the Committee. My assertion is that he has. 
The CHAIRPERSON (Lindsay Tisch) 
: Two letters are involved. I have a letter here dated 12 December. We are waiting for the letter of 2 December which apparently was tabled. The Minister is prepared to take a call. We hope that that will clarify the matter. The member made a point about the Minister making a correction by way of interjection. He made a mistake about the name. He knew that he made a mistake and he will take a call. Hopefully that will clarify the matter. I would like the member to resume his speech. 
Hon David Parker 
: I raise a point of order Mr Chairperson. The letter of 12 December to which you refer is a complete irrelevance. It is from neither a Mr McDonald nor a Mr McNicholl; it is from the former president of the National Party Sue Wood. That letter is an irrelevance. I cannot see the relevance of it to your ruling. 
The CHAIRPERSON (Lindsay Tisch) 
: We are just waiting for a copy of the letter of 2 December. We do not have that. 
Hon Trevor Mallard 
: It’s on the Table. 
The CHAIRPERSON (Lindsay Tisch) 
: It is not on the Table here and that is why I have only one letter Mr Mallard. So that is where we are at. In the meantime while we are waiting for the letter and for the Minister Gerry Brownlee to return I ask the Hon Pete Hodgson to continue. 
Hon Steve Chadwick 
: I raise a point of order Mr Chairperson. In order to be helpful I would like to table the letter of 2 December. 
The CHAIRPERSON (Lindsay Tisch) 
: It has already been tabled so we do not need to proceed with that. 
Hon PETE HODGSON 
: I raise a point of order Mr Chairperson. I have raised with you a point of order regarding your view as to whether the Minister misled the Committee. I am asserting that the Minister to your right has misled the Committee and I am asserting that he has done so by way of interjection. I have asked you to tell me whether you agree with that assertion and you have not told me. If you do not agree with that assertion I ask why you do not agree with it. As it stands at the moment if an interjection is to be part of a correction or a part of the debate—as a result of your earlier remarks—I point out that these interjections were made after the Minister knew that the letter in question which he denied receipt of was dated 2 December; then having worked out that he was wrong he raised a point of order to correct himself. Therefore the question that I have for you Mr Chairperson which you have not yet answered is whether the Minister has misled the Committee. 
The CHAIRPERSON (Lindsay Tisch) 
: It is not my understanding that the Minister has misled the House. The Minister will be taking a call to clarify matters. That is my ruling; I wish to proceed. 
Hon PETE HODGSON 
: Thank you for your ruling. I raise a point of order Mr Speaker. When you were giving me the call not so long ago I think you said I had 3 minutes and 28 seconds left—that is from a 5-minute call. The words used in my contribution so far have been these: “The revelation that the Minister has indicated that he has not seen the letter of 2 December raises two questions.” That is as far as I got. 
The CHAIRPERSON (Lindsay Tisch) 
: Is this still a point of order? 
Hon PETE HODGSON 
: Yes it is. 
The CHAIRPERSON (Lindsay Tisch) 
: I did stop the clock when you were bringing forward the point of order. 
Hon PETE HODGSON 
: Well I am just asserting rather obviously by way of quoting verbatim that what I just said does not take 90 seconds to say; it takes about 10. I wonder whether you could recalibrate your clock Mr Chairperson. 
The CHAIRPERSON (Lindsay Tisch) 
: Yes you did speak before you sought a point of order so we assumed that was part of your speech. But— 
Hon PETE HODGSON 
: Mr Chairperson I did not seek a point of order. The Minister called a point of order when I was one sentence into my contribution and that does not take 90 seconds. 
The CHAIRPERSON (Lindsay Tisch) 
: I am happy that we start the call again as a 5-minute call. 
Hon PETE HODGSON 
: That is very generous Mr Chairperson. The fact that the Minster has— 
Nathan Guy 
: Make it good! 
Hon PETE HODGSON 
: It will be good all right. The Minister’s point that he had not received the letter which he made when Mr Mallard questioned him about whether he had received it has now been reversed by the Minister who raised the point of order to say that he did receive the letter. 
Hon Gerry Brownlee 
: I raise a point of order Mr Chairperson. I think it would be good to raise a point of order now to clarify this matter as people fire dates all over the show. The first point I make is that the letter of 2 December— 
The CHAIRPERSON (Lindsay Tisch) 
: No that is a debating point. 
Hon Gerry Brownlee 
: Well most of what the member is about to say is totally irrelevant. 
The CHAIRPERSON (Lindsay Tisch) 
: We are not getting into points of order that become debating points. The Minister may take a call following the Hon Pete Hodgson’s call. 
Hon PETE HODGSON 
: We of course look forward to the Minister’s explanation but the facts as they stand at the moment are these. The Hon Trevor Mallard pointed out that a letter had been set to Ministry of Economic Development officials. The Minister indicated by way of a shake of the head that he had not received it. Mr Mallard responded in dismay as one might expect because the letter says that this man’s business is going down the gurgler as a result of this legislation. Repeatedly as Mr Mallard tested whether the Minister had received the letter we were told by way of an interjection and a shake of the head—or whatever—that he had not. That caused some concern on this side of the Chamber as one might understand. The letter has been around the news media because it has been followed by another letter from none other than an earlier president of the National Party yet the Minister sat there and denied knowledge of it. It was beyond belief. 
That was the situation that we were in and repeatedly the Minister gave one point of view. He is about to change that point of view but it does beg the question as to how he could ever be in denial of the knowledge of that letter. None of the rest of us had any misgivings about whether we knew about it; it was all around the country. The Minister has in short misled the House and that is serious. It is not a minor thing. Not only did he mislead the House but he did so even though he was under some focused attention from the Hon Trevor Mallard. I do not think that that is tolerable. I think the Minister has to say to the House that he is sorry. 
He has to apologise to the House for misleading us and then he has to answer another question: did he show the letter to the ACT Party because the ACT Party stands for economic growth and it stands for getting Government out of the lives of business? This legislation is taking down that man’s business. Mr McNicholl’s business is going to the wall and his letter in very moderate moderating language—it is a very very moderate letter—spells it out. I want to know whether the swing party in this debate was aware of that letter. If it was that is fine and dandy—we know how to value the ACT Party accordingly—but if it was not made aware of that and the Minister himself has denied knowledge of it for long enough then it raises some pretty interesting questions about whether the ACT Party is making an informed choice in this debate. I think the Minister has some questions to answer and he can begin by saying he is sorry. 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 I will clear this matter up by going through a bit of an order of what happened. Firstly on 2 December BioDiesel Oils wrote to the Ministry of Economic Development to a Mr Joe Connell. 
Hon Trevor Mallard 
: Don’t mention the name. 
Hon GERRY BROWNLEE 
: I mentioned his name because the member did. Mr Connell was engaged— 
Hon Members 
: He did not! 
Hon GERRY BROWNLEE 
: He did actually. 
Hon Pete Hodgson 
: I did not mention his name. 
Hon GERRY BROWNLEE 
: Members should not be silly; the  
Hansard  
record will show that. 
Hon Trevor Mallard 
: I think I did mention it the first time; it was a mistake. 
Hon GERRY BROWNLEE 
: Thank you. Subsequent to that on 4 December BioDiesel Oils wrote to me. That letter was written by a Mr Tom McNicholl and I am now informed that he attached to that letter the letter that had been sent some days before to the Ministry of Economic Development. 
On 11 December following our announcement I received a further letter from Tom McNicholl via Sue Wood. That letter will be responded to of course in due course but in the interim I asked my office to make contact with Mrs Wood in order that we might have a meeting with Mr McNicholl. That meeting and that offer were rejected. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Is this not just a classic? Within the first fortnight of Parliament since the election we already have the first Minister who is at risk. What is absolutely clear now is that despite getting a letter twice—once via his officials and once appended to a letter to himself—he did not read it. He made it clear to the House earlier that he did not read that letter. The letter was sent to his office twice and he did not read it. [ 
Interruption 
] The Minister might have looked at the letter later on when Sue Wood sent it but he had not read it when he took it to the Cabinet committee. He did not give it to John Key and he did not brief him on the effects of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill on this business. 
I ask John Key what he is doing having a Minister who is so lazy that he did not read the correspondence and show it to him or who deliberately deceived the Prime Minister by not giving him the full facts at the Cabinet committee when this legislation was being debated. It is absolutely intolerable to have a Minister who is either so lazy that he did not read the material or so thick that he did not understand it or who has deceived the Prime Minister by not tabling that letter—or at least a synopsis of it—at the Cabinet committee especially in the absence of a regulatory impact report. 
There is no regulatory impact report on this bill and therefore the Minister in charge of it has extra responsibilities. He must be even clearer than he would normally be not that there is any excuse for not being clear anyway in a Cabinet committee when seeking permission to have legislation go into the House. There is an extra obligation on this Minister as a result of the lack of a regulatory impact report. And what have we heard? We have heard that he did not read the letter. That is what he told the House—that he read neither the 2 December version nor the 2 December version that was appended to the 4 December version. 
What can we say about that? We can ask the ACT Party—and I know the answer to this because if the Minister did not show the letter to the Prime Minister I bet my bottom dollar that he did not show it to the ACT Party—what it is doing supporting legislation that does not have a regulatory impact report. That is a very bad reflection on Rodney Hide. Even a skimpy little one—a quarter of one—like those we had on the bills last week would have been a start. 
 I ask the Minister whether it was deliberate. Did he deliberately not have a regulatory impact statement because of this issue? I do not think it was deliberate; I do not think he knew the issue existed. I do not think he knew the issue existed because he told us he did not read the letter. He told us he did not read the letters of 2 and 4 December. 
This matter goes to a question of the competence of a Minister. When the Minister brings his first legislation to the House—the very first legislation—if he is not sure what to do there are a lot of very good people in the Cabinet Office to ask. There are a lot of people there—good public servants—who will give him advice if he asks for it about other things he should consider. There was no regulatory impact report so checking that the legislation does not affect people would have been the first bit of advice. Checking that it does not affect people would have been the first bit of advice that he got from the Cabinet Office. I ask the Minister whether he asked the Cabinet Office for advice. No he did not. He did not ask the Cabinet Office for advice on this measure. 
So there was no regulatory impact report and an uncertain new Minister who did not know what to do. The Prime Minister was clearly deceived—we are told it was accidental—and I believe the Minister when he said it was an accident. He did not mean to deceive the Prime Minister on the effects of this bill but nevertheless he did deceive the Prime Minister on its effects by not reading the correspondence and sharing it with the Prime Minister. 
AMY ADAMS (National—Selwyn) 
: 
 I move  
That the question be now put 
. 
Hon DAVID PARKER (Labour) 
:  
I want to follow up on the Hon Trevor Mallard’s comments here. We have heard various versions from Mr Brownlee all of which—all of which—conclude that he did not read the letter— 
Hon Trevor Mallard 
: The letter he got twice. 
Hon DAVID PARKER 
: It was probably three times because it was then attached to a letter from Sue Wood. 
Further in Mr Brownlee’s last contribution when he finally got to his feet and took a call on this legislation—which kills a whole industry—he said that he had offered to meet with Sue Wood and Tom McNicholl but that they had declined. That is on the record. I find that very very hard to believe. I have had numerous conversations with Sue Wood. She tells me that she has been brushed off by the Minister’s office that she has been trying to get through to the Minister—[ 
Interruption 
]—No I do not mislead the Chamber I say to Mr Brownlee. 
Hon Gerry Brownlee 
: Yes you do. 
Hon DAVID PARKER 
: I do not. She has told me that within the last week she has again been on to his office and that she has been brushed off by his office. So the idea that the Minister has offered to meet with Mr McNicholl and with Sue Wood the former president of the National Party is something that I invite Mr McNicholl and Sue Wood to call him on because if that is wrong then the member has egregiously misrepresented the position to this Chamber and he ought to be judged for it. 
The letter that he has not read needs to be read out to him now. There are very important passages in this letter. My call will not allow me to read all of them so I hope other members will make some of the other points but I will read a paragraph from about the third page of this letter which is very detailed: “The undersigned”—Mr McNicholl—“who owns BDO has during the last 8 years invested over $10 million in research and development and plant and equipment including the purchase of sites.” He further writes: “Repealing the mandate will also halt all on-going work and efforts in new technological innovation and development. The future value of this advancement will be completely wiped off for the investors”—that is $10 million of investment—“and shareholders as well as place New Zealand in a disadvantaged position worldwide in terms of engineering and process technology export to the rest of the world.” So there are export consequences as well as the loss of investment. 
The letter elsewhere says that the East Tamaki plant which has already been built is having “technological advancements currently being undertaken in our 10000000 litres plan at East Tamaki. The production volume will be drastically reduced (already it is at a very negligible level due to the minimal off-take by the oil companies) … The company will have no second thoughts to mothball its operation at East Tamaki and stop construction of building and site works on its new 60000000 litres plant at Waharoa to avoid any further loss.” It goes on to say: “We plan to employ 22 staff on three shifts at the Waharoa plant and 24 staff on three shifts at East Tamaki; a total of 46 full-time jobs when both plants are in full production to meet the mandate.” That would have been at the start of next year but that investment is being lost—those jobs are being lost. This is just one of many biofuel producers. 
The Minister got this letter but did not read it and we have no regulatory impact statement and we have no reference to a select committee. I invite ACT members—even at this late stage having now been provided with that letter by Labour members because they did not get it from National members—to read that letter to consider the effects of this on business and to consider whether they ought to be voting to slow down this egregious legislation rather than voting for the injustice they are about to cause Mr McNicholl a 75-year-old man. He is no highfalutin businessman; he is a very down-to-earth man. This is his life savings I expect. I do not know details of his financial position but I expect that his life savings are tied up in this investment and he is about to lose them as a consequence. 
This has all been spelt out to the Minister and it has all been spelt out to the Ministry of Economic Development. The ministry quite responsibly has made contact with this business. It is clear from Mr McNicholl’s letter of 2 December that it was written in response to a query from the ministry. The ministry was acting on behalf of the Minister. This letter no doubt went to the Minister’s office but he has not read it. 
COLIN KING (National—Kaikoura) 
: 
I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon David Parker to Part 2 be agreed to: 
to insert the following new clause: 
5A 
The Minister will on or before 30 June 2009 table in Parliament a report on the financial and unemployment effects of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill on New Zealand’s tallow to biodiesel industry. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Lindsay Tisch) 
: The second amendment in the name of the Hon David— 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; Progressive 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; United Future 1. 
Part 2 agreed to. 
Clauses 1 to 3 
Hon DAVID PARKER (Labour) 
: 
 I am promoting an amendment which is about to be tabled to this part of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill because I thought a very good suggestion was made by Mr Burns earlier in this debate that this legislation should be renamed the “Bio-fools Bill”. It is absolutely nonsensical legislation and it should be called what it is: it is foolish legislation. 
This legislation causes egregious injustices but the thing that concerns me most of all is that the Minister in the chair the Hon Gerry Brownlee has not read the most pertinent piece of correspondence that has come to his office concerning the effects of this legislation. Recalling that there is no regulatory impact statement and no select committee process it is important that he reads or learns of information about the adverse effects of this legislation on people on jobs on investment and on employers. So I will start reading this letter and I think it is so important that this be on the record that I expect other members of this Committee might want to read the parts of the letter that I do not get to in my contribution. 
This is a letter dated 2 December 2008 from BioDiesel Oils (NZ) Ltd. It is addressed to the energy and communications branch of the Ministry of Economic Development and it states: “Dear”—whoever—“We have received your email of 2 December 2008 in regards to the ‘state of play’ of the New Zealand biofuel industry in the context of a National party pre-election indication of its intention to repeal the biofuel obligation. 
We have considered the implications this will have on our existing operations thoroughly and append our response below. 
1. Biodiesel Oils NZ Ltd (BDO) was until 1998 a major solvent recycling and collector of used cooking oil. It was exporting UCO which was also referred to as tallow. 
In 1999 the company commenced research and development in the manufacture of biodiesel with UCO and later progressed to using animal fats in particular tallow. 
The company continued investing heavily in improving its production and chemical technology for converting tallow as a result of the government’s indication to promote greater use of renewable energy across the economy as part of the National Energy Efficiency and Conservation Strategy (NEECS). 
Around August 2005 when the company became aware that the government had in principle agreed to a Biofuel Sales Obligation it took further steps to invest in ramping up production output of its R&D plant in East Tamaki to 10000000 litres a year. 
When it became evident that the government was going to legislate the compulsory use of biofuel the company went ahead with its plans to construct a new 60000000 litres plant at Waharoa which is well underway. 
The company only uses locally sourced tallow that is now being exported for other purposes as its feedstock. This raw material complies with sustainable standards. With the combined capacities of both plants (East Tamaki and Waharoa) BDO is well positioned to satisfy the biofuels obligation for at least the next two years. 
BDO was very conscious and still is that the biofuel obligation introduced on 1st October 2008 is the single most important driver to sustain biodiesel production demand and consumer use. Without this the business case for BDO would have been extremely weak right from the start and investments decisions in R&D and production facilities would not have won approval from the shareholders and Board of Directors. 
It is therefore pertinent for the government to realise that our investments in biodiesel was primarily in response to legislating the biofuel obligation. 
2. Any change to the biofuel obligation will result in an immediate order to ‘stop work’ on all technological advancements currently being undertaken in our 10000000 litres plan at East Tamaki. 
The production volume will be drastically reduced (already it is at a very negligible level due to the minimal off-take by the oil companies) or ceased since BDO supplies its biodiesel only to Shell and BP. The company will have no second thoughts to mothball its operation at East Tamaki and stop construction of building and site works on its new 60000000 litres plant at Waharoa to avoid any further loss. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I will continue to read the letter: “Stop work will also be issued to the various supply partners to whom BDO has outsourced the fabrication of tanks vessels and process equipment for the new plant. This will invite cancellation fees from our supply partners and their material suppliers which could be detrimental to the bottom line in this troubled time. The company will also have to lay off two full time stainless steel tradesmen employed at the East Tamaki site. 
We plan to employ 22 staff on three shifts at the Waharoa plant and 24 staff on three shifts at East Tamaki; a total of 46 full-time jobs when both plants are in full production to meet the mandate. 
3. It must be noted that oil companies (BP and Shell NZ) are vital partners in the upstream supply chain of biofuels as they possess the expertise and facilities for blending and control the infrastructure for distribution and retail to the market. 
It is however our contention that the oil companies are against retailing both biodiesel and ethanol as this will have direct implications on their sales volume of mineral diesel and gasoline and monopoly. 
Some two and a half years ago we wrote to the oil companies pointing out that preparations be made for blending biodiesel with mineral diesel at their terminals. This suggestion was ignored to the extent that the oil companies have now requested us to undertake the blending at our site. This has imposed an additional $20000 on us to install a storage tank for mineral diesel at our East Tamaki site. We complied with this request as we realised that we were at the oil companies’ mercy to ensure the continued sales of our biodiesel. This proves our point that the oil companies had never been serious in retailing biofuels. 
The government must take notice of the consumers’ mindset in that they would not buy a new product such as blended biodiesel or ethanol unless there are cost savings compared to conventional fuels. In this regards the biofuel obligation would be a valuable aid to change the behaviour. 
4. The undersigned who owns BDO has during the last 8 years invested over $10 million in research and development and plant and equipment including the purchase of sites. 
 He firmly believes that any change contrary to the current biofuel obligation will see the instant demise of the biodiesel and biofuel industry in New Zealand. Apart from that it will destroy every dollar that has been invested in this sector by private individuals and companies like ours who believed in the government’s policies and goals for securing a better future and economy for her people and the country. 
To achieve the desired outcomes in reducing the rate of carbon emission the government has to see that sufficient volumes of biofuels are consumed. And to facilitate this demand huge capital costs and cash flow is required to build and operate biodiesel plants. It will therefore be stupid for BDO to build production facilities if it is unable to recover its investment due to the lack of volume off-take. 
Exempting excise tax and road user charges from biofuels act only as subsidies to fuel consumers. They do not compel the use of biodiesel unlike the biofuel obligation. 
Repealing the mandate will also halt all on-going work and efforts in new technological innovation and development. The future value of this advancement will be completely wiped off for the investors and shareholders as well as place New Zealand in a disadvantaged position worldwide in terms of engineering and process technology export to the rest of the world. 
We would urge you to recommend the retention of the mandate as laid out in the Biofuel Act. There is no sustainability issue regarding the product we produce which meets all standards. 
Yours sincerely 
Tom McNicholl 
Managing Director” 
I say to the Minister in the chair Gerry Brownlee that this is the letter that he did not read. This is the letter that he said he had not seen. This is the letter that goes to the heart of what he is seeking in this legislation to undo. I say to the Minister that this letter could not put it more clearly. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I am waiting now for the Minister in the chair the Hon Gerry Brownlee to get on his feet because he has left us with the very very distinct impression that he is absolutely incompetent. What he has done is tell the House that he does not read his correspondence. One letter would have gone via the ministry and it would have been part of the file on the bill. Another one went directly to his office on 4 December and it was attached to another letter. What he has told us is that he did not read it. 
What has also become clear is that that Minister having not read the letter and having not understood the effects of this legislation on a New Zealand business did not indicate to the Prime Minister in the Cabinet committee that this plant would be mothballed. He did not indicate to the Prime Minister in the Cabinet committee that 46 people would not have jobs as a result of this legislation. 
It is pretty rare for me to be caught short of something to say in the House but on this occasion it just beggars belief that a Minister in charge of this legislation would not tell the Prime Minister that the direct result of it would be that an individual would lose a $10 million investment and 46 people would not have jobs. There are a few other issues as well such as the fact that New Zealand’s international reputation will be going backwards not to mention the effect on the environment as a result of this legislation—and we have tended not to focus on that issue quite as much since the Minister made his startling admission that he does not read his correspondence. 
What is becoming clear to the House is that this is not the sort of bill that should be passed under urgency. Clearly urgency in this House has meant that the ACT Party has not been able to properly consider its position. To be fair to that party it was probably misled by the Minister as well. It is a very very serious matter. I ask Mr Garrett whether that letter was shown to the ACT caucus before it agreed to support the bill. I say to the member that he does not have to take a call; he can just interrupt. Let me put it this way: we are assuming that the letter was not shown to the ACT caucus. If we are wrong then it is incumbent on the member to tell us. Are we wrong? The member is not telling us so we will take it that as well as the Cabinet committee not seeing the letter the ACT caucus did not see the letter. The vital bit of business-wrecking information was not shown to the ACT caucus. 
I ask the ACT Party whether this situation makes any difference about how it feels about the legislation now. ACT is the party that is making the difference here. I ask whether the ACT Party as one of its first real choices in this Parliament wants to go down in the history of Parliament as being the party that supported the incompetent Minister. Clearly Rodney Hide the leader of a party that was not responsible enough to do a regulatory impact statement on this bill before it was introduced should have been asking Gerry Brownlee questions at the Cabinet committee about the effect of this legislation and about the lack of a regulatory impact statement—I understand that Rodney Hide is on the policy committee through which this legislation would have had to be passed. 
Not only should John Key have been asking the questions—certainly the previous Prime Minister would have been asking questions in respect of this particular matter—but answers should have been offered by Gerry Brownlee anyway. But he could not offer the answers because he did not read the mail. That is a sign of absolute incompetence from a lazy Tory. 
MOANA MACKEY (Labour) 
: 
 The Committee finds itself in an extraordinary position with a Minister in the chair who has not read critical pieces of evidence regarding the repeal of legislation when that will severely damage New Zealand’s economy and the investment of hard-working small-business people whom National claims to care about—both small and medium sized businesses. A gentleman who has invested $10 million wrote to Mr Brownlee asking him to please reconsider this legislation as he had invested $10 million of his own money—as he says in the letter if the Minister had bothered to read it—because of the biofuel obligation that had been brought in. He clearly outlined the case for why we need such an obligation and why it is very important for that obligation to continue. What did the Minister do? 
Hon David Parker 
: He ignored it! 
MOANA MACKEY 
: He did not even read the letter. 
The first paragraph of the letter is a response to an official from the Ministry of Economic Development. It says: “We have received your email of 2 December 2008 in regards to the ‘state of play’ of the New Zealand biofuel industry in the context of a National party pre-election indication of its intention to repeal the biofuel obligation.” I was on the Local Government and Environment Committee which considered the Biofuel Bill and the officials from that ministry were very good; I found those officials to be extremely knowledgable in this area. But it seems to me that perhaps the official had been asked by Mr Brownlee to send an email out to people. I find it hard to believe that of his or her own volition the official decided to send an email out to people in the industry—good on the official if he or she did—asking them to explain the “ ‘state of play’ of the New Zealand biofuel industry in the context of a National party pre-election indication”. To me clearly that direction came from somewhere. 
I wonder whether the Minister will take a call and indicate whether that direction came from him. If it did not come from him I ask why because it seems a sensible thing to go out and ask the industry where it is at and whether the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill will have an impact on the industry especially given that this bill has no regulatory impact statement attached to it. If the Minister did put that direction in and ask his officials to find out the state of play why did he ignore the information that came back from Mr McNicholl of BioDiesel Oils (NZ)? It seems astonishing to me that an email would go out presumably from the Minister asking about the state of play and then he would ignore all the information that came back in. Perhaps we could call the bill the “Biofuel (Ignorance is Bliss Head in the Sand) Bill”. 
Hon Steve Chadwick 
: It’s arrogant. 
MOANA MACKEY 
: It is arrogant because this bill is not going to a select committee. Mr McNicholl had no opportunity to come a select committee and explain the kind of impact the repeal of the mandatory biofuel obligation will have on his company and on his workers. At a time when one would think that the Government of New Zealand would be wanting to create jobs and support innovative businesses like BioDiesel Oils (NZ) Ltd Mr Brownlee comes down here to the Chamber—after bills last week that ripped the guts out of research and development—and has more legislation that will damage the very companies industries and entrepreneurs that we need at this time in order to bring us through the recession given what is happening overseas at the moment. 
I ask Mr Brownlee to take a call and indicate to the Committee whether he gave a direction for his officials to contact industry players and ask them where they were at. If he did I would like to know why he ignored that very crucial letter which he said he had not seen but now says he received and did not bother to read. 
I tell the ACT Party members to read that letter as clearly they have yet to see it. In all genuineness I ask them to read the letter and see the kind of impact this bill is going to have. At the very least the bill should have gone to a select committee. For a party that campaigned on having a regulatory impact statement attached to every single piece of legislation I tell Mr Garrett that this is a very very poor way to start. How much legislation has so far had what the ACT Party promised would be attached to every single bill and what is ACT’s leader now the Minister of? It is those members’ votes that will pass this legislation. It will not go unnoticed out there in the New Zealand public that a party that campaigned on the basis of the need to know what the impact of this legislation would be before it was passed is supporting this bill being rammed through the House with no select committee process and no regulatory impact statement. 
The Minister in charge of the bill has not even read the very information that he asked for. It was a smoke and mirrors request to make the sector feel that it was being consulted when clearly the Minister’s intention was to ignore every single word it said. 
JACINDA ARDERN (Labour) 
: 
 I am grateful for the opportunity to speak on this bill but it is with some shame that I do so and that shame is based on the subject matter we are discussing today. 
I have listened with some considerable interest and deep concern to the debate on the floor of the Chamber because this debate is all we have to go on. This is it. There is no select committee process and there is no regulatory impact statement. What we hear from members today is all we have. That is why I have listened with considerable interest to the discussion on this side of the Chamber because I believe that it is the only side of the Chamber that is taking into account the interests of our communities the interests of the players in this industry the interests of the people who might have been employed in this industry and the interests of the environment—and that is a big one. 
We are discussing the title of this bill. I have some suggestions for the Minister Gerry Brownlee and I would like to throw one out there to begin with. Based on what I have heard I propose that the title be the “National May or May Not Believe in Climate Change for Political Expediency But Will Do Nothing About It Bill”. I know that it is not too snappy but neither is National’s policy on environmental issues. 
What have we seen in the first month of this National Government? Let me give members a little refresher course. As soon as the Prime Minister made his first visit abroad what did we have? We had the Prime Minister of the UK Gordon Brown throwing a tax upon us. 
Hon David Parker 
: I raise a point of order Mr Chairperson. I hesitate to interrupt the member but it is impermissible for the Minister to be in the Chamber and not be sitting in the Chair. I would request that the Chairperson bring the Chamber to order 
The CHAIRPERSON (Hon Rick Barker) 
: The member is correct. The Minister who is responsible for the bill has to be in the Chair or he has to leave the Chamber. If the Minister wishes to make a phone call he should excuse himself. 
JACINDA ARDERN 
: I am happy to provide a copy of the  
Hansard 
 of my speech to the Minister for him to read when he has finished his all-important phone call. I hope he is speaking with the managing director of BioDiesel Oils. That would be a worthwhile conversation. 
I again reflect on what we have seen from the National Government on environmental issues. We have had the airport tax. We would hope that when a Government thrusts something like that upon us one of the things that we would see was a robust debate about all the things that the Government is doing in response to environmental issues that might allow for some bartering that might allow for a little bit of negotiation. What did we have? We have a select committee to question climate change I say to Mr Brownlee. That is what we have got. We have got the repeal of the biofuels obligation. And there is the emissions trading scheme. We cannot discuss what the Government is doing with the emissions trading scheme because I do not know whether the Government knows what it is doing—but we will come back to that. Those were our chips; that was what we had. If indeed the National Government believes in climate change what is it going to do about it? Repeal is not the answer. 
I propose another title for the bill: the “Gutting the Biofuels Industry Bill”. Aside from the environmental issues that is the other argument that we on this side have had to put because the National Government has not put it. The National Minister has not taken many calls on this part so I thought I would take the liberty of sharing some of his views on the impact this bill will have on the biofuel industry. His statement to the  
National Business Review 
 was: “We think that the growth of the biofuel industry will continue. A large number of biofuel companies in New Zealand who are currently producing … have been quite positive about where we are heading”. So positive in fact that the first thing they do is shut up shop. The first thing one of our major players in the industry does is shut down. 
For the edification of the members in this Chamber and because there is no regulatory impact statement I would like to share with them a little information about one of the communities that will be impacted. Waharoa is a small rural community in the Waikato. At the last census the unemployment rate was 23 percent. Given that we do not have a regulatory impact statement I would like to share with the Minister the unemployment rate in that small town. For a community that does not number more than a thousand what a boost 46 job placements would have been—massive. 
Hon Trevor Mallard 
: 22 jobs. 
JACINDA ARDERN 
: Rather there would have been 22 job placements which would have impacted on a number of families. What have we seen in the Waikato electorate alone since the National Government has come in? We have seen a loss of job opportunities in Waharoa. We are already facing 160 job losses in Morrinsville. 
Hon JOHN CARTER (Minister of Civil Defence) 
: 
 I move  
That the question be now put 
. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I particularly want to make reference to the Hon David Parker’s two amendments that are on the Table. The first of them was the excellent idea that he picked up from my colleague Brendan Burns to rename this bill the “Bio-fools Bill” because that is a very accurate representation of what the National Party is actually doing here today. Its members are making fools not only of themselves but also of New Zealand as a country on the world stage. I know in my time as a representative of New Zealand overseas that we were often proud to stand up—including I might add under a National Government with Simon Upton—to talk about New Zealand’s record on the environment and how we led the way. Unfortunately under this “Bio-fools Bill” along with the other measures that have already been brought in by the National Party in this short term in Government we are not able to say that. It is not only that; it is the importance to our overall economy and to new industries that are growing here. 
David Parker’s amendment to omit clause 2 is to substitute it with the following: “This Act shall not be submitted for Royal Assent until 30 days after a regulatory impact assessment and the report on the financial and unemployment effects on New Zealand’s tallow to biodiesel industry have been presented to Parliament.” That is a very very good amendment because at this time we are rushing through this bill without the opportunity to understand the regulatory impact or the impact on employment or the finances and economy of New Zealand. As we have just heard this is going to have a major impact not only on the small community of Waharoa but also on the people of east Tamaki. The bio-diesel industry was an industry that was growing and taking off and this bill is gutting it. As my colleague said we could call this the “Gutting of the Bio-diesel Industry Bill” because that is what the bill does. I urge the Minister Gerry Brownlee to take a call and tell us whether he agrees with the Hon David Parker’s amendment. It would be an opportunity to take some time over this bill and assess its impacts on the industry. 
We have already heard today in quite a startling development that the Minister in charge of this bill the Hon Gerry Brownlee did not even read the information that came to him from the industry that would be most affected by it. That is an unbelievable situation when there is no select committee process for the bill. We have a situation where the Minister in charge of the bill is also the Leader of the House and he has a 100 percent record of putting bills through this Parliament that have not been to a select committee and have been taken under urgency. Here we have an industry that will go down the gurgler on this Government’s watch—an unbelievable situation. I urge Government members to at least take a call and tell us what they think of the Hon David Parker’s amendment. I think it is an excellent amendment. It will give us the opportunity to understand the true impact of this law on the economy of New Zealand and on its industries. 
I also say that at an international level this has been a week of shame for this country in terms of its environmental record and this bill represents that. We have been proud of that record rightly but it is also important to our economy. We know that internationally buyers for supermarkets overseas and consumers who are thinking of coming to New Zealand as tourists all look to New Zealand to see us as a sustainable country. Yet we have seen over the last 2 weeks the Government take steps to suspend the emissions trading scheme—we think; we are not sure about that—to get rid of the biofuels obligation and to get rid of insulation for homes. If we had those things then we would be able to stand up on the world stage and say proudly that New Zealand is a country that takes sustainability seriously. We could get over the tyranny of distance by saying that we are a truly clean green country. Yet we come here today to debate a bill that will repeal the biofuels obligation and remove the opportunity not only to create an industry in this area but also to continue to show that New Zealand is a country that is serious about addressing climate change. 
This bill shows that National is not serious about addressing climate change and it is certainly not serious about listening to the concerns of the industries affected by the bill. We can read the letter from Tom McNicholl which Mr Brownlee decided not to read and we can also hear from Sue Wood talking about Tom McNicholl. It is perhaps hard for Mr McNicholl to talk about how he feels about this bill but Sue Wood has very clearly stated that her client is devastated. The person she is working for is devastated. Yet Mr Brownlee was not even prepared to read the letter to find out what was going on behind the scenes in this industry and to make sure that someone like Mr McNicholl could contribute to New Zealand in the way he wants to. 
NATHAN GUY (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 We could call this bill the “Climate Change Denial Bill” as some of my colleagues have suggested because fundamentally this bill comes down to a question of whether we believe in human-induced climate change. But of course Government members are taking a balanced view on these things these days a very balanced view! One day they think it is a hoax and the next day they believe in it. It is a balanced view. Tomorrow they will be back to thinking it is a hoax again or maybe that is where they are today because this bill effectively is Government members standing up and saying they still think that climate change is a hoax they still do not believe in it and they still do not think they need to do anything about it. 
Or Government members could start talking about whether they believe in the development of alternative fuel sources. Do those members believe in doing that? We have not heard very much from the Minister in the chair the Hon Gerry Brownlee. I wondered whether the Minister wants to step out of the House again and have Mr Williamson resume the chair because I think we were getting a bit more engagement from him when he was sitting in the chair. [ 
Interruption 
] That is right; we are getting a lot more engagement from Mr Williamson over on the backbenches. He is a Minister who believes in free speech and I am sure he wanted this bill to go to the select committee so that he could have a say on it. 
Hon Trevor Mallard 
: But Maurice doesn’t believe in climate change. 
CHRIS HIPKINS 
: Yes that is right. I am sure that Minister would like to have the opportunity through the select committee process to stand up and share with us his views on climate change. I think he would like to stand up and give us his views on climate change because this is a very important bill. This is a very important issue for New Zealand; in fact it is a defining issue for New Zealand. This bill is about whether we want to reduce our dependence on foreign oil. Do we want to reduce our dependence on foreign oil? It appears that this Government does not. Do we believe that New Zealand’s clean green image is something worth protecting? It appears that this Government does not. 
Hon Steve Chadwick 
: Well we do. 
CHRIS HIPKINS 
: It appears that this Government does not believe in New Zealand’s clean green image but we do—that is absolutely right. We in the Labour Party do; we think it is worth protecting. We will not enhance our environmentally friendly image by being fast followers. It appears that not only were we following but also we have turned around and we are going the other way. We are not turbocharging fast forward to the future but we have hit the reverse button and we are going backwards. This bill severely undermines New Zealand’s credibility on climate change. In fact there are members of the Government who think it is a bad idea as well. 
We are into inclusive government so I thought I would share some of the views of members of the Government—in fact those of Peter Dunne who stated: “I am particularly disappointed for the domestic biofuel industry which has for a long time signalled to me that unless Parliament enforced stiff regulatory legislation there would be no capacity to develop a domestically based tallow industry.” 
 That is from Peter Dunne a member of the Government. It is quite a good statement and I will share with members a little bit more: “As a result of National’s repeal domestic suppliers will find themselves undercut by cheap unsustainable imports which will eventually force them out of the industry. The environmentally conscious biofuel consumer will be faced with an imported product with all of the source sustainability uncertainties that we are all actively trying to avoid. The repeal of this legislation means there is nothing to stop the importation of biofuel from cleared South-East Asian rainforests from land that used to grow food for the poor people of the third world or from the United States’ carbon-intensive ethanol market. While National claims its repeal is due to concerns about environmental protection and world food shortages it is about to do the very thing that will potentially bury a 100 percent sustainable tallow-based biofuel industry right here in New Zealand.” That was from Peter Dunne a member of the Minister’s Government. 
Why does the Minister in the chair the Hon Gerry Brownlee not stand up and explain to us why National wants to do that? The Minister is reading his papers very intently now. Perhaps he is reading the letter at long last. Perhaps he will stand up take the next call and share with us his views on the letter which he now appears to be reading. I very much look forward to hearing from that Minister. 
Let us talk about some of the other things. This bill has not gone to a select committee so I will share with the Committee some of the other people’s views. They would like to have their voices heard. Brian Cox the executive officer of the Bioenergy Association stated: “New Zealand’s ability to seize the opportunity to become self-sufficient in liquid biofuels for transport will be slowed if the biofuels obligation in current legislation is removed”. He went on to state: “Investor confidence is key”. I thought investor confidence was something National believed in. 
Moana Mackey 
: No only in theory. 
CHRIS HIPKINS 
: Oh that is right; those members believe in it only in theory. Or is it another one of those things they believe in until they get into Government and then they can change their minds on things? They can believe in all those lofty things about being pro-business when they are in Opposition but when they get into Government they say: “Oh well we will just change our minds; we will just do whatever we like anyway.” 
Hon Steve Chadwick 
: Some are all right. 
CHRIS HIPKINS 
: Some are all right; that is right. 
AMY ADAMS (National—Selwyn) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Motion agreed to. 
The CHAIRPERSON (Hon Rick Barker) 
: There is an amendment to clause 1 in the name of the Hon David Parker which is ruled out of order as it is regarded as not being a serious amendment. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Clause 1 agreed to. 
The CHAIRPERSON (Hon Rick Barker) 
: We now come to clause 2 and there is an amendment in the name of David Parker that seeks to change the commencement date. There are some concerns about it not setting a precise date but on balance I think we will let the Committee decide the question. 
The question was put that the following amendment in the name of the Hon David Parker to clause 2 be agreed to: 
to omit this clause and substitute the following clause: 
This Act shall not be submitted for Royal Assent until 30 days after a regulatory impact assessment and the report on the financial and unemployment effects on New Zealand’s tallow to biodiesel industry have been presented to Parliament.  
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Clause 3 agreed to. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I raise a point of order Mr Chairperson. I bring to your notice that in the brace of votes we have just had United Future’s party vote was consistently recorded by one of the Government whips. In an earlier phase of the Committee of the whole House stage the United Future vote was not recorded by the Government whip. That leads to two possibilities: the first is that United Future had a view that it wanted to vote only in the latter stages of the Committee of the whole House and the second is that United Future’s vote was not recorded even though the National Party whip was under instruction to record it. It seems to me that the latter of those two explanations is the more likely. Therefore some of the votes recorded earlier in the Committee of the whole House stage may need to be adjusted. 
The CHAIRPERSON (Hon Rick Barker) 
: That is not a point of order. The votes are matters for the whips and it has always been the acceptance of this House that the whips are accurately recording the votes and casting the votes in accordance with a party’s wishes. What those wishes may or may not be at that time is for that party to determine not for the House. The record stands unless the whips come back and say that they have made a mistake and that is not the case at this point. 
House resumed. 
Bill reported without amendment. 
The CHAIRPERSON (Hon Rick Barker) 
: I move  
That the report be adopted 
. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Report adopted. 
Third Reading 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 I move  
That the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill be now read a third time 
. Hearing this debate one would think that this bill was about shutting down the biofuels industry in New Zealand. That has to be the most hysterical reaction to this particular bill that I could possibly imagine. I am staggered at the claim that the 20000 litres of biofuel produced in New Zealand right now will not apparently be produced the moment that this bill passes its third reading. I do not believe that. I think that in fact the biofuels industry in New Zealand has a very bright future indeed. What I my party and others who support this bill do not accept is that the only way New Zealanders will embrace biofuels is if the Government insists they become the compulsory customers of certain companies inside New Zealand. That is not a reasonable way to progress a move that is designed to improve New Zealand’s carbon footprint. 
In the Committee stage the Opposition kept on talking about the prospect of biofuels reducing our dependence on foreign oil. Well there is a prospect that that might happen but let us be very clear: to meet even the one-half percentage obligation would require some 60 million litres of bio-diesel. To get up to the full extent of the obligation in 4 years’ time would take over 300 million litres of bio-diesel. At the moment this country produces 20 million litres so it would be decades—decades—before we reached the position that would see us through biofuel non-dependent on foreign oil. Of course oil discovery in New Zealand may advance that position much more quickly. 
What we need is a programme in this country that encourages the development of biofuels and that ensures that the development of that industry is met by a market willing to take that fuel and I am confident we can have that situation in New Zealand. Interestingly we have it now but I think we could expand it quite considerably. 
The Opposition has also said that we are doing away with the option of producing standards for the sustainable production of biofuels. That is simply a total red herring. In fact the principal Act the Energy (Fuels Levies and References) Act 1989 requires that those sustainable standards are put in place. 
Hon David Parker 
: No it does not. 
Hon GERRY BROWNLEE 
: Mr Parker I am reliably informed is a guy who has always had his own view on these things. 
It also means that the work now being done by New Zealand Government officials to develop those standards will continue and those standards will be promulgated as soon as they are available. That has got to be a good thing because it will mean that New Zealanders can be sure that when they are pouring this new fuel into their tanks they are doing something to reduce the nation’s carbon footprint. 
There is a huge amount of international condemnation of biofuel produced in other parts of the world. As I said before we would need 60 million litres in the current year to meet the obligation put on the oil companies. We cannot do it from inside this country. 
Hon David Parker 
: Read the letter. 
Hon GERRY BROWNLEE 
: There are those who say we can do it; well where is the production now? It is no good saying that if the provision goes ahead we can do it because the obligation is there right now. It has been there from 1 October 2008. 
Moana Mackey 
: It’s 0.5 percent this year 1 percent next year. And this guy is doing it and you’re putting him out of business. 
Hon GERRY BROWNLEE 
: The member has made a lot of fun and games about the letter sent by the gentleman who has the plant in Tamaki and is proposing to build more plant. I have read that letter. He has put his case very succinctly but from his perspective. I have made the offer through Sue Wood to talk to him. It has been rejected. I cannot do much more than that. I cannot be fairer than that. The fact is that the biofuel obligation cannot be met in New Zealand without the importation of biofuels. I know that under the current law the opportunity for the big oil companies to have their obligation pushed out exists and that request would have come over my desk in no time at all. 
Also it is a little bit staggering that those in the industry who say that it is being destroyed and that they could have produced enough biofuel inside New Zealand actually did not have watertight non-breakable contracts with the oil companies. If they could not get that sorted out in the period that the obligation has been in place then what was the chance it might have been sorted out any time soon? 
I have said that I think biofuels do have a big future. I quite like the idea that a cleaner fuel would be available for many of the activities in New Zealand that require the burning of diesel. I point to Solid Energy’s approach. It has an experiment involving a fishing fleet in Wellington. That fishing fleet is 100 percent fuelled by bio-diesel and that is a great use of that fuel. Those on the boats like it. The fuel has proved to be very very reliable. If something goes wrong if the tank leaks or the boat spills some of the fuel then because it is biofuel it simply becomes fish food and does not do any environmental damage. That is a great use of it. Those sorts of things will develop. 
I note also that the company that Mr Leay heads up has had a product tested by Boeing. It announced that in the market just recently. The fuel is an algal-based biofuel. Quite interestingly a barrel of that particular biofuel has about a 33 percent jet-fuel capacity. That is fantastic and I am sure that technology will develop as time goes on. 
One can go through all of the biofuel companies look at what they are doing and see a clear picture of how they might progress their industry. But their coming to the Government and saying that they can make the progress they want to make only if Parliament chooses to give them customers by compulsion is not a particularly good way to go about it. 
Then there is the issue that has been advanced by our opponents that if this bill passes the country will be flooded by unsustainably produced biofuels. Well hang on let us work that out. They are saying that without this bill there will be no biofuel industry which would tend to mean there are no users but they say that somehow the country will be flooded with imported biofuel. I do not accept that for one moment. Some of the arguments mounted on the other side of the House have been to say the least very very inconsistent. 
What we will do is ensure that there is a sustainable standard for the import of biofuels to be used in the production of biofuels in New Zealand. And I will say this: when this bill passes later this afternoon the 20 million litres a year of biofuel produced in this country right now will still have markets and will still be sold and there will be more people looking for more of it as time goes by. We most certainly encourage that. 
Hon DAVID PARKER (Labour) 
: 
 The Minister of Energy and Resources the Hon Gerry Brownlee did not take one call of substance during the whole of the Committee stage of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill. He was exposed this morning as not having read the very important correspondence from BioDiesel Oils (NZ) Ltd—a company that this legislation may put out of business with the loss of 46 full-time jobs and the loss of $10 million of capital investment and research and development expenditure. 
As he gave his third reading speech he made another error that really disturbed me. He said that the Energy (Fuels Levies and References) Act already requires sustainability standards even when the detailed sustainability provisions have been taken out of it by this bill. He is wrong—he is just wrong and he does not understand the legislation. An empowering provision in the Act allows sustainability regulations to be developed to ban the importation of unsustainable biofuels but the provision is a power not an obligation. The obligation arose in the provisions that will be taken out by this very bill and it disturbs me that the Minister does not understand that fundamental point. This is Mr Brownlee who has been on Radio New Zealand National saying that National’s real reason for introducing this repeal legislation was that it did not want to see unsustainable biofuels imported into New Zealand. This bill makes a nonsense of that argument. He does not understand his legislation. 
I want to return to a higher level in this debate. I will not now traverse the issues of the terrible injustice that has been done to some biofuel producers in New Zealand but I will restate the reality that if biofuels were going to happen by themselves they would have happened by now. It is easier for oil companies not to incorporate biofuels in their fuel stream and that is why they do not. They have ample capacity to deploy 100 percent mineral oil and mineral oil - based petrol and diesel. They do not need to include biofuels and it is a bit of a hassle for them to do so. That is partly because they have to buy product from some other company. They like to have vertical integration of all parts of the supply chain and to have the profit stream that flows through to them as a consequence so they will not deliver biofuels unless they have to. That is why the mandatory obligation was necessary. 
The approach is similar to that taken in a lot of other countries. The approach being taken in New Zealand was a very moderate one—0.5 percent biofuel required in the first year. Again Mr Brownlee has it quite wrong. He pretended only 20000 litres of biofuel per annum would be available in New Zealand yet evidence has been read into this Parliament’s record that a factory in Auckland is already capable of producing 10 million litres per annum and an additional factory under construction in Waharoa is capable of producing 60 million litres per annum of bio-diesel from tallow which is the most environmentally prudent source of biofuel in the world according to the UN and most of the ecologists who follow these issues. Again it is a misnomer to suggest that if the mandatory obligation had stayed in place unsustainable biofuels would have come into the country. They would not have. From now—from 1 October this year—companies have to report the source of their biofuels. No fuel company will put its reputation at risk by importing unsustainable biofuels in the short period prior to the implementation of the detailed regulations that were to be promoted under the sustainability provisions and that are already quite detailed in the legislation. 
What was the import of the biofuels obligation? Most people in the world—as well as the National Government—say that they are convinced that human-induced climate change is real and that we need to reduce emissions. It is very hard for New Zealand to reduce emissions in agriculture. It can be done but there are no substantial ground-breaking alternatives to cows that do not produce methane. We can reduce the rate of emission but we cannot avoid emissions altogether. Some substitutionary technologies in energy can avoid greenhouse gas emissions and one of them is biofuels. 
Sitting suspended from 1 p.m. to 2 p.m. 
Hon DAVID PARKER 
: Before lunchtime I briefly recounted how the Hon Gerry Brownlee is still mistaken as to the effect of this legislation as shown in his third reading speech. He said that after the repeal of the sustainability clauses in the current legislation there will still be a requirement for biofuels coming into the country to meet sustainability standards when that plainly is not the case. He further said that there will be a requirement for the new Government to develop sustainability standards. That is not the case either. The legislation is permissive and allows standards to be developed but there is no guarantee that there will be a requirement to do so and there is no prohibition on unsustainable biofuels being imported in the meantime. 
I also highlighted that the Minister when sitting in the chair acknowledged that he had not read the statements that came from one of the major producers of bio-diesel from tallow. Correspondence that had been sent to his ministry on 2 December was copied to his office on two further occasions yet on no occasion did he read it. Indeed it appeared obvious that until we provided him with a copy of it this morning he had not read the correspondence. The reason I highlight that is that I think it is tragic that the effects of this legislation on that industry are going completely over his head. 
He did not read the important correspondence which showed that as a consequence of this legislation the $10 million investment made by Mr McNicholl’s company in production of bio-diesel from tallow is likely to fail the plant will be mothballed and the people who would be employed at the East Tamaki factory and the Waharoa factory will presumably be either laid off or not employed. A total of 46 full-time employees were intended to be in place by the early part of next year to operate on a 24-hour basis this very large facility that was going to be producing between the two sites a total of 70 million litres per annum of bio-diesel from tallow—a by-product of the livestock processing industry. The amount produced by that company alone during the first 2 years would have been more than enough to meet the mandatory prescription in the legislation. It was achievable. 
Mr McNicholl’s letter describes how giving biofuels a tax break equivalent to the tax break that we have given ethanol—relieving ethanol from excise duty is equivalent to a 42c per litre tax advantage for ethanol—is not the answer. We did not think it was necessary to bring the tax break forward for tallow if there was a mandatory obligation. But in the absence of a mandatory obligation it is obvious that the oil companies will do just as much as they have in the past—very little—to introduce biofuels. Gull Petroleum has produced a little but the major oil companies have not done much to incorporate it in their fuel streams. 
We tried to pass an amendment that would have made good the National Party promise that it would give equivalent relief or assistance to the bio-diesel industry. I proposed an amendment to that effect. This very simple amendment gave to sellers of bio-diesel relief of 42c per litre of bio-diesel sold and credited it against the levies that were payable under the Act. Again both the National Party and the ACT Party opposed that. 
It is interesting that this bill is opposed by Peter Dunne by the Maori Party by the Greens and by the Labour Party. We all see the injustice that is being done in addition to the environmental back step—one of many that are being taken by the Government at the moment be they on biofuels or on something else. For instance the next piece of legislation to be considered the Electricity (Renewable Preference) Repeal Bill makes it easier to build coal-fired power plants amends the Resource Management Act and abandons efforts to hasten insulation and other improvements—such as efficient light bulbs—to energy efficiency in homes which should be encouraged. This is to say nothing of the suspension of the emissions trading scheme and the job losses that have already occurred in the forestry industry and the carbon service industry as a consequence. 
However those consequences stand small in comparison with the environmental damage that is being done. The economic consequences of this bill are bad enough but I hang my head in despair that this Government is far from building on our fine traditions as a country of doing the right thing in respect of these issues and of taking sensible but not costly decisions that improve the environment and also create new jobs. The Government is ruining all that through the repeal of the biofuel obligation. Thank you. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 It seems to me that over the last 2 weeks the economic direction in this country has been set and it has changed from where it was in previous years. Generally speaking it seems to me that our approach to economic development and to progress as a nation is starting to regress. We are going backwards not forwards. We are becoming dumber not smarter. We are becoming unsustainable not sustainable. We are becoming antagonistic to new technology instead of embracing new technology. We are in denial of the global mega-trends instead of mindful of them. 
It is almost as though climate change is some sort of grand intellectual global plot that this Government feels it needs to pay some homage to because it is a vote maximiser. Actually to do as little as possible is the mindset that the Government is in. That appears to me to be what has happened in recent weeks. It started last week with the repeal of tax credits for all research and development in New Zealand. That in itself has set the scene for an economic direction that will be based on volume not value and based on making sure we are technology followers not technology leaders. That is hard enough and difficult enough to swallow. 
Then what happened was that the climate change policy of the new Government altered between election day and the formation of the Government and it altered very substantially. It altered in the sense that the Government’s position when it was trying to win an election was that it would amend the existing emissions trading scheme. Now we have this so-called high-level select committee that is taking us back to the drawing board to see whether we think climate change is of much consequence. This committee will look at what everyone else thinks about it what the big global take on it is what we think about the science and whether we are to have a carbon tax or an emissions trading scheme. As a result there has been a whole lot of lost investment in this country and the economic consequences of that are measurable and have come to book. 
As a result of the delay in emissions trading—if we ever get emissions trading back under this Government—we have also seen a delay in the retrofitting of all of our pre-1977 houses. This country is full of very very cold dogboxes. It is a country in which the graphs for admissions to hospitals in the winter months for various bronchitic diseases are much much more severe than they are in say Britain or Sweden where there is not a seasonal rash of admissions or a seasonal death pattern. There is a seasonal death pattern that exists in New Zealand that does not exist in those parts of the northern hemisphere. Even though the climate in those areas is colder than ours those countries none the less have much better building stock and pay much better attention to housing standards. We had an opportunity to fix that and it has gone out the window. That is a very very significant change indeed. 
We have had some other changes and one that we are debating right now is how we are going to put an end to biofuels. Right through the debate on the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill the Minister of Energy and Resources Gerry Brownlee has clung tight to the sophistry that he is not doing biofuels in the eye and that they will be able to proceed even though the requirement for a sales mandate is being abolished as a result of this legislation. Evidence has been adduced by the Opposition to show that the Minister is wrong. The evidence is really clear and it comes from the industry itself. It comes in the form of letters and one of those letters in particular has been read out in full during the Committee stage of this debate. It stated without any hesitation that the industry could not go ahead without this sales mandate. 
The Government’s reason for not proceeding with biofuels legislation that uses a sales mandate is that it is ideologically opposed to it. The Government is ideologically opposed to a sales mandate because it thinks it is coercive. Of course it is coercive. If we want to start something that has resistance from some of the largest multinationals in the world then we have to put our foot down just as we have to coerce oil companies to take sulphur out of petrol too much benzene out of petrol or lead out of petrol. We have to show them we mean it; if we do not they will continue to colonise us. That is what will now happen: those companies will sell mineral oil in this country pure and simple for the foreseeable future. There will be no beginning of the switch to an alternative even though we know that oil is a finite resource that sooner or later it will run out that before it runs out its price will go up and that it will then go up in price again. These things are now being ignored and newly so. I do not think I can recall a Western nation that has taken a step against biofuels. A number have failed to take any steps towards biofuels but I cannot think of a Western nation that has got up and said: “We are going to axe progress on biofuels.” I do not know of one and that it is a shameful position for us to be in. 
The real problem is that the Government’s arguments against biofuels are so weak. They have no balance to them they have no substance to them they have no logic to them and they hold together badly—so much so that the Government was forced in order to fill its speaking time to come up with a bunch of stuff that were red herrings. The debate that we have had in the last day has shown them to be red herrings. I guess the one that comes to mind and it will do as an example is the Parliamentary Commissioner for the Environment’s assertion that the Biofuel Bill as introduced was a bad bill. Well at the end of the day no one in the House disagreed with the commissioner. Certainly no one on the Local Government and Environment Committee disagreed with the commissioner. As that bill went through the House there was awareness that the price of food and the price of oil ran the risk of becoming linked and that that would be a bad thing because a person’s Sunday drive would be responsible for someone else not eating. So the members of the select committee and a few others who were advising from the outside moved to address that and to put sustainability descriptions into our primary legislation that are the most advanced in the world. Underneath that primary legislation further regulation was to be developed. 
The next bit of sophistry that came from the Minister was the claim that the regulations were too hard. Is it not interesting that official advice has apparently flip-flopped in the space of one general election campaign? We were in Government not so long ago and when we were in Government the advice was: “We will be ready by July.” Now it seems it will take far too long so the country most advanced in putting in legislative policy involving biofuels for such a future is the one country that is about to back off and say: “Square one is good for us. Going back to the point of zero is where we want to be.” So we now have a Government that has already started to show a pattern. The Government is only a few weeks old but the pattern is to go back to the future. The pattern is to say: “Let us find the reverse gear and depress the accelerator as far as we dare.” 
This is dreadful legislation. It is dreadful because it does damage to this that or the other company; it is dreadful because of job losses; it is dreadful because it takes us backwards; and it is dreadful because it leaves us ill-prepared for the future. 
If we think of the first charge on any Government we know that it is to defend the realm. In this country we do not have big threats of marauding hordes coming from Indonesia. Our threats are the external shocks of climate change and oil depletion and we have decided in this House today to see whether we can ignore those as possible threats. That is shameful—it is shameful. The biofuels legislation that is about to be ditched was modest enough but it was a start. It was a good start. There was an industrial development response to that start and there was a capital investment response to that start but now it is going up in smoke. It is going up in the smoke generated by mineral oil and that is not the future; it is the past. 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 It amazed me that the member Pete Hodgson talked about shameful policy. I will begin my contribution on this biofuels bill by reciting for members opposite their actual record on climate change. When they came to Government in 1999 New Zealand’s emissions were 68 million tonnes of carbon dioxide equivalent. In 2000 that figure went up by 1.9 million tonnes. If we go a further few years forward we see that in 2003 that figure went up by 2.5 million tonnes. If we look in terms of the most recent data we see that the figure went up by 2.9 million tonnes. For all the talk of members opposite about carbon neutrality their climate change record was one not just of increasing emissions but also of an increasing rate of an increase in emissions. In fact during the previous Labour Government’s period in office of 9 years the rate of growth of greenhouse gas emissions was almost double what it had been in the preceding 9 years under a National administration. So when I hear a former climate change Minister like Pete Hodgson saying that we who have been in Government for not yet 5 weeks should be ashamed I say that he should reflect on his own record. 
This biofuels amendment bill does exactly what National went to the electorate on in the 2008 election and said we would do. We have a mandate for this change and I tell the House that it is appropriate we pass this bill under urgency because there is the real risk of a waste of public money being invested in infrastructure which will not apply if we get on and get the law straight in respect of biofuels. 
The first point that is critical in any debate around biofuels is whether it will do good. I could quote  
Time 
 magazine the United Nations the OECD and the world food organisation which this year have all expressed real concern that biofuels are doing more harm than good. 
Hon Pete Hodgson 
: What is the world food organisation? Where is its headquarters? 
Hon Dr NICK SMITH 
: Well the member opposite wants to quibble about what those organisations are. Let me go through them again. The United Nations Secretary-General has urged member countries not to impose mandatory requirements for biofuels. Our very own Parliamentary Commissioner for the Environment has said that a compulsory biofuels requirement will do harm to New Zealand’s clean and green reputation and members on this side of the House agree with that caution. 
I also want to pop the balloon that has been put forward that says that somehow the previous Government provided for a sustainability standard. It did no such thing. The select committee was asked to develop a sustainability standard and when the officials said that it was pretty difficult and that the European Community had been trying to do this for 5 years and it could not get there do members know what the Government members decided to do? 
Chris Auchinvole 
: What did they do? 
Hon Dr NICK SMITH 
: They said: “Let us kick it to the officials. Let us get the officials to sort it out. It is too hard.” and the officials came up with some highbrow principles. I say to this Parliament that it is so easy to have highbrow principles but what is needed is the pragmatic ability to have regulations that work. They do not exist and it is an indictment on the previous Government that it introduced a compulsion for biofuels without actually having a sustainability standard in place. It was one of those classic examples of putting the cart before the horse. 
Members opposite have said the problem is that some biofuel companies would like the compulsory requirement. I bet they would! I would love it if this Parliament were to pass a bill to compel people to use my particular product. I brew a drop of home brew and it is an excellent organic drop. I would love it if this Parliament were to pass a bill to deal to those big corporate beer companies and require them to include a blend of 0.5 percent of “Nick Smith’s Home Brew Beer”. I would love to see such a bill passed. I could justify it because my beer is particularly good and I think it should be better valued by Parliament. But does Parliament really think that such a law would be good law? It would be a nonsense. For members opposite to simply say that because some biofuel company would like a compulsion to buy its product and that that somehow is good law is a very pathetic advance. 
The real difference in approach around the issue of biofuels is this. The first thing is that this Government is open about the fact that this House of Representatives will not be the one that finds the answer to the challenge around climate change and new fuels. I honestly do not know whether the answer will be hydrogen vehicles electric vehicles biofuels or some other technology that has not yet been invented. I do say to this Parliament that when we try to pre-guess what that answer is we are pretending we have a level of knowledge that we do not have. We should not try to pick winners—like biofuels. 
I would love it if the next speaker explained why we would compel biofuels but not electric cars. I personally believe that electric cars will be a bigger part of the future than biofuels. I think that Parliament should say that we have a transition to make to new renewable technologies and that we need to provide a kick-start and some incentives for them. The answer is not to compel any one of those technologies but to provide a consistent financial incentive to move to them. The idea that Parliament could prescribe that the exact answer is for New Zealand to have 2.5 percent biofuels by 2012 in my view was quite ridiculous. The proposal from the Minister to look at an excise tax advantage that would then allow that to flow through does make a lot more sense. 
The second point I will deal with is the issue of cost. Officials have made a prediction but nobody knows the proper price. It depends on the sustainability standard but we do not know what it is yet. If the sustainability standard is very narrow and tight then the price will be quite high. If the sustainability standard is very loose and very open then the price will be quite inexpensive. But if we take a moderate view of it it is about 4c a litre. Each cent on a litre of gas costs $60 million so we are talking about a $240 million cost being put on to consumers for this biofuels incentive of a teeny-weeny little percentage. 
As the Minister responsible for Climate Change Issues I put it to this House that the biggest contribution New Zealand can make to this huge challenge of climate change is around the technology to reduce the methane from agricultural emissions. Do members know that we are spending just $4 million on research and technology to solve that problem? How many members in this House can put hand on heart and say that putting a cost of $240 million on to the economy for biofuels while we spend just $4 million on agricultural emissions from farm animals—the real elephant in the room around climate change—is a sensible programme? In my view it is completely disproportionate and out of order with what is logical. 
The last challenge I would have for members opposite is simply to go back to their record on climate change. Can any member opposite name for me a country that has had a larger increase in emissions than New Zealand has had over the last 9 years? Can they name any country—any? The reality is that the previous Government had the very worst record and the few countries that may have had a worse record most of us have never heard of. I think it is about time that members opposite made some apologies for their appalling record on climate change before they lecture this Government about its sensible programme. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 I have to begin with that last point from Dr Nick Smith. As he well knows New Zealand’s greenhouse emissions rose fast under the National Government of the 1990s and they rose faster under the Labour Government of the 2000s for one simple reason—that is the economy grew faster under Labour than it did under National. I make no excuses on the grounds of economic growth; the climate does not care how fast the economy grows. And it did take the Labour Government a long time to realise it had to take some action. But finally the Labour Government took some action. It put in place some provisions to reduce our greenhouse emissions—very late nevertheless it did it. But what is the first thing the National Government has done? It has repealed the lot of them. Well maybe that is a lesson to Labour—that a Government has to do things early in the term if it wants them to stick. But the fact is that we did get some good policy and now it has gone. 
I begin my third reading speech on the bill to abolish the biofuel obligation by reading a little bit from the briefing to the incoming Minister of Transport. This is what the Minister was told by the Ministry of Transport: “Reliance on fossil fuels to power transport leaves New Zealand exposed to the expected rises in oil prices due to increased demand and a supply that many forecasts suggest will peak between 2010 and 2020.” The Ministry of Transport has finally got on board with peak oil! “To help our society and economy adjust to the true cost of using oil and emitting carbon dioxide the transport sector must improve energy efficiency and shift to energy sources and modes of transport that are more sustainable and over which we have more control. New Zealand is relatively well placed to generate electricity from renewable sources has good sources of first-generation biofuels in limited volumes and is developing sources of environmentally friendly second-generation biofuels. Making the most of our opportunities will be an important focus of the ministry’s activity over the coming decade.” Well it looks as though the ministry will not have that opportunity. 
I note that despite that briefing from officials the new Minister of Transport has not spoken once in this debate. Would we not think that an incoming Minister of Transport would be interested in a debate about what vehicles in New Zealand will be running on in the future? But he has not contributed one thing to this debate and I find that sad. No one in Government in fact has spoken up for our need to reduce dependence on imported oil. No one has spoken up on our need for fuel security at least in an emergency—to have enough fuel to get food to the supermarkets and to maintain emergency services. I have to say to Dr Smith that electric cars will not do that. No one from the Government has spoken up on the need to encourage science innovation and entrepreneurship which will lead to second-generation sustainable biofuels in New Zealand. That is an area where New Zealand has a big competitive advantage. Nobody over there has recognised the importance to business confidence of being able to rely on a law. Those issues have been left to the Greens. 
Biofuels are not the saviour of the world. They are not the whole answer to climate change and nobody has ever pretended that they are but they are part of it. New Zealand is particularly well placed because of our large land area and good growing climate and because of the wastes that occur from our agricultural industry. There are good biofuels and bad biofuels and the way to distinguish them is with a sustainability standard but the Government is repealing detailed instructions for writing that sustainability standard. Nick Smith in all his speeches and the Minister as well insists on conflating the United Nations’ concern about the effects of ethanol grown from subsidised corn in the US with the effects of bio-diesel made from tallow in New Zealand but they are as different as chalk and cheese. To be for one does not mean that one is for the other. 
The Government position is based on an aversion to mandatory means but we already mandate the composition of motor fuel. We already mandate sulphur levels the lack of lead and a whole lot of specifications around volatility and combustibility. What is so different in mandating 2.5 percent of renewable composition? Nick Smith again knowingly misrepresented the situation by saying that it was equivalent to compelling oil companies to buy Tom McNicholl’s product. Well he knows that is not true. It is equivalent to requiring oil companies to buy some renewable fuel. Tom McNicholl has to compete with everybody else on whether his product is the one that makes it. 
I thought that one benefit of this debate was that the Minister Gerry Brownlee was learning some stuff from all the contributions in the House. But I heard his third reading speech and I am afraid I was wrong because he still does not grasp the most important point of this whole debate. He is taking an economics 101 approach that says if the demand is there the market will provide. If we are talking baked beans or shoes that is correct but in this case the market will not provide and here is why. First of all oil companies will never demand biofuels. Why should they? They have their own product. They are not the consumer. As oil prices rise they will just put up the price of what they sell. So there will never be demand from oil companies for biofuels until oil wells are physically incapable of delivering enough oil. 
Members should remember that the briefing to the incoming Minister of Transport—and a very conservative briefing at that—says that that time will be from 2010 to 2020. If it is 2010 we need to have infrastructure in place now but we are not going to have that. As well when oil wells are incapable of delivering enough oil it will be very hard to import biofuels because everyone will want them. We may not even have our own tallow at that stage in order to set up an industry because it may well be under long-term contracts for export to China where the Chinese will be making biofuels out of it for their people because tallow will be a valuable ingredient. 
Gerry Brownlee thinks that because Fonterra and Gull Petroleum have a contract to sell 22000 litres of ethanol that shows that it can be done. Well they had a bit of surplus feedstock they were already making ethanol and Gull Petroleum was expecting a legal obligation so it got in first. It was a marketing strategy; it was a one-off drop in the bucket little bit of ethanol blended with petrol and it will be the last of that kind because the company did it expecting an obligation. If a company is building a biofuels plant will it invest under the law as the law is going to be in a few minutes? Well it will not if it is making ethanol because ethanol cannot be sold here as a fuel unless it is blended and oil companies will not be providing blending facilities. Most vehicles cannot run on pure ethanol so companies will not be proceeding with trying to make ethanol from waste wood for the same reason and that research will go overseas. If a company is making bio-diesel it may focus on whether it can make direct sales such as to the fishing fleet we have heard a lot about. When oil is $150 a barrel companies will get orders and when oil is $49 a barrel as it is now they will not get orders and nobody will build a plant when there is a stop-go market that depends on the fluctuation of international oil prices. So when oil hits $200 a barrel there will be no industry and maybe no feed stocks. 
The Minister even says that oil discovery in New Zealand may reduce our dependence on foreign oil faster. Well I am sorry but I tell him that oil discovered in New Zealand will not belong to us. It will not necessarily be refined here and it will be sold on the world market. We will have as much ability to buy it here as we have to buy any other oil in the world. It is frightening that as we get so close to peak oil we have a Minister of Energy and Resources who does not know that. He says we cannot meet our obligations within New Zealand without imports so let us look at the arithmetic. The first company has 10 million litres now with 60 million litres under construction making 70 million litres in all. If we add eco-diesel we have 20 million litres now with 20 million litres coming online next year. When we add BioDiesel Oils (NZ) 70 million litres are planned and under way. I tell Mr Brownlee that a total of 280 million litres a year by 2010 is already in the pipeline and that is almost the 300 million litres the Minister said we would need in 2012. That is without any wood or any algal biofuels. Clearly we can do it within New Zealand. The quantities in the Act are designed to keep pace with what we can do in New Zealand but all of that careful thought to give just enough encouragement to a New Zealand industry is being wiped away by this legislation. 
DAVID GARRETT (ACT) 
: 
 I rise to speak on the third reading of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill. As members of the House clearly know ACT is committed to supporting National’s first 100-day plan as laid out in the document  
My key commitments to you.  
The caucus and I intend to honour that pledge. Having said that I say I have listened to the contributions from the Opposition members with interest. As a new member of the House I was not involved in the debate surrounding biofuels last year. During the debate over this last day I have personally come to see some considerable sense in what has been said by members on the opposite side of the House. I stress that that is my personal position and view and that the ACT Party is committed to supporting the Government. 
I am glad to hear that Labour members recognise that some biofuels would dramatically increase fuel prices worldwide particularly hurting the 1 billion people who survive on less than $1 a day. I hear Ms Fitzsimons’ distinction—and I hear it loud and clear—between various biofuels and I hear her point that not all biofuels are alike. I am pleased to hear that both Labour and the Greens recognise the negative impacts of some biofuels—in particular those produced from corn and rapeseed which have been shown to contribute higher levels of greenhouse gases than fossil fuels. Certainly from my personal perspective bio-diesel produced from tallow in New Zealand appears to provide a number of benefits over the use of fossil fuels or fuels produced from what were once food crops. 
It is clear to me from listening to the debate that biofuels warrant further investigation and my hope is that over the next 3 years the Government with help from its support partners my party and the Maori Party can come up with a common-sense approach to this issue: a common-sense approach that will allow the development of biofuels that contribute to lower levels of pollutants in our environment but do not cause unintended consequences. It should be an approach that will allow the development of biofuels that will not lead to further price rises being imposed on those who can least afford that and most important an approach that will allow the development of a biofuels industry in New Zealand based on good science and good economic sense. That I am afraid is where I and my colleagues opposite diverge. Their feeling and it seems to be shared wholeheartedly by the Greens is that biofuels in order to be viable require regulation and compulsion. ACT agrees with the Government view that using compulsion to create a captive pool of customers is a bad idea. 
With regard to the letter from Mr McNicholl I read it with considerable interest and I noticed a couple of things. I think that maybe it was not very well expressed. He says that without the biofuel obligation the business case for BioDiesel Oils (NZ) would have been weak from the start. But BioDiesel Oils (NZ) appears to have been set up in 1998 so I assume he means the project to produce bio-diesel from tallow. The other point is that Mr McNicholl—understandably—has some concerns. He has relied on a captive market being delivered to him which is now going to be removed. Well I am afraid that is business. 
Mr Brownlee has made the point very well that the bio-diesel that is produced now is being sold somewhere and that it has been sold for some time. And we are not talking about a couple of truckloads; 10 million litres is a huge amount. ACT does not agree that mandatory limits need to be put in place. One point that has not been made is that if bio-diesel is a sustainable product at a good price all the supporters of the Green Party will flock to buy it. They have sincerely held philosophical beliefs in sustainability so if bio-diesel is available they will buy it. I am prepared to admit that I have learnt something and have refined my knowledge which was limited in this area. I would hope that the members opposite might learn something and see that mandatory levels are not a particularly good way to go. Clearly there is merit in tallow-based biofuels and that is an option that New Zealand companies should be taking seriously. 
One point that Ms Fitzsimons made your Honour—I am sorry Mr Assistant Speaker; it is a long habit and is hard to break—was that oil companies will not develop this industry because they do not need to. In the short term that is right of course; they have a vested interest in protecting their mineral oil market. But one crucial thing is that oil companies are not stupid. I heard Ms Mackey say she had worked for one. Well I worked for 10 years of my life in the oil industry and I think she would probably agree with me that the one thing the oil companies are not is stupid. They all know that we will eventually run short of oil. It is becoming more and more expensive. Peak oil is not going to happen in 2010 or 2020 but it will happen. And if the oil companies do not go down the route of supplying biofuels their competitors will. We have already seen—and it is a minor marketing point perhaps—that BP changed its identity some years ago from British Petroleum to Beyond Petroleum. All right that is a marketing ploy but it illustrates that the company recognises that diversity will have to happen and it will have to source liquid fuels from sources other than 10000 feet below the ground. 
Having said all of that as I said my personal view is that work needs to be done on biofuels. I think much of merit has been said by members on the other side of the House but ACT remains in support of this bill. Thank you. 
Hon PANSY WONG (Associate Minister of Energy and Resources) 
: 
 I am pleased to take a call in the third reading of this Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill. The bill is intended to repeal the compulsion part of the biofuel legislation that was passed by the previous Labour Government which continued to show its distrust of New Zealanders’ ability to make an informed choice. We all know that biofuels are already available for sale. National has made the point that we support the development of the biofuel industry but we also trust New Zealanders to be able to make an informed choice. Instead of making it mandatory to force the various distribution chains to sell “x” quantity of biofuel our approach is to implement viable alternatives such as tax incentives and at the same time—which is most important—to develop a sustainable standard. 
The Hon David Parker sat there and did nothing for 9 years and then in the last minute of a dying Labour Government those members brought in legislation that talked of compulsion and mandatory actions. I think that those members should have got the message from the New Zealand public that they have been voted out of office. On this side of the House the Government side we show that we have confidence in New Zealanders. Before anybody thinks about mandating anything a credible standard has to be developed to judge what a sustainable biofuel standard is. 
I ask members to think about this. It is incredible to think that the previous Labour Government—and this is why it lost office—would mandate an action without even developing some standards. What is a sustainable biofuel? We have all learnt now on looking back that the first wave of biofuel was disastrous for food crops and that the second wave led to deforestation. Now once again with the technology still in development some people want to rush headlong into mandating something. 
I am very very proud to be on the Government side. We are able to provide a viable alternative of tax incentives for the development of the biofuel industry and at the same time we are able to show our confidence in letting our people—New Zealanders—make those informed choices. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I rise to speak to the third reading of the Energy (Fuels Levies and references) Biofuel Obligation Repeal Bill. It is one of the few times I regret I have only 10 minutes to speak on the third reading. There are some points that I think are important to make. 
The first is that I welcome the comment made by Mr Garrett from the ACT Party that he had a personal view that was not consistent with the ACT position— 
David Garrett 
: I didn’t say that—“differed slightly from”. 
Hon TREVOR MALLARD 
: —was slightly different from the ACT position—after listening to the arguments from the Opposition. I welcome his frankness in saying that—and saying it even before I understand he has had his maiden speech in the House. It is good to hear that someone was listening to the debate and some of the points were well made. 
I also want to say to Nick Smith that his work in the select committee—it was relatively unusual—on the development of the legislation now being repealed was valued by members from the Green Party and the Labour Party. It was good. What I think he fails to understand—maybe he did not look carefully at the detail of this bill—is that the very sustainability requirements in that legislation are being repealed by this bill. He seemed to indicate that the work would continue anyway but of course it will not be required by legislation because those standards are being repealed. 
I want to make some general comments about climate change. As a relatively small country New Zealand has the possibility of doing some pretty wonderful things. We are over-reliant on motor vehicles compared with the majority of OECD countries we have a poor public transport system and therefore having a go at transport fuels is a very good way for us to reduce emissions. I agree with Nick Smith: I think that in the longer term it is likely that battery-powered cars will make progress. 
Hon David Parker 
: The Government’s ambition. 
Hon TREVOR MALLARD 
: That was the ambition of David Parker and a lot of work has gone on—including by State-owned enterprises—in this particular area in order to make sure we stay at the front of the world. But that is a longer-term situation and it may well be that some electric cars will have to be dual-fuel and that we will still have to rely on a normal combustion engine type of arrangement at least for some of the longer routes. Therefore we have to think about the use of fossil fuels the use of ethanol bio-ethanol and bio-diesel. 
 I was lucky as Minister of Energy and Minister for Economic Development to see quite a few projects around the country. People have been looking at making fuel from gas from the smokestacks at New Zealand Steel—Stephen Tindall and his team have been working in that area. People have been looking at using algae and they are likely to make progress. But we have only one world-leading biofuel technology in New Zealand that is ready to go now and that is fuel from tallow. It has been 10 years in the making a lot of very good research has gone into it and its economic viability is essentially proven. Most important it competes really well against international biofuels most of which are not sustainable. So it is win-win: we have something sustainable—it uses what is pretty close to a waste product in New Zealand; something we have a very high proportion of per head compared with most countries—and it works price-wise vis-à-vis international prices for biofuels. 
But there is a problem and that is that the oil companies do not like it. They do not like the investment in mixing that they have to do to ensure that it can be used and if there is not an element of regulation or compulsion they will not do it. They are big economic organisations and they make decisions in their interests as individual companies. It is right that they should do that. That is the way it goes and we accept that that is the way the world works. Over the years we have made lots of decisions that have hurt oil companies. They fought like hell when we took lead out of petrol. They hated it—they absolutely hated the idea of it being taken out. A whole pile of standards have been set and I think none of us would now want to go backwards. This situation is similar. This is about the setting of a standard that is important for the planet. Shifting towards biofuels is an important part of that. 
We are really lucky in New Zealand that a man—a pioneer and I understand a 75-year-old—Mr McNicholl—has decided essentially to shift the emphasis of his company which had been involved in recycling in a number of areas; over the last 10 years his major focus and his major investment have been on research and development on and then the building of what is essentially a pilot plant and then on the building of a major plant in Waharoa for the conversion of tallow to bio-diesel. I compliment him. He was a long way ahead of the pack and he got some endorsement internationally—the product is proven. He got some support. It was not that anyone was told that Mr McNicholl’s bio-diesel had to be used rather than the imported stuff; no one said that. No one said that people at the moment have to use sustainable stuff—although people have to declare if they are not which is quite an incentive to use it. But there was no compulsion to use Mr McNicholl’s product; it would compete with the overseas products. 
Mr Assistant Speaker Roy I regret to inform you that during the Committee stage of the bill we had an admission and an interchange that I would describe as unseemly at best. It became very very clear that Gerry Brownlee who is only 5 or 6 weeks into his term as Minister of Energy and Resources is behind in his correspondence. In fact that became clear 2 weeks ago so 3 weeks into his time as Minister he was behind in his correspondence. Mr McNicholl through the Ministry of Economic Development on the 2nd and directly to Mr Brownlee on the 4th sent a letter that outlined the issues for that company and the fact that this bill would result in the mothballing of his plants. It was again sent to his office on the 12th by Sue Wood a former president of the National Party. Unfortunately Mr Brownlee did not read that letter until 17 December—today. 
Hon Gerry Brownlee 
: Rubbish! 
Hon TREVOR MALLARD 
: No he made it absolutely clear in the Chamber that he had not read that letter until today. 
Hon Member 
: Ask him directly. 
Hon TREVOR MALLARD 
: I ask the Minister whether he had read it before. Again he refuses to deny it. But he made it clear in the Committee stage that he had not read that letter until today. 
He made some other comments. He said that his office had offered Mr McNicholl a meeting. As of Friday last week that was being vehemently denied by Sue Wood a former president of the National Party who said that his office gave her the brush-off when she tried to set up a meeting. It may be that as this legislation was falling down around his ears he offered a meeting after the fact. 
But the point is that Gerry Brownlee by not reading his correspondence misled the Cabinet committee that approved this bill. It is absolutely incumbent on a Minister especially one proposing to take to the House legislation without a regulatory impact statement—such as this bill—to brief his Cabinet colleagues on the effects. He has told us that he did not tell either the Cabinet committee or Cabinet that a company in which $10 million had been invested would be mothballed and 46 jobs would not be available. This is from a Government that says it cares about jobs and cares about investment. He has told us that despite having the letter in his office he did not tell his Cabinet colleagues about it. Well if that occurred two or three times under a Labour Government the Minister would get the sack. If it occurred once the Minister would get a very serious reprimand. I want to know from the Prime Minister what he is going to do about his incompetent lazy behind-in-his-correspondence Minister Gerry Brownlee. 
MOANA MACKEY (Labour) 
: 
 I am happy to take a call in the third reading of this very very bad and damaging bill—the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill. I note once again that this bill did not go to a select committee. Those affected by this terrible legislation were given no chance to come and have their say. Those National members who say that Mr McNicholl is lying when he says that he will lose his business if the Act is repealed— 
Hon Gerry Brownlee 
: No one said that. 
MOANA MACKEY 
: So is he telling the truth in his letter when he says that his plant will go under? 
Hon Trevor Mallard 
: He doesn’t know. Even that’s a very bad admission. 
MOANA MACKEY 
: That is right. He does not know because he read the letter only just before the lunch break. The National members who say that Mr McNicholl was not telling the truth in his letter when he said that his plant will go out of business if this bill is passed would have had the opportunity at select committee to have that discussion with Mr McNicholl face to face. 
Hon Darren Hughes 
: And Sue Wood from Otaki knows that. 
MOANA MACKEY 
: That is right—Sue Wood from Otaki the former president of the National Party knows that. The least the people of New Zealand should expect is that when their Government plans to pass legislation that is not only environmentally damaging but economically damaging legislation affecting someone who has invested $10 million of his own hard-earned money and employed 22 people in Waharoa which as my colleague Jacinda Ardern—who campaigned very hard in that electorate told us—had over— 
Hon Trevor Mallard 
: 23 percent unemployment in 2006. 
MOANA MACKEY 
: —over 23 percent unemployment plus another 20 people in East Tamaki that person has at the very least the right to come along to a select committee and put his case. He has the right to have National members who are like lions in the House today actually face up to this person who will be put out of business and tell him why they are passing the legislation. 
There is no good reason for this repeal bill other than revenge on the Labour Government—National does not like it because we put it into place. 
Chris Auchinvole 
: Oh! 
MOANA MACKEY 
: I am sure Mr Auchinvole’s call will elaborate on this in great detail but we also know that Mr Brownlee tried to claim in the Chamber today—I do not know whether it is true—that he was trying to get a meeting with Mr McNicholl to talk about the issue with him. According to Sue Wood as of Friday last week that was not the case. Again I come back to the fact that we would not need to be having this discussion if this bill had gone to a select committee and Sue Wood and Mr McNicholl had had the opportunity—which most in this country would think would be their right—to come along to a select committee and face up to those who are planning to put them out of business with this legislation. 
Hon Darren Hughes 
: Sue Wood was campaigning for the Nats at the election. 
MOANA MACKEY 
: That is right. She campaigned for the Nats at the election. The National Party campaigned on this policy. What it did not say is that the bill would be rammed through under urgency in the first 2 weeks of Parliament with no select committee process for the public of New Zealand to have their say. 
 Mr Brownlee has talked a lot about how unhappy he is about compulsion. This is a very fundamental philosophical opposition on his part so I went back and had a look at his first reading speech on the Biofuel Bill. I know that National supported this bill to select committee but Mr Brownlee raised a number of issues and concerns that he had about the bill as it stood going to select committee. He seemed to actually know a little bit about it. I read through his first reading speech; there was not a single mention of compulsion at all. I remind members that at the time the bill went through its first reading the mandatory target obligation was 3.4 percent not 2.5 percent as it came out of the select committee. At the first reading Mr Brownlee apparently had no problem with compulsion. In fact he went on to say: “we support the bill—with considerable goodwill—going to a select committee recognising the importance of all of this for New Zealand’s future. It has to be said that as an agricultural producing country with a huge emission problem from our agriculture sector and not wanting to penalise ourselves unduly in the future getting this part of the emissions profile in better shape is in all of our interests.” I do not know what has changed between now and then—who knows? 
Hon Gerry Brownlee 
: The select committee led me to change my mind. 
MOANA MACKEY 
: It is the select committee process that made the bill better. The select committee process that addressed every other issue he raised in his first reading speech apparently made it so that National could not support the legislation. 
But there was another very good first reading speech from a member of this House who is held in high regard Mr Eric Roy. I would like to read from his speech because I think it also raised a number of issues that we agree with here. He pointed out that there were a number of complex issues when it came to biofuels but that that they were part of the solution in terms of our response to the whole issue of climate change. He believed it was important that they formed part of the debate. He also said: “I also believe that New Zealand has to be in there at developmental and experimental stages because we will gain credibility in terms of the products we sell.” I agree with this entirely. He said: “we sit at 19.5 tonnes of greenhouse gas emissions per head of population and the rest of the world is at 5.5 percent. I happen to believe that there is something immoral in First World countries saying yes that the planet is in crisis but they will hold just where they are and everybody should hold where they are which means that underdeveloped countries stay underdeveloped. So we need to look for solutions.” I agree with that sentiment. He then explained the situation that we were in with the amount of fossil fuels that we were producing. He pointed out—quite rightly—that the transport sector was an enormous part of that area and that we needed to do it. He went on to say: “Biofuels are actually something we can engage in almost immediately. Both our diesel engines and our internal combustion engines can get straight into utilising these fuels. So we have an advantage there and while not neglecting other things”—like electric cars—“we are off first base in terms of working with biofuel solutions.” That just about says it all. 
One of the issues that consistently came up at select committee was that of low-hanging fruit. New Zealand is very different from most other developed nations. We need only to look at our greenhouse gas emissions profile compared to other developed nations to see just how different we are. New Zealand’s greenhouse gas emissions profile is nearly 50 percent agriculture which more closely resembles the emissions profile of a developing country than a developed country. It means that when we come to look at solutions for climate change we have enormous amounts of waste by-product from the production of meat and dairy which can be used for the production of biofuels and which other developed countries do not necessarily have in similar proportions at their disposal. 
We are for example talking about tallow. The research on tallow has been world leading. There were times when the cold flow properties of tallow were in question and people were worried. We saw a lot of evidence at select committee that this stuff is being used in Edinburgh. If bio-diesel from tallow can be used in Edinburgh at the temperatures it gets down to then certainly bio-diesel can be used all over New Zealand—otherwise not sold in the parts of the country where it may be too cold to be used. There is also the production of whey from our dairy production using ethanol. Ethanol is also a high-energy option and as we know the legislation was about energy not volume. 
Our dairy industry gives us huge advantages over other countries. It is not simply to say that we are the same as every other developed country—we are not. We have low-hanging fruit at our disposal that we can use now. The only reason that this legislation will be repealed is that the National Party does not like it. Mr Brownlee asked people to trust him to develop sustainability standards according to the principles already in the law. The legislation he is repealing had a requirement to do that. We proposed an amendment to leave the sustainability standards in the requirement. If he was genuine in what he said about those standards he would have supported that amendment because the principles that we worked on very hard at select committee were a good guidance. We were told at select committee that people wanted a clear steer on what those sustainable principles would say—what they could and could not do. These are long-term investments that both the producers and the oil companies are taking and they do not want to enter into a contract to find that 1 year down the track they are in breach of that contract because they can no longer sell that biofuel in New Zealand. 
If Mr Brownlee was serious about sustainability standards he would have supported the Hon David Parker’s amendment which left the requirement for him to develop those standards in the law. I suspect that it will be a very very long time before we see anything come out of this. A lot has been made of this obligation. It was an issue that we took seriously but what has become clear in this debate and at select committee and if we read the letter from Mr McNicholl is that the obligation made a difference. Mr McNicholl stated as much in his letter. He said: “Around August 2005 when the company became aware that the government had in principle agreed to a Biofuel Sales Obligation it took further steps to invest in ramping up production output of its R&D plant in East Tamaki.” He goes on to say: “When it became evident that the government was going to legislate the compulsory use of biofuel the company went ahead with its plans to construct a new 60000000 litres plant at Waharoa which is well under way.” So to say that a biofuels obligation does nothing flies in the face of the evidence that has been presented to the select committee and indeed to this House. 
It is appalling that the Minister in charge of the bill did not bother to read Mr McNicholl’s letter; he admitted as much in the House today. He finally read it when Labour members tabled it. I do not understand why this legislation needs to be rammed through under urgency. It provides no certainty as the Minister has just told us that he will go ahead and develop sustainability standards anyway. The sector out there is still wondering what the standards will say and do. At least if he had supported the Hon David Parker’s amendment to keep the sustainability principles in the bill people in the sector would have had some kind of clear steer on what those standards would be. They are now in no man’s land—they do not know. They do not know whether there will be any kind of sustainability principles produced at all. If there are people now have no idea what they might be because the Minister has taken them out of the legislation where they already were. This creates more uncertainty for the biofuels sector more uncertainty for oil companies and thoroughly dreadful legislation. 
METIRIA TUREI (Green) 
: 
 I want to take a reasonably short call on the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill. My colleague Jeanette Fitzsimons has described in some detail the facts about this issue the extent to which the Minister has got the issue completely wrong and why this bill is such a bad thing for the National Government to pursue. I want to talk about the international concern about biofuels and particularly unsustainable biofuels. There is a range of different kinds of unsustainable biofuels and I want to describe some of them. 
Unsustainable biofuels are those where the greenhouse gas emissions from the production of the biofuels are high. There is simply no means by which a biofuel is a viable alternative to the use of fossil fuels where in the production of that biofuel the greenhouse gas emissions are equivalent to those of fossil fuels themselves. It was very important in the setting of the sustainability standards that we made it very clear that a sustainable biofuel was only one that had a reduced level of greenhouse gas emissions over the life cycle of that fuel—a 35 percent reduction as a minimum so that it was a real reduction. 
But now that the National Government is repealing that legislation there will be absolutely no requirement in law that the biofuels used in this country emit less greenhouse gas than oil-based fuels. Taking that as one example we will shortly have biofuels imported by large fuel companies and being used in this country—mostly because the New Zealand industry is being slaughtered by this legislation—that are likely to emit over their life cycle the same greenhouse gas emissions as or possibly even more than oil-based fuels. So the repeal of the legislation by the National Government is likely to maintain greenhouse gas emissions at the same rate as at present for transport fuels or possibly even increase them. Certainly it will make no contribution at all to New Zealand’s obligation to reduce its greenhouse gas emissions. 
 The door will be open even further in terms of unsustainable biofuels in that the biofuels that the National Government is allowing to be brought into the country are unsustainable in terms of food production. Biofuels will be imported that are produced on land that people would otherwise have used to produce food for themselves their families and their communities or would have used in further trade around their communities to support themselves. A significant amount of writing has been done on this issue around the globe by people like Vandana Shiva. She has written a great deal about the impact of unsustainable biofuels on the poorest communities around the world in terms of the displacement of people and the theft of land. There has been a significant theft of land managed or owned by very poor communities; it has been taken off them by large international corporations. Some people have reported having land taken off them at the point of a gun; they have been forced off their land by the employees of mining companies and palm oil companies particularly in areas like the Solomon Islands. 
I have been to the Solomon Islands and visited with people there who were campaigning against unsustainable biofuels particularly those produced from palm oil. Much of the land those communities were living on and the forests those communities were living in were being used as a food source. People were also using those resources to build their homes and care for their children and they were using the forests as the source of medicines. Those communities were engaged in ancient knowledge ancient cultures and ancient traditions. Their lands were being stolen from them at the point of a gun because of the drive for unsustainable biofuels. International companies wanted the land in order to produce unsustainable biofuels that they could then sell on to Western countries like New Zealand because there is a demand for biofuels here. 
So what did we just make sure of? The Green Party along with Labour and even with a bit of agreement from Nick Smith agreed that we should have sustainability standards in New Zealand law that would say a sustainable biofuel was one that was not produced in competition with food production and was not grown on land that was used for food production and that would not impact on indigenous biodiversity. That standard is currently in the law that is soon to be repealed by National. It would have made sure that no biofuels imported into this country came from the end of a gun at the cost of indigenous communities losing their forests and watching their homes be bulldozed by international fuel companies who wanted their land to grow biofuels on. Under the existing law we would have made sure that biofuels produced in such circumstances did not come into New Zealand. New Zealanders would have felt absolutely assured that— 
Hon Gerry Brownlee 
: Where are the standards? 
METIRIA TUREI 
: The standards are in the law. The Minister of Energy and Resources does not know where they are because he has not bothered to read the legislation. He has no idea what he is talking about. He has not seen the standards so obviously he has not looked at the legislation that is in place at this very moment which he is repealing. He obviously does not even know what he is repealing. 
Those standards are in place right now and New Zealanders would have been assured that they were not responsible for the destruction of homes the theft of land and the destruction of indigenous rainforests around the world particularly in the Pacific. Those rainforests are very important not only for biodiversity reasons but also as food sources and medical sources for the people who depend on them. The poorest people on this earth rely on those natural resources for their lives but those resources are being taken off them by multinational corporations that want to grow biofuels to feed greedy Westerners who just want cheap and easy biofuels. The National Government is making sure it is possible now to import such biofuels into this country. 
It is also worthwhile to remember that not only is National opening the door for unsustainable biofuels to come into New Zealand but also it is providing public money to the companies that are part of the process of stealing land off poor people threatening them with a gun and destroying the indigenous forestry and rainforests. National is to give those companies subsidies to do all of those things. Not only will the subsidies go to those companies but also the same process of subsidising international companies will mean that our New Zealand domestic industry involving sustainable biofuels made from waste products will be killed off. The public purse is being used to fund the theft of land by multinational corporations and the destruction of New Zealanders’ jobs and New Zealand’s domestic biofuels industry. That is the National Government’s recipe for the economic—I do not know what it is; it is certainly not economic growth or development—degradation of this country. 
It is a tragedy for New Zealand to see that in just this one little piece of legislation which is only a few clauses and a couple of pages long. This bill is just a tiny little thing but inside it we can see the whole of the National Government’s policy and programme for this country which is to be as unsustainable as possible in the interests of both greed and international companies to destroy New Zealand industry to encourage job losses rather than job growth and to make it as hard as possible for the international community to look on us with anything but disgust and distaste. 
This legislation along no doubt with other legislation that is to pass sometime in the future and certainly a bundle that passed last week just goes to show the extent to which the National Government will drive this country into the dark ages. It will drive New Zealand back to a time when unsustainable growth and a very large pool of unemployed workers were created to the benefit of wealthier companies and particularly international companies; and back to a time when public money is funnelled either into private schools—we see almost a doubling of funding for private schools by the National Government—or into private companies so that more and more money is taken out of the public purse and given to private profit-making enterprises all in the name of greed and the National Government. So much for a brighter future! Indeed this National Government will drive New Zealand back into the dark ages and we will be ashamed to face up to the international scrutiny that will no doubt come as a result of that. In the context of indigenous communities that have relied on Western countries like our own country to put their interests at least a little into our consideration we might at least acknowledge the fact that their homes and livelihoods are to be destroyed. This National Government has no concern for them or for the interests of New Zealand. 
This is a sad sad day and this bill is a disgraceful act on National’s part. 
CHRIS AUCHINVOLE (National—West Coast-Tasman) 
: 
 This has been a very interesting debate to listen to and I really have enjoyed the beginning of each speech that has come from the Opposition side of the House. Sadly towards the end of all of those speeches we have heard a more partisan tone and they have turned into diatribes against the National Government. We even had Mr Parker talking about energy-efficient light bulbs and saying they should be back in there. Actually we have just had an election and the people have indicated what they want. There has been such a waste of energy in the discussion of the details of this but the thrust of the original discussions was good. 
I have a few questions to ask. Where is the mountain of surplus tallow at the moment? There cannot be a big surplus without displacing the production of other products by taking the tallow away. Opposition members say we will make more money out of tallow. Yes but this is the whole argument about biofuels. Corn was a low-value product that the Mexicans used as a base food supply and now it is beyond their reach. 
Hon David Parker 
: People don’t eat tallow. 
CHRIS AUCHINVOLE 
: Well no they do not but they make a lot of things from tallow that keep them healthy and clean and that they can afford. And Labour members talk about capturing it and legislating by compulsion so that it has to be used in biofuels. 
Mr Parker talked about an environmental backwards step and about the use of compulsion in order to introduce changes of that nature being the environmental backwards step. I was interested in what Mr Mallard said. We nearly got there and I thought his speech was going to be good because he was talking about the need to use new technology. The biofuel legislation restricts the use of new technology because it puts a ring-fence around a particular biofuel and says that people must use that one. 
Moana Mackey 
: No it doesn’t. 
CHRIS AUCHINVOLE 
: It does. It is not a mandate for change. Internationally the United Nations and the New Zealand Parliamentary Commissioner for the Environment both say that compulsion for biofuels is a disaster. 
Like Moana Mackey I shared an involvement in an oil company. We had a little oil company; there were about four of us in it. We used to import fuel. 
Hon Darren Hughes 
: Just like the Clampetts! 
CHRIS AUCHINVOLE 
: Ha ha! We changed it. It was a small business but there was enough technical knowledge amongst the partners to know that New Zealand had never had much of a go with decent petrol. We have not talked about standards that are really good for the country. That is why we have been badly served. 
Moana Mackey 
: So why didn’t it go to a select committee and all your questions would have been answered? 
CHRIS AUCHINVOLE 
: Well— 
Hon Gerry Brownlee 
: Moana went to forecourt school. 
CHRIS AUCHINVOLE 
: There we go. But even forecourt school people know that New Zealand’s petrol has never been the very best in the world. A lot of improvement can be made without having this sort of regulated procedure. 
To conclude I say the biggest problem coming in the arguments from members on the other side of the House seems to concern the loss of the compulsory nature of the legislation. 
Moana Mackey 
: The Minister didn’t care about the compulsory nature in his first reading speech. He didn’t even mention it. 
CHRIS AUCHINVOLE 
: But that is the only bit that seems to have objections to it. This is worthwhile legislation. It will set the clock straight. It will not stop the production of biofuels. It will not stop the encouragement of new technology. It will stop us walking into a backwater. Thank you Mr Deputy Speaker. 
Hon DARREN HUGHES (Labour) 
: 
 The Labour Party in Opposition joins with five other parties in opposing the third reading of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill in Parliament today because we believe this is very bad law and we believe this is a backward step for New Zealand. We do not believe there is any upside for New Zealand in this bill going through. We do not believe there is any upside for the environment we do not believe there is any upside for New Zealand industry and we certainly do not believe there is any upside for New Zealand jobs which will take an active step backwards when this bill receives its third reading if indeed that is what happens at the end of this debate. 
I would have thought that the National Government would reflect on the fact that five of Parliament’s seven parties are strongly opposed to this bill including its support party the Maori Party which is standing up for its beliefs and voting against this bill. We also heard from the ACT member who spoke David Garrett that he is against the bill as well but he will vote for it on the basis that it is part of the Government’s programme. That is not the position of course of the other support party the Maori Party which is not doing that but ACT has decided to support a bill that its individual members do not support. I acknowledge that United Future the Progressive Party the Labour Party and the Green Party are also not supporting the bill. That leaves National with only 62 votes against 59. That is a majority. It is a simple majority—a simple majority from a simple Minister. It means that the National Government will win on this but it should show those members that people are very upset about this bill going through because this is not good law for New Zealand. This is not a step forward for New Zealand industry. 
That fact is really compounded by the fact that this bill did not get a chance to go to a select committee. It is yet another bill from the inclusive Government that John Key told us he would run on which the public have not had a say. We heard from Mr Auchinvole that the reason the public did not get to have a say on this bill is that we had an election and there was a change of Government. I am sure that National’s decision to repeal the biofuel legislation was what drove tens of thousands of New Zealanders to the ballot box on 8 November! It is as though somehow anything that was ever in the National Party manifesto need never go to a select committee again because it is National Party policy. There is an arrogance in that stance that I think National will live to regret particularly when these bills cause long-term damage to our country. 
Hon Gerry Brownlee 
: No it doesn’t. 
Hon DARREN HUGHES 
: This bill does because this bill denies an opportunity. This bill is costing one man who has been mentioned several times during the debate—he has been the poster boy for it in a way—millions and millions of dollars in losses as a direct result of the decision this Parliament will make in 10 minutes’ time. That goes alongside other bills passed through their third readings that have also made an impact on people right down through to last week’s KiwiSaver changes which change people’s savings during their working lives. That makes a big change for people for ever. This bill makes a change that is negative and its consequences are more far-reaching than I think the Government is prepared to give us credit for discussing today in Parliament. 
My colleague Moana Mackey quoted extensively from the Minister’s speech that was given when he was the shadow Minister in this area and really I felt he was hung drawn and quartered on his own words with the bluster we have heard from him today and yesterday about why he feels the need to repeal this biofuel obligation. We know that his colleagues have not read a lot of the legislation that the Government has put before the House this week and last week; I suspect that they would not even have had a cursory debate on it in their caucus room. But what has been clear from a lot of the Government’s speakers is their total lack of understanding and failure to appreciate the fact that the obligation we are talking about is a tiny obligation out of all the oil sales in New Zealand. National is acting as if the former Government had on the books a compulsory measure by which absolutely everything had to be fuelled by biofuels; we would not even be able to spark up the lawnmower this weekend without pouring biofuel into it because the evil Labour Government in that nanny State way had insisted that only biofuel could be used. 
Paul Quinn 
: You agree—at last! 
Hon DARREN HUGHES 
: I want to say to the Government that if this bill did not pass then 99.5 percent of our oil would still be coming from the current sources we have—99.5 percent. In our law we had 0.5 percent as a target in order to get an industry going for biofuels. I do not know what bright ideas Mr Quinn has about climate change; I suspect that his bright ideas do not stretch all that far past dawn. But for those of us who have been trying to think about what things New Zealand can do in order to make sure that we can respond to climate change we can say we have not seen any ideas come from National. 
What has come from those members are things that have actively undermined New Zealand’s response to climate change and this bill has to be one of them. Gerry Brownlee has said that one of his first priorities as Minister of Energy and Resources in New Zealand is to take away choice from New Zealand consumers because he is taking away the ability for us to develop a proper industry in this country. He is happy to cut across private property rights and that relates to all those slogans and all that language that National members always use. But when those slogans do not suit National’s argument we never hear of them. National used to be the party of private property rights. I can see why ACT Party members privately have their views on these things but they are tottering along behind National in this respect. National is going to cancel the private property rights of somebody who has put in millions and millions of dollars of his own money into that property—his life savings. 
Paul Quinn 
: Like economic transformation closing the gaps knowledge wave? They’re slogans. 
Hon DARREN HUGHES 
: Mr Quinn in his rant yesterday told us that he would be behind the ordinary person in Parliament because he was a bloke’s bloke and that he would stand up for people yet today he is putting his vote behind a measure that will destroy millions of dollars belonging to a 75-year-old man who wanted to take the entrepreneurship— 
Paul Quinn 
: Rubbish! 
Hon DARREN HUGHES 
: Paul Quinn says “Rubbish!” but we know that he does not have a clue about it because he started shouting out “Rubbish!” only when Gerry Brownlee said “Rubbish!”. If the member is taking his cue on research from Gerry Brownlee then that would be a very strange way to spend his parliamentary career because one of the things that came out in this debate—for a bill that did not go to a select committee—was the fact that Gerry Brownlee was so far behind on his paperwork that he had not even read a letter from Sue Wood the former president of the National Party. I know that the National Party was very— 
Mr DEPUTY SPEAKER 
: Order! 
Hon DARREN HUGHES 
: It is fine by me Mr Deputy Speaker; if the man wants to make a fool of himself then he can do it for 2 years 10 months and 3 weeks and his little time in Parliament can be known for that. It is fine by me. 
But Sue Wood the former president of the National Party was very active in the National Party campaign at the last election. She was busy helping Mr Guy in Otaki during that election and she would have been thinking to herself that she would have a party in Government that would listen to what she had to say. I think she has put up some good arguments in her letter. But we now know that it is not her arguments that have been dismissed by the Government; it is her envelope that has been dismissed by the Government because Gerry Brownlee has not even had the energy to do his paperwork or to read his correspondence. He now has staff who can open his envelopes for him. Of course previously Gerry Brownlee used to go to any function that involved the opening of an envelope but now he has people to do his envelopes for him and he cannot even do that. 
Hon Dr Michael Cullen 
: What about a crusade on reading? 
Hon DARREN HUGHES 
: A crusade on literacy—that is right. If Sue Wood is listening on the airwaves now I would say for her benefit that the problem with her letter where she does deserve to have absolute criticism levelled at her is that she wrote a 1½ page letter to Gerry Brownlee. Everybody knows that one does not go over a page with Gerry Brownlee if one wants to have one’s views taken seriously. And if one really wants to convince Mr Brownlee one should double-space the page because the amount of biofuel he spits out when work comes over the desk could have actually met our sales obligations without our needing to pass this repeal bill which is being rammed through the House under urgency by a Minister who is not on top of his portfolio. 
Hon Annette King 
: Or even under it. 
Hon DARREN HUGHES 
: Well I do not want to pursue that line of inquiry all that far. But I say that the Labour Party is strongly opposed to this bill first and foremost because of its climate change measures. We are worried about that. We are worried about our country slipping from the position we have had as an honest broker on these matters a position of being a country that is respected and listened to on a challenge that will not go away just because there was a change of Government in New Zealand on 8 November. I will tell members one other thing: that challenge will not go away just because the ACT Party has decided to have a high-level parliamentary select committee inquiry into it. As loyal as we all are to New Zealand if any member in this House honestly believes that the world is waiting for the entire debate on human-induced global warming to shift all because our Parliament has a select committee hearing on it then that member is more deluded than many who currently sit opposite. 
The other thing we are very concerned about is the fact that we are shutting the door on the opportunity to develop an industry here which means that jobs will be lost as a result of the Government’s measures. We are heading into a recession when the Government will see lots of job losses. It is already promoting that as one of its policies; it will go back to its policy of 6 percent as the natural rate of unemployment. All the right-wing language is already coming through in that respect. The Government is determined to close the door on jobs here but I think that is a crying shame. At 0.5 percent the existing legislation still left 99.5 percent for the Government’s big oil company mates that got to National as Sue Wood herself suggests. That is one of the issues here. National’s links have not been able to be explored during this debate because we have not had submissions from the oil companies but I can guarantee that had the oil companies made submissions those submissions would have very closely reflected the Minister’s arguments; I am sure. 
Hon Annette King 
: Have they been to your office Gerry? 
Hon DARREN HUGHES 
: The Minister would have met with them before the election and made promises to them. He nods his head at that because he has made big promises to big oil. That is absolutely fine—that is what he has done. But even if the Government had left the requirement at 0.5 percent it would not be wiping out the oil industry; it would be opening opportunities for jobs and the industry and for making sure New Zealand was still playing a role in shifting our dependence away from non-renewable sources of oil which members must agree is something we have to do. 
So as always in these matters National is showing all its imagination and flair. It is getting rid of legislation yet has nothing to replace it with. This is a whole lot of hot air and bluster from the Minister in charge of the legislation. At the end when Ministers have the privilege of representing New Zealand abroad they will have a very sad and sorry story to tell. 
A party vote was called for on the question  
That the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill be now read a third time. 
Ayes 62 
New Zealand National 57; ACT New Zealand 5. 
Noes 59 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1; United Future 1. 
Bill read a third time. 
Electricity (Renewable Preference) Repeal Bill 
First Reading 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 I move  
That the Electricity (Renewable Preference) Repeal Bill be now read a first time. 
 The previous Government inserted Part 6A into the Electricity Act 1992 making the connection of new thermal generation plant above 10 megawatts for which an exemption has not been granted a criminal offence punishable by fine. The provision is known widely as the thermal ban. Eligibility criteria and matters dealing with the exemption application process were to be dealt with but those regulations have not yet been made. This bill repeals Part 6A of the Electricity Act 1992. 
Let me first outline the circumstances in which Part 6A was added to the Electricity Act. The previous Minister of Energy the Hon David Parker added the thermal ban provisions to the bill that introduced the emissions trading scheme at the very last minute. The provision had not been signalled in advance and the industry was taken completely by surprise. The justification for the ban was written hurriedly into the explanatory note of the bill and was somewhat deficient. At the select committee the ban came under heavy criticism. All of the major electricity generators said they were opposed to it. Major lobby groups like the Major Electricity Users Group and the Business Council for Sustainable Development said the thermal ban should be dropped. However the previous Minister remained wedded to the policy and it became law with the passing of the emissions trading scheme bill in September of this year. 
The current Government has listened to the experts agrees with the criticism of the ban and is now moving to repeal it. I will outline the specific reasons why the Government is repealing the thermal ban. 
The first reason is that the ban was totally unnecessary as an intervention in the electricity market. National believes that investment decisions in the electricity sector should be made on the basis of sound economics with environmental effects taken into account through a price on carbon rather than through some decision being ruled out through the command and control style reflected by the ban. If a price is put on carbon it will incentivise the uptake of renewable generation technology because thermal generation will be subject to carbon charges while renewable generation will not. It therefore surprised us that the previous Government felt it necessary to advance the thermal ban. This raises two questions. The first is whether the previous Government ever had confidence in its emissions trading scheme and I have to say that it looks to us that it did not. If the Government did have that confidence that raises the second question which is whether the ban is in that case just a bit of political symbolism. We think it is. Unfortunately that symbolism has dangerous consequences. 
That brings me to the second reason why the Government is repealing the ban: it puts security of electricity supply at risk. New Zealand’s electricity system relies on thermal generation. Coal and gas-fired plants generate about one-third of our electricity each year. Without those two fuels the lights would not stay on. This was made clear to the whole country in this winter of 2008 as it has been in three winters since the year 2000. Gas and coal plant were at times supplying over 50 percent of New Zealand’s electricity needs due to low hydro lake levels. Thermal generation then underpins the security of our electricity system and the ban creates an unnecessary hurdle for this vital resource. New gas plants like the e3p plant at Huntly are highly efficient and produce relatively low levels of carbon emissions. The last Government was so keen to see the e3p plant built that it chose to underwrite the gas contract to ensure that the plant had the fuel. More important thermal plants like e3p can run round the clock and produce large amounts of electricity. It is then in our view foolish for New Zealand to close off the option of more plants like the e3p plant if gas is available and the electricity system needs bolstering. Further the Government will leave investment in new generation plants up to the industry which is best placed to weigh up the capital and operating costs of new plant and the availability of fuel into the future. What we are not doing is ruling out carte blanche the types of plants that might be built. 
I do want to make it clear now that the Government does not expect the repeal of the thermal ban to lead to new coal-fired power stations being built. That was not the situation before the ban came into force nor will it be the situation after it is repealed. 
The third reason why the Government is repealing the ban is that it does not lead to environmentally sound outcomes. This is because the ban blocks investment in new generation that could displace more inefficient and more carbon-emitting existing generation. For example the ban blocks the building of new efficient gas turbines at the Huntly plant that could phase out the coal-fired turbines or return them to the reserve capacity for which they were originally built. So the ban ironically would have—should it have survived—ensured that for the foreseeable future Huntly’s coal-fired boilers would be fired up each winter to belch out very intensive carbon dioxide emissions. That to us makes no sense whatsoever. Newer thermal plants are very efficient. A modern combined-cycle gas plant like e3p emits just under half the volume of carbon dioxide per megawatt of energy produced compared with the Huntly plant when it is running on coal and about 20 percent less compared with the Huntly plant when it is running on gas. 
The fourth reason why the Government is repealing the ban is that it disincentivises oil and gas exploration in New Zealand. Already the ban in the short time it has been in existence is seeing some explorers and investors shy away from New Zealand. Under the current ban explorers have less opportunity to offset exploration risk and costs against potential gas sales. If New Zealand bans sales for new electricity generation we are not likely to see the exploration that this country could do with. Repealing the ban removes the risks for the explorers. 
As I said at the outset the current Government has listened to the experts and agrees with the criticisms of the ban. This is why we are now moving to repeal it. To make it very very clear exactly what our intentions are let me say this: when we look at the emissions profile from electricity we see one glaring place where there is an extreme amount of emission and that is the coal-fired plant at Huntly. We would note that there is a lot of renewable generation coming along. We are committed to the 90 percent renewable energy target and we do want to see more of that renewable generation developed. The fact is that there are times when we do have low lake levels. There are times when the wind does not blow. At those times there is a heavy reliance placed on the thermal capacity that this country has. So our simple view of this is to ask why we would shut out a fuel like gas as a potential source for electricity generation in the future when we know that even with much enhanced capacity in renewable generation there will be times when thermal generation is needed. During this winter it was about 50 percent of the time. It may drop during other winters but I do not think anyone in this House would be comfortable about telling New Zealanders two things: first that we are going to continue to burn coal at the rate we are and second that should renewable generators have those little down patches there is no thermal back-up for them. 
The thermal ban was a piece of political symbolism and we are repealing it today. I commend the bill to the House. 
Hon DAVID PARKER (Labour) 
: 
 I rise to oppose Electricity (Renewable Preference) Repeal Bill. It is bad legislation. We have already seen a bill thrust through under urgency that reverses the mandatory sales obligation for oil companies to start to include a small proportion of renewable fuels in the fuels they sell through the pump. 
Moana Mackey 
: Bad couple of weeks for the planet. 
Hon DAVID PARKER 
: It has been a bad couple of weeks for the planet as my colleague says. 
I will reflect again on something I mentioned earlier when we were debating the last bill. Both National and Labour agree that human-induced climate change is real. We are not alone in that view; the Governments of the United States China Australia and the whole of Europe have reached the same conclusion. Although it is true that some scientists disagree with that viewpoint the vast majority of them think that human-induced climate change is a real and serious problem. We have freedom of speech. Sceptics will always be able to have their say and they get more press coverage than they deserve because they are expressing a sometimes radical viewpoint in somewhat intemperate language and are willing to criticise other people who do not agree with their minority viewpoint as being dogmatic. None the less they have freedom of speech. 
If this Government has reached the view—as it says it has—that climate change is real then it is incumbent upon Governments like those I mentioned and the previous Labour-led Government to actually do something to reduce emissions. That is the only way to deal with climate change. We have to reduce emissions so that they do not get worse. 
In New Zealand’s case half of our emissions come from agriculture and are quite hard to reduce. There are some emission-reduction technologies that are already economic like nitrification inhibitors and the various ways in which we can be more prudent in the use of nitrogenous fertiliser. There are various other things that those in dairying can do to reduce emissions like using stand-off pads in winter etc. But by and large it is true that ruminants will still produce some greenhouse gas emissions so it is difficult for New Zealand to control and reduce its agricultural emissions compared with how easy it is to do in some other sectors. 
As we have said the way to reduce emissions resulting from transport is a combination of improved efficiency of vehicle fleets a modal shift into more efficient modes of transport so that again the fuel used goes further—for example putting freight on to rail using bigger trucks or having more passenger transport etc.—and then there is fuel substitution be it electricity or biofuels both of which will be important. Biofuels of course have been set back by the legislation the House has just unwisely pushed through on the votes of National and ACT 
Outside transport the other area that is the main source of energy-related emissions is electricity production. As the Hon Gerry Brownlee rightly said about one-third of our emissions come from thermal electricity and as the Hon Nick Smith will no doubt say when he stands until recently thermal electricity emissions have been going up in New Zealand. That has been a problem. That problem needs to be reversed by stopping those emissions from growing and getting them going in a different direction. 
We heard Gerry Brownlee talk about the existing provision in the legislation. It does not ban new thermal power stations; it restricts them. I will come back to that in a second. That was again his exaggeration. One would think that there were no exemptions for security of supply but there are. One would think from listening to him that one could not retire the Huntly power station and replace it with more carbon-efficient gas-fired power plants. That can be done under the existing legislation. What he said though was that it was unnecessary because this would be controlled through emissions pricing. This is the Government that has thrown the carbon market into disarray because it has said— 
Hon Dr Nick Smith 
: No it hasn’t. 
Hon DAVID PARKER 
: Dr Smith says it has not. There has been a loss of $300 million to $400 million of inward investment in the forest industry as reported widely— 
Hon Dr Nick Smith 
: Dream on! Where’s the proof? 
Hon DAVID PARKER 
: The proof is in the publications that have been put to the member by the investors who said they were going to invest the money and are now not going to. 
In addition to that the carbon service industry one of the world’s biggest players was about to open an office in New Zealand— 
Hon Dr Nick Smith 
: Yeah right! 
Hon DAVID PARKER 
: It was; people from the industry were here to open it. They had come to New Zealand then when National came out and said that it would suspend the operation of the emissions trading scheme they packed their bags left New Zealand and did not do it. That too is on the record. The member might like to deny it but it is true. The carbon market that the Government is saying will control the building of new gas-fired and coal-fired power stations does not yet exist. It is in disarray because of what that Government has already done. The Business Roundtable is out there saying that it wants a carbon tax. The National-led Government has said that it will look at that in the select committee. The Business Roundtable wanted the price of carbon at $5 a tonne—it would not make one iota of difference to that. 
Another reason why a price on carbon itself will not cut the mustard is that gas in the ground is not worth anything to people. It has to be burnt to be of value. The price of gas in recent years has more than doubled. The gas companies could prune back the price of gas a little bit—it would not drop the price of electricity because we know our renewable generators are already competitive with it—but they could undercut the costs of those renewable generators very easily build a couple of gas-fired power stations and close out the future of our renewable generation. They would close out the future of renewable generation in New Zealand the country that has the most cost-competitive renewable electricity choices in the world—in the world! 
New Zealand is turning its back on making that a reality. It leaves open the possibility that gas companies will come along—these guys have very big pockets—and decide to build their own gas-fired power station as quickly as we could blink. They can make the decision to do it as quickly as we can blink because they have the money to do it if they are allowed to. They could drop the price of gas so that it comes in at just under the cost of new renewable generation and they would close out those renewable generators. Those renewable generators are already cost competitive. 
In terms of the renewable projects that are consented to again Mr Brownlee is right. There is a big build going on in renewable generation at the moment. We have more than 5 years’ forward supply already consented to under the Resource Management Act. Geothermal generation capacity is being built. Geothermal is the most reliable source of baseload in New Zealand. It runs at higher reliability factors than gas coal or any other source of generation. It is more reliable than hydro because of course we do not have the water inflow risk. It is less susceptible to breakdown and there are fewer outages for maintenance than there are with gas and coal-fired power stations. Do not pretend we are doing this for security of supply reasons. We do not need to do it for those reasons. If we did the legislation already allows us to get an exemption to the restrictions on new geothermal generation and we can build it anyway. 
This is another example of where the National Government is turning its back on doing the right thing. The idea that New Zealand will not have the demand for gas just because it is not burnt for electricity is another nonsense. We know that the biggest consumer of gas in New Zealand is now Methanex. Methanex uses it for producing methanol. It has reopened two of its very large methanol production facilities in New Zealand and as a consequence demand for gas in New Zealand is going up already because of Methanex. Do not tell me that a growing market for gas somehow will not cause exploration for gas. The market of yesteryear was smaller and gas companies still explored for more gas. The market this year is bigger than it was in those prior years and I am being told that despite the fact that the market is growing there will not be any exploration for gas in New Zealand. That is just another nonsensical argument. 
The reality is that the world has very serious environmental problems of which the most serious at the moment is climate change. If a country as wealthy as New Zealand with our environmental ethic with our richness in renewable resources and with our system of democratic government cannot do the right thing and reduce emissions then the reality is that the world will not. It is a sad reality but it is a truth. 
If New Zealand with all of those attributes that I spoke about does not reduce its energy-related emissions then the reality is that the world will not. It is a very very sad thing to conclude and it is something that the previous Labour-led Government was not willing to accept. We were not willing to accept that future for our children for our grandchildren and for the hundreds of millions—and it is literally hundreds of millions—of people in poor developing countries whose lives will be made absolutely miserable through climate change. But this National Government is willing to accept that conclusion. It is willing to abrogate its responsibilities. It is willing to see climate change emissions grow in electricity because that is what this bill will cause. 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 The point on which I would agree with the previous speaker is that climate change is the most challenging and important environmental issue for this country and for the world. The real test though is will the “Thermal Ban Bill” as it is called make a constructive difference? I along with the Minister of Energy and Resources put to the House that it is Clayton’s legislation that will achieve the opposite to what it is intended to achieve and that the genesis of the legislation had far more to do with politics than finding a constructive way forward for New Zealand around the challenge of climate change. 
I make no apologies for being an engineer and a bit of a pragmatist. The part in this law that is a nonsense is pretending that we can differentiate between a peak-load station and a baseload station. The nonsense of the current law is that we could build another mammoth Huntly power station and say it is a peak-load station. When Huntly was commissioned it was a peak-load station. Yet under the current law and the exemptions we could build another station of that sort despite it being the single greatest source of greenhouse gas emissions in New Zealand. You see a peak-load station today may become a baseload station tomorrow and that is why this legislation achieves very little. 
The second thing I want to say about the Act that was passed by the previous Government is that it was all driven by politics. Let us just recite the previous Government’s record on thermal generation. When Labour came to Government in 1999 72 percent of New Zealand’s power was produced renewably. It dropped to 66 percent—a drop of 6 percent over its 9 years—and it dropped every single year Labour was in office. I asked the Parliamentary Library to go back and check whether any Government in New Zealand’s history has a worse record in terms of the drop in renewable energy. I say to my colleague from West Coast - Tasman that even if we go back to the very first lights being turned on in Reefton in the 1870s no Government has a worse record in terms of decline of renewable generation than the last Labour Government. Those members should hang their heads in shame. 
I further say how much of a nonsense it was. Do members know what the last Labour Government did? It used taxpayers’ money in 2002 to build a new diesel-fired power station at Whirinaki. Any New Zealander who picks up his or her power bill will find an electricity levy on it. That levy was to fund a new diesel-fired power station. When I hear members opposite pleading about climate change that they are somehow the great saviours of the planet why in goodness’ name were they spending compulsorily levied public money on a new diesel-fired power station? 
But it got worse. Do members know that the biggest thermal power station that has been built in the last 20 years was not private enterprise? It was the Government that provided a guarantee for the building of the e3p generator next door to Huntly. The Government said that it would not be built without a Government guarantee. The previous Government intervened in the electricity market to build a new thermal gas-fired station one year and the next year it wants to pass a bill to stop building thermal power stations. If we want confused public policy that is what we have seen over the last 9 years and that is why we have seen such an appalling emissions record around electricity. 
Again let us look at the facts of the last Labour Government’s record. We saw a 186 percent increase in greenhouse gas emissions from electricity generation. Let me just say that again. The biggest increase in greenhouse gas emissions during the last 9 years has been in the electricity sector and every piece of it was owned by the Government. Every single element was State-owned enterprises building things at the direction of Cabinet. Let us just look at the actual emissions figures. 
Hon Annette King 
: Of course that’s rubbish. 
Hon Dr NICK SMITH 
: Annette King the deputy leader of the Labour Party says that is not correct. She should explain. 
Hon Annette King 
: Happened at the direction of Cabinet. 
Hon Dr NICK SMITH 
: That is right. I ask the deputy leader of the Labour Party whether she was in the toilet when Cabinet agreed to provide a Government guarantee for the e3p generator. Where was Annette King when Cabinet decided to build a new diesel-fired power station at Whirinaki? Where was she? The Cabinet minute is very very clear in that regard. I say to the Minister— 
Hon Annette King 
: I think you are the Minister now. 
Hon Dr NICK SMITH 
: I apologise to the deputy leader and former Minister. Why is it that the biggest growth in emissions occurred in the electricity sector during the last 9 years? You see what members say on this side of the House— 
Hon David Parker 
: So your answer is to build still more thermal? 
Hon Dr NICK SMITH 
: Well I want to talk to them about that. The member opposite asks me about the policy. I think that it is very interesting to look at the record. There is only one year—only one year—in which there was a reduction in thermal greenhouse gas emissions. 
Hon David Parker 
: You told us there were no years. 
Hon Dr NICK SMITH 
: No no—overall and every year— 
Hon Members 
: Ha ha! 
Hon Dr NICK SMITH 
: Oh Mr Parker wants to get cute. It is true that every single year when Labour was the Government greenhouse gas emissions grew. But in terms of thermal emissions it is true that if we can substitute gas for coal that is a good thing. 
Hon David Parker 
: I agree and the current Act allows you to do it. 
Hon Dr NICK SMITH 
: Well well! The member opposite Mr Parker the man who was part of the Government with the worst record ever in respect of increased greenhouse gas emissions notes that if we can substitute coal for gas that makes good sense. That is why we call these silly regularity methods. 
Do members know the genesis of this bill? The genesis of this bill occurred when Labour went into the last election campaign with its trousers around its ankles absolutely naked on the issue of climate change because it had had 9 years of huge growth in emissions. So it dreamt up this idea of a Clayton’s ban to try to hide that nakedness. I challenge members opposite: which other countries in the world have a thermal ban of this sort—which ones? 
Hon David Parker 
: Which other country has our renewable resource? 
Hon Dr NICK SMITH 
: Ah! Let us compare the record—let us actually compare the record of increased emissions. New Zealand’s emissions have grown by 12 percent over the course of the last Government Australia’s by 8 percent and the United States’ by 4 percent. The United Kingdom’s have gone down by 2 percent. None of those countries which have a better record than New Zealand has instituted this sort of silly regulatory intervention. That is why it is the view on this side of the House that the right approach is to provide a market instrument. That is the agenda that this Government will be advancing so that there is an ongoing price advantage for renewable over thermal generation. 
I commend the Minister of Energy and Resources for bringing this bill to the House and for getting rid of the silly political gesture that was made earlier. Labour’s legislation was not designed to reduce emissions it was designed purely for politics. We need an energy policy that will provide for security of supply and that will provide the right incentives for improved sustainability. The Act passed by the Labour Government was a failure and it needs to be taken off the law books. 
Debate interrupted. 
Maiden Statements 
Mr DEPUTY SPEAKER 
: Honourable members we come to the last of the maiden statements. As has been the practice for previous statements I ask that you limit your congratulatory messages so that the incoming member can conduct his or her maiden statement. 
LOUISE UPSTON (National—Taupo) 
: 
 Mr Deputy Speaker congratulations on your appointment. Members of Parliament ladies and gentlemen friends and family I stand before you as a servant of the people of Taupo and of New Zealand. I am proud to be a National Party member of Parliament and proud to be a member of the Government led by John Key. On 8 November New Zealanders voted for change. They voted for better opportunities for the freedom to make choices in their own lives and for a Government focused on a brighter future. Today is my opportunity to introduce myself to share my journey to Parliament and also to share what I hope to achieve while I am here. I am Louise Upston; my maiden name was McGill. I am a fourth-generation New Zealander. When my family arrived here New Zealand was the promised land the land of opportunity. New Zealand was the chance for our forefathers to better themselves and their families. My father was born in Southland my mother in Selwyn. I was born in North Shore and raised in East Coast Bays. I first voted in Tamaki and had my first child in Mt Albert. I was married in Waikato but I chose to raise my children in the heart of the Taupo electorate. 
My father Ian who is here today and my late mother Norma shaped me. My parents taught me about hard work and determination. As I was the youngest of four my sisters and brother taught me a few lessons too. I learnt that I had to stick my head up to be noticed. I learnt to persevere when the odds seemed stacked against me and not to take no for an answer. These lessons had stood me in good stead when at the age of 19 I launched my first business. Since then I have been an employee an employer a manager a leader and a director. I have been in a range of industries including local government tourism education broadcasting and information technology. This is the breadth of experience that I bring to my electorate and to this House. 
Life has not always been easy for me; I have seen success and failure personally and professionally and I have learnt from it. Determination and a bit of guts have enabled me to overcome the challenges by getting over them around them through them or under them. 
Honourable members we all know the hard work it is to get a seat in this House. We work hard to get here. Getting a seat in this House has been a goal of mine for many years and many people have also worked hard to help me take my place here—in particular my husband Craig. Craig is an incredibly generous man who knows the importance of setting one’s sights high standing up for what one believes in and never giving up: Craig I could not have done it without you. To my children: Hamish my teacher; Mac my warrior; and Jessica my princess; my father my hero; and my late mother my guide; and to the many friends and extended family who encouraged me to follow my dream—thank you for your love and support; for your patience and your generosity. 
And I have the best “blue” crew in the country—we turned Taupo blue—they were as determined as I was to win the seat and worked incredibly hard with me to achieve the goal. I say thanks from the bottom of my heart to the National Party volunteers from Taupo led so well by campaign manager Simon Lusk and electorate chairperson Hilary Brown. Of course we have a very special Taupo resident—party president Judy Kirk who took this great party from its darkest days in 2002 to its brightest in 2008. 
To the Prime Minister the Hon John Key I say: “Thank you for your belief in a better New Zealand for your unwillingness to accept mediocrity and for your strength in these turbulent times. New Zealanders have put their faith and trust in you and I know they won’t be disappointed.” 
So why am I here? Because we need change—not change for change’s sake but real change that makes a difference to the lives of ordinary New Zealanders change that will give us a brighter future. First we have to change our attitude—dreaming big dreams setting big goals celebrating excellence acknowledging achievement and nurturing tall poppies. New Zealanders can do it. 
 Nelson Mandela once quoted Marianne Williamson: “Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure.” Our unique Kiwi spirit has power. In recent times it has been suppressed. Political correctness has invaded our homes our lives and our minds. Mediocrity has replaced excellence and fear has replaced courage. We are all pioneers whether our waka arrived this decade or last century and no matter where we started our journey we are all pioneers. That is what makes us unique. 
The people of this country we pioneers are all different. We are all equal and we can all succeed at something. Every New Zealander can do well and as a Government we want New Zealanders to do well. National is determined to raise the bar. I am proud to be part of a Government that will expect more—more of ourselves more of our Government departments and more of the communities we represent. We will not sit back and watch this great country go backwards. We will face the challenges head on. We will move nimbly when needed and boldly when necessary. We all know we are in challenging times. Resilience and determination and the belief in better days ahead will see us through. 
First and foremost I am here to represent the people of Taupo. The mighty Waikato River connects the people of my electorate from the peak of Mount Tongariro to the horse studs of Cambridge; from the trout capital of Turangi to the forest land of Tokoroa; and from the tourist Mecca of Taupo to the finest dairy farms in Tirau and Putaruru. My focus is on the people of Taupo and representing them. I have heard too many stories of hard-working New Zealanders trying to get ahead and having to fight a system that is meant to be there to support them. It should be simple for people to get the assistance they need. There are too many rules and regulations policies and procedures and not enough common sense. 
My parents had lots of common sense: they valued education because it meant opportunity. That is why education is my top priority. Every New Zealander has the right to a great education because education provides opportunities. We need to give every New Zealander the skills and knowledge to succeed. Currently one in five of our children fail. At one of the schools in my electorate 20 high school students have a reading age of 8. Our education system has failed those children. If they cannot read or write their opportunities in life will be severely limited. We should be helping those children and that is why I am proud to be part of National’s crusade for literacy and numeracy. As a parent as well as a politician I know that education is the first step on the path to success. 
Teachers and principals are doing the hard graft: doing their best to provide an environment where our children can learn. They deserve the resources to get the job done and our support to let them make decisions about how best to do their job. With our support and parent support teachers and principals will teach our children to strive and achieve aim high and work hard. Excellence in education will ensure New Zealand has a brighter future. 
My second priority is keeping New Zealand safe again. In March this year over a thousand people gathered in Taupo at a Sensible Sentencing Trust event. I saw ordinary New Zealanders demonstrating their disgust at the murder of Karen Aim. They were claiming back their town and demanding action to make it safe again. There are simple ways to do that. By changing the laws around sentencing bail and repeat offenders we can reduce crime committed by known criminals. 
Let me tell the House about a family in my electorate; about an innocent young girl with her whole life ahead of her—Krystal Bennett. She was stolen from her family by a known criminal: a disqualified driver who was driving an unwarranted unregistered vehicle and was a repeat drugged driver. The offender was on bail. She was awaiting sentencing for a crime she had committed 6 months earlier and not far from this Chamber she crossed the centre line ploughed into Krystal and killed her. 
The suffering of her family the Barnetts their lives ruined by a career criminal was dramatically increased by the previous Government which seemed indifferent to the victims of crime yet frittered millions of dollars on criminals. The victims—Sharlene and Malcolm—lost their daughter. They had to fight to get justice when they should have been supported by a system that puts victims ahead of criminals. Our police need our support in their fight for safer communities. In the fight to reduce crime New York’s former mayor Giuliani understood that police supported by politicians are much stronger than those attacking them. Mayor Giuliani backed his police force to reduce the crime rate. 
It seems everyone is presumed innocent except the police. They act courageously and make terribly difficult decisions in the line of duty and we repay that by hounding them in the media launching immediate inquiries and subjecting them to intense scrutiny. Why do we not support our police? Why do we not back them? Are we going to have to implement Tasers with video cameras to prove the police are innocent? Let us not be mistaken: the police are good the criminals are bad. It is as simple as that. We need to support our police and not tie them in knots with bureaucracy. 
Like all honourable members I want to ensure that New Zealand has a great future; a future where education is valued and our communities are safe. I am ambitious for my country my community and my kids. In this House we talk. We need to do more than talk. We need to act with courage and determination and to work hard for New Zealand. There are challenges ahead and I am realistic about the size of them. I am excited about being part of a team that will deliver a brighter future to New Zealand. 
MICHAEL WOODHOUSE (National) 
: 
 Can I begin by congratulating Eric Roy on his appointment as Assistant Speaker. It is a pleasure for me to see him in the Speaker’s Chair for my maiden statement given the important role he played in my decision to stand as a National Party candidate. I thank him and give thanks to my fellow southern National members Jacqui Dean Jo Goodhew and the Hon Bill English for their support this year. Former member Katherine Rich also gave me guidance and I thank Katherine on behalf of the people of Dunedin for her years of service. May I also congratulate the Hon Dr Lockwood Smith and Messrs Tisch and Barker on their appointments as Speaker Deputy Speaker and Assistant Speaker respectively. Coming as I do near the end of a long line of maiden statements I am reminded of United States Senator George Mitchell’s comments about commencement speeches. He said: “I feel a bit like Elizabeth Taylor’s 5th husband. I know what to do but I am not sure how to make it interesting.” I will do my best to keep your interest Mr Assistant Speaker. 
I want to acknowledge and congratulate my National caucus colleagues and in particular those who have entered Parliament for the first time in 2008. Much has been made of National’s move to a more representative caucus particularly in gender and ethnicity. That focus detracts a little from the fact that these colleagues are remarkable individuals in their own right all of them and I feel privileged to be a part of the class of 2008. To all those accorded the honour of representing our people in the 49th Parliament congratulations. 
My own journey from hospital manager to member of Parliament has been by any measure a swift one. I am very mindful of the confidence placed in me by my party. I look forward to demonstrating that that confidence is well placed and I pledge my absolute loyalty to the National Party and commit to upholding its values and vision for New Zealand. The Hon John Key and the Hon Bill English are the most formidable Prime Minister - Deputy Prime Minister combination of the postwar era at a time when their skills in economic management are most needed and I am privileged to be a member of their caucus. I am indebted to the party membership in Dunedin and to those who supported my campaign as a candidate for Dunedin North in particular party president Judy Kirk; regional chair Kate Hazlett; electorate chair Sandra Christie; campaign manager Scott Mason; committee and campaign members; and so many others to whom I do a disservice by not mentioning. Thank you to those who gave their support as volunteers. It is through their efforts that a robust democracy is given strength and vitality. 
I want to pay tribute to my best friend wife and huge support Amanda. I am truly fortunate to have her in my life. Thank you for your unwavering support. My daughters Emily Isabel and Chloe have kept me grounded and given us more joy than they will ever know. They are my reason. They represent the future of this great country. Whatever demands are placed on me I will not forget my responsibilities as husband and father. There will be times when duty requires the sacrifice of time otherwise spent with them. I thank them for their understanding in those times. I am delighted they are here to share this milestone but slightly disconcerted at the fact that my children are far more excited at the prospect of meeting the Prime Minister than catching up with their dad. I dedicate this address to my late father Allan. I know he is watching and proud of this achievement even if he might tease my choice of party. I share this day with my mother Pat. I am honoured by her presence despite her own health challenges. There are many other family members watching here in Dunedin and around New Zealand and I thank them for their support. 
Although elected from the National Party list it is my privilege to represent the people of Dunedin in this House. I believe it is incumbent on all list members to be as active in representing a constituency as electorate MPs are be that geographical cultural gender-based or some other form of representation. Twenty-two thousand five hundred Dunedinites cast their party vote to my party and they have a voice in me. But of course my service is to all the people of Dunedin. I have blue and gold blood running through my veins and I will work hard for the south. I want to acknowledge the Hon Pete Hodgson MP for Dunedin North and the other Dunedin-based MPs. Despite differences in political philosophy we are all working in the best interests of Dunedin. 
Dunedin and Otago have a rich heritage one that my colonial ancestors helped fashion. My great-great-grandfather James Woodhouse emigrated from Lancashire and in 1862 discovered gold at the junction of the Teviot and Clutha rivers near Roxburgh. No great wealth was passed down however as he purchased the Bannockburn Hotel and fathered eight children. In those days in Central Otago churches were not permanently established and the pastors and priests maintaining the spiritual health of those pioneers were a transient group. Family legend has it that wife Mary was so keen to ensure her brood were christened that she used whichever man of faith was around at the time each child was born. Thus according to legend descendants of James and Mary were christened Methodist Catholic Presbyterian Anglican and so on. I am not sure how true this is but if it is then my great-grandfather was born when the Catholic priest was passing through. My maternal great-great-grandfather was Patrick Lyng an immigrant from Dublin and Lawrence’s first butcher around the time of the Gabriel’s Gully gold rush. 
I was born and raised in South Dunedin in a family of nine children the first eight of whom were born before the eldest had had his 8th birthday. This gave me some interesting early life experiences. Although not really conscious of it we were not well off. By today’s standards we might have been considered poor. But thanks to outstanding parenting and after surviving running battles and backyard rugby with five brothers a certain degree of resilience and self-sufficiency developed. That which today is considered a necessity but which was very much a luxury then had to be earned by working. Part-time jobs before and after school were the norm—up to three at a time while at high school. My mother is fortunate that so many of her children and grandchildren still call Dunedin home. Sadly that is not the case for many New Zealanders who fly thousands of miles overseas to attend the weddings of their children. Grandparents now need to learn how to use a webcam to talk to their grandchildren. We Kiwis have always yearned to travel and I look forward to working in a Government that yearns to bring them home again. 
Despite the economic downturn I have every confidence in the medium-term future. We are rich in natural resources and with practical and sustainable use of those resources our economy can grow at a much greater rate than has been the recent experience. Tourism for example has massive untapped potential particularly in the south. It is tempting to keep the richness of our tourist destinations to ourselves. Indeed the wonder of the recent increase in the tourist trade in Central Otago the Catlins and the Otago Peninsula is not that it is occurring but that it has taken the rest of the world 150 years to cotton on to what we have always known—that the south is amongst the most beautiful and dramatic regions in the world. 
However we are at risk of not fulfilling our intellectual and entrepreneurial potential. Our universities and in particular Otago University are founts of awesome knowledge and research capability. The challenge for government is to encourage them to increase their ability to harness and develop that knowledge onshore convert knowledge into commercially viable industries and overcome the tyranny of distance. By this I mean a targeted research and development support not an ill-targeted tax credits regime. National’s ultra high-speed broadband strategy has the potential to overcome the distance problem and create opportunities not even conceived. 
I believe it is the responsibility of government to create an environment wherein its citizens can aspire to achieve all they can and wish for. It is for individual citizens to seize that opportunity. When the fruits of effort are achievement and reward they should be congratulated thanked and celebrated for that achievement. That reward might not be financial but if it is that is also something to be celebrated not envied and criticised. I fear that in this country we are conditioning our young people away from such aspiration. I have led successful businesses but not actually owned them; I admire those who do. They operate in the face of personal and financial risk in a very complex regulatory environment. It was incongruous of the previous Government to claim to support the growth of industries and then drown them in regulation and red tape. It was incongruous to claim to respect the autonomy of its citizens and then seek to control aspects of their lives that Governments have no business being in. Fundamentally this comes down to trust. I believe it is government’s role to create the environment wherein businesses and individuals can aspire to fulfil their potential and then trust its people to get on and achieve. 
I also roundly reject the notion offered by some that conservatism and social justice are mutually exclusive. I will be a strong advocate for social justice. But social justice is not served by inaction in intergenerational welfare dependency increasing illiteracy rates family dysfunction and the poverty of spirit that pervades many sectors of society. I do not accept that those who are successful have somehow climbed on the shoulders of others. We have a duty of care to help those less fortunate but no good is served by the politics of envy. 
 Until recently it was my privilege to be the chief executive officer of Mercy Hospital Dunedin a private surgical hospital owned by Nga Whaea Atawhai o Aotearoa—Sisters of Mercy New Zealand. I thank my Mercy team for their huge support on this journey. The story of the sisters and their foundress Catherine McAuley inspires and challenges me and forms the basis of my leadership ethos. Reconciling the demands of highly technically-advanced healthcare organisations with compassionate care of the sick and vulnerable is not easy but it is possible following simple principles. One thing I understood implicitly was that none of the hospital’s funds could be committed to charitable work unless they were first earned. I also understood that the more we earned the more good we could do. I see parallels with the functions of government in that respect. In my time as Mercy’s chief executive officer and as president of the New Zealand Private Surgical Hospitals Association I have presided over the growth in both demand for and supply of private surgical services. I believe that an ideological mindset has prevented better use of spare capacity in private hospitals and that has been to the detriment of the health of New Zealanders. I firmly believe that the future of this nation’s health is based on a strong and sustainable public sector. That said New Zealanders have a right to good information on what they can reasonably expect from the public system in order that they can make informed choices. If opportunities exist to better use the private sector to enhance the health of the nation they should be taken. I strongly support my party’s policy in this regard. 
Next week Mercy Hospital will perform 36 grommet and tonsillectomy operations on children languishing on the Dunedin Hospital waiting list. Medical staff will give their time for free and the private hospital will cover all other costs—hardly the actions of a profit-motivated private sector. This has occurred several times and is happening because of surgeons’ frustration at worsening public waiting times. It is time to re-engage the medical and nursing staff who feel increasingly disenfranchised from the decision-making process and to put the patient at the centre of healthcare delivery. We must accept with good grace that not all the needs can be met by the public purse but I do not accept that this is as good as it gets. The rest of the world is embracing new ways of delivering care using amazing new technologies and therapies. Back-office staff cannot make those changes; only a re-engaged medical and nursing staff can. Again it comes down to trust. 
Mr Assistant Speaker as you know I am very keen on rugby and have been a premier referee for many years. We have similar roles in a way: both penalising the offside and preventing the repeated infringements that spoil the contest. I use a couple of tools in refereeing—these red and yellow cards—that might be useful to you. I would be very happy to lend them for use with one or two worthy recipients. 
I will work to encourage policies of aspiration equity of opportunity the celebration of success and the compassionate of support of those who need Government assistance. The people of Aotearoa New Zealand deserve no less from us and I will work to the best of my ability as their representative to achieve that end. 
AARON GILMORE (National) 
: 
 About 25 years ago I sat in the living room of our family State house in Corhampton Street in Aranui. It was early August and freezing cold. It was night and we did not have enough money to put in the electricity meter to give us power. We had some light from some large candles that sat on the table and my grandmother and I were having Weet-Bix for dinner. The next morning we could not afford breakfast and I went hungry until a kind teacher of mine bought me lunch. That day and many others like it while growing up in the eastern suburbs of Christchurch taught me valuable lessons: the merits of hard work of a good education and of the freedom of choice over compulsion; and the importance of family. 
Today I stand before members in this wonderful House before many other talented New Zealanders. Some members are old enough to be my parents. Some are like me new young faces in this Parliament. I look forward to working with all members. In my career to date I have found that a good team will beat a great individual any time—and our Government is a great team. 
I represent the so-called Generation X. It is my generation who will soon take the torch and have the responsibility to lead New Zealand and look after those who raised us in better economic times. Too many of my generation have decided to make their lives in other countries. I took a stand to create a global business career here in New Zealand most recently working in the export manufacturing sector running new technology ventures for a major multinational. As a trained economist with a lot of time in the corporate sector I believe I have the necessary skills and experiences that this Parliament may require in these tough economic times—though someone said to me the other day that the purpose of astrologers is to make economists look good. 
I come to this House as its luckiest member this term—elected on our party list by fewer than 40 votes across the entire country. Sir Edmund Hillary once said to me in 1990 when I was a member of New Zealand Youth to Everest that it is funny how good luck follows those who are determined and work hard. I would like to thank 40 of my 56 cousins for voting for our party for the first time in 2008. A member needs only enough votes to get him or her here but I have no plans to remain the most marginal member of this House. 
Today is a good day to be a New Zealander with our National Government led by our wonderful Prime Minister the Hon John Key. I am honoured to be a junior member of this Government and under his leadership and I look forward to spending many years working with him. Of course I would also like to pay thanks to the Speaker for all the good work and sound guidance he has provided. There are a few other people I would like to thank: my campaign team the wisdom and wit of my regional chair Roger Bridge and the formidable determination and grace of our party president Judy Kirk. 
But today is also a great day to be from my home. Today for the first time in 154 years my community has a new voice in Parliament to represent it in our nation’s capital. I am humbled to be that voice. You see National has never until now in its proud parliamentary history had an MP from my community. Over that time my mother’s family who are from Tuahiwi have lived in eastern Christchurch while my father’s family comes from Taumutu. My mother Kay was expelled from two schools due to abuse experienced at home and was placed in foster care when young. She went on to a career as a seamstress and is well known through Parklands after 20-odd years on the school parent teacher association making uniforms for sports teams and being mum to three stroppy boys. My dad Garry suffered constant taunts from an abusive stepfather as the sole fair-skinned red-headed boy growing up in a Maori village so much so that he changed his name at 18 to Gilmore which is our family name today. He has spent most of his life working as a cobbler. 
Money—or rather the lack of it—has always been a hot topic in our house and in our wider family and that has driven me to be careful with it. We have always as a wider family worked together to share our meagre resources to make sure no one goes without for too long. I will bring the same focus to Parliament. 
Named after the great Elvis Aaron Presley I am the son of Kiwi battlers. My parents worked 18-hour days for years to save enough money to buy our small family house where we and my two brothers Craig and Nigel lived. 
The two communities my parents were from were founded by the survivors from the greatest military loss in our history. This was not from the killing fields of Europe but from the greatest loss of life in one day for the people of Aotearoa which occurred in 1832 at Kaiapoi Pa north of Christchurch. In one day the largest single population of Maori in New Zealand at that time was massacred. Over 3000 people were lost and only a handful of survivors remained to tell the story. This tragedy is one that needs to be taught about in schools and to be rated alongside that of Passchendaele Gallipoli and the Somme which are honoured in this House. 
The electorate I come from is my home. It is where I was born and raised attending my then local primary school decile 2 Parkview School and becoming its first-ever MP. I recently spoke to some 5-year-olds from my old school. I hoped I would offer them the inspiration and the ambition to break through the glass ceiling put before them that I experienced. I also attended Shirley Boys High School in Christchurch and in its 51-year history I am its first MP as well. I will not be the last MP from my old schools. 
 Christchurch East was historically one of the poorest electorates in New Zealand but no longer is that the case. It is one of large contrasts. Some of the poorest people in New Zealand are still there and have progressed little under previous Governments. As well as having many new suburbs with many affluent people it is rural in the north and urban in the south with the heavily polluted Avon River running near its bottom. The eastern suburbs like many growing areas need more schools roads and jobs and lower pollution and crime. The lack of broadband is a laughing joke in the area. National will actively work to fix many of these things while it is in Government. 
I returned home 4 years ago. I am a loyal Cantabrian. Our beaches our forests our rivers and above all Canterbury’s people are what I love. The fact that I can now help people in my community makes me happy. To get this far has been an effort combining family members friends and teamwork and it has been a triumph over obstacles. All my life people have said I will not make it. As a kid I experienced poverty; I did not like it. In recent years with hard work and wise investments I have experienced relative wealth; I liked that better. I have stayed in $2000-a-night hotels in India. They were quite nice but not as nice as sleeping under the stars on a warm summer’s evening beside Lake Sumner in the Southern Alps with some friends—that was free. I have lunched with billionaires and beggars and learnt something from both. 
More people can achieve the same wonderful contrasting experiences if they too get a good education and work hard. I was lucky to have the love and guidance of my late grandmother Doreen Kennedy-Spiers-Humm who pushed me to read widely to go to school and to go to university. By going to university I achieved something no one in my family had ever achieved before. My parents Garry and Kay instilled in me some great values which I hold true today: integrity honesty openness respect for others hard work a love of the outdoors determination and a good sense of humour. Representing young families I also hope to be an example like many others in my caucus that people from disadvantaged backgrounds can with hard work and determination succeed against significant odds. 
I acknowledge my biggest supporters today. Jenny the love of my life and the best woman a man could have is my rock in the often turbulent waters of our hectic lives. And of course to my beautiful children Blake and Evelyn I say Dad loves them more than they can imagine. 
I want to be an example of what other kids out there can achieve. Ours is a Government of ambition and aspiration for all. Together we need to ascend to the heights of our aspiration. When I was 10 I was told I would never finish school and would only be trouble. I proved those who said that wrong and went on to complete two university degrees. The street I grew up on was deemed by the police to be one of the worst in New Zealand 2 years running due to insidious gang violence. That is not an excuse to fail; it is an opportunity to succeed. When I was 19 I was told I would never make a living doing what I wanted to do in New Zealand yet I have done well enough in New Zealand to be resented by some and labelled a rich prick. When I was 25 I was told after contracting a rare eye condition called keratoconus that I would never see again but today with the miracle of modern New Zealand - developed technology I can. 
Those who know me well know I am also passionate and loyal. I like to live my life by a saying that I understand comes from Mario Andretti: “If everything seems under control then you just aren’t going fast enough.” 
Sir Jack Marshall in his maiden speech many years ago spoke of four parts of liberalism. I identify with much of what he said. The one pillar that we are still a long way from achieving in New Zealand is the one that we should be most concerned about: the pursuit of economic liberty. New Zealand in my lifetime has gone only backwards on the goal of achieving economic liberty. We need to fix that by giving people greater freedom to grow the economy with less intervention by improving productivity and by having a smaller Government and a smarter investment in people and technology. 
New Zealand can be the most prosperous country in the OECD—at the top not in the top half. We need to be a nation that is more than the world’s farmer; we need to create wealth from our minds. We must work smarter to compete on the world stage. We must be prepared to take new risks on young people and on technology. We are blessed with natural resources and smart people. Let us use them to our advantage and not lock them away or encourage people to go to other places. Let us embrace technology for the good it can do and not shun it in fear. Let us dream a little of a New Zealand that I think we all want: a New Zealand that is safe clean prosperous and of course fun; one where people from all walks of life have a quality of life second to none; and one that is a melting pot of the world’s cultures. 
I have worked in 11 nations and I have seen good and bad in all of them. We should model ourselves on the best bits of them but retain our unique Kiwi identity. We are ourselves a nation of immigrants from many of those places. I myself am an amalgam of many races—Irish Scottish Danish and a little bit Maori—but I am 100 percent Kiwi. New Zealand should be the same—the best combination of the world today. But today that is only a dream. Too many people define themselves by their race and not by our nationality. We need our kids to aspire to greatness whoever they are and wherever they come from. For too long we have said that people cannot succeed due to poverty the colour of their skin or where they live. We are one small nation; we just need to work together. The comedian Billy Connolly had it right when he said: “New Zealand wasn’t the end of the world but you could see it from there.” So more than any other nation we all need to paddle in the same direction or we will sink. 
Our nation is great at sport. Eastern Christchurch today may be middle New Zealand but it is home to many of New Zealand’s greatest sportspeople. But I want our kids to aspire to more than just sporting greatness. We need our kids to aspire to be a Richard Branson as well as a Richie McCaw. We need our schools to be the best in the world so that more poor kids can improve their lot. Low-decile schools like those that I attended are not what they used to be. Kids in these schools do not achieve. Education as we have heard many times in the last few weeks is the pathway out of poverty to prosperity. Large numbers of young people are still leaving school with insufficient skills for the global economy while too many of our most talented choose to leave New Zealand and never return. We need more people to have high-income jobs in New Zealand driven by high technology and good old-fashioned hard work. We need our country to be safe so that only the criminals feel unsafe. We need a country where we are compassionate and care for the old the poor the sick and the infirm; and where our natural areas remain international examples of splendour that we cherish and do not pollute. 
Today that is all a faraway dream. Well when I was a child eating Weet-Bix by candlelight in my grandmother’s State house I realised that dreams come only to those who work to make them happen. Now the challenge we have together becomes to deliver on my dreams. My only fear is that there is not enough willingness across this House to deliver a New Zealand that we all want. So I say to members the words of George Patton: “Lead follow or get out of the way.” 
JOHN BOSCAWEN (ACT) 
: 
 Firstly I congratulate Mr Speaker and his colleagues on their appointments as Speaker Deputy Speaker and Assistant Speakers respectively. I acknowledge the Hon Wayne Mapp and Phil Twyford fellow contestants for the seat of North Shore and I thank them for the manner in which they conducted their campaigns. I also acknowledge and congratulate all other new members of Parliament and I wish them well in their careers. 
I too am humbled privileged and honoured to have been elected an ACT list member of Parliament and to have been given the opportunity to serve. To all those who supported ACT throughout New Zealand I say a very sincere thank you. 
I have a vision of New Zealand as a country that is safe rich and prosperous and once again enjoys one of the highest standards of living in the world. Our problems are man-made and if we are as a first step to lift our living standards to the level of those in Australia we need to break the cycle of dependency and create an environment that encourages rather than discourages hard work thrift and enterprise. We need to reduce taxes increase productivity and improve our international competitiveness. 
Education will be absolutely fundamental to achieving this vision—not just in ensuring that every child leaves school able to read and write but equally important in changing attitudes. Kelvin Davis said in the House last week: “Educational engagement and achievement is vital to Maori greatness and prosperity. We will achieve more with one full generation of highly educated Maori than we will from the last 168 years of grievance.” I totally agree. During my time in Parliament I expect to play a part in making my vision of a prosperous inclusive country a reality. 
Throughout life our parents teachers mentors and experiences shape our philosophies values and beliefs. A maiden speech is an opportunity to publicly acknowledge and thank those who have contributed to making us who we are today. My late sister Leanne and I were privileged to grow up in a loving two-parent family. My early memories are of my father Owen who was a schoolteacher while my mother Beverley Wheeler—who with my partner Jane is sitting in the gallery today—sacrificed her early career to stay at home and raise Leanne and me. I am deeply indebted to both my parents for the start in life they gave me and for the values they instilled in me. 
My father—who sadly passed away last November—had an unparalleled association with Otahuhu College that spanned over 60 years. He was a pupil a head boy prefect a teacher in the 1950s and 60s a Fulbright scholar and finally the job he coveted most: principal of Otahuhu College for 14 years from 1972. My father was highly regarded by most in education circles and he devoted his life to the school and its pupils. He was constantly pushing teachers and pupils to excel and to achieve their maximum potential be it academically in sport or in other ways. 
Just a few years before he suffered a stroke in 2001 he gave me a copy of the interview notes that he had prepared over 25 years earlier for his 1971 interview as principal for me to use in writing his obituary. I was surprised to read that as early as 1971 he was calling for the teaching of the Maori language at Otahuhu College. He then learnt Maori through correspondence school and because of the shortage of Maori language teachers taught it himself to fifth form School Certificate level in addition to performing his duties as principal. Maori culture is one of the things that surely makes New Zealand and New Zealanders unique and gives us all a sense of identity. Who in this House is not moved by the many waiata and haka from the public gallery that have followed so many of our maiden speeches? 
For most of his last 6 years my father was treated with dignity and respect by the hard-working and generally lowly paid staff of ParkHaven Hospital in Mangere. I thank them. I believe that their families can enjoy higher standards of education through greater choice greater certainty of health care and higher standards of living as a consequence of ACT’s policies and that is one of the reasons why I have come to Parliament. 
My mother sister and I also attended Otahuhu College. I now follow the Rt Hon David Lange as the second old student of Otahuhu College to enter Parliament. My father taught us both. 
My maternal grandmother Mona Wheeler was the most selfless kind and loving grandmother any child could possibly have. She was absolutely devastated as we all were when Leanne died as a result of a car accident at the age of 20. Leanne was an outstanding sportswoman outgoing a Rotary exchange student and she packed more into her short life than many do in a normal lifetime. 
As children my mother tried to encourage in us a sense of thrift. Each week my sister and I were given initially 2s 6d then 25c as pocket money. What was left at the end of the week my mother doubled and it had to be banked in our school bank accounts. I soon worked out that 100 percent interest over a week was a very good return and for several years my passbook showed weekly deposits of 50c. With a savings culture ingrained in me as a child I was instantly attracted in 1995 to ACT’s policy of significant tax cuts with a portion dedicated to compulsory savings. The Rt Hon Winston Peters eventually incorporated most aspects of ACT’s policy into his own referendum on compulsory savings which was sadly lost in 1997 by 93 percent to 7 percent. In my view this was a major lost opportunity for New Zealand and New Zealanders. 
I congratulate the Hon Dr Michael Cullen on the introduction of KiwiSaver and I hope that the recent changes reducing the minimum contribution to 2 percent will see even greater numbers of ordinary working families participate. This will hopefully provide the foundation for the scheme to become compulsory sometime in the future. In my view nothing will give ordinary New Zealanders greater freedom independence and certainty than knowing that in retirement their living and medical expenses will be adequately covered. While those not working or with inadequate savings will need to be provided for this must surely be better than relying on future generations of politicians to bid for the votes of the elderly as they do now. 
My parents also encouraged my entrepreneurial efforts. For many years as a child I would get up early on a Sunday morning and ride my bike around the streets of Papatoetoe and Otara collecting beer bottles. At university I developed a miniature golf course at Mt Maunganui which my father helped build and my mother and grandmother ran during the summer holidays. Following my graduation with a BCom from Auckland University I worked initially as an accountant at UEB Industries then at Eta Foods. Like a lot of people at this time I borrowed heavily to invest in the stock market and lost everything and more in 1987. I fought off the threat of bankruptcy at the age of 30 and after 5 years of insolvency and with the support of both my parents I eventually emerged as the developer and outright owner of the 100000-square-foot K-mart Plaza Shopping Centre in Hastings in 1992 which I fully debt funded. 
I was lucky however. I was young hard-working and committed with more than adequate time to rebuild financially. I contrast my situation with that of a large number of New Zealanders in their 60s 70s and 80s who have lost all or part of their life-savings through recent finance company failures. This is a tragedy as most of these people unlike me will have little chance to rebuild their savings. The fact that so many can lose so much with no government intervention is in my view a disgrace. 
Developing the K-mart Plaza in Hastings was a once-in-a-lifetime opportunity and it has changed my life in so many ways since 1992. Firstly it has enabled me to travel extensively throughout the world and to have the privilege of experiences few New Zealanders enjoy. For example I found it impossible to stand inside Nelson Mandela’s cell on Robben Island or in its limestone quarry without having enormous respect for all that he endured and achieved. Alternatively when visiting eye hospitals in India I constantly asked myself why the elderly in New Zealand must wait for cataract operations when advances in technology in recent years should have made this a relatively simple quick inexpensive and on-demand operation. 
During this time I have been free to support various philanthropic causes. I am a member of the Rotary Club of Downtown Auckland and I am proud that Rotary International a worldwide organisation with over a million members has been instrumental in virtually eliminating polio from the world over the last 25 years. The love of music and culture instilled as a child sees me a trustee of the Auckland Philharmonia Foundation and I take this opportunity to acknowledge the work of the Hon Judith Tizard and all that she did in promoting the Auckland Regional Amenities Funding Bill last term. 
I have also been able to devote considerable time and resources to the ACT Party. I first stood for ACT in Epsom in 1996 and like so many of ACT’s candidates in 2008 I had no expectation of being elected; rather my role was to help get others into parliament. For those who did the same for me this year I am sincerely grateful. I acknowledge all those ACT MPs who have come before me and in particular the Hon Rodney Hide and the Hon Heather Roy who have kept the party together over the last 3 years; the selfless contribution of the Hon Richard Prebble; and Dr Muriel Newman who through her website first alerted me to the Electoral Finance Bill last August and the ease with which I could make a submission. I have the greatest admiration for the Hon Sir Roger Douglas and the foresight and courage he showed in addressing the country’s problems during the fourth Labour Government. Without his encouragement I would not be here today and I will regard it as a privilege to work with him over the next 3 years. 
In addition I acknowledge and thank so many others: our volunteers our electorate committees our parliamentary staff our party and campaign staff and all those who supported us financially. Special thanks go to the board our party president Gary Mallett and our vice-president and my North Shore campaign chairman Michael Crozier who is with us this afternoon. I also want to make special mention of ACT’s longest-serving and most selfless tireless and committed individual: Brian Nicolle. 
I now turn to the Electoral Finance Bill which was introduced into this House last July. Incredibly the Government sought to regulate virtually every form of political expression for the full election year. Anyone who wanted to express any form of political opinion was to be required as a minimum to sign a declaration before a justice of the peace before they spent a single dollar expressing their view. Worse still the Government’s own lawyers the Crown Law Office thought this was perfectly acceptable and not in breach of the New Zealand Bill of Rights Act. It is hard to imagine a more Draconian attempt to muzzle free speech. If New Zealanders disagreed they needed to say so. The contempt with which the former Government treated the public was in my view unbelievable. I am sure members know the story well. 
Thankfully the Human Rights Commission strongly disagreed and described the bill as a “dramatic assault on two fundamental human rights that New Zealanders cherish” and said that the bill “was inherently flawed”. They along with the New Zealand Law Society and others called on the Government to withdraw the bill and start again. I travelled from Auckland to tell the members of the select committee that they should regard the commission’s submission as my submission and if they did not withdraw the bill as recommended I would consider running a campaign against the Electoral Finance Act. The rest is history. Over the ensuing months over 7000 people joined me in protest marches throughout the country. I am tremendously indebted to all those who joined me in speaking out on an issue that goes the very heart of our democracy. 
I believe that in passing that legislation the former Government was trying to restrict our democratic rights to criticise it in election year. Although I am sure this is not the only issue that contributed to its defeat I certainly believe that it contributed to a change in public attitude to the Labour Government and to the size of its defeat. Accordingly I believe that it serves as a lesson to all future Governments that hopefully this generation of politicians will never forget. I congratulate the Hon Phil Goff on acknowledging Labour’s mistake and the Rt Hon John Key and National on their decision to repeal the Act. How ironic that at the beginning of the parliamentary sitting—on the first day of the new year—I stood in the gallery in silent protest and early next year I will be in this House voting for its repeal. 
However I also note that the Electoral Finance Act is not the only piece of anti-democratic legislation on the statute book. In 1995 Parliament passed legislation making it illegal for political parties to use their own money to purchase broadcasting time. For example in the most recent election Labour and National were given around $1 million each in free broadcast time while the Greens and ACT had just a fraction of this. I believe that it is only fair and democratic for all parties to have the right to use their own funds to purchase additional broadcasting time up to the largest allocation. 
Finally to my partner Jane I say thank you for all your love and support and to the current and past pupils of Otahuhu College I say “Kia tama tane”. 
DAVID GARRETT (ACT) 
: 
 In the 1980s my colleague Roger Douglas presided over an economic revolution in this country and it was sorely needed. Imported goods were rationed and supplied only by the fortunate holders of import licences which were issued to them by their mates in the then Government. Farmers were subsidised in every area of their endeavours and for things that had nothing to do with farming— subsidies that were paid for from high taxes paid by everyone including those on low incomes. In the words of the late great journalist Frank Haden the “gummint” as he called it has no money. It gets it from the people. 
Although they have been much criticised by many—and some of those who formed part of that Government are still in this House—none of the major economic reforms of the 1984-87 Labour Government have been reversed in the past 20 years. Today largely thanks to the reforms introduced by Sir Roger and those who came after him the incoming Government at least had a reasonable idea prior to the election of the serious economic problems it would face. 
I come to this House firmly believing that a revolution of no less a magnitude than the economic revolution of the 1980s is required to repair our broken justice system. Consider where we have come as a society in the 50 years since I was born. Measuring homicide rates per 100000 of population allows us to compare New York with New Plymouth and Dunedin with Düsseldorf. Until the beginning of the 1970s New Zealand’s annual homicide rate per 100000 of population was about 0.5 per year. Today our homicide rate is about three times higher than it was in 1970; it is about 1.5 per 100000 per year. That is a threefold increase or 200 percent compared with 40 years ago. 
Let us personalise it. Seven men are currently serving time in New Zealand jails for their second homicide. In other words they have already completed one sentence for culpable homicide either manslaughter or murder and killed again when they got out of jail—seven. Of the other killers currently in prison 78 had at the time they committed the killing for which they are now incarcerated served at least three previous sentences of imprisonment for serious violence. In other words 78 people would be alive today if at the time they were killed New Zealand had a three strikes law of the kind ACT is promoting. Some of the survivors of those victims are in the gallery today. 
It is not just homicide that has increased exponentially. In the past 9 years alone violent crime generally—stabbings serious assaults and aggravated robbery—increased 47 percent. No amount of spin from either politicians or officials can disguise that reality. Spurious explanations such as a greater reporting of crime are just that: spurious. Homicide and armed robbery have never been under-reported in this country at least not since we have had newspapers and a police force. 
The nature of crime has fundamentally changed in 40 years. A researcher today could pore over newspapers from 40 years ago searching in vain for stories about drive-by shootings gang members killing rival gang members’ children and contract killings; none of those things appeared until the 1970s or later. The fact that scum like samurai sword murderer Antonie Ronnie Dixon go about armed with automatic weapons is no longer remarkable in the literal sense of that word. One does not remark upon it because it happens if not every day then every other week. That is an appalling indictment on us as a society and sadly on this House as the place in which ever more liberal policy has been transformed into law. 
So just how did our society become so altered? One of the favourite explanations offered by many academics and others is unemployment. The only problem with that theory is that it does not fit the facts. We have recently come out of a period of 7 years or so of full employment. The former Prime Minister who has just joined us was quite correct when she said a year or so ago that everyone in New Zealand who wanted a job had one. Our unemployment rate in 2007 of less than 4 percent is regarded throughout the Western World as full employment. If unemployment causes crime why then did violent crime rise over the past 9 years by 47 percent during a period of full employment? 
If we go back much further in history to the Great Depression of the 1930s unemployment then was more than 20 percent and there was a minimal welfare safety net. People literally starved in this country. In 1932 there were food riots in Queen Street in Auckland. The rioters were not looting shops for camcorders and plasma TVs; they looted because they needed food to keep them alive. If unemployment is a major cause of crime why then did violent crime actually go down in 1932 in the midst of this deprivation and misery? The usual riposte when this little problem with the “unemployment causes crime” theory is pointed out is: “Well we were all suffering together back then.” Wrong! Disparities between rich and poor were actually greater 70 years ago. I have seen photographs of the members’ stand at the Ellerslie races in 1932—the same year as the riots. It is full of well-dressed people and the car park is full of large American cars with uniformed chauffeurs standing beside them. 
It is often said that we have the society we deserve. I quite agree with that sentiment but not for the reasons those who overuse that cliché usually have in mind when they say it. I firmly believe that we are reaping what we have sowed. We are reaping a harvest from a focus on rights without consideration of responsibilities by considering criminals as also being victims who just require the right kind of therapy in order to become decent citizens and by making our jails places to which some people are quite happy to return. 
A criminal with a record recently held up a bank in Te Puke and then waited outside to be arrested. His lawyer told the judge that he was not coping financially so he wished to go back to jail—back to a place where there are no bills with three square meals a day paid for and cooked by someone else and a cell with a plasma TV and underfloor heating. The story was not even on the front page. It is no longer remarkable but those who doubt me can check the  
New Zealand Herald 
 of Saturday 6 December. 
People opposed to the views of groups such as the Sensible Sentencing Trust tell us—and they probably actually believe it—that our society has become much more punitive. That is nonsense. It is quite difficult to get sent to prison in New Zealand today. Prison populations have risen sharply simply because we have become a much more crime-ridden society. I recently read a biography of Sir Elton John which included a reference to an incident in New Zealand in 1974. John Reid Sir Elton’s then manager assaulted the well-known journalist Judith Baragwanath pushing or knocking her to the ground and then hit a man who came to her aid. It was a pretty ordinary assault at least by today’s standards. No weapon was used. Reid was sentenced to and ended up actually serving a month in Mount Eden Prison—not a month of home detention or 10 hours’ community work but a month in the cold stone castle. A month in jail for assault—how terribly terribly Draconian. I have been unable to ascertain whether Reid ever reoffended upon his release. Thirty-five years later it all makes rather quaint reading given what is now commonplace in the criminal courts every Monday morning. 
I have learnt from those who have gone before me that an essential ingredient of the good maiden speech is an explanation of why one comes to Parliament. It should now be obvious that my chief reason for coming to this place is an abhorrence of how our society has changed in regard to personal safety and a passionate desire to do something about it. Anyone who considers standing for Parliament must carefully weigh the effects on one’s life and family against what one hopes to or might reasonably achieve. 
For me it was also necessary to satisfy myself that standing for the ACT Party as opposed to simply voting for it or being a member of it fitted with my personal philosophy. In that regard I reached a turning point when I realised that what I thought was simply an electioneering slogan was in fact a core part of the ACT Party’s constitution. Clause 3 of the ACT Party’s constitution states that the first duty of any Government is to protect the safety of its citizens. That is utterly in accord with my personal beliefs about the function of government. It is also a function that successive Governments have been failing to perform. They have been failing to perform it for a generation with the degree of failure becoming worse. 
As naive and idealistic as it may sound I am here to try to play a part in changing that sad state of affairs. It is my firm belief that we can turn this mess around and once again become a country where children can walk to school without their mothers fearing for them. We can become a society where when she is older my daughter can—as my sisters did—go out for a walk on a hot summer’s night without fear of being raped or worse; a society where when the residents of a State housing block in Gisborne go to the beach they can leave their house not only unlocked but also open so as to benefit from the cooling breeze flowing through the house from the open front and back doors. I know this is true because I was there. That is the environment I grew up in. 
When one talks about this to New Zealanders under about the age of 35 they think that such a society is but a utopian delusion or if it ever did exist it must have been 100 years ago. It was as older members and members of the audience know only a little more than 25 years ago. A senior member of the Labour Party said in this House last week that there was in fact no golden age. Not true. In the New Zealand of the 1960s just like in the New Zealand of the early 2000s we had full employment and all of the components of the welfare State. We had most of what we have now without the crime. 
If I did not believe that we can once again become a society where law-abiding people go peaceably about their business and criminals are treated like the criminals that they are then I would not be here. I firmly believe we can return to that real and not illusory golden age albeit with licensed restaurants lattes and mobile phones. 
I believe that we can return to a system where a sentence of 5 years in jail means 5 years not 2 years; a system where a judge can sentence our most odious murderers to life in prison without parole; a system where prisons are humane but otherwise stark and cold places to which no one with half a brain would wish to return; a system where violent criminals get a second chance but not a third; and a system where three-time violent offenders go to jail for 25 years to life. 
 Having said that I say that we need to face up to the fact that our prisons contain many mentally ill offenders who should not be there. They are there because we have attempted over the past 25 years to treat all our social ills with imprisonment. The place to treat mentally ill offenders is in institutions set up to do so. We have secure units to treat the mentally ill; we should be using them. 
Those who say that our prisons are five-star hotels are exaggerating. Wanganui Prison New Plymouth Prison and Paremoremo west all of which I have visited are one-star at best. But those who say that they are hellholes are exaggerating much more. We have moved from a penal regime where prisoners worked in the quarry behind Mount Eden Prison before retiring to a cold cell to a system where work is voluntary and prisoners retire to a centrally heated cell with plasma TV. This change has coincided with the destruction of our once civil society. Whether those two phenomena are causally related no one knows for sure although there is convincing evidence from other countries that imprisonment does work but we just do not hear about it much. 
It is time to say “Enough!” to the ever-more liberal penal policies of the last 40 years and to try another tack. As someone in this House said last week only a fool expects different results from doing more of the same thing and that is exactly what we have been doing with penal policy for 40 years. But there is no quick fix and no one answer. If the policies I advocate were to be introduced as a package tomorrow their effects would not be seen quickly. It has taken us more than a generation to reach the sorry state we are now in and it will take us a generation to change it. We now have an entire generation of thugs who have grown up in the knowledge that there are no real consequences for bad and criminal behaviour. We need to raise the next generation knowing that they unlike their fathers will be held to account and will be punished for bad behaviour. 
Finally I will say a brief word to my family. Talamonuu ki hoku mali mo ’eku fanau faka’ofo’ofa ’a ia ’oku nau ’i heni fakataha mo au. Malo ho’o mou poupou’i au ’i he konga fo’ou mo fakato’aloto ko ’eni ’o ’eku mo’ui. Fakamalo ho’omou ’ofa’i au. ’Oku ou fakatauange ko ’eku mavahe mei he feitu’uni te mou ongo’i neu fai ha ngaue lelei mo tokoni ki hono fa’u ha sosaieti saiange ma’a moutolu. In my best but imperfect Tongan I sent greetings to my wife and family who are here with me today. I thank you for the support you have offered me in this exciting new part of my life and for the love you have all given me. I hope that when I leave this place you will feel that I have done some good and helped to create a better society for you my beautiful children. Thank you and I love you. 
STUART NASH (Labour) 
: 
 First and foremost I offer my congratulations to you Mr Assistant Speaker on your election to a most esteemed position in this House. 
I decided very early on not to raise the ghost of a past Nash who is long buried in time and memory but whose footsteps still haunt this place for even though he wandered these halls for 40 years that was after all 40 years ago. However as I make my way around the corridors of this wonderful old building I cannot help but notice that the giants of past eras have never been laid to rest as their photos are there to inspire us encourage us and to remind us of the proud legacy that we carry as a Labour Party team dedicated to always asking as Harry Holland the first leader of the Labour Party did “Is it right?”. Harry Holland realised that if it was right for the people of New Zealand it would be right for the New Zealand Labour Party. This underlying principle of whether it is right for the people of New Zealand has guided all our Prime Ministers from Joe Savage to Helen Clark and I hope in fewer than 3 years’ time Phil Goff. 
It is with a sense of honour and pride—but also I must admit a degree of nervousness and trepidation—that I start my parliamentary career. I hope I can live up to the memory and expectations of past members for the privilege of being a Labour Party MP is one that has a very proud history. 
Numerous paths lead to this Chamber but none of us would be here without the patronage and support of those who encourage and mentor us to this position. First and foremost I must convey my thanks to the Hon Dr Michael Cullen for without his support I would not be here. I acknowledge this and I hope he knows that it is greatly appreciated. But behind every successful man there is a surprised woman and I am sure Michael’s partner Anne Collins would agree with that statement. To Anne Raewyn Barry Tom Wilson Geoff Braybrooke Bill Sutton Guy Wellwood and all those who have supported and encouraged me I salute you and thank you with all my heart especially as my rival in Napier reminded me around 18 months ago of a Winston Churchill quote. When the great man was asked: “Doesn’t it thrill you to know that every time you give a political speech the hall is packed to overflowing?” he replied: “It’s quite flattering. But whenever I feel that way I always remember that if instead of making a political speech I was being hanged the crowd would be twice as big.” 
Napier is also where my story begins a little longer than a little while ago so it is nice to come here and be called a young fresh face—and who said the media is all bad? My family history in Hawke’s Bay begins in around 1865. My daughter is actually the fifth generation of our family to attend Napier Central School; our family’s attendance goes right back to its founding over 130 years ago. Napier is without a doubt one of the best if not the best city in New Zealand. It has the climate the fruit the wine the beaches the art deco architecture and a rugby team that has beaten Waikato the last four times the two teams have played against each other. The only thing it does not have is a Labour constituent MP—but we are working on that. 
My father Hal Nash is a wonderful man who practised the principles of social democracy during a long legal career better than anyone I know and my mother Jenny Nash had four children under 5 at one stage. It is a testament to her strength of character and fortitude that she is still completely sound of mind. I had a wonderful upbringing when the summers were long hot and sunny and schooldays at Napier Central School Napier Intermediate School and Napier Boys’ High School were fun. 
They say that politics is in the blood but I do not believe that. Politics is in the heart and in the soul and in our family it was around the dinner table. But perhaps the one person who first shaped my political leanings was that great social democrat Elvis Presley. It was not to do with his unique solutions to prison reform or his yearning for social justice and equity in the ghetto or even for animal rights for bad dogs. No unfortunately for me he died on the very same day that the Rt Hon Sir Robert Muldoon delivered a Budget and the day before I had to present a news item in front of my classmates. Five 9-year-olds spoke about Elvis Presley; one poor chap spoke about the Government’s fiscal plans—thanks Mum! I have bad memories of Mr Muldoon for a lot more reasons than most in my party. 
The advice my father gave me when I showed a real interest in politics was to get educated and get some experience to take into the House. So a few universities later and some experience in a couple of industries I am here living my passion and my dream. However when my father was asked just recently whether he was proud of me he said it was a dreadful job that I had chosen. I did not come here looking for a job but because of a calling. I liked the line of my fellow newbie Phil Twyford who said “some of us will be remembered but most of us will not.” To be remembered is not what motivates us. If I can leave this House for the final time in the knowledge that my party’s legacy has made a positive difference to the lives of all New Zealanders who call New Zealand home I have accomplished my goals and ambitions. That is why Helen Clark Michael Cullen and all of you who have served in the fifth Labour Government will be talked about fondly by future scholars historians and New Zealanders alike around the dinner tables and barbecues. My beautiful daughter Sophia and my wonderful son Charles are growing up in a better world due to the tireless work energy and legacy of this wonderful party I am proud to be a member of. 
This place is not called a House for nothing. We spend an inordinate amount of time here. There is a bed in my office there is a kitchen outside my door and the father of the House is in the room adjacent. I wonder whether the senior whip Darren Hughes was trying to tell me something when he allocated me my office but I then realised the message was not actually very subtle at all because within the first 2 weeks we have been obliged to be here until midnight on most nights. But the Labour caucus is a family not just because we live work and eat in the same house and under one roof but because our differences unite us in a common belief and philosophy that forces us to always ask: “Is it right?” and then to do what is right. 
In a previous life I travelled overseas for business. Although I enjoyed the job I found that international travel was a real tonic for the soul and I say that because whenever I flew into Auckland Airport I realised just how lucky I was to be living in this wonderful country. Our beaches are pristine our skyline is visible our fields are green our different-coloured children play together in our many parks and our families interact side by side regardless of socio-economic status and enjoy a champagne lifestyle regardless of what is in the chilly bin or on the barbie. 
I see myself first and foremost as a public servant employed by the people of New Zealand to represent this country and its citizens. I am available to help all those who either request or desire my help regardless of sex race age or political affiliation. I am also a proud social democrat who will work hard to develop a regulatory environment that encourages sustainable economic development and growth through increasing our international competitiveness. This will be done by developing trade partnerships and models that not only promote our companies but also encourage them to seek further offshore opportunities. That will allow New Zealand’s competitive advantage to be clearly articulated and understood by all of those whom we seek trade alliances with. That is nice politics-speak but what it actually means in plain English is that the No. 8 fencing wire mentality and the “she’ll be right” attitude that we have prided ourselves on to date are no longer good enough in the 21st century. To reach the top these days we need to be very smart exceptionally well prepared intensely focused and willing to stand up and fight for what we believe in with all our energy. Handing out replica All Black jerseys is no longer good enough to clinch the deal. 
I also know that unrestrained and unregulated economic growth can have a negative effect on a country’s well-being. For example this can occur when those in the workforce have diminished or oppressed rights—and we have seen this in the very first week of this Government—when investors and markets are being deliberately or negligently misled or manipulated and when scarce resources are exploited. It is the philosophical mandate and governance role of any social democratic party to ensure that the negative social and moral effects of economic growth are mitigated through information communication sound policy justifiable regulation and wise legislation. But Pat McGill a community hero who spends his days advocating for prison reform and helping and supporting those outside Napier Prison who need his help and support just wants to know that we are still asking ourselves Harry’s question: “Is it right?”. 
A friend of mine said to me recently that the time has now come to adopt a new economic model. However the time is not right for simple adoption but for the invention and development of a new economic paradigm that takes into account the expectations of 21st century New Zealanders. Friedman is dead. The economic philosophies of the laissez-faire practitioners have finally been laid to rest and cremated in the ashes of the current economic crisis. That is why I was so disappointed with the Speech from the Throne. It talked about aspiration yet there was nothing substantive to deliver it. It mentioned productivity yet there was nothing concrete to drive it. It was not visionary at a time when we are beginning to develop our own global identity and struggling to a certain extent to understand our place on this earth. 
History has proven that the only party to really deliver significant gains for the people of New Zealand is the New Zealand Labour Party. We are and always have been a party of social evolution if not revolution. We work to build to empower to create and to practise fiscal accountability as well as social responsibility. We work as a collective and are more powerful as one than we can ever be as individuals quite simply because we always ask: “Is it right?”. 
I am very optimistic about the long-term future of our party because when I look around our caucus room I see an awesome array of experience mixing helping and mentoring the new. But quite simply we are just 43 New Zealanders full of energy competence and a belief in the principles and philosophies of social democracy and with a willingness to work hard and create a better New Zealand. It is the most aspirational team I have ever had the humble pleasure to be part of. 
I finish by quoting what John F Kennedy wrote shortly before his assassination because I think it sums up this Labour caucus and its leadership under Phil Goff and Annette King: “If we are strong our strength will speak for itself. If we are weak our words will be of no help.” And believe me this caucus and its leaders are strong. Thank you. 
CARMEL SEPULONI (Labour) 
: 
 Mate atu he tete kura ara mai ra he tete kura. Nga mihi maioha ki nga iwi o tenei rohe karanga mai mihi mai. Ki nga tini totara kua hinga atu moe mai ra. Ki a tatou e hui nei tena koutou katoa. When an old frond passes a young shoot sprouts to take its place. Warm greetings to the iwi of this area. To all those great totara who have passed rest. To everyone gathered here greetings. 
Tulou i le paia fa’atafafa o le Maota Fono. Talofa lava. Malo le soifua. My greetings and acknowledgment to all esteemed members of this House. Greetings to you all. Tapu moe ’afio ’ae ’Otua ’i hotau ha’oha’onga. Tapu moe ’Eiki Sea ’oe Falealea. Tapu moe ’Eiki Palemia. Kae’uma’aa ’ae hou’eiki Minisita. Pea tapu moe toenga ’oe kau fakafofonga falealea ’oku mou me’a heni he ’aho ni kae ’ataa mu’a keu fakahoko atu ’ae fatogia ko ’eni kuo fakakoloa ’aki au he ’aho fakahisitolia ko eni. Io “kuo ta kau he lau pea lau kuo ta kau”! 
God who is in our midst honourable Speaker of the House honourable Prime Minister honourable Ministers and also members of the House who are here today. It is indeed an honour for me to be here at this historic event for today we the Tongan people are finally part of this New Zealand Parliament and today everybody knows that we are now included. 
I have entered Parliament at a wonderful and opportune time despite the fact that we are in Opposition. With incredibly strong and supportive senior Labour Party MPs and an exciting new intake of 13 energetic diverse and committed newcomers I am truly privileged to be a part of this team. I feel honoured to serve the Labour Party alongside the distinguished and inspiring Rt Hon Helen Clark and the esteemed and respected Hon Dr Michael Cullen. We are fortunate that their track record of superior leadership continues under the direction of the Hon Phil Goff and the Hon Annette King. 
I have the privilege of being the first of Tongan descent and the youngest and the most recent member of the already robust Labour Party Pacific caucus. My respects must go to our senior Pacific member and MP for Mana Luamanuvao Winnie Laban; to our MP for Mangere Sua William Sio; to our Tahitian MP Charles Chauvel; and to our new Indo-Fijian colleague Rajen Prasad. I pay tribute to our former Samoan member of Parliament and strong Pacific advocate Vui Mark Gosche. Vui leaves a legacy of achieving results for our Pasifika communities. I thank him for the constant words of advice and guidance. I also acknowledge my political adversary but fellow Samoan National Party MP Peseta Sam Lotu-Iiga. 
I greeted the House first in te reo Maori out of respect for tangata whenua. There is an inextricable link between Maori and all of our Pasifika peoples. We are linked geographically historically linguistically culturally and most important through our shared whakapapa. I pay respects to Nga Iwi Maori and in doing so I acknowledge our shared ancestors for they are responsible for our existence and our collective achievements. 
 Secondly I spoke in Samoan my father’s first language. This is a language we were not raised to speak; my father thinking at the time that it was best for us to learn only English. Thirdly I spoke in Tongan my grandfather’s first language. Eight out of nine of his children were raised in Samoa and were not raised to speak in Tongan. Only the one sibling who was born and raised in Tonga has retained this language. It is so very easy to see how quickly a language and the elements of identity that language carries can be lost if not nurtured. 
It is only appropriate that I reflect on the journey that has brought me here today. I had a quintessentially New Zealand upbringing with my father working at the Waitara freezing works and my mother working at the Swanndri factory and later as a kiwifruit picker and packer. My maternal grandparents were sheep farmers in Stratford. Growing up I saw the most wonderful display of contrasting political views. 
Although my mother did not have strongly formed political views her parents were resolute Tories. My father was at the other end of the political spectrum and a staunch supporter of the Labour Party. I was fascinated by their opposing political views and have vivid childhood memories of the ways in which these would be manifested. I can remember sitting down at the kitchen table with my grandparents listening to my grandfather grumble about the Labour Party as he listened to his wireless. I recall one time interrupting his grumbling session to say: “But grandad the Labour Party looks after the poor people.” His response to that was: “Just eat your ruddy Weet-Bix.” 
On the other side was my father. His first job in New Zealand was at the railways at Stratford and he would later work for 18 years at the Waitara freezing works. He came to New Zealand speaking only Samoan but quickly picked up a very colourful version of the English language quite commonly spoken on freezing works floors. It was always entertaining to watch him employ this colourful language in his rants and raves at the mere glance of Sir Robert Muldoon or later Jim Bolger during the evening news. As a child one knew not to move during these moments unless the command was given to turn the “beep” TV off. It was my own personal critique of their arguments for why they supported their respective parties and my own upbringing in Waitara that would cement for me my political allegiance. 
The new member of Parliament for New Plymouth mentioned Waitara in his maiden statement but there is a side to Waitara that did not gain mention. Waitara is a place of historical significance to this country. As the place where the first battles of the New Zealand land wars were fought it is a place where much blood was shed and lives were lost and it is a place where thousands of hectares of land were confiscated unlawfully. There is a wairua to Waitara that stems from its history and the battles that have been fought. There is an aroha amongst the people that continues to thrive despite the immense challenges that have been faced. During my own upbringing in Waitara I observed and experienced some of these challenges. In this town of 6000 people 1500 jobs were lost over the course of the 1990s. Perhaps we should call those years the decade of no jobs and no money. 
My dad was a union delegate and was involved with the intense and ongoing strike action of the early 1990s. The freezing works which at its height had employed over 1000 people began progressively to make people redundant until its closure in 1998. In 1994 my own father was laid off for the second time. Although he looked he could not find another job. He contemplated moving to Auckland but found it difficult to reconcile the likely reality of a pitiful minimum wage of $7 an hour—not enough to look after a family. I look back on this time with sadness as a once thriving town went silent. Things were tough and money was tight. 
To this day I take personal offence when I hear negative rhetoric proclaiming the unemployed as dole-bludgers and/or when it is implied that people are too lazy to get out there and find a job. This was not the case in my family nor has it been the case for the vast majority of people I know who have at some point in time needed to draw on Work and Income entitlements for support. 
During the 1990s I saw the political and economic climate of the time pull the rug of dignity out from under the feet of hard-working New Zealanders. There is very little that can match the degradation felt when men and women are unable to provide for their families. Unable to cope with the miniscule weekly sum that my father was allocated to look after his family he made the decision to leave us and seek employment in Australia. Yes he migrated to Australia in 1995 not 2005. 
I observed a National Party Minister sarcastically reciting in the House the other day: “I remember the 1990s.” in a disdainful tone. Her banter signalled National members’ tiredness of being reminded of their wrongdoings from the past. However let me draw on a well-known whakatauki. “Titiro ki muri kia whakatika a mua”—look to the past to proceed into the future. This may be a Maori proverb but it is a concept that is shared by Pacific peoples. The memories of our Pacific peoples are very long indeed. We strongly believe in looking to our pasts to find our presents and to inform the decisions we make going into the future. With that in mind it is of little wonder that the vast majority of Pacific peoples remain Labour voters—the dawn raids under the Muldoon Government and high unemployment rates and low wages of the 1990s have ensured this legacy. This is reinforced by the list of achievement for Pacific people attained under the leadership of the Labour Government over the past 9 years. 
Is it not ironic that I discuss the appalling employment conditions of the 1990s under a National Government in light of the response by the new National Government to the recession that we now face? In the early stages of the 1990s the National Government introduced the Employment Contracts Act which was to impact negatively on the rights of workers. Now in late 2008 the introduction of the 90-day bill which also serves to negatively impact on the rights of workers hails the beginning of another ominous National Government term. 
I have lived in Auckland for the past 13 years stepping away only for a year to teach in Samoa and connect with my family. I have worked in the tertiary sector as a literacy educator a student mentor adviser an equity manager and a Pacific health research project manager. I have seen the very best and the very worst of Maori and Pacific in education. There have been times when I have felt immense levels of anger due to the unnecessary failure of the education system to adequately cater to our people’s needs. Conversely I have seen some incredibly innovative teaching and learning practices and the positive impact that this has had on individuals and whole groups of people. I have had the privilege of meeting teaching and mentoring some of the most inspiring Maori and Pacific people both young and old. I have been inspired by their success in navigating their way through tertiary study to achieve at the highest levels. 
There are always two sides to every story and it frustrates me that when it comes to our Pasifika people 80 percent of the time the focus seems to be negative. I have learnt through my own experiences and the experiences of others around me that our young in particular can quickly begin to self-stigmatise when the media and society stigmatise them. When the media portrays only a picture of a ghettoised poverty-stricken group of troublemakers then our youth can resign themselves to the fact that this is what they are. They may even take pride in this prescribed image because it provides them with a level of attention and status that although negative is attention and status none the less. This perspective only adds to the perpetuation of the problems that exist. 
I deplore the deficit lens being held so intently over our Pasifika communities. Although there are issues that must be addressed I strongly believe that their resolution can come from adopting and adapting best practice where our people have successfully overcome challenges and there are many. 
I thank my parents Fa’atalii Kamisi Sepuloni and Beverley Anne Jordan for all that they have done for their children and grandchildren. Both had very limited educations but encouraged us to work hard in school. They would wake to 6 a.m. starts and take every opportunity to work overtime so that they could provide for my father’s siblings and parents in Samoa as well as for us their three daughters. We never had much but we always had food on the table and whatever we required for school. I am thankful for all that they have given to us and I am indebted to them for their role in all that I have achieved. I will never forget my father’s words when growing up: “Go to school so you can get a good education and help our people.” It is this aspiration to serve the collective that continues to drive me in all that I do. 
The future of New Zealand Pasifika people is promising and positive. We have experienced a 10 percent increase from 2000 to 2007 in the numbers of our Pasifika children enrolled in early childhood education. There has been a 13.7 percent increase from 2003 to 2007 in the number of Pasifika students leaving school with National Certificate of Educational Achievement level 2 or higher. In 2007 there were almost four times as many Pasifika people aged 25 to 64 years with tertiary qualifications when compared with the 1996 figure. On top of that our unemployment rate has dropped from 13.5 percent in 1999 to 6.5 percent in 2007. I acknowledge the previous Labour Government for its leadership role in this. These achievements need to be built on so that even more of our people can get the benefit of a good education. 
In recent times Pasifika communities in New Zealand have highlighted the need to retain guardianship over our cultural and spiritual inheritance: the languages values and beliefs that are our ancestors’ legacy and our birthright. The Labour Party is notable for its support in recognising the place of Pasifika peoples in New Zealand and in honouring the ties our country has in the Pacific. I hope to support and nurture initiatives in these areas during my time in Parliament. 
As a member nation of the ocean continent in which we reside New Zealand can play a crucial leadership role. Over the past week I have sat quietly at the back of the House listening to the debate about climate change global warming and sustainability and New Zealand’s role in addressing and leading the world on these issues. These are urgent issues and New Zealand must lead the way. Here in the Pacific the repercussions of rising sea levels can already be seen. Take Tuvalu: its highest elevation is only 4.6 metres above sea level but most of Tuvalu is not more than a metre above. Even if Tuvalu were not completely flooded it faces the escalating risk of storms and cyclones which due to changing weather patterns are increasing in strength. Tuvaluans are contemplating the possibility of the loss of their land culture language and way of life. I cannot comprehend why the National Government and its partners continue to prevaricate over our national response to this international crisis. 
My role in this House is no different from the role I have had in every other job I have worked. It is to listen and advocate to educate and to empower. The difference between this job and any others I have held is that I am privileged now to be at the ultimate of decision-making tables. Whilst at this table my commitment is to advocate for the vulnerable promote social justice and equity provide perspectives on issues affecting Pasifika and highlight the great potential that exists in our communities. I do not claim to be an expert on all things Pasifika and I will rely on Pasifika communities to keep me informed. Having been born and raised in New Zealand I also want to be involved in the wider issues affecting New Zealand and I look forward to being able to engage and contribute. 
Without wanting to close this maiden statement like an acceptance speech for a Grammy award I would like to make some final acknowledgments. I acknowledge my friends and my extended family for their love faith and support. I acknowledge my mother father and Uncle Tevita who are here today. I acknowledge the support I have received throughout my campaign from the Tongan community particularly the Mangere Tongan Labour branch under the leadership of Pastor Moi. I pay my respects to Anapeta Mau Hola Taue Salote Lilo and Semisi—thank you for your love and support. I pay my respects to the Labour Party’s Pacific sector for it is through this body under the passionate leadership of our chair Jerome Mika that this has all been made possible. 
I acknowledge my late grandparents with the only sadness of this occasion being that they cannot be here. From Vava’u and Niua Toputapu in Tonga came my paternal grandfather Fa’atalii Sepuloni. He embodied the true sense of humility hard work and love for God and for family. From Vailele in Samoa came my paternal grandmother Masae Sepuloni. She passed away before I had the opportunity to meet her but having listened to my dad talk about her all my life I feel as if I know her. My maternal grandparents were Wilfred and Peggy Jordan. Despite their initial reservations at having a Pacific Islander as a son-in-law they loved their afakasi granddaughters as they did all of their grandchildren and I am eternally grateful to them. 
My final acknowledgment is to my 10-year-old son Bailey—thank you for your patience and unconditional love. The campaign and this entire journey has been as hard for him as it has been for me. I love him more than anything else. 
Malo ’aupito. Fa’afetai tele lava. No reira tena koutou tena koutou tena koutou katoa. 
Hymn 
CHRIS TREMAIN (Junior Whip—National) 
: 
 I seek leave for the House to sit beyond the normal 6 p.m. rising to allow completion of the maiden statements. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Leave is sought for that purpose. Is there any objection? There being none leave is granted. 
CAROL BEAUMONT (Labour) 
: 
 Karanga mai rau rangatira ma me nga hoa hoki. Te Whare e tu nei te papa takoto ki waho tena korua. E nga mana e nga reo e nga tangata o te wa tena koutou tena koutou tena koutou katoa. 
[An interpretation in English was given to the House.] 
[ 
To the many chiefs and colleagues also extend your call of welcome to us. To the House that stands before us and the courtyard that lies outside greetings to you two. To the authorities languages and the people of the moment greetings to you greetings to you and greetings to you all 
.] 
Having paid my respects in the first language of our nation I now acknowledge the Treaty of Waitangi as the founding document of this country. Mr Assistant Speaker Barker I acknowledge your appointment. 
I am aware of the privilege and responsibility that being a member of Parliament bestows on me. It is a great honour to represent my fellow New Zealanders and to serve and be accountable to them. I will undertake this role passionately seriously and with integrity. I will work constructively with all of the people MPs and staff of this House which occupies the central place in our democracy. 
Let me acknowledge all members. Ours is not a well-respected role. We have a shared responsibility to work to improve the way in which MPs are regarded by New Zealanders as attacks on politicians have the insidious effect of undermining our democracy. 
I want to acknowledge my family and friends especially my mother Barbara for her unconditional love; my stepfather Ray who is watching at home; my sister Alison for her consistent support and friendship; and my wonderful nieces Keriana and Emma who keep me focused and for whom I want to see a better future. I also acknowledge my partner Robert for his support his friendship and his love. My friends and union colleagues are also important in my life: my thanks to you too. 
I acknowledge with pride our new Labour leaders Phil Goff and Annette King and also our previous leaders who provided outstanding leadership for this country—Helen Clark and Michael Cullen. I am proud to be part of this determined and principled Labour caucus and I am proud of what Labour has achieved and delivered for New Zealanders not only over the last 9 years but over our long history. I particularly acknowledge the role of Helen Clark as someone who has inspired me since 1981 when she was elected as the member for Mt Albert. I acknowledge Helen’s strength intellect integrity and commitment to our country and to the cause of peace and social justice globally. Like many others I have been enormously proud of Helen as our Prime Minister; history will confirm the significance of her contribution. 
I stand before this House as a passionate advocate for social justice and human rights who believes in fairness opportunity prosperity and sustainability for all New Zealanders. I want an Aotearoa New Zealand that provides hope and ideas for social justice in our region and globally. 
Social justice means equality of opportunity. I proudly identify as a trade unionist and as a feminist despite the unthinking stereotypes some feel compelled to promote. In my experience union officials are people who care and who want to make a difference. I acknowledge in this House the valuable work they do. 
Social justice means being fair. I grew up in a family where we struggled to make ends meet. I understand the stress that puts on our families. My parents believed in a fair go working hard and education—values that have shaped my life. My late father Ron who would be so proud to see me here taught me to speak out against injustice and fostered my love of debate but also showed me injustice firsthand. My dad despite leaving school at 12 became a tradesman mechanic and I wanted to follow in his footsteps. That may have been natural but what even as a child I knew was not right was his dismissal of my dreams as being unsuitable for a girl. 
Social justice means educational opportunities for all. My political activists grew from my time as chairperson of the Melville High School student council. While at school I was also a cleaner and a member of the cleaners’ union. My sixth form history teacher Marjorie Barrows fundamentally changed my life course by persuading me not to leave school but rather to go to university. 
 Education is a passion of mine. Education is transformational—for individuals as it was for me and for our society as a whole. Our social and economic development relies on improving the educational levels of our people. I can only imagine the impact of low literacy levels on individuals—on their job opportunities their employment security and their exclusion from vital parts of our collective life. Imagine not being able to help your children with their homework to decipher prescription instructions or to read the newspaper. Imagine the impact that improving literacy could have on the individual families and society. 
I trained as a teacher a role we do not value highly enough and have been an adult educator working with those already in the workplace. The focus on workplace learning given that 80 percent of the workforce of 10 years’ time is already in work is something I believe in strongly. For the concept of lifelong learning to have real meaning requires our workplaces to be places of learning. This is not suggesting an impost on employers but a cultural change by all concerned. I was very proud of the huge increases in industry training under the Labour-led Government and the proposal to provide workers with the right to a retraining allowance. I commit here to promoting measures to ensure that lifelong learning is a reality for all New Zealanders. 
I will stand in this House to champion the cause of social justice and human rights. Human rights are both individual and collective. Our rights are mutually dependent and as the UN Universal Declaration of Human Rights adopted in 1948 recognised individual rights must be placed in the context of economic social and cultural rights. 
When the declaration was signed Dr Colin Aikman speaking on behalf of New Zealand said: “Experience in New Zealand has taught us that the assertion of the right of personal freedom is incomplete unless it is related to the social and economic rights of the common man. There can be no difference of opinion as to the tyranny of privation and want. There is no dictator more terrible than hunger. And we have found in New Zealand that only with social security in its widest sense can the individual reach his full stature. 
Therefore it can be understood why we emphasise the right to work the right to a standard of living adequate for health and well-being and the right to security in the event of unemployment sickness widowhood and old age. 
Also the fact that the common man is a social being requires that he should have the right to education the right to rest and leisure and the right to freely participate in the cultural life of the community. 
These social and economic rights can give the individual the normal conditions of life which make for the larger freedom. And in New Zealand we accept that it is the function of government to promote their realisation.” 
Assuming the inclusion of women too this remains true 60 years later. Unfortunately some see human rights only in terms of self or see any talk of rights as “political correctness”. I believe in a strong rights-based framework and I will defend human rights for all. 
Workers’ rights are human rights guaranteed by international and currently domestic law. I pledge here to fight each and every attack made on workers’ rights including on workers’ collective rights to union representation. Unfortunately we have already seen workers disadvantaged in this forty-ninth Parliament with the reduction of KiwiSaver entitlements unfair tax changes and the removal of rights to fair treatment for new employees in most workplaces. 
Poverty and increasing inequality are among the most serious human rights issues facing the world today. In New Zealand inequality grew in the late 1980s and 1990s and the much referred to gap in wages between Australia and New Zealand grew exponentially. Last year for the first time in two decades the gap between rich and poor narrowed due in no small part to a deliberate redistribution of income by Labour to low and middle-income families. Who benefits from inequality? Not the suffering families struggling to make ends meet. Not the children who go hungry. 
Inequality is not only simply wrong in a comparatively rich country like New Zealand; it is unsustainable. The health and educational outcomes of poverty impact on our whole country economically and socially. Global poverty is a proven destroyer of individual and societal potential and a grave threat to peace security and sustainability. 
Increasing provision for social justice depends on a healthy economy. Our economy faces a number of key challenges that can be met only by a highly skilled workforce developing smarter products and services. To continue to improve our valued public services and standard of living we must be aware of not only wealth distribution but wealth creation. I am committed to sustainable economic development. We need to be deliberate smart cooperative and strategic to strengthen our economy to cope with offshore volatility. New ways of working together and the clarification of the roles of Government business and yes unions have been a worthwhile development in the last 9 years. 
An important aspect of social justice is the right to work. In recent years we have achieved some of the best employment outcomes of any Western country. Now there are major challenges ahead with unemployment forecast to rise rapidly. Work is of huge individual and society importance. The Council of Trade Unions and Business New Zealand have started discussing what the workplace of the future would look like. I support the Council of Trade Unions’ view that its attributes must include high wages and high value high skill levels and fairness and that it must be located in a strong industry and be healthy and sustainable. High-skill high-wage and highly productive workplaces cannot occur without productive employment relations with decent wages and conditions of work where workers’ rights to a collective voice are respected. 
The attacks of the 1990s on workers were not the way to go. There is still a low-wage legacy from that era. Low wages lead to low capital intensity and people working longer and longer hours to make ends meet. Low wages and low skill levels contribute to low productivity. 
Families are the basic building blocks of our society and the implications of long hours and low wages on them are huge. We must focus on our children who are our future. We must ensure their access to quality public education and health and we must challenge any family violence that threatens to mar their future. I will firmly support initiatives in the area of family violence reduction and I take this opportunity to acknowledge all those working to eliminate this huge problem. 
Investing in people supporting them throughout the life cycle and ensuring they have the ability to participate to their full potential are essential for our success as a country. Social inclusion needs to be deliberately fostered. It benefits none of us if new migrants to our country are not able to participate to their full potential or if young Maori and Pasifika people are overrepresented in the unemployment and educational underachievement statistics. 
Small countries like New Zealand have a greater opportunity to build consensus on what sort of future we want. A number of successful small countries have created “social partnership” approaches to ensure that workers businesses and the Government all play a crucial role in economic and social development. 
This brings me to my final point: only healthy democracies can ensure successful fair societies. Democracy is something we value highly as New Zealanders. It is something we have fought for and have led the world in achieving. For democracy to thrive our people must have the will and ability to participate. Many New Zealanders do not participate in democratic processes and some attribute this to apathy. I believe the reasons to be more complex and include lack of knowledge language barriers disillusionment with political processes time constraints and a sense of powerlessness. Whatever the reason the alienation of some is a loss to us all because not only is their vote lost but so are their ideas and their commitment to common values and goals. We must all work to lift genuine participation. 
As a Labour MP I will be based in the Maungakiekie electorate where I live and where I was our candidate in the recent election. I acknowledge and thank my campaign team and the large group of Labour activists who worked so hard. Let me acknowledge the Hon Vui Mark Gosche the previous MP for Maungakiekie. Mark has always been a strong advocate for the values of Labour the people of Maungakiekie and working people generally. Mark has inspired many people through his obvious integrity and the courage he displayed through huge personal tragedy. I know that the people of Maungakiekie will miss him as their MP. I want to acknowledge both Mark and Carol Gosche for their support friendship and encouragement. I also acknowledge Peseta Sam Lotu-Iiga as the MP for Maungakiekie and indicate my willingness to work with him constructively on local issues where possible. 
Maungakiekie is a vibrant and diverse electorate. In the course of the campaign I saw the huge number of people who work for community good in sports groups on marae in youth groups in community safety groups in churches and in community development initiatives. They are ambitious people. It is important to reflect on the meaning of the word “ambitious” because recently it has been used by many only in the context of the individual. It is more than that. I consider myself ambitious and have always wanted to use my skills in roles that challenge me but my real ambition is in wanting to make a difference for others. As my friend Helen Duncan a former Labour MP said in her maiden speech: “I believe … that people are not driven solely by the pursuit of individual goals and ambitions and that the welfare comfort and happiness of others can make a difference to our enjoyment of our own lives.” I commit to being ambitious for Aotearoa New Zealand and all our people and I will seek to ensure that we measure what we are doing by considering the economic social cultural and environmental impacts of our actions. 
I believe that most people want to do the right thing that they want a better future for future generations. It is about being clear about the future we collectively want and determined to make the necessary changes. In the words of Sonja Davies a pioneering woman union leader and member of this House: “Nothing is ever too difficult to achieve. Only inertia can defeat us.” No reira kia kaha kia toa kia manawa nui tena koutou tena koutou tena koutou katoa.  
[ 
Therefore be strong be brave be stout-hearted. Greetings to you greetings to you and greetings to you all 
.] 
Sitting suspended from 6.12 p.m. to 7 p.m. 
Electricity (Renewable Preference) Repeal Bill 
First Reading 
Debate resumed. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 The Government is continuing its assault against progress. It started last week with the removal of the research and development tax credits—that was the opening bid—and we also learnt there will be no action on the emissions trading scheme any time soon. We are sending that legislation off to a so-called high-level select committee. Then earlier today the biofuels industry had its ankles cut from underneath it which will mean a swag of disinvestment in that industry quite apart from the disinvestment that has already occurred in the forestry industry last week. And now the Government is saying it is time we should burn some fossil fuels to make electricity. The Labour Party will strongly oppose this bill because the legislation it repeals has a function to play and its removal will see the possibility of thermal generation being built that is unneeded and unnecessary. Let us be clear that the moratorium is against baseload thermal generation only. If any more peaking plants are needed in this country they can still be built despite the moratorium; it is baseload thermal generation to which the moratorium applies. 
Why does the moratorium apply? It applies for the simple reason that this country has an integrated electricity generation system involving predominantly hydro and thermal energy with increasing amounts of geothermal and wind energy. That integration is secured by a variety of Cook Strait cables and it is in balance now. It used not to be in balance; it used to be wildly out of balance depending on how far back in history one wants to go. I can go back quite a long way but the Max Bradford era will do. Max Bradford took the electricity generation system and turned it on its head. There was in effect a strike by capital for years to come. We had a strike by capital in the early part of this decade. We saw one thermal plant go on then we saw the five new generators/retailers duck and weave to see whether they could avoid capital investment until one of them came forward. Then another came forward but in the meantime we certainly started to run thin on the margins. 
Those margins are now in much better shape than they have ever been—or at least in the last 1½ decades that I can speak of. The degree of new generation coming on is known to be sufficient. The point is that the new generation coming on is renewable. There is now widespread investment in geothermal wind and small-hydro energy. Those investment projects all of which are known because they have been publicly signalled—and one or two of them have not been publicly signalled but have been privately signalled to officials—and many of which have already been consented will come on the book one after another in an orderly sort of queue. The 10-year moratorium on baseload thermal generation was simply to signal that the future of our integrated system needed to be more predominantly based on renewable electricity generation. It was that straightforward. 
It is possible to build—so long as one can secure a long-term gas contract and that does present difficulties—a quite large baseload thermal generation plant quite easily. Such plants are less costly because their capital costs are lower. The running costs are of course higher whereas the running costs for renewable electricity generation plants approach zero. The consent process is simple because the footprint if you will of a non-renewable electricity generator is relatively modest—it might take up only a hectare or so of land. Once the investment in transmission supports a baseload generator the generator will be used. Once the owners have it up and running and the gas contracts are in place they will bid in such a way as to ensure that the generator is used. That is why additional baseload thermal generation is not a good component of our electricity system. 
The opposite needs to happen. As our renewable generation picks up we need to take offline some of our most inefficient thermal generators which happen to be coal-based in the main. We have four big coal driveshafts all of which are in Huntly and all of which are called collectively the Huntly power station. Each of them can produce 250 megawatts but there is no reason why one by one they cannot be taken offline in the future as they come up for major refurbishment or indeed cannot be refurbished and put into the reserve scheme. The Electricity Commission has the say over that and the role to play there not Cabinet or this Parliament. That is what the future of this country looks like. We should take some of our older thermal generation plants progressively offline. Some of them should stay in the reserve generation market in case we get an unusually calm and dry year in our hydro catchments but there is no need for new thermal generation plants to proceed at the moment. 
If this moratorium comes off and a plant goes ahead as a result—because gas contracts that give investors security of supply might be bought or sold on the market—what will the Government do about that? The member who spoke before me was the Hon Dr Nick Smith and he spent his entire 10 minutes saying that thermal generation in New Zealand had increased. He is right. Just to recap briefly why that is the case I tell members that the main reason was a strike by capital straight after the Bradford reforms and only when people finally woke up to the fact that we might start to run out of electricity did we get ourselves a thermal power station in the form of e3p. There is no need for another thermal power station. It is a shame we have that one. There is no need for another. Nick Smith in his logic spent his entire 10 minutes saying that we had increased thermal generation yet his response is to remove a moratorium to allow for more. This guy has a PhD; what does that say about the quality of tertiary education when he says that his position is to be against more thermal generation but his voting position is to vote down a moratorium that would stop it? 
Hon Darren Hughes 
: The “Minister of Inertia” told him to do that. 
Hon PETE HODGSON 
: Oh the “Minister of Inertia” told him to do that. The Hon Dr Nick Smith our brand-new Minister for the Environment gave a 10-minute speech to tell us he wanted no more thermal generation but will vote to allow a moratorium against thermal generation to lapse. That is not good logic; that is dumb logic and one does not have to have a PhD to know that—someone in primer 2 would know that. If one is in favour of something one should act in favour of it. If one is in favour of something then one’s vote should follow one’s voice. But the Hon Dr Nick Smith has voiced in one direction and will vote in another. That just goes to show the pretty pass we have reached in this Parliament; this Government is determined to carry out a 100-day action plan and is determined to do things and to be seen to be doing things but is not concerned about the strategy logic or direction—or anything else—of what it is doing. 
What is more there will be no select committee hearings on this. There will be no select committee hearings on anything that has been passed in the last 2 weeks—no select committee hearings at all. Yet we know that in the Prime Minister’s own electorate Helensville where a thermal generation plant may be built if this legislation is passed the good people have something to say about that. Are they being excluded from the process because the Prime Minister has decided that this legislation will not go to a select committee? Yes they are being excluded. So there we are off to another great start. The Prime Minister the member for Helensville keeps saying to the local newspapers that he wants to be a very good local member and spend as much time in Helensville as he can— 
Hon Clayton Cosgrove 
: Does he live there? 
Hon PETE HODGSON 
: Of course he does not live there; he lives miles away in some mansion or other. He has just decided he will have legislation go through the House that may be damaging to his constituents but they will not have a chance to have any say. In fact he would not even meet them before the election—he was too busy. The person who was the Leader of the Opposition the Prime Minister in waiting back then said that his diary was filled up from July until the election. He would not even meet his constituents but now there is the possibility of a thermal power plant going up in his electorate and he is not prepared to allow the legislation relating to it to go to a select committee. That is the sort of deal he has with his constituents and I just hope that they pay a bit of attention to the man’s words and actions because they operate in contrary directions. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 On the face of it it does not matter very much that the Government is repealing the renewable electricity preference in Part 6A of the Electricity Act 1992 because the renewable electricity preference has so many exemptions and loopholes in it that one could drive any power station through those loopholes and have it approved. So I am not really sure why the Government is bothering to repeal something that was always a bit of a fiction. 
Let us look at some of the exemptions. First the preference applies only to baseload power stations. Anything that runs for less than about one-third of full-time is exempt anyway so one does not have to get permission for it. Secondly one can apply for an exemption if there is any kind of security of supply problem. I can imagine a number of situations where people wanting to build power stations might do that. Thirdly one can apply for an exemption if one can show that one’s power station will replace a power station that produces higher emissions. That is true of any gas-fired power station that anybody wants to build and it is true of any new coal-fired power station that anybody wants to build because they will all be more efficient than Huntly power station on coal. It is true that the Minister of Energy and Resources has to sign this off. 
I asked three submitters who made submissions on the Climate Change (Emissions Trading and Renewable Preference) Bill to the Finance and Expenditure Committee about this. I asked whether they could imagine any kind of power station at all that could not be built under one or other of these exemptions. None of the three submitters could. Contact Energy said that it could not but that it is a nuisance having to apply for an exemption even though it would be granted one. So we could argue that renewable electricity preference was always a bit of a wet paint sign. The Minister Gerry Brownlee said he would abolish it and goodness it is important—is it not—to take urgency before Christmas to pass the abolition of a wet paint sign through all its stages! 
However the Minister talked about symbolism. I think the reason this bill matters is its symbolism and the message it sends which is that the Government will burn more fossil fuel it does not believe in renewable generation and it thinks coal is sexy. If the Government is not trying to send that message why would it bother repealing legislation that would never stop a single power station being built? 
The Minister says that putting a price on carbon will encourage renewable electricity rather than fossil-fuelled electricity. But the way in which the electricity market—which was set up by a previous National Government—actually operates means that all electricity whether hydro wind or anything else will be charged at the same price to the consumer as coal-fired electricity. That means there will be large returns to renewable electricity generators but not to consumers. Those returns were to be the source of funding for the billion-dollar Green Homes Fund. We wanted to give this money back to people in a form that was more use to them than just a bit of cash. We wanted to give it back to them in the form of a warm dry healthy home that would be there for ever. That was to be the source of funding. The Government keeps claiming that there was no source of funding for the Green Homes Fund but that is where it was going to come from. 
The Minister says that we need to build more fossil-fuelled plant for security of supply. Well I am sorry but we cannot find any numbers at all to justify that. A lot of geothermal plant is being built at the moment which is— 
Hon Trevor Mallard 
: And a lot more to be built. There’s a big long list. 
JEANETTE FITZSIMONS 
: The member is right: there is a lot more to be built. A huge amount is in the pipeline right now—consented and being built consented and ready to be built or on its way through the consent process. It is enough to last us for years of normal growth and it is all renewable. But the Minister wants to cut off some of that at the knees and allow the building of fossil-fuelled plants that will crowd the renewable generators out of the market. 
You see if we want security of supply we need a diversity of renewable sources. We did not have security of supply when our energy was all hydro. A dry winter was a real problem. We have more security of supply if we have a mix of hydro and wind because they peak at different times. But we have much greater security of supply still if we have geothermal as well as hydro and wind. When the wave and tidal resources that are being developed now—and for which New Zealand has very good resources—are delivering we will have even greater security of supply because security lies in diversity. 
The other thing that will lead to security is looking at the demand side of the equation. Security of supply means that supply is always able to cope with demand. We can deal with that by building more supply which is the expensive and unreliable way of doing it or by making the demand side more efficient which is longer-lasting and cheaper. That is what we have been trying to do for the last 3 years with the Energy Efficiency and Conservation Strategy and all the work that the Energy Efficiency and Conservation Authority has been doing on energy efficiency standards insulation of houses assistance to industry and so forth. So if Gerry Brownlee wants energy security he needs to focus a lot more on the demand side than New Zealand ever has. 
The Minister spoke as though we will be closing all of our gas plants but we need some gas for peaking. We have a large gas plant at Stratford we have a large gas plant at Huntly we have a large gas plant in Otahuhu and we have several smaller gas plants around the place—we have gas for peaking. What we need is some good renewable baseload like geothermal and some more wind which will balance the hydro. That is what is being built. 
The real problem with devoting more gas resources to electricity generation is that it pushes us into a gas shortage to which the answer is imported liquefied natural gas (LNG). The people of New Plymouth do not think that that is a very good idea because LNG plants have the potential to blow up whole cities if anything goes wrong with them. Leaving aside the question of the risks of an LNG plant I say that if we allow Genesis and Contact Energy to build an LNG reception plant in New Plymouth we will link the price of all electricity in New Zealand to the price of oil internationally. That is because all the contracts for the international sale of LNG are linked to the basket of oil prices in Japan. That is the way the market works. If we are to import gas we will pay for that gas the price that we are currently paying for imported oil. New Zealand’s electricity—with a few small exceptions such as coal recently being imported to run Huntly—has always been indigenous. We have controlled our own sources. Going down the gas route will expose us to international oil prices just as they are about to go through the roof again. What could be dafter than that? Is that security of supply? 
The Minister said that he does not expect more coal-fired stations to be built as a result of this bill. Well I am sorry but Don Elder does. Don Elder from Solid Energy is very focused on building coal-fired power stations in Southland and on the West Coast. Without any indication at all that the Government has a preference for renewable generation there will not be anything to stop him. 
The Minister says he is committed to the target of reaching 95 percent renewable energy by 2025 but it seems he is not committed to any action to get there. This is becoming standard with the Government’s new targets. It set the target of a 50 percent reduction in greenhouse gas emissions by 2050 but it is not committed to any ways of getting there. In fact all the ways that would have got us there have now been abolished. 
Hon RODNEY HIDE (Leader—ACT) 
: 
 It is with much pleasure that I rise on behalf of the ACT Party to support the Electricity (Renewable Preference) Repeal Bill. This bill is a direct consequence of the relationship built up between the National and the ACT parties. I am very pleased that we are going to have some economic sanity and some sanity in energy planning and supply in New Zealand as a consequence. 
Putting a ban on the use of fossil fuels to generate electricity in New Zealand was a mad idea cobbled together at the last minute. It shows that the previous Government’s policy on climate change global warming and the emissions trading scheme was cobbled together and not well thought through. If that Government had been committed to and had believed in an emissions trading scheme—and I have to say I do not believe in it—it would have priced the emission of greenhouse gases and it would have allowed people to get on with it reflecting the price. That is the whole logic of having a tradable scheme. That is the purpose of such a scheme. One does not need to tell people how to do it when to do it and why to do it; one lets them get on with it. But the previous Government being of the meddling variety that knows best and tells people what to do was not content with just jacking up the price of everything to every business and every homeowner in the country; no it wanted to go a step further. 
I listened carefully to Jeanette Fitzsimons’ speech because I am always open to the possibility that we could be wrong and that reversing the ban might be a mistake. I have to say I heard no reason to suggest that the Government is wrong in going with this ban. Jeanette Fitzsimons said—and I remember her saying the same thing at the time the ban came in—that the ban was toothless that it would not achieve any result and that anyone who wanted to could get round it. Well is New Zealand so short of legislation that we should be passing legislation that has no effect? I do not think so. If Jeanette Fitzsimons does not think the ban achieves anything then let us get rid of it. I guess the hallmark of this Government is that it is honest about what it is doing. I think that what we saw previously was a lot of hot air— 
Hon Darren Hughes 
: What about the member’s select committee on climate change? That won’t achieve much either. 
Hon RODNEY HIDE 
: That member Darien Hughes who lost his seat at the last election is calling out that he knows everything he knows all about the select committee that will meet for the first time tomorrow and he knows what the result will be. That is how clever that man is who lost his seat. Mr Darien Hughes was a member of a Government that rammed through the emissions trading scheme without actually considering the options and without doing a regulatory impact statement. I was very very interested to hear Darien Hughes and others call out that the Government is passing stuff to remove unnecessary—[ 
Interruption 
] What did I call him? [ 
Interruption 
] Oh I get confused. I heard Darren Hughes calling out that the Government did not do a regulatory impact statement to remove red tape. Where was the regulatory impact statement from the previous Government on the implementation of the emissions trading scheme? Where was it? It did not happen did it? 
Let me go back to Jeanette Fitzsimons who I was discussing before I was rudely interrupted by the man who lost his seat. Jeanette Fitzsimons wants to ban— 
Hon Darren Hughes 
: How many MPs have you got? 
Hon RODNEY HIDE 
: The member wants to know how many MPs I have. I know that for those in the Labour Party it is tough to count. I have five. 
Hon Darren Hughes 
: How many when you took over as leader? Nine! 
Hon RODNEY HIDE 
: Oh the member is saying I went from nine to five. Yes but here is the interesting transition that occurred. When I took over as leader we were sitting where Darren Hughes is. When he came into the House he was sitting on this side of the House. Now he is sitting over there somehow claiming victory and not able to count. Look I like the member— 
Hon Darren Hughes 
: It took you 12 years. 
Hon RODNEY HIDE 
: Oh yes but good things are worth working towards. I did not have to slip into another party. We actually had the courage the discipline and the focus— 
Hon Darren Hughes 
: To destroy your party. 
Hon RODNEY HIDE 
: —to start a party. Actually the Labour Party has had more success at destroying political parties than any other party here. Let me go through the list. It destroyed the Alliance party it destroyed the New Zealand First Party it destroyed the United party it tried to destroy the Maori Party but did not succeed and it will probably destroy the Green Party. That is how the Labour Party operates. I am sorry— 
Hon Darren Hughes 
: Watch those words it will happen to you! 
Hon RODNEY HIDE 
: I am just explaining it. Darren Hughes calls out that it is going to happen to the ACT Party. Maybe but I tell Darren that that will be up to the voters. I know he does not like the voters having a say but it will be up to the voters just like— 
Chris Hipkins 
: Through the select committee maybe. 
Hon RODNEY HIDE 
: What is that? 
Chris Hipkins 
: Send the bill to a select committee and let the voters have a say. 
Hon RODNEY HIDE 
: I have seen Labour operate select committees. Does the member remember the select committee on the Electoral Finance Bill? The public got to have a say. I tell Mr Hipkins that I remember what the public had to say. I have a memory of what the Law Commission the Law Society and the Human Rights Commission had to say and now that member’s own leader says “Oh we got it wrong.” Well that is what the select committee told Labour. I come back to Ms Fitzsimons. These young pretenders who are not allowed to speak in the House try to get into  
Hansard 
 by interrupting the famous leader of the ACT Party and MP for Epsom. Let me get back to Ms Fitzsimons. I can remember Jeanette Fitzsimons giving a seminar at the University of Canterbury many many years ago. 
Hon Darren Hughes 
: You were at Lincoln. 
Hon RODNEY HIDE 
: I have actually been to more than one university. 
Hon Member 
: Including the university of life. 
Hon RODNEY HIDE 
: Yes. Ms Fitzsimons’ concern was that we were running out of fossil fuels. She even put a date on it—1992. News flash! We did not run out of fossil fuels in 1992. In fact it turns out we have so many fossil fuels to power the future of New Zealand that now Jeanette Fitzsimons wants to ban their use. The Green Party predicted that we would run out of fossil fuels more than 15 years ago. We did not run out of fossil fuels and their having failed to run out the Green Party now wants to ban their use. What is the Green Party and the Labour Party policy? Are we going to run out of fossil fuels or do we have to ban their use? 
I say to the Labour Party and to the Green Party that our concern has to be the cost to New Zealand of powering business of keeping our houses warm and of actually succeeding as a nation. All that these sorts of bans do—and bans are always the response of the Labour Party and the Green Party—is put up the costs of the very people whom they claim to represent and care about. That is why I am so pleased to be standing in this House to support the repeal of a very stupid and very misguided ban. Phil Goff has said that the Electoral Finance Act was a mistake; I am looking forward to the Labour Party members saying that this ban was a mistake too. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Last week Wellington hosted a prestigious event packed full of academic excellence ground-breaking research and creative expertise. I am not talking about the maiden speeches—as outstanding as they all have been—I am thinking of the Realise the Dream event which celebrates our extraordinary young secondary students who are pushing boundaries and taking on the world of science research and technology. The event hosted by Genesis Energy included a project from Jake Martin of Cambridge High School. He explored the possibility of turning biomass energy and waste streams into a usable energy source for transport by experimenting with an engine that runs on wood. His model a gasifier demonstrated not only that the charcoal waste product of his engine was useful for growing plants but that the biochar produced was also magnetic. 
Is it not time for Aotearoa to realise the dream? The question is of course what the nature of that dream is. In the Maori Party our dreams include keeping our natural resources and environment healthy safe and intact for future generations. To do this we know will require this House to exercise as much rigour and expertise in creating innovation and energy efficiency as those students attending Realise the Dream did. For the great challenge facing us all is that while on one hand Genesis Energy was sponsoring an amazing event that was all about inspiring our young people to achieve on the other it was announcing plans for price hikes of up to 9 percent in parts of Auckland. This is our challenge: to meet the growing demand for electricity while at the same time seeking to reduce demand by the energy efficiency strategies we invent. If a group of secondary school students can construct a steam engine that produces electricity surely the members of this House can come up with a good idea or two about renewable energy sources including geothermal hydroelectricity wave wind photovoltaic and solar. Merely continuing to use coal oil and gas to generate electricity is hardly stretching beyond the frontiers of what we know already which is that coal is the fossil fuel that generates the most carbon dioxide per unit of energy generated. 
The coal-fired power station at Huntly—technically known as a baseload fossil-fuelled thermal electricity generation plant—has a direct and immediate impact on climate change yet in this bill we are disregarding our best knowledge and throwing caution to the wind. Is caution or is commercial pressure paramount? The question that must test all of our minds is whether we actually know what problem this bill seeks to address. Is the real issue that we all need to show much greater interest in creating effective energy conservation and efficiency strategies? Is the real issue that our transmission infrastructure is in such a poor state that the surplus capacity in Te Wai Pounamu cannot be carried across to Te Ika-a-Maui because the Cook Strait cable needs urgent repair or replacement? Is the real issue the bizarre fact that in our southern hydro lakes Waitaki and Manapouri the transmission infrastructure is so weak that water is currently being spilled? Or is the real issue the structure of the electricity industry itself? 
I was interested to read the recent statement from Bryan Leyland of the Climate Science Coalition. He suggested that the way the market is structured now rewards generators for keeping us on the edge of a shortage. It is all a matter of perspective. Rushing under urgency to try to meet the growing demand for electricity by increasing thermal generation is at best short-sighted and at worst it simply heaps coals on an ever-burning fire. Repealing the ban on thermal energy generation will have other effects that the Maori Party is concerned about. Maori organisations involved in sustainable energy developments such as geothermal power have spoken to us about their concerns that fossil fuel plants as a result of this bill will be at an unfair advantage that is not conducive to fair competition with renewable energy developments. That is because there is no current economic instrument through which these fossil fuel plants will have to face their carbon costs. 
It is time to be brave to realise the dream and to explore other alternatives. Alternatives such as geothermal energy deserve the support of this House. Geothermal energy is a sustainable energy source. There are no pollutants attached so it is safe for the environment. There is also a significant amount of energy to be harnessed with geothermal power. It is a source that is available 24 hours a day and for which very little land is required. It is a concept the Maori Party is very interested in. We know that Maori organisations have been heavily involved in geothermal energy developments. In fact one of those energy developments Tuaropaki Trust—an amalgamation of landowners from the seven Mokai hapu who affiliate to both Tuwharetoa and Ngati Raukawa—topped the Maori and iwi sector in the  
National Business Review 
’s monthly exciting company series with a rating of 93.1 which is the highest ever recorded. 
The Tuaropaki Trust was described by trust chairman Tumanako Wereta as giving his people a beacon of hope and prosperity. That hope and prosperity has emerged from annual revenues that have almost doubled to around $50 million in the past 4 years. The trust combines farming and horticulture business with geothermal power generation and satellite communications. It has come a long way since 2000 when the trust commissioned its first generator Mokai I powered from geothermal steam under the land. A second plant has since opened up and now a total of 110 megawatts of electricity is being produced. Tuaropaki Trust is not just about providing a beacon of hope and prosperity to the descendants of seven hapu of Mokai; it provides Aotearoa with inspiration about a bright future—a future when renewable energy allows us to be sustainable while at the same time protecting and preserving the limited resources of oil gas and coal. 
We are so fortunate in Aotearoa that we have so many renewable options. We must place faith and trust in those organisations that can produce renewable energy and reduce carbon emissions as a result. We need to find new post-carbon ways of living to contribute to solutions that address the global issues of peak oil and to find sustainable energy alternatives without indulging in further finite and exploitative gas and oil exploration. The security and demand of supply the infrastructural problems the price hikes and the structure of the electricity industry are all challenges that face us. But they are not insurmountable. Windflow Technology in Christchurch has become a world leader in the design of smaller but highly efficient wind turbines. We can accelerate the development of new technology by making a commitment to using renewable energy. That commitment creates a market for electricity from renewable energy and supports private investment which in turn brings down the relative cost of renewable electricity. We need a forward-looking policy to kick-start a new industry and to create a competitive market in which new players can compete with established operators. 
With the Electricity (Renewable Preference) Repeal Bill we have a solution that misses the mark in terms of addressing the wider scope of these problems. Furthermore it is of course of note when one of our country’s biggest energy companies Contact Energy said last night that it had no plans to build fossil fuel power stations despite this bill being on the books today—a view that is apparently shared by Genesis Energy as well. The Maori Party policy is to support the development of renewable energy as a key response to both climate change and peak oil. We cannot support this bill. Thank you. 
Hon PANSY WONG (Associate Minister of Energy and Resources) 
: 
 I think the Green Party co-leader Jeanette Fitzsimons actually provided the reason why Parliament should support the repeal of the last Labour Government’s legislation in terms of the emissions trading scheme—the part relating to banning thermal generation. She correctly pointed out that the legislation relating to the thermal ban had so many loopholes that one could drive a bus right through it—it was completely useless. So why should Parliament embrace the retention of part of a piece of legislation when apparently nobody—even the parties that supported it—has confidence in its being effective? In fact it is useless so why should we retain that part of it? 
 The other issue is that Labour—the Opposition—has made much of the fact that this bill has not been sent to a select committee. Let me share with members of Parliament the way that Labour respects the select committee process. When the emissions trading scheme bill was sent to be examined at the select committee the part of the legislation banning thermal generation was actually added in the last very minute despite all the submitters including the Business Council for Sustainable Development which opposed the inclusion at the last minute of the thermal ban. That is not to mention the major sector groups such as the Major Electricity Users Group and the generator group. So Labour did not pay much respect to the select committee process. A bill was sent to a select committee new additions were made and the committee completely ignored the feedback on the legislation from the submitters. 
I am glad once again to be able to take a call in this House to support the legislation that National has been campaigning on—we have made our position very clear. We believe the way to incentivise renewable resources is that thermal generation will eventually be subject to carbon charges and renewable generation will not through the emissions trading scheme that we will develop. That is a very sensible way forward rather than retaining the part of the legislation that even the Green Party says is not workable and is sending all the wrong signals. Of course I hasten to point out that I have not seen Pete Hodgson—who goes on and on about what the Hon Max Bradford did to the electricity industry—in his time as Minister of Energy ever come up with a plan. Even now every winter New Zealanders are still subject to the threat of either a power cut or increases in power prices. I believe that our Minister of Energy the Hon Gerry Brownlee has once again sensibly brought in legislation that sends a clear signal that we support renewable preferences. Once again we believe that to retain a part of a piece of legislation that is not workable and puts our energy supply at risk is not the way to go. I am very happy to support the passage of this legislation. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 Members on this side of the House treat the challenge of tackling climate change very seriously because if anyone heard the contribution by the Hon Nick Smith Minister for the Environment they would have had their strongest inclination confirmed that a National-led Government does not believe in a coherent approach to tackle the defining issue of this generation—climate change. We have heard members from all over this House say how important climate change is. We have heard members from across this House say we need to do more for future generations of young New Zealanders. But what we hear from the Government is something that should concern young New Zealanders. It is a signal that I think does not provide leadership and does not lift aspiration to the possibilities of how this country could operate in terms of where it sources its energy. 
The mere fact that we are speaking to the Electricity (Renewable Preference) Repeal Bill shows that the Government will do anything to get energy no matter where it comes from. That is a real concern because the Minister for the Environment made light of the serious challenge confronting our country to reduce greenhouse emissions to better regulate our reliance on new thermal generation and provide and incentivise the landscape to explore and realise renewable energy generation. Instead the Minister claims that by lifting the moratorium on new thermal electricity generation the National-led Government’s commitment to tackle the effects of climate change remains on track. 
I say no. In support of the earlier contribution of my colleague David Parker I say that this bill will do nothing to encourage a coherent step towards a sustainable future. I absolutely agree with statements made by the Maori Party on Maori wanting to take leadership on this issue. The example that she raises with Tuaropaki—and I have talked to the people there and I have seen that they have an absolute commitment in renewable energy—reinforces the view that I present in this House. I know too that in the area of wind generation across the west coast from the north down to the south there are iwi who are looking at how they can better engage in renewable energy generation. 
In the first 2 weeks of this Government we have seen a delay in the introduction of the emissions trading scheme by establishing a special select committee that serves no other purpose than to placate the confidence and supply agreement with ACT. I again draw members’ attention to the contribution made by the leader of the ACT Party. A good 50 percent of his speech was a distraction to many members of the House and to those who were listening to the debate in a very serious way. 
We have also seen the dismissal of the intent of the biofuels sales obligation—putting at risk private sector investment and local jobs in small communities. If this is the Government’s leadership in this area then I will have nothing of it. I know that many more people feel the same way. 
The third thing we have seen in the last 2 weeks is the ramping up of thermal generation; a message that says we should be ramping up thermal generation through the introduction of this bill. There has been much talk in this House about great leadership a brighter future and lifting aspiration. For those words to have real meaning courageous steps in climate change have to be taken; action has to take place. Instead the National-led Government wants to be a fast follower. That is right—a fast follower. Surely we should do more to encourage investment in renewable energy to ramp up our effort in energy conservation and to promote new technology to reduce carbon emissions. There is no sign of this happening under the Government. Instead it chooses to walk quickly into the past forgetting about a sustainable future forgetting about what people think and how this bill might affect them. After all we are here under urgency limiting opportunities for members of the public to hold this Government to account. 
Comments were made earlier—again by the ACT leader—about the issue of the regulatory impact statement. There is nothing of that nature with this bill. The public have had no opportunity for this bill to be heard at a select committee where they can raise their concerns. More important people in the Prime Minister’s own electorate have taken to writing letters to the editor to be able to express their very serious concern of not being able to present this issue to their local member of Parliament. We should be concerned. A local resident in Helensville says: “Local residents and lobby groups like my own have had the brush-off from Mr Key’s electorate office when requesting a meeting to discuss local issues before the election. These include energy and climate change policy relating to the Genesis energy proposal to build a non-renewable energy gas-fired power station at Kaukapakapa. After the election it is too late; the hearing is next month.” His own residents have taken to writing letters to the editor when a simple hearing would do. 
So we should not be surprised that this bill is being put forward under urgency not going to a select committee not enabling local people to have their say not enabling those people whom we purport to represent to share their view on what I think is part of a range of measures that the members of the public deserve to have a say on. Surely a bill with such an impact on the Government’s overall approach to reducing greenhouse emissions should go to a select committee but sadly it will not. That will be the legacy and track record of this National-led Government’s attempt to meet its sustainability challenge. That will be a very sad face. 
Earlier this year in the Prime Minister’s own electorate in Helensville a number of members in his local community just wanted to meet him and that did not happen. Even during the election campaign Mr Key took a balanced approach by sitting on the fence saying one thing to residents and possibly another to his caucus who were busy dealing with the detail of this policy after the election—only after the election. We can only surmise that because this bill is being rushed through in urgency at a time when it deserves public scrutiny. 
MPs come to this House and have the privilege of representing their constituencies and their communities. Sadly for his own constituency the Prime Minister cannot do this; this is the legacy of how the National Government will run the Treasury benches over the next 3 years. We will be back here revisiting National legislation because it has failed this country and the challenge to seriously deal with climate change. 
We cannot have leadership that denies some inevitability about the state of our environment. We cannot be fast followers; we have to be leaders. We cannot be deniers; we have to take responsibility and action. I am a Huntly girl at heart and I was raised there for most of my life. We used to jokingly say that we had the largest light bulb in the country: the Huntly power station. In this House there is no one who would like more than me to see the retiring of the Huntly power station in favour of renewable energy but that decision would need to ensure that communities are better prepared to absorb the impact of meeting new employment opportunities and I hope that that may come through the clean-up of the Waikato River. 
I think this bill does very little to lift aspiration in our country’s efforts and it requires a whole-of-Parliament approach to say that we accept that climate change is an urgent matter that we all must agree to do something on. The lack of leadership provided by the Government is of concern and we need only look to the changes that have been achieved over the last 2 weeks. Gains under Labour were more than aspirational. We took active steps to tackle climate change through recognising the important contribution of renewable energy to supply the energy sector strengthening an energy-efficiency campaign and supporting Green Party initiatives like retrofitting homes and encouraging solar water heating greater investment in public transport introducing a biofuels sales obligation supporting smart procurement initiatives introducing market tools like the emissions trading scheme and encouraging support for new technologies through research and development tax credits. These are just a few of the real steps taken by the Labour-led approach and sadly in only 2 weeks all of them have been abolished and reversed by the National-led Government. Its members are not offering leadership when it matters most to the future of New Zealand. 
CHRIS AUCHINVOLE (National—West Coast-Tasman) 
: 
 I guess anyone listening to the discussion we have been having would wonder what the fuss is about. Earlier we heard from Jeanette Fitzsimons who I thought spoke extremely well when she described the original legislation as toothless from the very beginning. She thought that it would never work and that it was pointless to have it. In that case surely we are meeting the requirements for getting rid of it. The previous speaker Nanaia Mahuta whom I have considerable respect for talked about how important it was to have that legislation. But it does not actually do anything. The reality is that the costs of thermal generation are quite high. I cannot imagine a generator thinking “Oh goody let’s rush into it.” That is not the way it works. 
This is a Government that keeps its word and delivers on its promises. The Opposition sadly needs to get used to that; we will give those members a little bit of time. 
Hon Darren Hughes 
: 2 years 10 months 2½ weeks! 
CHRIS AUCHINVOLE 
: I was thinking more of a 5-year term. I can understand the Opposition being upset at seeing legislation being reversed but let us face it: the fact is that it is mostly rhetoric that is being reversed. The last two bills are good examples of that. As Jeanette Fitzsimons said they are “a bit of fiction” “a bit of a wet paint sign” and “symbolism”. Those were the expressions she used. 
One of the features of the Labour Government was the astonishing increases not only in carbon emissions and the use of thermal power that occurred during those 9 years but also in the prices of domestic power—I believe those price increases were 48 percent. What does the renewable preference that is being repealed actually do? It provides a political cover for a situation that I think the Labour Government did not really wish to admit to. The renewable preference has produced confused public policy. There has been a 180 percent increase in greenhouse gas in the electricity sector during the 9 years of the Labour Government. The right approach surely is to have a policy that provides security of supply. 
Let us look at the ban from a number of points of view: the ban was an unnecessary intervention from the very beginning and it was unnecessary for the electricity market; command and control systems do not work well and have not worked well; this ban puts security of supply at risk; it is thermal generation that New Zealand is reliant on; gas plants like the efficient e3p plant at Huntly can run round the clock and National will leave investment in those plants up to the industry; this legislation does not lead to environmentally sound outcomes because the ban blocks investment in new generation that could potentially be more efficient and emit less carbon than the current one; and the ban is a disincentive for oil and gas exploration because explorers will have less opportunity to offset exploration risks and costs against gas sales if New Zealand bans sales to power stations. Oil exploration is a sensitive activity and it will not take too much before we see explorers and investors going elsewhere. 
The thermal ban provisions were part of the legislation that was introduced as part of the emissions trading scheme and the ban was added at the very last minute which makes it interesting that those members talk about a lack of consultation. The provisions had not been singled out in advance and the industry was taken completely by surprise. The Government is today repealing this legislation which is an intrusion into the electricity market. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 To take up the point of the previous member when he asked what all the fuss was about I thought I would go back to the purpose of the Electricity Act 1992 we are repealing here today and talk a little about that. The purpose of Part 6A of the Act as stated in section 62A “is to reduce the impact of fossil-fuelled thermal electricity generation on climate change by creating a preference for renewable electricity generation through the implementation of a 10-year restriction on new baseload fossil-fuelled thermal electricity generation capacity except where an exemption is appropriate (for example to ensure security of supply).” 
Let us run through that for a moment and just consider some of those things: “to reduce the impact … on climate change”; well I think surely members on this side think that that is a good idea. We have always believed in human-induced climate change. We do not take the “balanced” approach of National members who believe that it is a hoax one day and believable the next and who then come back and repeal all of the climate change legislation. They have a balanced approach on the same day in fact; they change their minds as they go along. 
Hon Gerry Brownlee 
: Same speech different day. 
CHRIS HIPKINS 
: It is a different day—that is right. Mr Brownlee says it is a different day a different position. 
The Act created a preference for renewable electricity generation; I am staggered as to know what the problem with that is. What is the problem with creating a preference for renewable electricity generation? Surely that is something that we must agree on. What on earth is wrong with a preference for renewable electricity generation? But the Minister does not seem to be all that interested in engaging in this kind of discussion or argument. 
The Act also put in a restriction on baseload fossil-fuelled thermal electricity generation. It was saying that our core energy suppliers were expanding our core energy supply. This was not the peak stuff. This was not the stuff we need only in times of really high demand. This was the stuff that basically added to the baseload and the Act was saying that that should not come from thermal electricity except when it was needed to secure supply. What is wrong with that? There does not seem to be anything wrong with that. But no—the Government is going to railroad this repeal bill through without allowing members of the public to have any say on it. 
I take up two other points that Mr Auchinvole raised in his speech. First of all he said that thermal generation was expensive and there would be no clamour to build more thermal generators. It was a very interesting point because then he went on to say that the removal of this restriction would lower power prices. With that kind of logic I am staggered he is not in the new National Cabinet. I am absolutely staggered. 
Hon Darren Hughes 
: Didn’t Max Bradford say the same thing about power prices? 
CHRIS HIPKINS 
: That is right; Max Bradford said a very similar thing did he not? He said that the reforms were going to lower power prices for consumers. Did they result in lower power prices for consumers? No they did not—not in any way. So once again it is another day and there is another bill from this Government denying that climate change is a reality. Government members think that it will all be OK if we just stick our heads in the sand for a little longer. Everything will be fine; ignorance is bliss. 
The Government has failed to answer some of the most basic questions. Do those members actually believe in human-induced climate change? Because anybody listening to this will be totally confused about what the Government’s position is. Do they support renewable energy or not? 
Paul Quinn 
: Yes. 
CHRIS HIPKINS 
: They do! But with the second bill in a row they are doing away with provisions in legislation that support renewable— 
Hon Gerry Brownlee 
: So wrong! 
CHRIS HIPKINS 
: It is so wrong! That is right I say to Mr Brownlee; it is so wrong. So why is the Government doing it? If it is so wrong why is the Government doing it? Renewable energy is integral to New Zealand’s future. It is part of our international reputation as a clean green country. It is something we are all proud of when we go overseas. We come from a clean green country where most of our electricity is produced from renewable sources. That is something I was incredibly proud of when I went around the world. But how on earth can New Zealanders be proud of their country when they are out in the world talking about their clean green status when the Government back home is doing away with all the legislation that has been put in place to really enhance that? 
Our international delegations when they go off to climate change conferences overseas are not up the front any more talking about all of the wonderful things that New Zealand is doing. They are down the back hiding behind the conference sign and hoping that no one will notice them because they are so embarrassed to be representing New Zealand and this Government. The international community has noticed. Has it not noticed? What did Gordon Brown do on John Key’s very first visit to the UK? He introduced a departure charge on flights coming to New Zealand. John Key popped in to visit and oh up popped that departure charge which will penalise and punish the New Zealand tourism industry. It will have a major impact on the Kiwi economy and a major impact on our own airline of course—which we own thanks to the good previous Labour Government. That charge was John Key’s “reward”; I bet that a lot of businesses in New Zealand are hoping that John Key stays home a little more. If that is the kind of response we get when John Key goes off overseas then I think they will be hoping he stays home a little more do members not think? I do not think we need any more of that. 
If Labour had been in Government and Helen Clark had been Prime Minister she could have gone to the UK sat down with Gordon Brown talked about all the wonderful things we are doing and put forward a very compelling case for that departure charge not to be raised. Can John Key do that? No he cannot. He will stand there and say that the Government is not really sure about this climate change thing and that his Government is going to repeal all of the legislation put in place by the previous Government to deal with it but that he does not want that tax to be put on us. But who on earth will take any notice of that? Perhaps he would be better off staying at home and coming to grips with the real issues here. Perhaps Mr Key and his Government would be better off letting the public of New Zealand have a say on this bill rather than trying to ram it through under parliamentary urgency. 
Moana Mackey 
: It’s not going to a select committee. 
CHRIS HIPKINS 
: No apparently it is not going to a select committee. 
Hon Member 
: Another one? 
CHRIS HIPKINS 
: Another one—I know. How many of those have we been dealing with in this House? 
Moana Mackey 
: Doesn’t that make it all of them? 
CHRIS HIPKINS 
: I think that would make it all of the bills we have been dealing with. This Government has not sent a single bill to a select committee—not one single bill. What have we had? We have had the “Ninety-day Fire at Will Bill” and there was an inadequate regulatory impact statement on that bill so the ACT Party is doing very well. There was an education bill that said in the regulatory impact statement that the bill was unnecessary there was a biofuel bill with no regulatory impact statement and now we have this bill with no regulatory impact statement. So we are really really good with our regulatory responsibilities! I think the Government has a Minister for regulatory responsibilities. He is doing pretty well so far is he not? 
Hon Darren Hughes 
: Where is he? 
CHRIS HIPKINS 
: Where is he? He is doing a very good job so far. 
Obviously the public of New Zealand have not had a chance to have a say on this bill so I thought maybe we should give voice to some of the people who have concerns about this legislation because they will not get to come to this Parliament and have a say on it. The Environment and Conservation Organisations of New Zealand—ECO—said: “It is a surprise that National is putting the ETS on hold when it claimed it was their idea to have an emission trading system and that they take climate change seriously.” But I think that that was before the election though was it not? That was one of the things National said before it became the Government. It has changed its mind now. That organisation went on to say: “New Zealand has had reviews nearly every year on climate change policy from 1992 to 1997 until the emissions trading regime was decided on. The ETS combined with the moratorium on large new thermal generation would have for the first time placed a price on carbon and have provided investors in cleaner technology with some degree of certainty.” I thought National was in favour of certainty for business. 
Moana Mackey 
: In theory. 
CHRIS HIPKINS 
: Oh that is another one of the things that National said before the election. It all sounded very good before the election but it is not so good once National got into Government. It is very inconvenient is it not? 
What about the Bluegreens? Whatever happened to the Bluegreens? I am sure they had some views on this. In fact they got Greenpeace to come along and speak to their conference on it. 
Hon Darren Hughes 
: The Bluegreens are dead! 
CHRIS HIPKINS 
: Oh they have disappeared. But what did Greenpeace tell them? It said: “the fact is the ETS will not be enough in itself to prevent inappropriate thermal projects at least in the medium term so we need the disincentive of the Renewables Preference to prevent new emitting investment from being ‘locked in’.” That statement came from the Bluegreens’ conference. Oh but that is another thing; that was before the election. I forgot—how foolish of me to forget. That was one of those things National said before the election; then it became the Government and now it is just doing whatever it likes. It does not have to worry about those pesky members of the public anymore because it can just ram legislation through under urgency without having to worry about any of that public consultation stuff. That is not so important to this Government; it really does not mind about that. 
Hon Darren Hughes 
: That’s the Tolley principle. 
CHRIS HIPKINS 
: That is right—that is the Tolley principle. 
This bill will not lower power prices regardless of the Government’s rhetoric on the issue. It will result in an increased reliance on thermal power which will push up power prices because as Mr Auchinvole said thermal power is expensive. Let us be honest about it—this bill will result in higher power prices. The era of cheap non-renewable energy sources is gone. 
Moana Mackey 
: It’s been a great couple of weeks for the planet. 
CHRIS HIPKINS 
: That is right. Has it not been a great couple of weeks for the planet thanks to this Government here—the climate-change deniers on the opposite side of the House? That is why National is trying to ram this through under urgency and why it does not want the public to have a say because then the public would know that National really does not care about New Zealand’s clean green image it really does not care about renewable energy and it does not care about the state of the planet. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 The ban on new thermal baseload generators is part of the emissions trading scheme as members know and it has the intention of reducing carbon dioxide emissions in New Zealand. This ban has created a scenario that the designers of the policy may not have foreseen and had they foreseen it they may have thought twice. 
Members might quickly disregard the following statement because it comes from a stakeholder in the oil and gas industry: “The Government’s planned 10-year ban on gas-fired base-load power stations is ‘ill-conceived’ posing risks of much higher power prices and risks for the oil and gas sectors power security and the economy.” Todd Energy said that in March this year. Members might quickly disregard that statement but I believe that this policy has led not just to those weaknesses and concerns but also to an environmentally unsound outcome as well. I will explain this to members because they may find that to be a bewildering statement as well. I will tell members why it delivers a worse situation environmentally and socially and why it is an ill-conceived policy. 
The moratorium essentially says to those companies that explore and mine for oil and gas that there is now a diminishing market for their gas. Daily costs to explore for oil and gas are moving upwards towards $1 million per day. That is $1 million a day for helicopters support crews platform costs etc. If one suddenly finds oneself with a swiftly diminishing market then one has lost the serious motivation to invest that sort of money. So exploration and subsequently the supply of gas to the New Zealand market begin to be threatened. 
This of course is OK if one wants to stop the increase of thermal generation. But the problem is that around 50 percent of the plants built since 2000—plants built under the last Government’s oversight—are gas-fired thermal plants. The major players that this affects are Genesis and Contact Energy which have embarked on a project to now import liquefied natural gas (LNG) in order to secure their security of supply for electricity because nearly all of their power stations run on gas. 
The managing director of Todd Energy commented: “Damage to the gas sector will increase gas prices in the long term. Ironically this upward pressure could actually lead to a switch back to coal or other more GHG intensive sources of energy.” Such a greenhouse gas - intensive source of energy is LNG. The Contact Energy and Genesis consortium called Gasbridge is proposing to import LNG to New Plymouth to fuel its gas-fired plants as an insurance policy in case gas supplies run out. 
To produce LNG one has to refrigerate it to minus 162 degrees Celsius ship it in specifically designed tankers from a LNG production plant located in a different place on the planet offload it and through a heat process convert it to gas so that it expands to a volume 600 times greater than what it was stored at. Then one can use it to fire a power generation plant. This process creates a carbon footprint that is far higher than that of natural gas which we source from our own reserves. Indigenous natural gas produces 52 kilograms of carbon dioxide per gigajoule of energy. A full fuel cycle using coal produces 99 kilograms of carbon dioxide. The full fuel cycle analysis on gas through the LNG process showed that the overall emission was 73 kilograms of carbon dioxide per gigajoule of energy. That is a 40 percent increase in greenhouse gas emissions due to the process of production transportation and conversion to gas. This is what is happening in New Plymouth where a consortium wants to establish an LNG terminal because it cannot trust the gas supply as a result of the proposed ban on thermal base generation. 
This moratorium seeks to decrease greenhouse gas emissions but it is actually serving to create the need and opportunity for LNG to come to New Zealand and this will increase greenhouse gas emissions. Although it might not increase them from here it will increase them overseas at production plants and as tankers carry LNG across the planet. Thank you. 
A party vote was called for on the question  
That the Electricity (Renewable Preference) Repeal Bill be now read a first time. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Bill read a first time. 
Second Reading 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 I move  
That the Electricity (Renewable Preference) Repeal Bill be now read a second time 
. It has been very interesting listening to the speeches this evening from those who are opposed to this bill. I would have thought that the real effort that New Zealand should be making in the energy sector was to lower emissions. That is what the game should be all about. The thermal energy ban introduced by the Labour Government is a large and pretty obvious impediment to achieving that particular result. 
I will explain that in a minute but first I want to challenge some of the statements made earlier suggesting that the ban while it was in place was about protecting New Zealand’s clean green image and about making sure that when New Zealanders in the climate change sphere attend international conferences we can tell a so-called good story. A little bit of a look behind the scenes tells a pretty ugly story. In the time that the Labour Government was in office the extent of production of energy from renewable sources fell from about 72 percent to about 66 percent. That is the record of the people who say they care about New Zealand’s clean green image and about being able to say the right sort of rhetoric at international conferences. They simply saw the extent of renewable energy fall. The image that was supposed to be created was that they had great care for the environment but the record shows quite the opposite. 
It is also interesting to note that as this policy has been in place and as the Labour Government struggled with the whole concept of having a vibrant energy policy the retail price for electricity paid by New Zealanders when they turned on the light turned on the heater washed the clothes made the toast boiled the kettle or whatever rose from 1 November 2001 through to 1 November 2008 by a staggering 63 percent; it rose by 63 percent through those 8 years during which Labour was saying it was about protecting our clean green image and about having the right story to tell when we attend international fora on climate change. What is worse is that when that price rise of 63 percent is broken down it works out that electricity prices for consumers rose each year—each of those 8 years—2½ times the rate of inflation. 
Clearly something has been going wrong. The price has been going through the roof and we can also see that the extent of energy generated from renewable sources has fallen. Worse than that the emissions profile of the energy sector has massively increased. 
I know that the opponents of this bill tonight will say that all of that is just because we had a few years of bad hydrology. Well those same years that saw the 63 percent price rise—2½ times the rate of inflation each year—included 4 years when we had a supposedly one-in-60-year scenario to deal with. That indicates gross neglect of the generating capacity of this country. 
What this Government is saying in removing the thermal ban is simply this: what is the elephant in the room— 
Hon Darren Hughes 
: Ha ha! 
Hon GERRY BROWNLEE 
:—and I use that term somewhat advisedly I might say and I say “what” not “who”—in the energy sector? It has to be the large coal-belching plant at Huntly. I can tell members that when that plant was commissioned in 1987 it was to be a peaking plant; it was to come on whenever we needed it. But it has been a baseload plant for some years now running for 7 8 9 10 or more hours a day burning coal as it goes. That plant alone contributes the largest part of the emissions from the energy sector. 
 If we wanted to do something about it the smart thing to do would be to say that that plant would be retired that plant would be stood down and we would meet the costs of replacing it with an e3p plant or some such other plant—a combined-cycle plant. If that were to happen if the megawatt capacity of Huntly coal were replaced by gas New Zealand’s emissions from energy in this year when thermal power has run at extraordinary rates would fall by over 3000 tonnes. Why would we want to have a policy in place that prevents that? That is what the ban does and that is why we are going to repeal it. 
Hon Trevor Mallard 
: Because it would take it down to nothing you fool. 
Hon GERRY BROWNLEE 
: The member over there says that the ban would take the emissions down to nothing. Tell me where the projects are! I ask Mr Mallard to tell me where this country is going to get megawatt capacity in the time that we need it—in the next 5 or 6 years—that is able to be fired up to give electricity to the grid at very short notice. It simply is not there. So the Government is saying that we reject Labour’s idea of belching out lots of carbon dioxide through coal burning over successive years and we are saying to the industry that it should look at some alternatives. 
It gets worse. When we start to consider the response of the Labour Party in Government to emergency generation we might have thought it would say: “Why don’t we build one of those highly efficient combined-cycle gas plants that we could fire up very very quickly”— 
Hon David Parker 
: It’s very expensive when you don’t use them much. 
Hon GERRY BROWNLEE 
: The previous Minister of Energy says it is expensive so let us not put a price on carbon dioxide emission. He does not care; he says it is acceptable to use the solution that his Government came up with. Here is how it works. New Zealand consumers through the levies on their power bills have paid some $230 million over the last 5 years to the Electricity Commission. The Electricity Commission’s response to a requirement that it have generation in reserve was to build a diesel-fired plant at Whirinaki. 
Chris Auchinvole 
: Diesel? 
Hon GERRY BROWNLEE 
: A diesel-fired plant. The “We don’t like thermal energy and let’s clean up the emissions from energy” Labour Government built a diesel-fired plant at Whirinaki. And what did it burn this year? Well it was not 10 million litres of diesel. 
Chris Auchinvole 
: Was it 12? 
Hon GERRY BROWNLEE 
: It was not 12 million; it was closer to 70 million litres. One has to ask what sort of argument against this bill there can be from people who have such a shoddy record. 
We have a determination that the emissions profile from energy will change. We believe that part of that is rapid fuel substitution. We also believe that backing up some of those renewable projects with the speed of thermal generation is going to be very very important because this country cannot go on having power price rises 2½ times the rate of inflation. That is the Labour Government’s record. 
Hon DAVID PARKER (Labour) 
: 
 We heard the last speaker the Hon Gerry Brownlee and the Hon Dr Nick Smith saying that National believed in the 90 percent renewable generation target by 2025 set by the previous Government but that it is going to build more thermal generation. How does that work? How does one increase the percentage from currently two-thirds renewable generation to 90 percent by building more thermal generation? That is what the Electricity (Renewable Preference) Repeal Bill is about. It is about building more thermal generation. Those two propositions are just irreconcilable. Members opposite cannot say they want to get to 90 percent renewable generation but they are going to build more thermal generation too. They cannot do both. The two are absolutely irreconcilable. 
I want to deal with one of the other propositions put by the Hon Gerry Brownlee. He said that the legislation currently prevented retiring old inefficient thermal plant and replacing it with more efficient gas-fired plant. 
Hon Darren Hughes 
: Rubbish! 
Hon DAVID PARKER 
: That is rubbish. The legislation currently expressly allows that as one of the exemptions to the restriction. It expressly deals with it. Repeal the legislation I say to Mr Brownlee and what we get is the new gas-fired power station but not the retirement of Huntly. We get both—that is the problem you see. The problem is that if extra thermal generation is built and the old stuff is not retired we get extra thermal generation. We get increasing not decreasing greenhouse emissions because we have both. 
Hon Gerry Brownlee 
: Rubbish! 
Hon DAVID PARKER 
: “Rubbish!” he says. Well where is the control on Huntly staying when someone else builds a new gas-fired power station? 
Hon Gerry Brownlee 
: Price. 
Hon DAVID PARKER 
: Oh it is price. So why has price not already retired Huntly? The Minister of Energy and Resources cannot answer. 
Hon Gerry Brownlee 
: There’s nothing to replace it silly fellow. 
Hon DAVID PARKER 
: Goodness me! 
The other thing he says is that nowhere else in the world is doing this sort of thing. Again he is wrong. Lots of countries have virtually no renewable generation and have set legislated targets to increase from nothing or close to nothing to 20 or 30 percent. That is a 20 percent increase in renewable generation from nothing. What was the legislation doing? It was effectively legislating to go from our current two-thirds 66 percent renewable generation to 90 percent. That is a 24 percent increase which is not much different from the increase that has been legislated for in other countries when they use renewable preference methodologies to bring forward renewable generation that would not otherwise happen and to avoid increases in thermal-related greenhouse gas emissions. So again the Minister I am afraid will have to take responsibility for increases in thermal-related emissions. 
He said that somehow renewable generation is responsible for the increase in power prices in the last few years. I tell him that what has caused the increase in prices is the rising price of gas. The price at which electricity is dispatched sets the market price in New Zealand. Under our auction system the bid that is the highest of those for electricity that is dispatched is paid to everyone. What sets the price? It is never renewable generation that sets the market price because we all know that once a renewable power station is built its fuel is free. Whether it is water air or geothermal the fuel is free. Once those power stations are built they cost very little to run. Gas-fired and coal-fired power stations always have a fuel cost they have to recover so the gas and coal-fired bids into the market are always the bids that set the market price. It is because the price of gas has doubled following the lifting of price controls following the Maui gas running out. It is still a lot less than average prices for gas overseas. That is why even now New Zealand electricity prices are substantially lower than world averages. Indeed even now our industrial tariff is as cheap as Australia’s although our residential tariff has crept higher. So the idea that it is renewable generation that has bumped up the price of electricity is again wrong; it is the price of gas. Yet the Minister wants us to build more gas-fired power stations. 
The other thing the Minister mentioned was the risk of liquefied natural gas (LNG) importation. How does using more gas decrease the risk of reliance on LNG imports in the future? Is that not twisted logic? I think it is. It cannot be right. If we do not want to run out of gas we should use less not more. If we use more gas we are more likely to run out and to have to import LNG and if New Zealand imports LNG then its electricity prices will for the first time in our history be pegged to international fossil fuel prices. New Zealand’s electricity prices would go up by about double. They would probably be close to double if we had to import LNG. That would be the worst of all futures for New Zealand. Going to renewable generation of course avoids—or minimises—the risk of that being a future reality. 
In terms of constraints and where renewable generation is going to be built I tell members that there are already plans on the books of the major generators to build 1400 megawatts of new renewable generation over the next 5 years and the Minister knows that. 
Hon Gerry Brownlee 
: Where is it? Where are the pegs in the ground? 
Hon DAVID PARKER 
: The geothermal energy which is the biggest source of that new-load growth is in the central North Island. We had a 130-megawatt geothermal facility completed this year bearing in mind that demand growth in New Zealand is about 150 megawatts per annum. If we want to retire the likes of some of the Huntly generators we have to build about 175 megawatts per annum on average for the next period until 2025 to meet that 90 percent renewable figure. A big slice of it will be geothermal. It is already economic because that is what the major generators are investing in. 
Hon Gerry Brownlee 
: Why are they building it? 
Hon DAVID PARKER 
: They are building it. They have just finished one—130 megawatts—this year. There is another one of 200 megawatts already under construction by Mighty River Power. That is next year’s demand growth. Contact Energy has also committed to another large facility at Te Mihi. That is about 600 megawatts that I have just given you. That is 4 years’ demand growth at the rate of 150 megawatts per annum. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Keep the Speaker out of it please. 
Hon DAVID PARKER 
: I apologise Mr Assistant Speaker. In addition we have large amounts of wind power consented. That was one of the successes of the Labour Party’s climate change policy. We brought forward wind power through the projects to reduce emissions. We made it economic before it would otherwise have been economic. It now stands on its own feet. It is economic. Where is it being built? I do not know whether Mr Brownlee has been to Palmerston North recently but if he had a look around there he would see some big wind farms on the horizon. That is one of the places they are being built. 
Hon Gerry Brownlee 
: They were there a long time before you were ever a Minister. 
Hon DAVID PARKER 
: They have been extended within the last year and if the member did not know that then he really needs to do his homework. Makara is the biggest wind farm built in New Zealand so far. It is under construction at the moment. I think its first windmills are due to be producing power early next year and it is set to be completed by the end of next year. 
David Garrett 
: What do the locals think about the Makara wind farm? 
Hon DAVID PARKER 
: Some of the locals did not like the idea but that is true of any project. Some of them did not like it. The wind farm got a consent though and from memory 150 megawatts is being built—but it might be bigger. There are consented sites throughout the South Island. Consents are being sought by Contact Energy for about 500 megawatts of wind power in the North Island. 
There is oodles of renewable generation. But do members know what the biggest risk is to that? The biggest risk is if Todd Energy or one of the other big owners of gas decides: “We’re better off turning that into electricity. We’re going to invest in a gas-fired power station.” If the Government is silly enough to let Genesis proceed with Rodney—it never came to the previous Government for shareholder approval and probably would not have got it; it never got to that point—and it builds a 400 megawatt gas-fired power station then it will close out renewable generation. It is that simple. We are at a fork in the road. If New Zealand goes down the path of more thermal generation we will close out the renewable sources. We will never get to the target National says it has adopted to have 90 percent renewable generation by 2025. There will be rising emissions from electricity when we could have emissions starting to go down from electricity. 
Again I say that if New Zealand cannot get this right there really is no hope that the world will. I find it very depressing to know that the National Government is once again as it was on biofuels the canary in the cage on these issues. If New Zealand does not get it right we have to conclude that there is very little hope that the world will. Our Labour Government was not ready to reach that conclusion. We knew it could be done we had the policy in place to do it and that member’s Government is irresponsibly reversing it. 
Hon PANSY WONG (Associate Minister of Energy and Resources) 
: 
 There was a lot of wind and hot air blowing from the Labour Opposition. If it could be turned into energy we might not need to build any more renewable generation or whatever. After 9 long years the Hon David Parker has said that everything is under control; New Zealand is leading the world. I am sure that New Zealanders will be so glad that Labour is no longer the Government. Mr Parker was trying to tell them that they are lucky that New Zealand’s power prices are very reasonable. Tell that to our senior citizens and the households that year on year are facing the threat of power price increases and power cuts. 
The Labour Party’s mate the Green Party pointed out that the thermal ban in the emissions trading scheme legislation was nothing but a sham so why should it continue to defend the indefensible? I think at least the Green Party’s credential on renewable energy is slightly superior to that of the Labour Opposition. Government members are pleased to say that we do not have to once again support banning or mandating alternatives that will not be viable because the Green Party has already said that the thermal ban is not workable. So why not be honest and remove it from the legislation? The Minister of Energy and Resources the Hon Gerry Brownlee has already pointed out that the emissions trading scheme that National supports will be the pricing signal because thermal generation will attract carbon charges while renewable generation will not. I also hasten to point out that during the 9 years of Labour’s rule we found that a hydro scheme was not able to go ahead— 
Hon Gerry Brownlee 
: Not one. 
Hon PANSY WONG 
: No not one. That was because the Resource Management Act was the legislation that was acting as much as a barrier to renewable generation as to any— 
Hon Gerry Brownlee 
: The Minister was very excited about ferns and things like that. 
Hon PANSY WONG 
: Exactly. Obviously the Minister of Energy and Resources the Hon Gerry Brownlee felt very strongly about that. Not only will National remove this dishonest legislation the thermal ban that the Green Party says will not work but we will advance changes to the Resource Management Act. That will do a lot more to lead to more renewable generation being built. Members on this side of the House are about practical solutions not about slogans and action about leading the world. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I think that was a 3-minute contribution of a possible 10-minute speech and it is fair to say that the member said almost nothing that was intelligible or intelligent during her contribution. 
It is important for the House to realise what we are doing here today. We are taking New Zealand from a position of international leadership first in the biofuels area then in the emissions trading scheme and now in the thermal generation ban which we are removing. We are moving from a position of international leadership and the possibility of having cheaper power prices to having a system where we become more and more reliant on gas. Gas prices of course are dictated very much by oil prices. The thing that we know is that in the future oil prices will go up. They have been up and they have come down but we know that over a 20-year time-scale they will go up. The thing that we also know about gas prices is that they tend to track oil on the way up but they do not fall away in quite the same way afterwards. 
What is happening is that the National Government has chosen to let power prices go up in New Zealand at the rate that they have gone up in recent years. The reason that they went up so fast in recent years was that there was effectively a strike of capital a very small amount of building of power projects as a result of the Bradford reforms of the 1990s. I might ask why we would build extra plants. If the companies knew that they could sit tight with their already established generation and as a result of a shortage of generation have prices go up that means they could get an increased return without risking any investment at all. 
But after the legislation was passed we had quite a rush towards increased generation. Contact Energy one of the companies I was not responsible for announced plans to invest about $3 billion in 1400 megawatts of increased generation over a period of 10 years. It included 500 megawatts of geothermal power. Just to let people know I can tell the House that we need about 175 to 200 megawatts of increased generation each year to keep up with growth. The Greens will disagree; they would probably say that we do not need any or that we should be running down the supply. But with the sort of economic growth that we were averaging under a Labour Government that was roughly what was needed. 
What will happen now because of the removal of this ban is that people will build the plants that are cheapest to build and most expensive to run. It is much much cheaper to build a gas-fired thermal plant than it is to build a geothermal plant for pretty obvious reasons. Companies do not have to drill 5 kilometres down in order to get the steam coming out. But the difference is— 
Chris Tremain 
: Where do you think the gas comes from? 
Hon TREVOR MALLARD 
: Pardon? 
Chris Tremain 
: Where do you think the gas comes from? 
Hon TREVOR MALLARD 
: No no. There is a lot of drilling for gas but for the next few years there is quite an available gas supply. I think in fact the member will know that the problem is somewhat the opposite: some people for a while thought they had some gas they could not get rid of. Notwithstanding the fact that we had an oversupply of gas for a period of time the oil companies managed as they generally can do—and as Todds are experts at doing—to screw the system and get some pretty good returns on it. 
Mighty River Power is probably New Zealand’s most expert company at building geothermal plants. It managed to get its latest project at Kawerau going about I think 5 months early. It is a very very good plant at Kawerau running at peak capacity and it is probably now the cheapest plant in the country to run. The company has a new site that has received consent near Taupo. People were complaining about the Resource Management Act. Do members opposite know how long that one took to go through? 
Hon Gerry Brownlee 
: It was very very fast because there was a limited number of objectors. 
Hon TREVOR MALLARD 
: Six months! It took 6 months to go totally through the Resource Management Act process and there was a limited number of objectors— 
Paul Quinn 
: That’s because all of the landowners had an interest in the plant anyway. 
Hon TREVOR MALLARD 
: That is exactly right; it is exactly the point. Paul Quinn has got it! That is the first time he has got anything in this House. The vast majority of geothermal energy in New Zealand is under Maori land in the Tuwharetoa area mainly—heading through to Waiariki—and those people are desperate to use their resources. But Paul Quinn who has never done a thing for those people in his life objects to that. He thinks that Tuwharetoa should not be allowed to develop their geothermal resources; he is going to block them by having a thermal plant built in John Key’s electorate. That is what he wants; he wants an expensive thermal plant built in John Key’s electorate. That is his preference. He wants to block Tuwharetoa. There might be some local jealousies involved; I do not know about the iwi relationships up there but why that member is so against the people around Turangi and Taupo having some more geothermal power—things that are jointly owned by iwi—I do not understand. It is a system that works very very well. It is working well in Kawerau it is working well in the Resource Management Act consent— 
Paul Quinn 
: Why would I be against it Trevor; I’m part of it. 
Hon TREVOR MALLARD 
: Hey the member will have a heart attack or start crying if he keeps going like that. It is hard to tell with that member what he is going to do. [ 
Interruption 
] Oh he has to be on his feet to cry. 
We know that as at 1 July this year 426 megawatts were under construction and it did not include the Contact plants. So that is enough for 2 or 3 years—189 megawatts of wind power and 237 of geothermal power. Those that were under construction and due by December 2009—that is those due to start in the next period—were for another 188.6 megawatts of wind power and 105 megawatts of geothermal power. There are also another 665 megawatts - worth of consented projects and consent has been applied for in respect of 2875 megawatts. 
The point I am making to the House is that an enormous amount of renewable energy is coming downstream but it will be killed by this legislation because it is cheaper to build a gas-fired plant. These companies are not stupid. If they can get a plant with a lower capital cost with almost a guarantee of the price going up—the price will go up because they are relying on gas and it is inevitable that the price of gas will go up—then these companies will go down that route. 
I find it just amazing that in this House the priority for the Government is to shift away from the things that we can give international leadership in. John Key has asked to have another meeting with Gordon Brown but whether he will get it after calling Gordon Brown a hypocrite yesterday in the House I am not sure. When John Key goes to the UK to see Prime Minister Gordon Brown to say: “Please do not put your tax for environmental reasons on people coming to New Zealand.” he has to go there in good faith. But he will have to disclose that we have removed the emissions trading scheme that we have effectively stopped people from using biodegradable fuel in New Zealand by killing the tallow plant and that at the same time we have switched our production from geothermal to dirty thermal products. I just ask how we can ask the Brits to keep our tourism industry going when we are heading in exactly the opposite direction from what everyone knows has to happen around the world. 
Dr KENNEDY GRAHAM (Green) 
: 
 I rise following the intervention of my co-leader Jeanette Fitzsimons to oppose the Electricity (Renewable Preference) Repeal Bill. I do so in the knowledge that the reasons that have been advanced by this Government have not been found to be convincing. The Minister has indicated his view that the legislation that banned thermal generation amounted to pure symbolism that it put the electricity supply at risk and that it therefore was required to be repealed. The Minister Gerry Brownlee and others among his National colleagues took it upon themselves to criticise Jeanette Fitzsimons’ intervention on the grounds that if the original bill was toothless then it should never have been put in place and that it should be immediately repealed. That is a rather thin point of logic and when I weigh it up in the context of the broader issue of the contribution of this current bill and others to the daunting challenge of combating climate change I find that it is found wanting. 
What I would like to do to try to place a constructive interpretation on both the Government’s position and that of the Opposition is to ask the Minister some questions and to put those questions in the broader context of the wider issue of climate change itself. If we look at the basic facts of climate change—an anthropogenically induced phenomenon that is recognised as a fact through scientific consensus by it seems everybody in this House except for possibly five members—we find that the prognostication is that sea-level rise will occur to the extent of at least 0.5 metres over the next 50 years and that in the event of a more drastic phenomenon of ice-melt in the Arctic in Greenland and in the West Antarctic sea-level rise could possibly occur to the level of anything between 6 metres and 15 metres without any of us knowing the precise probability of that. 
 That possibility is not discounted and it is not discounted in the Intergovernmental Panel on Climate Change recognition—it has not been included in the fourth assessment report simply because it was not yet reflected in the peer-reviewed literature. So we have to recognise that that possibility cannot be discounted. In that event the implications for the physical integrity of the planet and certainly for the integrity of human society as we know it are extraordinarily grave. 
That is all based on an expected global warming of somewhere between 2 and 3 degrees. From that basic point we proceed to the Kyoto Protocol whose binding legal obligations we have assumed. Let nobody in this House be in any way over-impressed by the limited effect the Kyoto Protocol will have on combating climate change. I am happy to be corrected on my facts by experts—other than perhaps those sitting in this House—but my understanding is that of the anticipated 2 to 3 degree increase in temperature the Kyoto Protocol if fully implemented would result in a diminution of somewhere around 0.2 degrees. It follows that the Kyoto Protocol if fully implemented would have a very very modest effect on global warming. 
Because of that every Government and State that is party to the Kyoto Protocol has not only a binding legal obligation but an overwhelming moral obligation to do everything in its power to cut greenhouse gas emissions. Is New Zealand doing that? Let us look at the previous Government’s track record. In the last recorded year there was an increase in greenhouse gas emissions over and above the 1990 level of somewhere around 24 percent. It is projected that that increase will double to somewhere around 47 percent by 2012. So the previous Government has a rather uninspiring record. 
Now we turn to the present Government with its aspirations to meet its recognised Kyoto obligations. Will it meet its aspirations? The Minister of Energy and Resources Gerry Brownlee tells us that the Government is committed in principle to 90 percent renewable electricity generation by 2025. Do the Minister and his Government have a well-thought-through strategy articulated clearly before us to attain 90 percent by 2025? Personally I am less interested in the niceties of precisely what will happen to power generation whether or not this bill is repealed than I am to hear from the Minister on whether he has a credible strategy to attain the goal of 90 percent renewable energy generation by 2025. Are we about to see a strategy that perhaps puts in benchmarks or milestones every 5 years: in 2010 2015 and 2020? I propose to the Minister in a constructive spirit that he take it upon himself to table in the House a proposal by which we can monitor the progress towards 90 percent renewable energy generation by 2025 using 5-year benchmarks. If that were forthcoming then we would be able to take the Government at its word and put faith in the credibility of its stated intent to switch to 90 percent renewable energy generation. I hope that such a proposal is forthcoming; I will genuinely in good faith look to see whether it comes. Thank you. 
DAVID GARRETT (ACT) 
: 
 I am one of the two people in this House who will be directly affected by the lifting of the so-called thermal ban. The other person is the Prime Minister Mr Key who as we all know is the member for Helensville. I live in the Helensville electorate and regularly have a beer at the Kaukapakapa pub where I have to say the so-called Helensville thermal power station is not a popular cause. Both Mr Key and I will have some problems with the repeal of Part 6A of the Electricity Act but of course we are here for a wider purpose. 
Most locals are opposed to the Helensville power station but unfortunately locals oppose everything. Just a second ago I heard a laudatory statement about the latest proposed wind farm. I am not sure whether it is the same one but in the paper this morning there are the usual protests from the residents who live near the latest proposed wind turbine farm. Of course that happens everywhere. 
Unfortunately nimby-ism is alive and well in this country. Whether it is prisons or power stations nobody wants them nearby. But we all like hot showers we all like to have the lights going and we all like to have our heat pumps working. I think that even the Greens and those who live sustainably whatever that means exactly like to have hot showers and to cook their meals on an electric stove. So whether or not we like it we all need electricity. In an ideal world we all would have—and I would have too—solar panels on our roofs to supply all of our electricity needs but sadly the reality is that we just do not have the much vaunted replacements for current energy sources. 
I touched a second ago on wind power. Every time there is a proposal for a wind farm the nimbies come out. There have been complaints about the wind farm in the Manawatu; there are complaints about the wind farms proposed for the South Island. It happens everywhere. As I have said no one in my local area wants a power station to be built down the road. We see these silly billboards talking about our having Christmas trees for 365 days a year even though the thing is proposed to be built 2 kilometres off State Highway 16 where in reality no one will really notice it. But that is the way we do it. 
Tidal generation is another one. I am 50 years old and I recall tidal generation being the next big thing in the 1970s. It was going to be around within 5 years especially in a country like New Zealand which has tidal surges such as those through the entrance to the Kaipara Harbour. I have seen them when I have been out fishing. When I went out there the first time and people told me I would need a two-pound sinker I thought they must have been joking but they were not. The tide through there is tremendous. Well tidal generation is still at the experimental stage. Part of the reason of course is the Resource Management Act. God knows how long those people have been trying to get their experimental turbine in place but I believe they finally have. But 30 years on from the 1970s we are no closer to using water turbines to generate all our electricity. 
We rely heavily in this country on hydro power. I am not a conservationist or tramper—I am a getting a bit long in the tooth for it—but I know many people in the conservation movement in the Royal Forest and Bird Protection Society and other organisations of that kind. I have not heard any of them suggest we should dam another river. As far as I am aware they all say that all the rivers that do not have major conservation values have been dammed. So there is hydro power gone. 
What about nuclear? As I said in an earlier contribution in the House the local Greens get very green when we talk about nuclear but the European Greens have said that it is a great idea and that in fact it is the most green alternative. The local Greens do not agree and funnily enough I agree with them. It is not a good idea for a number of reasons. There are intractable problems with waste and as far as I am aware there has been no sensible solution to that. I lived in Tonga for 4 years and the King of Tonga proposed that a dormant volcano be the world’s nuclear waste disposal dump. That was one of the silliest proposals but I have heard of other proposals that are almost as silly. No one has offered a good proposal for nuclear waste. 
We live in an earthquake zone. As members will know the Japanese recently suffered a major earthquake— 
John Hayes 
: Were you the court jester? 
DAVID GARRETT 
: —no I was never paid enough—and there were major concerns about damage. But one of the things that very few people mention about nuclear stations is terrorist risk. People go on about the fail-safe protections of nuclear plants but they are all predicated on one thing and that is that the operators of the plants do not want them to fail so they have seven or eight fail-safe back-up mechanisms. But if we have terrorists who are prepared to die then it does not matter whether there are 27 fail-safe mechanisms they will come in and blow the rest of us up as well. 
Hon Judith Collins 
: If they want to die why don’t they just stay at home and do it? 
DAVID GARRETT 
: I agree with that. 
I have gone through wind power nuclear power and hydro power. What does that leave in a country like ours? It leaves gas oil and coal. Oil is pretty dirty. 
John Hayes 
: There is hydro. 
DAVID GARRETT 
: We went through hydro. Oil is pretty dirty so that leaves gas and coal. I understand that the technology for— 
Jeanette Fitzsimons 
: Coal is even dirtier. 
DAVID GARRETT 
: I am told that the technology for scrubbing coal is now advancing at a great rate as it all is and that is my next point. As to gas I can remember that not that long ago liquefied petroleum gas which is the same gas we are talking about for firing gas-fired power stations was touted as the green alternative. 
Jeanette Fitzsimons 
: Different gas. 
DAVID GARRETT 
: A different gas? Oh OK. 
Jeanette Fitzsimons 
: Yes propane not methane. 
DAVID GARRETT 
: There is a big difference in emissions is there? It is still a lot cleaner than oil and it is a lot cleaner than coal. 
Paul Quinn 
: This is today’s education. 
DAVID GARRETT 
: It is good is it not? The removal of emissions from the burning of gas is a rapidly evolving technology. As I have said it is a lot cleaner than the coal alternative. 
I believe we have 1500 years’ worth of coal in New Zealand and I can see that getting burnt at some stage but not yet. The technology is still developing. Everybody realises that for a whole host of reasons it is desirable that we have alternatives to fossil fuel burning. As I said in a contribution on an earlier bill I would be delighted if we could all burn 100 percent biofuels tomorrow but the reality is that the technology is not there. I think that its time will come but that time is not now. 
Thermal generation is a very sensible alternative in the short term. The life of a power station is 20 or 30 years. We might as well burn the gas. It is sitting in the ground. It is a pretty clean alternative. It is not the cleanest but it is a pretty clean alternative. The technology is advancing. Let us take the Kaukapakapa or Helensville station—by the time it has reached the end of its natural life or probably before we will have much better technology and maybe even tidal generation will finally have come. But right now gas is a pretty good alternative. ACT supports this Electricity (Renewable Preference) Repeal Bill to allow us to keep on having hot showers in the meantime. Thank you. 
CHRIS AUCHINVOLE (National—West Coast-Tasman) 
: 
 I would like to correct a comment that I made last time I spoke. I said that the retail price rise was 48 percent but after listening to the Minister I realise that I was wrong. The retail price rise was not 48 percent it was 63 percent from 1 November 2001 to 1 November 2008. 
Hon Maurice Williamson 
: Well the member should resign. 
CHRIS AUCHINVOLE 
: The member should not say that remark too loudly. There have been 4 years in which we have had a one-in-60-year near crisis in supply. Huntly is the biggest generator of emissions. If the bill we are now proposing were not passed we would not have any prospect of changing to something like the e3p plant which would dramatically reduce the generation of greenhouse gases. Again this is an act of honesty on the part of the Government. We are removing a piece of inert legislation. 
I listened with interest to Mr Mallard who talked about exercising international leadership. He also introduced a new phrase that I did not hear in the electricity debate when we were sitting on the other side of the House. Whenever we charged the previous Government with having insufficient supply and insufficient capacity we were told that everything was all right. Mr Parker kept saying that there was adequate generation capacity and that National’s criticism was ill-founded. But from listening to Mr Mallard now I understand that it was a capital strike. That was the reason for generation not being developed over the period of Labour’s 9 years. 
It seems to me that we are now having a little bit of a history rewrite; it was a capital strike. I do not think that will wash. But again there are a range of views on the effect of power generation systems. Mr Mallard referred in his speech to the United Kingdom. I understand that it is having a burst of enthusiasm for hydro electricity generation over there at the moment. I was told on what I think is fairly good authority—although I do not know the veracity of it—that the Brits are planning hydro schemes on 1000 Scottish rivers. [ 
Interruption 
] Aye and it is not just the fishing. I have to tell the House that by passing this bill this Government will meet with the approval of a group of environmental enthusiasts on the West Coast whose preference will be for thermal rather than hydro. Before the election I was approached by this particular group and asked whether we would make a commitment to bringing back thermal generation and I can assure the House that they are very enthusiastic environmentalists. 
Dr Paul Hutchison 
: But a lot of them are out of work on the West Coast. 
CHRIS AUCHINVOLE 
: No no these are a very dedicated group of people and I frequently discuss things with them. They are dedicated to river use. They are kayakers and rafters and they see nothing wrong with developing clean-coal technology for power production. They will be particularly happy to see this bill go through. 
Hon Darren Hughes 
: What does this mean for the West Coast? 
CHRIS AUCHINVOLE 
: We will measure that in a future speech. We still have another reading to do and I will certainly include that in my next speech. There is a wide range of views beyond the myopic view of Labour. In spite of Mr Parker wringing his hands over the demands of the increasing population the reality is that the increasing population demands energy supply. To put a block on it with legislation is like saying that we can stop the tide from ebbing and flowing and we cannot. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 It is always an honour to follow such an eloquent speaker from the Government. I would like to take up the theme of rising power prices. 
Paul Quinn 
: Chapter 3 of chapter 3! 
CHRIS HIPKINS 
: Is that the best the member can come up with? 
I would like to take up the theme of rising power prices and what has contributed to those. We need to face up to the reality that the era of cheap electricity generated by non-renewable sources is over. 
Actually one of the big drivers behind the recent significant increases in power prices has been the end of cheap Maui gas. If we look at the history of what contributed to that we see that way back when the Maui gasfield was first developed the then National Government under a gentleman called Robert Muldoon I believe his name was decided to fix the price of Maui gas. All of the gas coming out of that field was at a fixed price. And it was fixed for a very very long time because the field was such a large one. What that did was artificially suppress the price of all the other natural gas throughout the country. It made it uneconomic to explore other gasfields—and any exploration company will tell members that. The Maui gasfield was effectively New Zealand’s only major gasfield because it was not economic to explore any others and it was not economic to start drilling wells. When that gas started to run out and that artificial price constraint came off suddenly it become much more economic to drill other wells and the price of gas went up because the gas coming out of those other fields was much more expensive. That was a major contributor to the increase in power prices. 
That highlights for us that we will never get cheaper power prices by relying on non-renewable energy sources. If we want cheaper power then renewable energy has to be one of the key ways to go. We have to look at sources such as wind. Once wind generation is in place it is a relatively cheap source of energy. The member from ACT David Garrett talked a little bit about the nimby approach and claimed that rather than try to find places where we can put wind turbines the solution is to do away with the Resource Management Act so that people do not have a say at all. So we need to look at renewable energy sources. 
We also need to face up to a couple of the other realities about gas and about burning fossil fuels. Burning natural gas in an electricity plant is one of the least efficient ways of using natural gas. Even if we say that it is worth using natural gas—that we have a supply of natural gas and we should use it—burning it in a power plant is one of the least efficient ways that we can use it. If one burns it where it is used—in the home under a hot-water cylinder or on a hob or whatever—that is a lot more efficient. We waste a lot of gas if we burn it in a power plant because we then have to transmit it to the point where it will be used—to the home or the industrial user. That is very inefficient because we lose a lot of it through the transmission of it and we lose a lot of it through converting it from one type of energy to another. It is incredibly wasteful. 
Of course we see the nimby approach again in that not many National Party people seem keen to have high voltage power cables go through their land. I have not seen very many National Party members standing up and arguing for that! I would like to take up—[ 
Interruption 
] There we go! That certainly woke them up; I wondered where they had gone but they are back. It is good to know that Government members are on the job and wide awake. I would like to pick up one of the comments that the member from ACT Mr Garrett made. He said: “I am not [much of] a conservationist … I am getting a bit long in the tooth for it”. Is that not a revealing statement: “I am not [much of] a conservationist … I am getting a bit long in the tooth for it”? 
David Garrett 
: I actually meant a tramper. 
CHRIS HIPKINS 
: Oh right. I thought he was saying that once we get a bit older we do not have to worry about what comes next we do not have to worry about saving the planet or any of those pesky little things; we do just what we like— 
Hon Darren Hughes 
: Sounds like Maurice. 
CHRIS HIPKINS 
: —and do not worry about what kind of state we leave the planet in. Speaking of Maurice Williamson I think he should take the next call and give us his views on climate change. 
Hon Member 
: He’s not allowed. 
CHRIS HIPKINS 
: Oh that is such a shame because it would be good to know what National really thinks. I know that Maurice Williamson is a very very honest member of National and we can rely on him to stand up and tell the truth. I would really like Maurice Williamson to stand up and give us his views on climate change. I think they would be incredibly revealing. But he is not allowed to and that is such a shame for this House and for the democratic process. 
Hon Darren Hughes 
: That is so 6 years ago though. 
CHRIS HIPKINS 
: That is right—it is so 6 years ago. 
This Government really does not have any vision when it comes to dealing with climate change and it really does not have any vision when it comes to promoting renewable energy and we have seen that twice today. We have seen that in this bill. Instead of promoting renewable energy Government members would rather go back to using fossil fuels. We saw it in the earlier biofuels bill. They are not really into biofuels either; they are not really into alternative fuel sources for our transport and all those things. They would rather bury their heads in the sand and pretend that climate change is not happening. There is no real issue of climate change according to the National Government and its good friends from the ACT Party. What is more those members are not very interested in encouraging research and development on our clean green future. That is a real shame for New Zealand. We could be world leaders in this stuff but National members do not want to be world leaders. They would rather wait and see what happens. When we are all up to our necks in it they will be saying: “Wasn’t it good that we didn’t show any leadership? We are one of the first countries to drown but that’s all right. We didn’t show any leadership but never mind.” 
They do not have any commitment to energy efficiency either. All of these issues are related. Those members do not have much commitment to energy efficiency. That is why they scrapped the home insulation scheme. We have heard a number of members opposite talk about nice warm homes and people being able to afford electricity to have nice warm homes. But what did they do? They scrapped the home insulation scheme. They scrapped the extra money that would have gone into the home insulation scheme. No we are not going to live in nice warm homes any more under this National Government—at least not unless we can afford to insulate them ourselves. National members are not really interested in that at all. 
So what is this bill all about? This bill is being rammed through under parliamentary urgency as has happened with every bill that this Government has passed—every piece of legislation. I think that is a really important point for the people at home who are listening to the radio or watching Parliament TV. [ 
Interruption 
] That is right—on a Wednesday night. This Government has yet to pass a bill using the democratic processes of this House; it has yet to send a bill to a select committee where people can have a say. Government members are not really interested in hearing what members of the public have to say. They do not trust the people. They are not interested in their views. They won the election and they will do whatever they like. It was in their manifesto like their tax plan. 
H V Ross Robertson 
: I raise a point of order Mr Speaker. I am sorry to interrupt the member but you yourself have drawn to the attention of the House on at least three occasions now that there is continual interjection from the other side of the House. If members on that side would look at Speakers’ rulings 57/3 they would know that interjections are out of order unless they are rare and reasonable relevant and restrained. A running commentary is totally out of order. That is the first point. The second point of order is that a number of new members—and I accept that they will not know the rules—have moved seats in order to facilitate interjection and are not in their own seats. They are also out of order and I hope you will bring them to order. 
Mr DEPUTY SPEAKER 
: I thank the member for those points. I have brought to members’ attention on a number of occasions that there is too much barracking and barracking is out of order. The point that the member makes is very correct: members cannot move to a seat that gives them an advantage. Members of the Government have moved seats and have been barracking. Although you can sit in any seat you wish you cannot interject from a seat that gives you an advantage compared with where you normally sit. 
CHRIS HIPKINS 
: It is unbelievable that right at the very beginning of the Government’s term the new Prime Minister the new Minister of Tourism comes along to this Parliament with two pieces of legislation that absolutely ransack our reputation as a clean green country. Two of the first pieces of legislation that his Government wants to pass will absolutely dent our clean green image overseas. This is recklessness it is backwards-looking legislation and it is another nail in the coffin of our international climate change credibility which this Government does not seem the slightest bit interested in. It is backwards looking it is unnecessary and these energy policies are putting our children’s future at risk. Future generations deserve the same clean environment that we grew up with. That does not appear to be something that this Government is committed to or interested in. It is not interested in renewable energy. It is not interested in home insulation. It is not interested in climate change at all really. In fact the Prime Minister of New Zealand thinks it is a hoax but on another day he thinks it is not and then he does and then he does not. 
Who knows what the Government members really think because unfortunately Maurice Williamson is not willing to stand up and tell us. He might be willing to take the next call. He is ready! He is ready to roll. Maurice Williamson is going to stand up and give us the National Party’s real view on climate change and we are all looking forward to hearing it. 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 Before I begin my contribution I tell the new member Chris Hipkins that I am a very strong believer in climate change. I always have been and I always will be. I believe the climate has always changed and if it stops changing then we will be in deep shtook. 
I think the measure that we are debating tonight is very very important on one basis alone: it is something we committed to do during the election campaign. I know that does not sit well with the Labour Party and I know it would be really churlish of me to do the Michael Cullen line tonight—“We won. You lost. Eat that!”—so I will not. Nor would we want to be that churlish. But we made it very clear with regard to energy sources that the best method of determining what was right was a general market model based on all of the parameters including carbon emissions being taken into account not some artificial ban that said that as one particular mode of generation is evil we are cutting it out—even if in fact the evidence over time showed that some of the generation methods might actually replace some of the very old and very heavy carbon-emitting coal-burning methods. 
Members from the other side do not like that. They have a pre-defined position that they will stick to and control. I understand that the Greens are opposing this measure but I do not know of any of their members who do not use electricity and I do not know of any of their members who do not think that some of the modern progress society has made from the benefits of electricity is valuable. Yet they come along and try to have us all living in sackcloth and ashes because they think it is so evil and so wrong to be using some of these modes of generation. 
National’s view is very simple on this: a market model is the best way to determine outcomes. In fact best generation will be that which produces the least emissions at the best cost and at the best rate for society. This artificial ban which was put in force by the previous Labour Government was exactly that—an artificial ban. It was trying to make everybody feel good. Labour members say that this particular method is wrong and everything else is better but they know in their hearts that that is not right. Labour members know that that artificial ban is not right and that we are best to go through each of the modes. My personal preference is hydroelectricity. I still think there are options for hydroelectricity in this country and I would love to think about how it would be if 50 years ago we had taken the “We do not want hydroelectricity” position. If the Greens had had their way 50 years ago we would not even have the dams that we currently have. Yes they are intrusive but they are a hell of a lot less intrusive than some of the other methods of generation. 
In this Electricity (Renewable Preference) Repeal Bill we have said that we will remove the ban on thermal generation and move to a sensible balanced and focused approach to the energy needs of the nation. I want any member of this House to get up tonight and say that he or she does not care about the energy needs of the nation if we are to compete in the world of the future and be a participant on the world stage or care about what the cost of generating that energy is and that he or she will just be stuck in some myopic absolutely elementary view of the world that says: “I will not allow things that I have decided should not occur.” From my perspective that is exactly where New Zealand cannot be. 
We have to look at every mode of generation. We have to look at cost-benefit ratios of those modes. Yes I accept that in the line items of those spreadsheets there has to be the carbon cost—of course there does. But if in the end one particular mode is beneficial to this nation then having an artificial approach of “I have come to Parliament with a ban and I will stop this.” is simply a bizarre way to go. 
National saw that; it said at the election that there was not a secret agenda. We said that the ban is wrong and artificial and this legislation moves accordingly. I am very very happy to be a member of a caucus a party and even a coalition Government that wants to look at highly efficient forms of generation to look at those that contribute as little as possible to our greenhouse gases and to not put in place an artificial ban. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 Under normal circumstances the Electricity (Renewable Preference) Repeal Bill would have gone to a select committee and we would have had submissions from the public. Views opinions and evidence would have been canvassed more information would have been gathered and there would have been time for honourable members to consider the evidence and the information to prepare a report and to bring it back to this House so that we could have an informed debate on the issues we are now addressing in the House. We cannot do that so we are forced under urgency to have a discussion and a debate on some very serious issues. 
I heard the member Maurice Williamson say that he like us supports the pursuit of renewable energy sources. We can all agree on that—the question is about the methods we use to get there. For that same member then to say we were closing our eyes to our reliance on electricity or putting a ban on thermal energy only and closing our eyes to the real opportunity there—which is greater demand in the electricity market—is I think very myopic in itself. I say to Mr Williamson that we know we have to shift the frame. That is what the future of energy reliance will look like in a new generation. But the member might not understand that; when we look at members sitting in the House proportionally we see that the new generation view of what the future vision of electricity supply might look like is probably coming from the views represented in the Opposition. 
Hon Members 
: Ha ha! 
Hon NANAIA MAHUTA 
: I am making a very serious point. When members opposite talk about other forms of electricity generation and about looking at renewable generation we would agree on those. But we differ on the method and in terms of the ban we are saying that putting a ban on thermal generation just highlights the fact that thermal generation is a higher carbon emitter than other sources of energy generation. That is quite a simple point. 
For anybody listening to this debate and probably trying to work out what is really being said I point out that only the Labour Opposition and members of the Green Party are taking this issue seriously are putting a comprehensive and coherent range of tools at the front and centre of tackling the issues of climate change and are providing the types of sustained arguments that we have provided over the last 2 weeks. That is an important point because if we look at the views out there in the community on this particular move by the Government we see that the Sustainable Electricity Association New Zealand said in respect of this move by the Government: “The government will face more big power price hikes like Genesis’s 9 per cent rise unless it acts quickly to encourage more renewable generation”. That remark was made today by the chairman of the Sustainable Electricity Association Brendan Winitana. He went on to say: “Overturning the thermal power station ban is only a short term solution.” That might appeal to the supporters the big backers of the Government but it does not provide a comprehensive vision about what the Government will do and what steps it will take to tackle the very real challenge of climate change and the effects on our environment. 
Brendan Winitana went on to say: “As the Prime Minister acknowledges we need more renewable generation. That’s why he should be looking at small scale renewable generation as part of the solution. … Importantly small scale renewables will mean less thermal generation and so lower emissions. It’s a win-win for the environment and power consumers.” That is the balance that this Opposition is looking for I tell Mr Williamson not the balance the member is saying is thermal generation at all costs. Meanwhile by the way we also support looking at other renewable energy sources. It just does not add up; it is a really important point in terms of ensuring that the public have a say on this because we just cannot ignore the informed views of people out there who have long-standing reputations on issues to do with the environment. 
Let us take another view—that of the Environment and Conservation Organisations of New Zealand: “Local Government has embarked on consultative processes under both the Resource Management Act and the Local Government Act allowing communities to define the objectives yet Mr Hide as Local Government Minister is likely to want to override them. ‘The communities and the environment will suffer’ said ECO spokesperson Cath Wallace. The Resource Management Act has an important role in protecting New Zealand’s threatened biodiversity improving water quality air quality and making communities more sustainable. National and ACT by putting on hold climate change action and reviewing the emissions trading regime is making New Zealand an irrelevancy in international negotiations in the lead-up to the crucial Denmark meeting on Climate Change at the end of next year 2009…”. 
So what is the Government not listening to? It is certainly not listening to the voice of the public; that is why we are under urgency. It is certainly not hearing the very serious views expressed by Opposition members in this House and Government members are certainly burying their heads in the sand on this challenge of meeting climate change. And what for? National members want to signal to their supporters that yes National has won the election and yes the ship is turning in a different direction. The ship is turning in a different direction with a new leader at the helm—Mr Key. And how have they signalled this? Their ship is turning with a new leader at the helm and what are they doing? They are turning and reversing decisions on climate change through delaying the introduction of the emissions trading scheme and through the setting up of a special select committee on climate change. What are they doing? They are removing the biofuel sales obligation that would help to reduce our reliance on petroleum oil through fostering alternative biofuel sources. What are they doing? They are repealing the Electricity (Renewable Preference) Amendment Act that places a 10-year moratorium on new fossil-fuelled thermal electricity generating capacity. Their ship is turning; that is all this is about. This is the symbolism that the National Party wants to show. 
It is just before Christmas so we have to ask ourselves what is so urgent about this legislation that National has to ram it through under urgency with no public participation and no views exhausted and with respect with very very little or limited debate. It is all about symbolism; that is all it is. I want to make that point because the Act the Government is actually seeking to repeal includes quite an interesting provision around public consultation. I heard the member Pansy Wong; I listened very carefully to her when she said: “It’s OK. Renewable projects will go through under the RMA.” But what she has not told the public is that the National Government wants to gut the Resource Management Act in order to be able to streamline a whole lot of decisions on a number of nationally identified projects that the Government will identify as important so what will probably go will be public consultation. [ 
Interruption 
] I challenge Nick Smith to say that public consultation will not go under the reforms he is proposing in the months ahead. 
Hon Dr Nick Smith 
: Absolutely. 
Hon NANAIA MAHUTA 
: I challenge that member to stand up in the House to say “absolutely”. Is that member going to repeal any provision relating to public consultation and the Resource Management Act? Will the member take a question? There is silence. So that is indicative that there is a strong intention to remove public consultation when National amends the Resource Management Act. We should be very concerned because this will be about National ramming through its projects for its mates so that it can show that the ship has turned in a wholly different direction and that there is a new leader at the helm. Climate change is not at the front and centre of National members’ decision making and they have proved it. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I am thankful for the opportunity to speak on the Electricity (Renewable Preference) Repeal Bill. I congratulate the Hon Gerry Brownlee for the elegant brevity of this bill. What a marked contrast to Labour’s emissions trading scheme legislation! How many pages was it? About 600 or 700— 
Hon Maurice Williamson 
: That was just the amendments. 
Dr PAUL HUTCHISON 
: No there were something like 1863 last-minute amendments. But I was making the point that it was very good to see the elegant brevity of this bill which is 2 pages long. 
This bill repeals Part 6A of the Electricity Act 1992 which was added by the enormous tome that was Labour’s climate change legislation. It will remove a barrier to investment in new baseload fossil-fuelled thermal electricity generation plant. It is very important to remember that Labour’s thermal ban allowed Huntly power station to continue burning coal. The Hon Nanaia Mahuta should be aware of this—as anyone should be. Labour had not turned the ship—or the waka as the case may be—around at all. The provisions allowed Huntly to continue burning coal. The point I want to make is that using gas is twice as efficient as coal— 
Hon Dr Nick Smith 
: Three times! 
Dr PAUL HUTCHISON 
: Well I did some investigations this afternoon and the official figure was that it is at least twice as efficient in terms of emissions per megawatt of power generated. There is a certain madness in what the last Labour Government did. 
I quote from an article from 13 October 2008—a time when New Zealand was exposed to extraordinary seasonal weather patterns—“If it wasn’t for existing baseload gas and coal fired thermal power stations blackouts would have occurred. Rather than banning baseload thermal plant we should be encouraging more diversity for electricity generation; subject to generation investors themselves factoring in future carbon cost risks.” National has committed to an emissions trading scheme. If we go back to the 1990s we see that it was the National Government that signed up to Kyoto; we have committed to abiding by our international obligations. But we expect a rational response and not one driven by sheer ideology as in the case in question. Who in their right mind would ban an efficient method of generating power in favour of one that was over twice as inefficient? 
Hon Maurice Williamson 
: Who would? 
Dr PAUL HUTCHISON 
: It is a good question. Who would do it? Maybe the Hon Maurice Williamson could tell us. 
Hon Maurice Williamson 
: No I can’t. 
Dr PAUL HUTCHISON 
: No he cannot. Well I thought it was the Labour Government that did it. 
I quote a media release from the Major Electricity Users Group that came out on 13 October 2008 before the general election: “Ban on thermal stations a regulatory nightmare”. The quote is from Ralph Matthes. 
Hon Steve Chadwick 
: It’s a lobby group that has got its way now. 
Dr PAUL HUTCHISON 
: The Hon Steve Chadwick says that it is a lobby group. But after all it is the Major Electricity Users Group. Surely it is a group that is concerned about consumers and not concerned about straight ideology. Even if the price of power were twice as much the Labour Government would have forged ahead and made New Zealand consumers pay for it but pragmatism has to be shown if we are to have an emissions trading scheme in this country that is to some degree realistic. 
 The point made by Ralph Matthes was that “The discussion paper is a reminder that the legislative ban on new thermal power stations is all about reducing carbon emissions no matter what the additional economic cost to New Zealanders.” Unfortunately that was the attitude taken by Minister Parker at the time. Matthes says that “The ban on new thermal power stations is over the top.” He goes on to say that “The ban on thermal has had a chilling effect on investment in petroleum exploration. The timing of the ban when capital markets world wide are struggling to attract new investment couldn’t have come at a worse time. When most other countries are happy to migrate from largely coal based to gas based power plants New Zealand’s approach of saying no to baseload gas but embracing weather dependent new hydro and wind generation is foolhardy.” 
The second article I draw members’ attention to is from the  
Independent Financial Review 
 back in April 2008: “Government has head in the sand over emissions”. The author says—and this may be unparliamentary but I am quoting it—“Sniff sniff! Can anyone smell hypocrisy? There is more than a whiff of hypocrisy to the government’s energy strategy. It seems that on many fronts the government wants to reduce carbon emissions at home but is quite happy to make money from its own state-owned enterprises exporting fossil fuels for use overseas.” 
Hon Pete Hodgson 
: Who is the author? 
Dr PAUL HUTCHISON 
: I say to former Minister Hodgson that his Government was quite happy to export coal to Korea to Indonesia— 
Hon David Parker 
: Japan. 
Dr PAUL HUTCHISON 
: —to Japan and to China and was quite happy to do so as long as it was not responsible for the emissions. 
Hon Pete Hodgson 
: Who are you quoting Paul? 
Dr PAUL HUTCHISON 
: I am quoting a fellow by the name of John Pfahlert—I think that is how it is pronounced. 
Hon Pete Hodgson 
: Pfahlert—we know him. 
Dr PAUL HUTCHISON 
: Well he is a very good thinker. The point he is making is that the Government is just being—I cannot use the “h” word again— 
Hon Maurice Williamson 
: Oh go on! 
Dr PAUL HUTCHISON 
: No I could not do that. In his words “they can clip the royalty payment ticket while conveniently overlooking the fact the gas or oil will be used to fire CO2-emmitting power stations in Japan Korea and China.” 
The very last issue I point to is that the Labour Government was great at talking the talk but the record shows that 74 percent of new generation over the last few years has been thermal. That is quite extraordinary. Now suddenly Labour members want to ban it. They want to ban it in favour of a method that is twice as inefficient. That seems to be plain barmy. Thank you. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 It is very easy to demolish things. It is very easy to repeal things. It does not take very long to destroy things. It takes a lot more creativity time and effort to actually build things up. I guess we could say that the one good feature that this Electricity (Renewable Preference) Repeal Bill has is its brevity. Part 1 consists of four words. In essence the entire bill consists of four words but those four words have quite an effect. 
I want to go back to something the Hon Dr Nick Smith said in his first reading speech on the bill because it was a very significant few words. He said “the genesis of this bill” several times. We know about the genesis of this bill; we know that Genesis was the genesis of this bill. We know that this repeal bill is being rushed through urgency because Genesis—one of the three State-owned power companies—plans to build the biggest gas-fired power station ever in New Zealand’s history up on the Kaipara. It is concerned that under this bill it would have to apply for permission to do so. Of course Genesis is New Zealand’s fossil generator. It runs the Huntly power station burning the coal that produces the majority of our electricity greenhouse emissions. Genesis runs e3p the gas-fired station that produces some more of our carbon dioxide emissions. 
Because Genesis has been focused on fossil fuels for so long it has not developed expertise in geothermal and wind and it has missed the boat in terms of getting access to the best sites in New Zealand where those renewable sources are. This plant is not about New Zealand’s needs for electricity; we could easily demonstrate that this plant is not needed for New Zealand’s electricity supply. This plant is about Genesis’s profits. Why is it that Genesis has to make profits? It goes back to a certain Max Bradford who split up an integrated efficient single national generator into five profit-making entities that had to compete. Although it might be very sensible for the power consumers and for New Zealand’s industry to let those businesses that have expertise in renewable energy like geothermal and wind to get on and build more in fact Genesis has to build more in order to compete. That is what this bill is all about. No other generator wants to build fossil generators at the moment. 
Meridian has already positioned itself as a wholly renewable generator is proud of it and trades on that. People have switched power companies just to buy from Meridian because it is wholly renewable. TrustPower is also totally renewable but it is quite small. Contact Energy is also a fossil generator and it has some gas-fired plants. But members of Contact Energy came to see me quite some time back before this part of the bill was even drafted and said that they already had consent for a new gas-fired power station they were going to build in Otahuhu. They decided to put it on the back-burner because they thought it was better to build geothermal and wind and they could build enough geothermal and wind for New Zealand’s needs without having to build any more fossil as long as they could get them through the consent process and they are getting them through the consent process just fine. So Contact Energy is building renewable generation even though it is a fossil generator. Mighty River Power has hydro and a lot of geothermal is into a lot more geothermal and is not proposing any fossil power stations. 
There is only Genesis and Genesis is the genesis of this bill. If it builds its nearly 500-megawatt plant which is very big up on the Kaipara what will happen to the New Zealand electricity system? First the next renewable energy power plant will not be built because if there is a big fossil plant sitting there that is able to run nobody is going to invest money in renewable generation as it will corner the market first. We will have an oversupply. Of course the Major Electricity Users Group wants these stations to be built because it wants an oversupply of electricity to bring the price down as generators desperately try to sell it to someone. That is what will benefit its members. That does not benefit New Zealand; New Zealand still has to pay all that unnecessary capital cost. 
The Government says it supports the 90 percent renewable generation target. If that is true it simply has not thought through its position. We have done the numbers. We did the numbers with the Ministry of Economic Development and the Energy Efficiency and Conservation Authority. It is not possible to meet that target if the Genesis plant is built without closing a lot of other perfectly good gas-fired power stations. When we project forward the growth rate in electricity demand and we look at how we would get from 70 percent or a bit less to 90 percent by 2025 we find that we not only need to close the Huntly power station which would be a very good idea but we need to close another of the existing gas plants as well replace it with renewable generation and build no more fossil plants. So the Government cannot possibly support the target of 90 percent renewable energy unless it is planning for people to build more fossil plants just in order to close perfectly good ones that are operating already. There are plenty of renewable energy plants to build. Some are being built and a lot more could be built. 
The irony of all this is that Part 6A of the Electricity Act has a specific exemption for Genesis. We always called it the Genesis clause. It is section 62G(1)(e) and it covers exactly the situation that Paul Hutchison was talking about a minute ago where we want to build a more efficient plant to replace a less efficient plant. I argued strongly that that clause should be taken out because we have already built two gas-fired power stations in New Zealand on the grounds that they would back out Huntly power station. They were more efficient than Huntly and Huntly was to be closed in favour first of all of the Stratford gas-fired power station in the 1990s and then secondly for e3p on the Huntly site. Both of them got permission and support on the grounds really that they were more efficient than Huntly but Huntly still runs full bore on coal. So are we to justify a third big gas-fired plant on the basis that it will back out Huntly then a fourth and then a fifth and will Huntly still be running in 50 years’ time? It is ridiculous! 
It is time to replace Huntly with renewable generation. We have the geothermal capacity to do that we have the wind capacity to do that we have the capacity for more direct solar and coming on stream in I would guess around 10 years is marine energy—tidal and wave—which will contribute in the future. We simply do not need to fill up the atmosphere with carbon dioxide in order to keep warm even if we are stupid enough to want to keep our heated towel rails running 24/7 with no towels on them which is what some people use electricity for today. 
A party vote was called for on the question  
That the Electricity (Renewable Preference) Repeal Bill be now read a second time. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Bill read a second time. 
In Committee 
Part 1 Part 6A repealed 
Hon DAVID PARKER (Labour) 
: 
 I would like to begin by responding to what the Hon Maurice Williamson said which was that the answer to New Zealand’s electricity demand problems was to dam more rivers. He gave the impression that damming rivers was an easy thing to do without significant environmental effects— 
Hon Maurice Williamson 
: I didn’t say that at all so don’t tell lies. 
Hon DAVID PARKER 
: I raise a point of order Mr Chairman. The member accused me of telling lies. The  
Hansard 
 record will show that he stood and told the House that we should build more hydro generation. He should be asked to withdraw that comment. 
Hon Maurice Williamson 
: No; he just said “dam all rivers” and I didn’t say that. 
The CHAIRPERSON (Eric Roy) 
: Basically that is a debatable point. The member who interjected really cannot accuse another member of lying so on that account he should not use that terminology. It is a debating point I guess. 
Hon DAVID PARKER 
: Thank you. Well it is not a debatable point as to whether I am a liar. 
The CHAIRPERSON (Eric Roy) 
: The point that the member was making was a debatable point. 
Hon DAVID PARKER 
: Thank you Mr Chairman now that we have clarified that point. The member has said that he would dam more rivers in New Zealand and that he thought the Greens were wrong to oppose the damming of rivers because that was undermining security of supply. 
Hon Maurice Williamson 
: I didn’t say “dam all rivers”. 
Hon DAVID PARKER 
: I did not say that the member said “dam all rivers”; I said that he would dam more rivers. 
Hon Maurice Williamson 
: You just did say that. 
Hon DAVID PARKER 
: Sorry; if I said that I meant to say “dam more rivers”. Can I list for the member the number of rivers down my way where we already supply far more power than we use to keep the member’s lights on in Pakuranga. 
 In my area the Taieri River is already dammed—one of our major rivers. So are the lower reaches of the Kawarau and so is the Clutha in more than one point. The list goes on. So too the Waitaki River is dammed so is the Tekapo so is the Ohau River so is the Pukaki River so is the Waipori River so is the Teviot River so is Lake Manapouri the Wairau River and the river system around Manapouri and various other systems in Southland which I must admit I cannot name offhand. In addition consents in recent years have been issued for the damming of the Arnold River for the damming of the Waiau River and for another dam on the lower Waitaki River. When do we stop? 
Chris Hipkins 
: Do we have any left? 
Hon DAVID PARKER 
: Well we do not have many left down my way. 
Hon Dr Nick Smith 
: Is Labour’s position to oppose any more hydro? 
Hon DAVID PARKER 
: It is Labour’s position that we do not need much more hydro that we— 
Hon Dr Nick Smith 
: “Much more”—oh you’re going to dam more rivers. He’s going to dam more rivers. 
Hon DAVID PARKER 
: No; actually people will not see Labour proposing changes to the Resource Management Act to enable more rivers to be dammed. It has been interesting that Contact Energy has said that it does not need just aided processes to get consent for more dams on the Clutha River; it needs a change to the environmental baseline that is provided by the Resource Management Act so as to undermine the environmental protection that the remaining undammed sections of the Clutha River currently enjoy. 
If members on the other side of the Chamber think they will be able to provide security of supply through damming more rivers and they think that they will do that down our way then they should think back to the Save Manapouri campaign and the Save the Clutha campaign and they will realise that down our way some things motivate people. One of them is that when generators have dammed so many of those rivers in Otago South Canterbury and Southland and still want to do a lot more of that then they ain’t seen nothing yet when it comes to civil protest and popular protest against what would be wrong. 
We do not need to do that. So I am somewhat disturbed when I hear that Gerry Brownlee who is on record as saying that we should have quite a bit more hydro lots of little—[ 
Interruption 
] Yes the Minister has. I have heard him say it. He has said that now we have done all the big rivers then we should do quite a few more of the small rivers. I put that on record. 
I will move now to the issue as to whether we need to have some change in the legislation so that we can retire old thermal plant. The existing Electricity Act already specifically provides at section 62G(1)(e) that an exemption can be given where new generation plant “will be connected and operated in circumstances where an existing thermal electricity generation plant will be retired in whole or part” as long as there will be a 20 percent reduction in emissions. 
 So the existing legislation allows for new more efficient thermal plant to be built to retire old coal-fired plant like Huntly but if the Government repeals the legislation then that will not happen. Instead it will get a new gas-fired station at Rodney and it will get Huntly as well so it will get increased instead of decreased greenhouse gas emissions. The existing legislation is necessary. A price on carbon alone will not guarantee where we need to go in respect of renewable generation. 
In terms of what is consented and whether this is threatening security of supply I make two points. Firstly security of supply is a class of exemption. Anybody who has security of supply concerns can get an exemption to the restrictions on baseload thermal generation from the Electricity Commission making a recommendation to the relevant Minister that would then be adopted. But that is unlikely to be necessary because we have so many renewable projects that are already consented. I have heard National members say they are not economic. I ask why these current-technology renewable projects are already being built by in respect of geothermal generation Contact Energy Mighty River Power and up north by Top Energy. Additional wind farms are also being planned for construction by a wide range of generators including Contact Energy Mighty River Power and Meridian Energy which has the Makara project currently under construction with the potential for close to 200 megawatts at that facility. There was an announcement recently of a Mighty River Power project over to the south-west of Wellington and some very large wind farms are being proposed for Otago some of which are consented and some of which are in consent. 
There is ample new generation. In fact there are already more than 655 megawatts of consented projects. To put that figure in perspective 150 megawatts of extra capacity is needed each year to meet increasing demand. In addition to those consented projects there are already an additional 2875 megawatts of other renewable projects in consent processes as of 1 July 2008 and indeed some of those projects have already moved on to be consented. 
One of the things we should remember about National power policy is that it was National that visited upon the country the so-called Bradford reforms which were introduced under the control of Max Bradford but voted for by the previous National Government. It is interesting to reflect on how much easier it would be to go to renewable generation if we still had the old Electricity Department structure. Under that structure all that would have happened would be a meeting between the Minister and Electricity Department where the Minister would say “Hey look is it possible to build renewables instead of thermal please?” and the department would say “Oh yeah that’s economic and that’s possible.” and then the Government would say “Could you please do that and not build any thermal.” and that would have happened. I ask members to look at what we have now got ourselves into because of the ridiculous so-called reforms of the Bradford years and the plan now for Genesis to build more facilities using gas. 
I ask one other question of the Minister in the chair Gerry Brownlee. Last week we had Genesis put prices up and this week we had the Governor of the Reserve Bank say that given inflation pressures in the economy and the fact that we have a recession around the world and decreasing rates of return in virtually every other sector of the economy it is about time the electricity sector decreased its expectation of ever-increasing profits no matter what the economic cycle. He said that electricity companies should not charge so much. Well the Minister is part of the Government that owns on behalf of the taxpayer the major State-owned enterprises like Genesis Energy Mighty River Power and Meridian which produce about two-thirds of New Zealand’s power. I ask why the Government does not simply say its expectations of rate of return from these companies has dropped by 2 percent. If the Minister said that to those generation companies it would immediately cause them to not increase their power prices. 
Hon Gerry Brownlee 
: Where were you for 9 years? There was a 63 percent increase in prices. 
Hon DAVID PARKER 
: Well in the last 3 or 4 months the world’s economy has gone down. In fact I have heard the Government’s own Minister of Finance acknowledge that reality. Maybe the Minister in the chair has not caught up on it. The solution lies in the Government’s own hands. It should not blame it on anyone else. It should get off its hands and tell those State-owned enterprises that they ought not to be putting up their prices because in hard times the Government expects its companies to bear some of that pain to not put prices up and to not expect the same high rates of return during this part of the economic cycle that they expect in every other part of the economic cycle. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 A long time ago we were at the beginning of the second reading debate on the Electricity (Renewable Preference) Repeal Bill and I remember the good Minister of Energy and Resources the Hon Gerry Brownlee talking about the elephant in the room. I wonder whether the Minister can remember that comment. We thought it was a self-referral but the good Minister was able to put us right. He told a story in which it became apparent that the elephant in the room was the Huntly power station that great gargoyle that burns so many tonnes of coal and emits vast quantities of carbon dioxide into the atmosphere. He said that if there was a moratorium on some new plants that would replace this great gargoyle this great monster that needs to be replaced would not be replaced that therefore we need to get rid of the existing legislation and that that is why the Government has introduced this bill. That was roughly his contribution in the second reading. We know that it was nonsense. 
Hon Gerry Brownlee 
: It is very rough. 
Hon PETE HODGSON 
: Well I did it in 1 minute. The Minister spent 10 minutes but that was the essence of it. 
There are two reasons why it was nonsense. The first reason has already been outlined by Jeanette Fitzsimons and David Parker and it is that the legislation the Minister is ripping out of the statute book says if members care to read it that where there will be a significant improvement in energy efficiency then of course that plant can go ahead. You see a straw man was set up and it has been knocked over by black-letter New Zealand law. The Minister needs to forgo that argument in all parts of the Committee stage and so does Dr Paul Hutchison and anybody else who runs up that particular flag—that under the moratorium it is not possible to build a more efficient fossil fuel station and back off a less efficient one. It is possible. It is a matter as I say of black-letter law. 
The second reason is even more interesting. The Minister’s mind is in this frame: “Is it going to be gas or is it going to be coal?”. It could be in another frame altogether such as “Is it going to be renewable generation or is it going to be coal?”. I invite the Minister to make the paradigm shift from gas as a source of baseload generation to renewable generation. Of course he may be thinking “Ha ha! It doesn’t always rain.” and “Ha ha! It doesn’t always blow.” But we have an integrated electricity system and the Minister knows as well as I do that the spread of the catchments of our hydro facilities and the spread of wind generation—especially in the foreseeable future—is such that there is very good integration across the land. Of course there can be dry years. We have had a few. I hope we do not have any more any time soon and I am delighted that the lakes are at a state of considerable replenishment right now. 
Hon Steve Chadwick 
: Yes happy Christmas Minister. 
Hon PETE HODGSON 
: Happy Christmas to the Minister. That is where the reserve generation capacity comes from and that is the future of the Huntly plant. I ask the Minister to take out one of its driveshafts to take out 250 megawatts—or indeed to invite the Electricity Commission to consider doing so because he does not have the ability to do it; it would have to be done by the commission. Let us see whether that is a future possibility. When National fetches up paper tigers and straw men and runs red herrings up flagpoles we can pick them out pretty quickly. Fortunately there is an erudite Opposition here to point out the error of the Government’s ways. 
You see there is no particular need to scrap the existing legislation. Ideology is what is at play here. Government members claim that it is bad legislation because it was introduced by an awful horrible bygone Labour Minister in an awful horrible bygone Labour Government and that is why it has to be thrown out. It is actually quite elegant legislation. It gives a market signal in law it puts exceptions in place where exceptions may be needed it is time-limited it is designed to ensure that the base of New Zealand energy will be renewable energy and it is designed to have New Zealand heading towards 90 percent renewable energy by 2025. And 90 percent by 2025 means no more fossil fuel power stations thank you very much between now and then; otherwise those who build them will have to wreck them in order to meet the target. 
The moratorium is simply a way of signalling in law that the Government’s intention is serious. If the moratorium is going to be ripped down it seems to me that ipso facto the Government’s target which is the same—90 percent renewable energy by 2025—is one that it does not intend to keep. I put it to members opposite that I do not think that it is remotely possible for us to achieve the Government’s own target of 90 percent renewable energy by 2025 by allowing more fossil fuel generation. I do not think it is arithmetically possible. Therefore the Government should be saying: “We have told porkies and we need to change our target.” or it should get rid of the legislation before us now. It needs to do one or the other. It should change its target and say it has been telling porkies or it should get rid of the legislation before the Committee right now. 
I think those are the two options. I think they are the only honest options and the fact that the Government is not prepared to take either of them means that it is designing a future that is based on sophistry. We will catch this Government out within 3 years and we will replace it at the end of that time. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 There has been a consistent theme running through the legislation that has been rammed through Parliament in the last week without any public scrutiny and that theme is a lack of logic. Apart from the absolute outrage of rushing through legislation that does not need to be rushed through uncontested under the cover of Christmas there is a lack of logic. It runs through every bill that has been passed in the House in the last week and it does not make sense. It is as if the National-led Government is living in a parallel universe. 
National policy says it believes that New Zealand is a responsible international citizen and as a country that values our clean green environment must act to reduce our greenhouse emissions. That is National policy. This week the mantra of John Key and the National Government has been “balance”—balance of environmental issues against economic interests. It sounds more like code to me than balance. But according to National we must have thermal generation to ensure security of supply and to keep prices down even though there is enough thermal generation already—and everybody on this side of the Chamber has talked a lot about this tonight—to ensure security of supply. 
We already have these new generation projects coming on stream over the next 4 years and we need about 150 to 200 megawatts built each year to keep up with demand—and we have heard David Parker list them tonight. Our security of supply margins have been improving all the time. So given that this Government claims in its policy that it wants to reduce greenhouse gas emissions— 
Hon David Parker 
: I raise a point of order Mr Chairperson. We have a Minister in the chair who never takes a call who would not defend his biofuel legislation and who is not taking a call here yet he abuses his position in the chair in respect of his access to the microphone. He abuses the convention of Parliament that the Minister in the chair will not make interjections whilst in the chair and will instead exercise his right—indeed his duty—to take calls periodically. I request Mr Chairperson that you call the member to order. 
The CHAIRPERSON (Eric Roy) 
: I will uphold the point of order. It is in breach of Speaker’s ruling 59/4. It is the convention that the Minister in the chair will not interject when the microphone is on. 
Hon Dr Nick Smith 
: I seek leave to table for the good benefit of the member on her feet the press release by Mr Pete Hodgson announcing Labour’s construction of the Whirinaki diesel-fired power station noting that— 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. Is anyone opposed to that course of action? There is no objection. Under the Standing Orders the member will have to table that document today. 
Document by leave laid on the Table of the House. 
CLARE CURRAN 
: Why is National ramming through reckless backward-looking legislation that does not take into account the reality of secure supply and is a kick in the teeth to New Zealand’s reputation as a nation that takes climate change seriously—a nation that is willing to do the right thing? 
As Stuart Nash said in his maiden statement tonight Labour always asks: “Is it right?”. Well unfortunately I do not think that this Government is concerned about what is right. It is more concerned about having a blind commitment to some other agenda. Hmm I say to myself! Anyone would think that another agenda is going on here but I am a bit of an optimist and I always like to think the best of people—I do. I would like to believe that a brilliant new strategy is being developed that is so brilliant it requires a review of the emissions trading legislation a reconsideration of all the principles of climate change and disinvestment in the biofuels industry. 
I would like to believe that this really brilliant new strategy will somehow magically reduce our emissions but despite my optimism I have a horrible feeling. We all know that in this time of economic crisis across the world confidence is the key to dealing with the problem—confidence in the financial system confidence in the institutions and confidence in the Government because it knows what it is doing and has a plan. 
Hon Dr Nick Smith 
: Absolutely. 
CLARE CURRAN 
: I tell the member that this bill destroys confidence as have all the bills that have gone through the House in the last week. The repeal of the legislation requiring oil companies to mix petrol and diesel with biofuel undermines confidence in new industry the 90-day bill undermines confidence amongst workers the education bill undermines confidence amongst teachers and children and now this bill undermines confidence in New Zealand’s commitment to addressing climate change. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I am sure my colleague Clare Curran will be able to take another call and carry on with her excellent speech. 
I refer us back to Part 1 of the Electricity (Renewable Preference) Repeal Bill. Part 1 repeals Part 6A of the Electricity Act 1992. I think it is worthwhile to take just a moment to reflect on the purpose of the part that we are repealing. The purpose of Part 6A is in part to implement a 10-year restriction on new baseload fossil-fuelled thermal electricity generation capacity except where an exemption is appropriate—for example to ensure security of supply. I find it difficult to understand why the National Government would want to repeal something like that. 
This restriction is part of a wider plan in respect of our sustainability that the Labour-led Government had been working on. Yesterday in the House we heard uncertainty as to whether the emissions trading scheme has been suspended or whether it is continuing in some other form. We also know that as part of our emissions trading scheme Labour and the Greens had agreed on an insulation package we had the biofuels obligation and we had brought through this renewable preference focus. That was Labour’s plan to help address our issues of sustainability—a long-term plan to start dealing with a long-term issue like climate change. In Part 1 of this bill we see “short-termism” whereby National says that it made a promise on this issue and it is going to go through with it. It is short-term logic and it does not follow through on the importance of the issue of climate change. National does not seem to have a plan. 
Earlier today we heard the Minister in the chair the Hon Gerry Brownlee say we just had to wait—that is what he told us. Well climate change is a pretty pressing issue. We need a plan and we need to know what is going on in terms of the National Government’s overall sustainability plan. How will it address those climate change issues? It is not acceptable for National to bring a bill to this House and say that it is getting rid of the renewable preference but that it does not know what else is happening. It does not know what the rest of the plan is. It is not even sure where we are going on the whole issue of sustainability. 
This is a reckless bill. It looks backwards. It takes us backwards. It is a nail in the coffin for New Zealand internationally. I have stood on the world stage and talked about New Zealand’s environmental record and I have been proud to do that. I was proud to do that under a National Government when I was working at the United Nations in New York because Simon Upton a former Minister for the Environment stood up for New Zealand. He stood up and said that New Zealand had a record that we could be proud of. He meant what he said when he talked about sustainability. 
The Labour Government came in and tried to carry that on. In Part 1 we see the repeal of one part—one aspect—of that attempt. It repeals a part of legislation that says that we will put a restriction on baseload fossil-fuelled thermal electricity generation. There are exemptions. There will be times when we will allow that to happen. But we want to send a signal out to the world to New Zealand and to the environment that we can work with renewable generation. Somehow or other National seems to be telling us that security of supply is incompatible with renewable generation. That seems to be what it is saying. But we have heard time and time again in this debate that that is not true. 
Hon David Parker 
: New Zealand used to be 90 percent renewable. 
GRANT ROBERTSON 
: That is right. New Zealand used to use 90 percent renewable energy. We are working away with 1400 megawatts of new generation projects coming on stream over the next 4 years. David Parker has outlined those projects; they are meeting the demand that we need to meet. 
Why does National want to repeal Part 6A? This repeal bill sends a signal to the rest of the world that we do not take seriously our sustainability challenge. The fundamental thing that New Zealand needs to do is show the world that we are taking the sustainability challenge seriously. It is not just about the environment or the future that we want to leave for the next generations; it is about our economy because it is about how we are seen in the world. We have already seen this with the statements Gordon Brown has made and his policy—which we are looking at—that could restrict people travelling to New Zealand if cost is a factor for them. Now we will see it again and again. 
The National Government has to wake up and realise that our reputation internationally is important not just for foreign affairs officials but also for our economy and for getting our goods sold overseas. The image we are sending with this bill is that we do not want to go towards a renewable future. Everyone else in the world might be going towards a renewable future but we do not want to! We want to go backwards to more coal and more gas rather than to look ahead to our natural advantages. Part 1 repeals one of the most significant things that we could do. It is a key part of the picture yet National has decided it wants to go backwards. 
Hon Dr Nick Smith 
: You’ve gone backwards for 9 years. 
GRANT ROBERTSON 
: We have not gone backwards for 9 years. 
Hon STEVE CHADWICK (Labour) 
: 
 I rise to take a call to build on the previous speaker’s comments about New Zealand’s international reputation. I have just returned from a climate change conference in Viet Nam that I attended with Dr Paul Hutchison and Sue Kedgley where we hung our heads down in shame. This conference was about climate change and the effect on population and population demographics. We used to be looked at in this forum as leaders in the world. 
Hon Dr Nick Smith 
: Absolute rubbish! 
Hon STEVE CHADWICK 
: And I will build on another conference I went to in Chile where I was asked with Ministers of Conservation—I say to Dr Nick Smith—to also give a paper on conservation and climate change. People at these conferences were looking to New Zealand to be a leader and to take keys and intuition from the way that New Zealand was going. 
I think that the trifecta the Government has plonked in the House under urgency brings shame on this Government. What did we see? We saw the gutting of the emissions trading scheme and that Dr Paul Hutchison now has to chair a select committee—with no gender perspective on the terms of reference I note. Women are hugely affected by the effects of climate change and we will make sure that we fix that. The emissions trading scheme special select committee is going to waggle on for some time giving no clues to the market about the investment signals that the previous Minister of Energy had been very clear on with our energy strategy stating that we would have 20 percent renewable generation by 2025. 
Hon David Parker 
: 90 percent. 
Hon STEVE CHADWICK 
: It is 90 percent. What a line in the sand that was. 
Hon Dr Nick Smith 
: 20 percent! That’s about right. That’s where it was heading. 
Hon STEVE CHADWICK 
: I will correct that I say to Dr Smith. It was 90 percent renewable generation by 2025. What a wonderful signal that was by the previous Minister of Energy. We also had the biofuels target. Shame on the Government now for the damage it has done to the biofuels obligation and to investor signals in what was a lofty goal for New Zealand. 
Now tonight there is the trifecta: this ridiculous Electricity (Renewable Preference) Repeal Bill. I am ashamed that after all the work we did led by the then Prime Minister Helen Clark we are now looking at a cumulative effect that is not going to let New Zealand hold up its head in international fora and say we are leaders on climate change. 
So what do we have? We now have a Prime Minister who has also made himself—and I thought it was very clever at the time—the Minister of Tourism. As well as looking at footballs for the World Cup he will also go around the world as Minister of Tourism touting the brand of clean green New Zealand. I think our Prime Minister needs to look very closely at this trifecta which signals a slipping and sliding back to the times before Labour came into Government in 1999. It is a sad day for us. 
I think the other thing about all of these signals is that these are deemed to be “urgent” measures—lifting a 10-year moratorium on baseload thermal energy. It is absolute rubbish that we have to be doing this in urgency and that it will not go to a select committee to allow the Major Energy Users Group the small energy-developers and the consumers to come before that select committee to give their view. I am ashamed of the process that this legislation is going through now; it is absolutely shaming. The country is noticing it and soon it will wake up to realise that this was the genesis—as Jeanette Fitzsimons said—for allowing the production at e3p and Kaipara. Of course this was what this was all about—opening up the way to gas— 
Hon Dr Nick Smith 
: e3p at Kaipara? 
Hon STEVE CHADWICK 
: —no at Huntly—and opening up other thermal baseload generation. The spokesperson when he was in Opposition kept asking David Parker why he was so risk-averse about lifting the 10-year ban. I also want to mention the first role of the Minister of Energy which was to come into what was my old electorate which I love dearly to open the Kawerau power station. And how did that happen for Mighty River? 
NATHAN GUY (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
JACINDA ARDERN (Labour) 
: 
 I am grateful for the opportunity to speak on the Electricity (Renewable Preference) Repeal Bill. Another hour passes and another Act is repealed by the National Government another round of select committee hearings is bypassed and another regulatory impact statement fails to be produced to this House. 
I find that part quite amazing I have to say given the rhetoric from that side of the Chamber about the importance of regulatory impact statements. 
Hon Member 
: They have a Minister. 
JACINDA ARDERN 
: Absolutely! Those members think the issue is so important that they have a Minister for Regulatory Reform yet the House has not seen one adequate regulatory impact statement. 
We are speaking on Part 1 which repeals Part 6A of the Electricity Act 1992. Given the brevity of the bill before us for the edification of members I would like to read from section 62A which gives the purpose of Part 6A: “The purpose of this Part is to reduce the impact of fossil-fuelled thermal electricity generation on climate change by creating a preference for renewable electricity generation through the implementation of a 10-year restriction”—I highlight that part for the edification of members—“on new baseload fossil-fuelled thermal electricity generation capacity except when an exemption is appropriate (for example to ensure security of supply).” That last part is particularly interesting and I would like to dwell on it if I may. 
Moana Mackey 
: You may. 
Hon Steve Chadwick 
: Yes. 
JACINDA ARDERN 
: I will; thank you colleagues. We have heard that one of the reasons for the existence of this bill is to give that all-important security of supply. No one is doubting the importance of security of supply. That is why Labour legislated for it; that is why we pointed out its importance in the purpose section of Part 6A of the Act. Now we see it being used as an excuse for Part 6A in its entirety to be repealed. I see that the Minister in the chair Gerry Brownlee has a picture book in front of him at the moment so perhaps he is not concentrating fully on the happenings of the Committee. I have a question for him: what is the point? If this bill is all about security of supply and Labour has already set out provisions for that what is the point? In fact the Minister has heard speakers on this side of the Chamber point out that plenty of new generation is coming on stream over the next 4 years. In fact we need much less generation than we have coming on stream. We are prepared so what is the point? 
All I see on that side of the Chamber is a complete lack of aspiration. I know that National members would like to patent that word. It is their favourite. It is the word of the hour: “We are going to turbocharge aspiration.” In fact as far as I can see turbocharging aspiration is code for ramming legislation through the House. Their turbocharged aspiration has brought us the repeal of Labour’s biofuels legislation and now the repeal of Part 6A of the Act. What does this tell us? If we might actually have to build a new industry we might actually have to bring forward entrepreneurial Kiwis to create jobs and we might actually have to be a bit creative in the work we do the National Government believes that it is too hard and we should get rid of it. That is what aspiration means to the National Government and that is all that we have seen. 
There is a lack of aspiration for our environment and that is the critical part for me. I am standing here proudly as a child of the 1980s but with some shame at what members from the 1970s 1960s 1950s and beyond have brought forward for us. What does this bill say to the next generation of Kiwis? 
Hon Dr Nick Smith 
: Oh! 
JACINDA ARDERN 
: Where is the can-do attitude I ask Dr Smith. Where is the can-do attitude? I can tell members that the Labour Government had aspiration for this country. We saw what was possible we combined it with our absolute dedication and commitment to improving the environment of New Zealand and we put forward legislation which the National Government is now busily repealing. I would also add—to look forward a little—that I know that the National Government is also very keen to get to work on the Resource Management Act. 
PAUL QUINN (National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Part 1 agreed to. 
Part 2 Consequential amendments to principal Act 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I will talk to Part 2 which is a relatively small part with some consequential amendments to other parts of the principal Act beyond the repealing of Part 3. I want to address my remarks on this part to rebut some of the logic—actually logic is far too strong a word—some of the commentary that the Hon Dr Nick Smith has made throughout the debate in the first reading and in the second reading. Actually he was active during the biofuels bill too but I should not talk about that at length when we are dealing with the Committee stage of this. He was active also last week when we were setting up a select committee to look into climate change. But I really should not talk about that at great length because we must contain ourselves to the purposes of the Committee stage. But the consistent theme has been in the words of the Hon Dr Nick Smith— 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. We are debating Part 2 of the Electricity (Renewable Preference) Repeal Bill. This part deals with only the consequential amendments such as the powers of the Electricity Commission to investigate issues in respect of the electricity renewable preference provisions that are being repealed. I think you should require the member to speak on that part. 
The CHAIRPERSON (Eric Roy) 
: That is right; you have made a fair point. Thank you. I think the member on his feet knows that. I just say that when it comes to closures repetition and relevance are a matter that the Chair considers. 
Hon PETE HODGSON 
: I thank the Hon Dr Nick Smith for repeating the very words I had used. This is like being in an echo chamber not in the Chamber of the House of Representatives. The point I was about to make and now will make which is relevant to this part because this part makes some consequential amendments and therefore makes the abolition of the energy renewable preference bill complete—without it it would not be complete—is that the Hon Dr Nick Smith has throughout this debate said for a day and a half now that Labour’s record on climate change was shocking and that Labour’s record on building fossil-fuelled plants has been shocking. He has been listing figures and listing power stations. He has been not taking his tablets and all the while he has been voting against any improvement. 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. You can always tell when Labour members are in trouble with the debate; they get personal and nasty. I do not think that those sorts of statements do anything for the Committee and I take offence. 
The CHAIRPERSON (Eric Roy) 
: Let me just say that we are going to have to change our habits in terms of points of order. I will make a general point first then I will respond. Members raising points of order should adhere to what the Standing Orders and Speakers’ rulings say—that they should be terse. The presiding officers will not tolerate barbs innuendos or imputations in points of order. We will deal with points of order in a fair and just way in the House in general. The member has just offended in that way—not in a particularly bad way but it is symptomatic of what is going on. I want to make that point very clear. We are going to change our habits as a House about that. That is the first thing. The second thing is that the member did breach what is accepted. 
Hon PETE HODGSON 
: Very good Mr Chairman. Dr Nick Smith has all this while said that the progress this country has made— 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. I think the statement that was made by Mr Hodgson was offensive and I take offence. I think the member should be required to withdraw and apologise Mr Chairman. 
The CHAIRPERSON (Eric Roy) 
: I ask the member to withdraw and apologise. 
Hon PETE HODGSON 
: I withdraw and apologise. Right through the debate the Hon Dr Nick Smith has railed against this country’s poor record but voted to make it worse. I want him to get to his feet to explain what is logical about a member apparently caring a great deal about our progress on climate change and apparently caring a great deal about emissions that occur in our electricity sector but then voting to make them worse—voting to get rid of biofuels and in the case of this legislation and this part which completes the abolition of the moratorium voting to allow the building of baseload fossil-fuelled generation. He speaks in one direction and votes in another. I want the honourable gentleman to take the call and explain himself because he has not got any logic to his logic. The gentleman says one thing and votes in the other direction. I am getting sick of it. I reckon— 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. We are meant to be debating Part 2. It is a very narrow part and it changes very narrowly the investigative powers of the Electricity Commission. The Standing Order around the Committee stage debate is that the member needs to narrowly reflect on those issues in Part 2. I ask that he be required to comply with the Standing Orders. 
The CHAIRPERSON (Eric Roy) 
: I uphold that point of order. 
Hon PETE HODGSON 
: Very good Mr Chairperson. I was simply making the point that Part 2 completes the abolition of the moratorium. Therefore by completing the abolition of the moratorium Part 2 allows the moratorium to be lifted; therefore it being lifted allows for the development of further fossil-fuelled electricity generation and therefore is not consistent with anyone who argues against that. 
The most vociferous arguments against those things have come from the Hon Dr Nick Smith who none the less votes in the other direction. I do not understand it and there are a bunch of words I cannot use to describe it so I shall not. But I do think that in the course of this part of the Committee stage of the bill the Hon Dr Nick Smith Minister for the Environment should get on his pins and describe what it is about his contribution that is remotely logical. So far it appears to me to be bereft of logic. The good gentleman has got himself a PhD from somewhere and therefore has to have a couple of brains to rub together and I would like to see that exposed. I would like to see the gentleman get to his feet and see whether he can make something resembling a coherent argument in favour of fewer emissions but somehow against a moratorium that would stop them. Thank you Mr Chairperson. 
Hon DAVID PARKER (Labour) 
: 
 Part 2 amends the principal legislation by removing the inquiry powers of the Electricity Commission. I will discuss those inquiry powers and describe to the Committee how those powers currently work under the existing legislation and why it is important that they not be repealed. One reason I want to explore this is that when the existing legislation was passed one of the principal objections raised in the debate by National Party members was that essentially the decision as to whether an exemption should be given from the restrictions was a ministerial discretion which effectively enabled the future shape of the electricity market to be determined by ministerial fiat. That was never the case and it is interesting that in this debate National members are no longer using that justification; they have moved to different grounds. I make that point because it shows that the underlying purpose now is political not principled. 
The existing legislation states that the Minister of Energy can grant exemptions in a number of categories and that it is for the Electricity Commission to do an inquiry on an application by someone who wants to come within the ambit of one of those exemptions in order to see whether the exemption should be granted. The commission then makes a recommendation to the Minister of Energy and the Minister has the authority to do only one of two things: the Minister can either accept the recommendation or reject the recommendation. The Minister of Energy cannot replace the recommendation of the commission with some different decision. The Minister cannot replace the recommendation with his or her own decision but can accept or reject the recommendation. 
The exceptions that are allowed for under the legislation which the Electricity Commission has the duty to consider are set out in section 62G in Part 6A of the Electricity Act. The first is that the Minister of Energy can grant an exemption—again on the recommendation of the Electricity Commission—if the specified generation plant will be non-baseload plant that will have an average load factor less than a prescribed limit will emit greenhouse gases less than a prescribed limit or will have a start-up time of less than a prescribed limit. 
The second exemption is where there is a combination of renewable or other non - fossil-fuelled plant together with fossil fuels. That cogeneration process can be a sensible way to generate electricity. 
The third exemption is one that I have mentioned in previous contributions in response to the National Government’s assertion that the country could not build new more efficient thermal plant to retire less efficient coal plant for example. That category exemption is found in section 62G(1)(e). It states that the specified generation plant that could be allowed will be connected and operated in circumstances where an existing thermal electricity generation plant will be retired in whole or in part and that the specified generation plant together with any part of the existing thermal electricity generation plant that is not retired will be operated in a manner that will reduce greenhouse gas emissions by at least 20 percent based on emissions of the existing thermal electricity generation plant and the projected emissions assessed in the prescribed manner. It also requires the Electricity Commission not to reduce the security of supply. 
So what would happen in practice under the legislation as it stands will not be able to happen if Part 2 of this bill passes in its current form—that is the Electricity Commission will lose its ability to make that inquiry. If as National members say they are concerned about being able to replace inefficient thermal plant with efficient thermal plant then the Electricity Commission is the body that would listen to those applications and it would have the expertise to assess the security requirements of the system. For example we do not want to lose the whole of the Huntly power station to some interruptible gas-peaking plant because that would not be good for the security of supply but we might be willing to have that replaced by a more fuel-efficient gas plant that has lower emissions than a gas-fired plant. It would be for the Electricity Commission— 
NATHAN GUY (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I just want to build on the comments of my colleague David Parker about the powers of the Electricity Commission which are covered under Part 2 of the bill because as was kindly pointed out to us by members opposite we are debating the investigation powers of the commission which are being removed as a consequence of what we have already done with Part 1. Really we have to ask what the commission would be investigating. We have already heard from David Parker that some of that is around the question of exemptions; and in listening to the debate it seems to me that a number of members opposite do not seem to realise that there was an exemption part of the Act. It does not even seem as though they want to know that. The very reason it was there was to allow as we know the Electricity Commission to investigate situations where there was a more efficient thermal option that could be brought on board. That was an important part of the Act because although we wanted to ensure that renewable generation was preferenced and we wanted to make sure that New Zealand goes forward into the future with renewable energy we also wanted to make sure that we continued to develop efficient options where they are. So that is what the commission would have been investigating but it will not be able to do that now as we go to repeal that legislation. 
What else would the commission be investigating? It would potentially be investigating other areas where people perhaps were going to breach the moratorium. We do not know that there was a lot of that going on because what we do know is that there was a large amount of renewable generation coming on stream—1400 megawatts. So it would have been unlikely that the Electricity Commission would have been investigating this kind of breach of the moratorium but it is possible. Once again we will not be going down that path because we are here trying to repeal that under Part 2. 
Another part of what the Electricity Commission would have been looking into around the grounds terms and conditions of exemption was under section 62H of the Act. The Minister of Energy would have had to specify in the exemption the ground or the purpose under which the exemption was going to be granted. It then went on to state what conditions would be imposed upon that and if the person was granted an exemption he or she then had to specify the kind of generation plant that would be operated and how it fitted with the rest of the Act. So that is the kind of work that the Electricity Commission would have been investigating. It was an important thing. But a really critical part that we have not discussed yet is section 62I which is actually the public consultation process. 
Moana Mackey 
: National doesn’t believe in that. 
GRANT ROBERTSON 
: I know that National would find that a difficult subject to discuss because we have seen throughout this week that public consultation is not something it is interested in but that was the role that the Electricity Commission was going to do—to make sure the voice of the public would be heard if there was a case for an exemption or indeed if there was a case for someone being prosecuted. 
Section 62I of the Electricity Act states: “Before making a recommendation to the Minister of Energy to grant an exemption the Commission must—(a) publish its intention to do so … and (b) give a reasonable opportunity to those persons to give those views; and (c) have regard to those views.” So that is what the commission was going to be doing. It was going to be operating a public forum in which people could put forward their views. That is a very very good thing and it is not something we have had an opportunity to do under this bill. 
This bill makes a significant change to the way we look at our sustainability challenge going forward and there is no opportunity for public consultation. Obviously the Electricity Commission had that role and that is now gone. The select committee would have been a great venue at which to have a debate about the mixture of New Zealand’s energy generation that we want going forward. But no National has come to this Parliament for the past 2 weeks to show us that it does not really want to listen to the public’s concerns. It does not want a body like the Electricity Commission to have the opportunity to hear public concerns. 
It simply wants to ride roughshod over New Zealand’s global and local interests. It is sort of like a perverse version of the “think global act local” approach that the National Government is taking. On a global level it wants to take us backwards by ensuring that we will not only be made a laughing stock on the world stage but also be told here in New Zealand that we will not look forward and we will not try to protect our environment. What we see in Part 2 is the enabling of the repeal of an important part of the make-up of our sustainability going forward. We want renewable energy because it is good for the environment. That is also good for jobs and employment and we can see that right around the world—in the European Union and in Germany in particular where a lot of jobs have been created in the renewable energy industry. That is not what the National Government wants. It does not want to see any jobs created in this area; it wants to take us backwards to a time that realistically is not where we want to go. 
MICHAEL WOODHOUSE (National) 
: 
 I move  
That the question be now put 
. 
Hon SHANE JONES (Labour) 
: 
 I will take a short call—a skimpy small contribution inversely related to the problems that will follow—on Part 2. I follow on from what Mr Robertson has said. The stripping away of these institutional powers worsens the capacity for ordinary garden-variety Kiwis. Whether they be firms and users of energy investors or communities they will have their rights to engage in participatory democracy stripped away from them. 
Hon Gerry Brownlee 
: This is very good. 
Hon SHANE JONES 
: I say to Mr Brownlee that the bill is inversely related to a certain girth but I will say more on that at another time. It is a very mean-spirited approach to people having a stake an opportunity to participate in and influence the outcome of investments in the energy sector. It might suit some narrow sectional interests that have been driving for a whole host of reasons and for a long time to change the character of energy investment and the range of sources from which we derive energy or the resources we use to create energy. In that sense it is a very blinkered approach. Others have spoken about how it will have ruinous consequences on our international reputation. 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. We are meant to be debating Part 2 of the Electricity (Renewable Preference) Repeal Bill. It is a very narrow part dealing only with the deletion of the words “Commission” from the investigating powers of the Electricity Commission. I have listened carefully to the member. He has been well outside the Standing Orders and you should require him to speak to the part. 
Hon SHANE JONES 
: Speaking to the point of order I say that it is quite simple. This strips away institutional powers and it will have an effect in terms of how the full legislation is implemented. 
The CHAIRPERSON (Eric Roy) 
: No the member is getting into the debate. Several cautions have been given to Committee members to stay on target to stay on message and to keep within the realms of Part 2. I invite the member to continue. 
Hon SHANE JONES 
: For fear of spurring another avian contribution from Dr Smith I say fair enough. Dr Smith may laugh but as I have said before there is a famous Maori proverb: “He pipiwharauroa atu i konei ki kona—when the cuckoo leaves one nest it goes over there still a cuckoo so kaua koe e katakata. [ 
do not laugh 
] 
To go back to Part 2 I say that it is an egregious slur that Dr Smith puts upon the ability of a parliamentarian to contribute to such an important matter. National has brought forth a set of ideas and is hiding them as narrow technical amendments. But in actual fact it is a circuitous attempt to erode our ability to act in a sustainable and very wise fashion and uphold our international integrity in the eyes of our competitors. Also it worsens the prospects of moving towards a broad sustainable approach in relation to energy. This is a very worrisome negative and mean-spirited attempt to strip away a fantastic set of changes that was brought forward by my colleague here. The Government refused to allow them—[ 
Interruption 
] Ah there is noise from the cuckoo’s nest and it is now being joined by chirps and trills from the back of the Chamber. Of course those members fear the accuracy of what we are saying. One cannot reduce people’s rights to participate and one cannot force industry to pay higher costs as a consequence of stripping away the institution’s ability to investigate and to test the worthiness of various energy proposals. For that reason this will be only a short contribution to the statutory landscape until such time power returns to where it belongs. Kia ora tatou katoa. 
TIM MACINDOE (National—Hamilton West) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Part 2 agreed to. 
Clauses 1 to 3 
Hon DAVID PARKER (Labour) 
: 
 I rise to take a call in the debate on clauses 1 2 and 3. I focus for a start on the date that this legislation comes into force which is the day after the date on which the bill receives the Royal assent. We can take it from that that the Government intends having passed this legislation in urgency to take it as soon as it can to the Governor-General to get its Royal assent and thereafter it intends this legislation to take effect. 
I ask the Minister what the rush is and why the Government thinks there is a need to repeal the existing legislation—which is the effect of this bill—so soon when it does not yet have the price of carbon in the economy that it says it will rely upon as the alternative in order to discourage thermal-based electricity and instead prefer renewable sources of electricity. We have heard from the National Government that it has adopted the Labour Government target of 90 percent renewable generation by 2025. But in order for there to be a meaningful prospect of that target being achieved we have to build renewable generation in the future rather than more thermal generation and that of course was what the existing legislation did. It placed restrictions on additional thermal generation thereby encouraging New Zealand to go for renewable generation. 
The great thing about renewable generators as we all know is that once we have built them the fuel is free. We do not have to buy more gas and more coal for ever. But when Government members spoke during earlier stages in this debate they said that they would achieve that effect through having a price on carbon. But of course we do not yet have a price on carbon in the electricity sector; we have a price of carbon in the forestry sector only and indeed that has already been undermined by the National Government saying that it will suspend the emissions trading scheme. 
We have a select committee being set up by a motion and taken through this Parliament by the Leader of the House who is also the Minister of Energy and Resources. This new select committee has been created to look at amongst other things whether we should have something other than an emissions trading scheme or whether we should perhaps have a carbon tax. 
Hon Shane Jones 
: Rodney Hide made them do it. 
Hon DAVID PARKER 
: Rodney Hide made them do it; that is right. Amongst other things those members were weak and they thought that they should open up the ambit and extend the inquiry into matters relating to whether climate change is real. In the meantime we do not have a price on carbon. We have uncertainty as to when we will have a price on carbon whether we will have a price on carbon and whether the price of carbon will be anything near the real market price of carbon or will be at a low figure such as the figure proposed by the Business Roundtable which would have little environmental effect and would not act to discourage more fossil-fuelled thermal electricity in any meaningful way. 
I ask the Minister to take a call and explain why it is necessary to have such an early date for this legislation to come into effect and to say whether he has considered having an assent date that is after the date when the select committee reports back on whether we should have an emissions trading scheme or after the date on which we have certainty as to whether we will have a market price on carbon. As the Minister has said in his remarks at an earlier stage he and his Government are relying on that price of carbon to discourage more fossil fuel - based generation and to instead have renewable generation. I just cannot understand unless I have some explanation from the Minister how it can be that we can rely on a price of carbon that does not yet exist. 
This also links back to the date on which the Electricity Commission loses its investigatory powers. Allied to those investigatory powers is the public right of participation in these decisions because under the current law the commission has to publish notice of its intention to do something and to give a reasonable opportunity to let people express their views and then it must have regard to those views. It seems inappropriate that those rights are being taken away. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 Right through this debate there has been one argument that the National Government could have put in favour of the Electricity (Renewable Preference) Repeal Bill but has not. The idea came up in this stage of the debate: the former Minister of Energy the Hon David Parker put his finger on it. One way of describing the argument that the Government should have come up with in support of this legislation but has failed to goes like this: why would one bother to have a moratorium on fossil fuel generation when the emissions trading scheme is coming? Why would one do that when the electricity system is to face a marginal charge for carbon dioxide? What would be the point of having a moratorium in addition to that? 
Right through this debate the National Government has not adduced that argument; it has simply not thought it through. If I were in the Government I would argue in favour of the legislation that is before members by saying that it is belt and braces. Why would one need both? When it comes to the commencement clause we need the belt at one point and braces thereafter—or if you like braces at one point and the belt thereafter. Sooner or later the stationary engine sector will come into the emissions trading scheme; it is scheduled to come in on— 
Hon David Parker 
: 2010. 
Hon PETE HODGSON 
: —1 January 2010. That is 12½ months from now. Maybe the commencement date should be 1 January 2010 or—just to be a little more careful because a high-level select committee is going on and some people in this Chamber think that that means there is a lot of time to do not very much at all—we could have a commencement date of “1 January 2010 or at the inclusion of the stationary engine sector into the emissions trading scheme whichever comes later”. One could do it that way. 
I wonder whether the Minister would like to take a call and pick up the thoroughly good bit of logic put forward by my colleague the Hon David Parker. I wonder whether he would like to take a bit of help from the Opposition—which has finally come up with a good reason why one might want this legislation—and use the belt and braces argument. He could use the commencement clause to ensure that we have one and then the other but never both. I wonder whether the Minister is tempted to rise from the chair and take a call to explain whether he thinks that logic has any fault in it. 
It seems to me that there is no intellectual grunt behind the Government’s position. We are offering it some. I will do so again. One does not need both belt and braces. Let us have the belt for the moment and braces thereafter. Why do we not do that through the commencement clause? Why cannot the commencement clause read: “will come into law on 1 January 2010 or at the arrival of the stationary engine sector into the emissions trading scheme whichever comes later.”? Then if the Government needs a bit of extra time with its high-level select committee nothing is lost—the moratorium remains in place until it is replaced by the marginal cost of electricity generation inclusive of the cost of carbon dioxide. 
There is a certain magic to that idea—certainly we think there is—and we wonder whether the Minister if he can stop yawning long enough would like to get to his feet and tell us what he thinks might be wrong with it. Did he get it or shall I go though it a third time? 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is appropriate to be debating the title clause of the Electricity (Renewable Preference) Repeal Bill. It is hard to understand how anybody could not have a preference for renewable energy as opposed to the counterfactual—that is energy that is not renewable and energy that will not be available for our grandchildren. 
I am not a paid-up member of the Green Party but I agree with its members that we face peak oil prices at some point. Even foreshadowing constraint we live in a time when oil prices have reached US$150 a barrel. How long will it be before it is US$200 a barrel or US$400 a barrel? The long-run average trend is up and against that background that will of course drag up the price of other fossil fuels such as coal and other substitutes— 
Hon David Parker 
: Gas. 
Hon DAVID CUNLIFFE 
: Gas. In that kind of world what is really important is that New Zealand as an energy-dependent country is well stocked with alternative energy sources. So it is absolutely vital that we create the incentives now because of the long lead times that are required to bring in this production. 
It is also the case that because of the good work of the Hon David Parker and the outgoing Government there are enough megawatts of capacity and renewable energy in store in the next few years to provide for the growth in baseload and peaking demand. That means that the renewable energy preference policy is working as it was planned and foreseen to do. But it worked only because the Labour Government had the fortitude to send a clear signal to the market and the market cannot internalise that which the participants do not personally bear. The market cannot internalise the benefit to society of having a long-term plan for energy that is sustainable and protects our security. The market can only take to book the benefits that are relevant to each individual company. 
Therefore it follows that clear Government leadership is required and therefore in a fossil fuel - constrained world it follows that that policy was good which brings us to the reason why we are here. Why on earth would we do this? Why on earth would we remove a preference that makes all the sense in the world? Nick Smith is smirking. I wonder why Dr Smith is smirking. He has a PhD and he should be able to work out that this legislation is a giant act of shooting oneself in the fossil fuel foot. 
This policy does not actually have any relevance to the language in the explanatory note of the bill which conveys that the legislation is somehow related to the emissions trading scheme. Let us just stand back and think for a second about why we have an emissions trading scheme. The emissions trading scheme allows our economy to adjust at a least-cost price path for any given level of carbon emission constraint. So at whatever level at which the Government would like to see us pumping soot into the atmosphere—whatever level Rodney Hide thinks would be OK—the cost of adjustment will be lower under tradable emissions. David Carter may laugh. The member represents the agricultural community I believe. 
Hon Steve Chadwick 
: I raise a point of order Mr Chairperson. I noted that the Minister in the chair David Carter was very keen to take a call as he interjected on the previous speaker. We are very happy for him to take a call. We note that he has not yet done so in the Committee stage. 
The CHAIRPERSON (Hon Rick Barker) 
: That is not a point of order; the member knows that. I would remind the Minister that it is accepted practice not to interject from the Minister’s chair because he or she has access to a live microphone. I ask the Minister to restrain himself. 
Hon DAVID CUNLIFFE 
: It is therefore very hard to imagine why the National Party in Government would want to impose change on New Zealand that at any given level of emission reduction would cost our economy more when tomorrow it will announce significant increases to Government debt a forecast track for higher unemployment a forecast track for more difficult— 
Hon Dr Nick Smith 
: That’s your legacy. 
Hon DAVID CUNLIFFE 
: No no. [ 
Interruption 
] I raise a point of order Mr Chairperson. You are doing a great job as the Chair. I do not believe that anything the previous Government has done is “your” legacy. 
The CHAIRPERSON (Hon Rick Barker) 
: I respond to the member by saying that that is not a point of order because the interjector does not have the call. It is the speaker with the call who should not bring the Chair into the debate. The only reason that that interjector is now in the debate is that the member has made mention of him. Had the member ignored the interjection the person would not be in the record. The member has 59 seconds to continue. 
Hon DAVID CUNLIFFE 
: Is it not interesting that that member is still smirking? He is smirking about an international environment that is getting worse by the day. I understand the latest projections are for Chinese growth in the coming year to fall as low as 2 percent. And David Carter smirks. That member purports to represent agricultural producers whose livelihoods will be negatively affected. 
I ask Mr Carter whether this is just the arrogance of new-found office—is that what it is about? He is a member from a sector that is characterised by high emissions of methane of nitrous oxide and of other greenhouse gases that will be hugely affected if this bill goes through. 
Dr Paul Hutchison 
: Have you got any solutions? 
Hon DAVID CUNLIFFE 
: Yes we have solutions. One of those solutions is to ensure that we are able to have renewable energy flows which means that we can adjust with the least disruption to our economy. 
Hon DAVID CARTER (Minister of Agriculture) 
: 
 I move  
That the question be now put 
. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 It is somewhat ironic to be rising to speak on the Electricity (Renewable Preference) Repeal Bill when we have had such a lack of energy from the Minister in charge of it Gerry Brownlee. In fact I do not think he has taken a single call on this bill which is in his name—not a single call to speak on this bill. He got an exemption! Do members think he would be eligible for an exemption— 
Hon Member 
: Thermal generation! 
CHRIS HIPKINS 
: —for thermal generation? 
I am very happy to rise and speak on the title clause of this bill and to offer other potential titles. I thought maybe we could call it the “Climate Change Denial Bill”. But then I thought maybe we could call it the “Climate Change Denial Bill No. 2”. 
Moana Mackey 
: Or No. 3. 
CHRIS HIPKINS 
: Maybe even No. 3. The bill that we were debating immediately before this one the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill would be “Climate Change Denial Bill No. 1”; this bill would be “Climate Change Denial Bill No. 2”. 
I am a bit confused as to where Government members stand on climate change. I know that they are taking a balanced approach: on one day they say it is a hoax and on another day they say that of course they have always believed in climate change. Then they seem to come back again and say that it is a hoax. So I am a bit confused and I imagine that anybody listening at home would be a little bit confused as to the Government’s actual views on climate change. 
I notice that the Minister for the Environment Nick Smith is suddenly very quiet. Clearly he has been railroaded by the other members of his party. Maybe that is another potential title for the bill: it could be the “What Happened to the Bluegreens Bill”. 
Hon Dr Nick Smith 
: It was in the Bluegreens policy. 
CHRIS HIPKINS 
: Was it in the Bluegreens policy? 
Hon Dr Nick Smith 
: Yes it was. 
CHRIS HIPKINS 
: Is that right? So how is that possibly—in any way shape or form—green? 
Hon Member 
: It’s blue. 
CHRIS HIPKINS 
: It is blue—it is certainly very blue—but I am not sure where the green bit comes in when those members are saying that they do not really like renewable energy and they do not really think it is all that important. It is certainly not a high priority for this Government to make renewable energy important. This is the second bill in a row where we are debating whether to wind back the clock on renewable energy. That is what National seems to think is one of its most important priorities immediately on becoming the Government. In fact it thinks it is so important that the public of New Zealand should not have their chance to have a say on its decisions at all. The Government just rams the bill through under urgency without anybody having a chance to have a say. 
We could call this the “Clean Green Image Revocation Bill” because that is actually what this is all about. 
Hon Dr Nick Smith 
: It was only ever an image. 
CHRIS HIPKINS 
: Dr Smith says that it was only ever an image so we were never a clean green country. The people of New Zealand who are very proud of our clean green image will be very very disappointed to hear that. They will be very very disappointed to hear that according to this new National Government we are not a clean green country at all. 
Hon David Parker 
: Aotearoa—the land of the long white cloud. 
CHRIS HIPKINS 
: That is right—the land of the long white cloud. It is not a clean green country any more and according to National it never was anyway. So let us not worry too much about that—let us not worry about that at all! 
We could call this the “Where Has the ACT Party Gone Bill”. This is yet another bill being passed that has no regulatory impact statement. How many bills have been passed that have no regulatory impact statements or very inadequate regulatory impact statements? I wonder whether we have a Minister for Regulatory Reform now and whether he has a view on the fact that there is no regulatory impact statement on this bill and that there has been a complete absence of any form of regulatory impact assessment on the legislation that is being rammed through. We could call this the “Where Did Think Big Go Bill”. Where did Think Big go? This is the “Think Big Legacy Bill” perhaps. 
Members opposite have been talking about increased power prices but we know that in most instances thermal generation is actually more expensive than renewable generation. Why on earth does this Government want to promote more thermal generation— 
Hon Dr Nick Smith 
: So why do you need to regulate it if it’s cheaper? 
CHRIS HIPKINS 
: Perhaps the Minister for the Environment needs a little lesson on how the electricity market actually works. Maybe he could talk to the Minister of Energy and Resources but I am not entirely sure that he understands it either. I am not entirely sure that he has quite got to grips with that. 
Moana Mackey 
: He hasn’t got to that page in his colouring book. 
CHRIS HIPKINS 
: That is right. The picture book has not quite got up to that part yet. The cartoonists cannot quite draw it fast enough for him to keep up. 
There are many other titles for this bill. 
Hon Member 
: Hoax. 
CHRIS HIPKINS 
: It could be the “Climate Change is a Hoax Bill”. 
Grant Robertson 
: A balanced approach. 
CHRIS HIPKINS 
: It could be the “Balanced Approach Bill”. Again we are coming back to the balanced approach. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Hon Rick Barker) 
: I will take one more call. 
MOANA MACKEY (Labour) 
: 
 I am happy to take a call on clauses 1 2 and 3 of the bill. Again I urge the Minister of Energy and Resources to get on his feet and actually respond to the criticisms and the questions of the Opposition. I hope the Minister is not running on renewable energy because if he is I am starting to think it ain’t so flash. Instead of sitting there and yawning looking through his picture book and doodling on the little bit of paper in front of him maybe he could take a call. 
I remind the Minister that we are in urgency because of his Government. He is giving us looks as though somehow it is our fault that he is forced to sit in the chair and answer questions. He is yawning like nothing else. I remind him that it was his Government that called urgency— 
Chris Tremain 
: And this is the title. 
MOANA MACKEY 
: —and is putting this bill through the House under urgency and that is the reason he is in the chair. Maybe we could call the bill I say to Mr Tremain the “Would It Not Be Wonderful If We Had a Minister in the Chair Who Took a Call Bill”. Maybe that would be a good title for this legislation. 
Once again we see legislation being rammed through Parliament under urgency that does not have to be rammed through Parliament under urgency. Maybe another title for this legislation could be the “We Desperately Need to Look Like We Are Doing Something in the 100 Days of Turbocharged Aspirational Action That We Promised the Electorate So We Are Forcing Through Legislation That Could Have Gone to a Select Committee Because We Have Decided That the Right of the People of New Zealand to Have Their Say at a Select Committee is Less Important Than Our Image That We Are Doing Something Bill”. I know that it is a long name but I think it fairly encompasses— 
Hon Member 
: It’s longer than the bill! 
MOANA MACKEY 
: —it is longer than the bill—what the bill does. I know that members on this side of the House have been making this point a lot during urgency. That is because 100 percent of the bills passed so far have been rammed through under urgency with no select committee process. That might be a record that the member is proud of and his little twitchy smile tells me that he is proud of it but the select committee process is important to this House. It is a way that we can make legislation better. There are concerns—[ 
Interruption 
] 
Hon Member 
: It protects them from themselves. 
MOANA MACKEY 
: It does. The Minister may think he knows everything but there may be some people out there in the country who know a little bit more about this and who want to have their say. People who are affected by this legislation might want to have their say and the Minister is denying them that right. I think that is appalling. 
Another title for this bill could be “Another Bad Day for the Planet Bill”. My colleague Steve Chadwick in her contribution earlier raised the fact that this bill is part of the trifecta of the urgency last week and this week. Mr Brownlee in either his first or his second reading speech—I cannot remember which one it was because they were so close together; they did not have the usual 6-month select committee process in between them and were about an hour apart—basically said that doing something will make things worse. That is also the argument we heard from Mr Brownlee on the biofuel legislation—that the fact that we had done something would make things worse than if we had done absolutely nothing and left it up to the market to decide everything. Well I say that it is shameful for a Government to absolve itself from responsibility like that. It may have no ideas on how to do anything but that does not mean it should be ramming through legislation under urgency to repeal legislation that was developed at a select committee and was passed through this House when it actually has no idea what it will do. 
This is yet another piece of legislation that puts the cart before the horse. The Minister is saying to the people of New Zealand: “Trust me; trust me that I will do what I said I would do and that I will implement all the things that I am promising to make this better.” Well why should we trust this Minister? He comes from a Government that in 2 weeks has made New Zealand a laughing stock on the world stage when it comes to climate change. 
Hon Dr Nick Smith 
: Rubbish! 
MOANA MACKEY 
: It is true I say to Dr Smith. The member probably has no concern about New Zealand being a laughing stock. He is probably quite used to it. But the fact is that is how we are now being seen. In 2 weeks the Government has undone a number of years’ worth of good work and for no reason. Today the Minister Gerry Brownlee—he might consider this a good day at the office—lost a businessman the $10 million that he had invested by repealing the biofuel obligation. The Minister in the chair might be proud of that—I do not know; I do not know what drives some of the people in the National Government—but one would think that it would be a bad thing. 
We could also describe this bill as incredibly bad for research and development in New Zealand. Last week we had the repeal of the research and development tax credit which would have helped some of our most innovative businesses some of which were doing work in this area. Mr Brownlee knocked them out last week. This week he is knocking out renewable energy. 
CHRIS TREMAIN (Junior Whip—National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Clause 3 agreed to. 
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 I move  
That the Electricity (Renewable Preference) Repeal Bill be now read a third time 
. What a demonstration of supreme arrogance we have seen from the Labour Opposition this evening. When the  
Hansard  
record is perused it will be extraordinary to note not only the weakness of Labour’s argument but also the fact that throughout the evening Labour members had to rely on a lot of personal attacks on colleagues of mine to get them through the argument. You see I suppose for all those new members who have come into the Labour Party there is no need to be apologetic about the debacle of the last election result. Of course they will be basking in the success that they have personally enjoyed. Unfortunately this debate confirms that the Labour Party is just as arrogant and out of touch today as it was on 7 November. 
The bill deals with this very very simple problem: for decades now we have seen a neglect of the generating assets of this country which has meant that New Zealand has put itself in the position of having a less than secure electricity system. If anyone on the other side of the House wishes to argue against that proposition I ask them to just look at the recent history. In 9 years the Labour Government managed to preside over four one-in-60-year events in the electricity sector. That is not something that just happened by coincidence. It is something that happened through that Government’s very much designed neglect. 
The thermal ban is very very symbolic. It was extraordinary to hear the previous Minister of Energy David Parker argue over and over that there was no need to repeal the legislation. In essence his argument was that it had no effect anyway. When we think about it we are left with the question about what exactly the plan was that that Minister was trying to follow. The reality is that over those 9 years not only did carbon dioxide emissions from the electricity generating sector climb considerably but so did the price that New Zealanders paid at a retail level for their electricity. The people Labour claims to be so concerned about—the poor and middle-income people who struggle to pay bills at times—saw a 63 percent increase in electricity prices over the time that Labour was presiding over this portfolio. 
More than that that figure represents a two and a half times inflation for each of those 9 years. That cannot be a record that any Government would be comfortable with. The question is why that occurred. Well it is simply that Labour was too harsh in the way in which it dealt with hydro-generating applications. They were knocked over one after the other if not by the resource management process then in many cases by the Minister of Energy or a Minister inside the Government. The consequential effects were that after the crisis of 2003 with great fanfare and a huge amount of trumpeting the Government backed the development of the e3p plant at Huntly by underwriting a gas contract for Genesis Energy. That is a thermal plant built by a Government that was so committed to renewable energy. As if that was not enough the Government decided it needed to back itself up by having an emergency capacity—a capacity that would produce up to 3 percent of New Zealand’s electricity needs at tight times. So what did Labour do? It built a 150 megawatt diesel-fired plant at Whirinaki. Those were Labour’s responses to the neglect that had gone on in those early years. 
Not only that Labour decided that it had better fix the organisation of the electricity industry by putting in another committee—another body another bureaucracy—the Electricity Commission. Over the first 5 years of its existence the Electricity Commission has taken some $230 million off New Zealanders. That is over and above the 63 percent price rises and over and above the two and a half times per year inflation rise. 
Hon David Parker 
: No it’s not! 
Hon GERRY BROWNLEE 
: I say to Mr Parker that it is. There we go: here is a man who has his head so far in the clouds that he does not even read his own electricity bills. That is a straight levy; it is $250 million taken straight out of the pockets of New Zealanders to set up a bureaucracy that has achieved what? We have gone from being a country that was able to generate its delivered electricity from 72 percent from renewable sources to a country that is now producing about 66 percent from renewable sources. It is a massive fall and all this has come from a party that all through this debate has said that it was all about renewable energy when it was in Government. I just find that totally totally—I cannot say the word that I would like to but I am incredulous. 
The member Shane Jones used a lot of “ous” words; he said this legislation was “ruinous” “egregious” and “circuitous”. Well I think many of those arguments could be mounted for the way the Opposition has handled this debate. Members opposite can screw up their faces all they like but they have an appalling record in this area. The barefaced facts are right there in front of them—72 percent down to 66 percent price rises of 63 percent $250 million out of the pockets of New Zealanders and this year 70 million - odd litres of diesel burnt in the Whirinaki emergency plant. That indicates that the party now in Opposition did not have a clue what it was doing in Government—not a clue. 
Hon Pete Hodgson 
: You’re going to get a history lesson in a minute Gerry. 
Hon GERRY BROWNLEE 
: Mr Hodgson—the man who presided over the establishment of the Electricity Commission the man who made the decision to underwrite the gas contract for Genesis and the man who made the decision to build Whirinaki—says he is going to stand up in a minute and give us a history lesson. Well history lessons are interesting but they make no difference to the consumers who have to pay the price. 
I tell the House that in advancing this bill we should put a bit of a rationale into the mix for decisions that will be made by those who invest in generation in this country. Why would we want someone who is proposing a wind project to have to go cap in hand to the Minister to ask whether he or she could put in some thermal generation to back up that particular project? It makes no sense. We think those organisations are capable of making those decisions themselves. 
There will be fuel substitution as a result of this legislation passing today. I suspect a greater number of renewable projects will be advanced because although the Government talks about them and they may well be consented very few are actually in the build stage. 
This legislation simply recognises the repeated comments put before the Finance and Expenditure Committee at the time it was first considered. Those comments essentially damned the proposition. It allows the industry itself to make rational decisions about how future investment is made and this country needs a heck of a lot more of that if we are to see some curb in the outrageous price path that is the legacy of the Labour Government. 
Hon DAVID PARKER (Labour) 
: 
 It will not be lost upon listeners to this debate and listeners to the debate in this House over the last 2 weeks that Gerry Brownlee who accused the Labour Opposition of arrogance for doing the job of the Opposition—in terms of trying to show the weaknesses in legislation and the poor processes—was the very member who under urgency has pushed through legislation that has not had the benefit of select committee consideration. That member sat in the chair like a stuffed dummy and did not take one call in the Committee on the Electricity (Renewable Preference) Repeal Bill—not one call. And we are accused of arrogance! He abused his position in the chair. He made the occasional interjection but did not take one call—not one call. His answer to curbing emissions growth in the electricity sector is to make it easier to build more fossil-fuelled thermal plants. When we boil it down we see that it is as simple as that. The Government is pretending to want 90 percent renewable generation but its answer is to make it easier to build more fossil-fuelled electricity plants. 
The Government claimed earlier that the legislation as it is currently drafted stops the retirement of inefficient thermal plants but that has been shown to be wrong. It is an issue that Mr Brownlee has not responded to either as the Minister in the chair or in his third reading speech. We showed that the legislation currently allows an exemption to the restrictions on new more efficient thermal electricity generation that retires old less efficient thermal electricity generation—a new gas-fired station to retire part of the coal-fired Huntly power station perhaps. But of course the ability to exert that sort of control is lost because of this repeal legislation and in future we will see more gas-fired power stations as well as coal-fired power stations. 
Mr Brownlee makes a lot of the fact that the e3p power station was built. Actually e3p was the only significant thermal power station added during the period of the Labour Government and it was necessary for the security of supply. That is why it was done. That is one of the reasons why we have security of supply exemptions under the legislation as it currently stands—they are occasionally necessary—but we have got to the point where it is less likely that they would be necessary in the future because we have brought forward wind power through good projects to reduce emissions. That makes it affordable and helps some of those projects through the consent process and in the last year we have built only renewable generation. Indeed against a background where we need to build additional capacity of about 150 megawatts a year to meet demand growth this year we have 426 megawatts of additional capacity under construction and it is all renewable electricity generation. 
So what we did turned the corner; it worked. We had geothermal and wind electricity generation coming forward and we also had some hydroelectricity generation coming forward. I am on record as saying that I do not think we should need much more hydroelectricity generation. It has too much of an adverse consequence on our rivers. But some hydroelectricity generation has been consented to and it will be built. That is another point where there is a lack of logic behind the Government’s plans and this has been disclosed by the Opposition speeches. Mr Brownlee has the temerity to call the Opposition arrogant because we were doing our job even though he did not take one call during his time in the chair. 
Mr Brownlee makes a lot of the Whirinaki power station. I think he referred to 70 million litres of fuel—I cannot recall the exact figure. It sounds like a big number and it is not small but he talks in litres. If we convert that figure to greenhouse gas emissions assuming 1 litre of fuel is roughly 1 kilogram of fuel we find that that is 70000 tonnes of carbon dioxide times two. So that is about 150000 tonnes of carbon dioxide. It is not insignificant but it is not enormous either. That is because although the Whirinaki power station has quite a capacity it does not run very much. It only runs about 1 percent of the time and when we need it we need it. We build thermal plants in that sort of situation rather than renewable plants because the capital costs are a lot lower and the running costs although they are higher are incurred only when we are really short and we need it for a short burst. 
This legislation is typical of the legislation that is now being promoted by the National Government. The Government says it wants to reduce emissions or to control emissions growth and it pretends that it wants to meet the goal of 90 percent renewable generation by 2025 but it will not take the steps that it needs to take in order to get there. National criticises any regulatory intervention saying that we should leave it all to market prices. It ignores the reality that in most of the market economies of the world there are regulatory interventions to lift the percentage of renewable electricity generation. The only real difference between New Zealand and Australia in that regard is that Australia is trying to lift from a very low percentage to something around 20 percent—I forget the exact number—and similar increases are being proposed in other countries. In New Zealand because we are already at around 66 percent to get to 90 percent we have to lift it by about 24 percent. So this regulatory intervention to lift it by 24 percent is not very different to the regulatory interventions taking place in other parts of the world. 
The last point I re-emphasise is that we cannot rely on a carbon price when we do not have a carbon price. How can we rely on a carbon price to stop new thermal electricity when we do not have one? How can you credibly stand up in this House and say that when you have a select committee set up to look at whether you should ever have a carbon price. We do not have one yet and the select committee will be considering whether we should ever have a carbon price or whether we should just adapt to climate change rather than trying to reduce emissions. How can you credibly say that you have a carbon price that will forestall extra thermal generation when the Government is not yet clear as to what the price of carbon will be? 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Please keep the Chair out of the debate. The member keeps referring to “you”. Please keep the Chair out of it. 
Hon DAVID PARKER 
: I am sorry Mr Assistant Speaker. 
The Government’s acolytes at the Business Roundtable—themselves fossils—are promoting fossil fuel use and a carbon tax and they say it should be $5 to $10 a tonne. We know that when push comes to shove they will be saying $5 a tonne. We know that $5 a tonne which is but 20 percent of the market price of carbon— 
Hon David Cunliffe 
: What’s the international market price? 
Hon DAVID PARKER 
: The international price is around $25 a tonne at the moment. Four-fifths of the cost would be left with taxpayers and the Government would expose the participants in the electricity market to only 20 percent of the cost. That $5 a tonne would not be sufficient to forestall investment in thermal generation. It just would not work. So how can we pretend that we can control the growth in fossil fuel electricity emissions by putting a price on carbon when first we do not have it and secondly if we did have it it might be at an artificially low price that would not work? 
In terms of the projects that we already have consents for the details of these have been listed and provided to those who are now members of the Government on many occasions. Those members made Official Information Act requests and asked questions in the House and the details of the projects have been provided to them many many times. They know like we know that our cheap sources of generation that are readily available from renewable sources include geothermal generation. There has been a renaissance in geothermal generation in New Zealand and we are very very lucky to have it because were it not for that geothermal generation it would be quite difficult for us to meet that 90 percent target whilst maintaining the security of supply. That geothermal generation provides baseload generation. We have substantial quantities available and we already know that it is economically sound because Mighty River Power and Contact Energy are both heavily investing in geothermal generation in order to bring those renewable projects to market. 
I also refer to some of the confusion that the Minister of Energy and Resources referred to in his criticisms of the Electricity Commission. What does the Electricity Commission do and why did we need it? Well one of the reasons was that after Max Bradford’s reforms New Zealand was the least-regulated electricity market in the world. We had completely unregulated lines businesses; we now have regulated lines businesses. At the time of the previous National Government we had about $50 million per annum being spent on capital investment in the transmission grid. That is now up to half a billion dollars per annum—a tenfold increase. So there is that level of investment which is improving the security of supply. The Minister says security of supply is so parlous after 9 years of a Labour Government but the reality is the opposite. Security margins in transmission have been improving year by year. 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 The first point I make in this debate on the Electricity (Renewable Preference) Repeal Bill 
is that there are some really important issues on which there is agreement across the House. The first of those is that climate change is the biggest and most important issue facing us the second is that greenhouse gases need to be constrained and the third is that we need to increase the amount of renewable energy we are generating in New Zealand. You see the real argument here is not about the objectives but about how to get there. Where members disagree is that members on the Government side of the House favour price instruments and reform of the Resource Management Act rather than the very crude and blunt regulatory instrument that we are repealing. 
We have heard all sorts of extravagant claims from members opposite. Let me just go through their record during the last 9 years. Let us be fair here. Labour was in charge of climate change policy for 9 years and National has not had 9 weeks. Before members opposite get on their hind legs and lecture us about successful climate change policy I remind them what has actually occurred over the last 9 years. Emissions have increased from 68 million tonnes to 78 million tonnes. They have gone up by over 1 million tonnes per year. In terms of renewable energy the record of the last decade shows that 75 percent of new generation that was built during the course of the last Government was thermal generation. 
When we look back over the record of the last Labour Government and compare it with that of the previous National Government the Lange-Douglas Government prior to that the Muldoon Government prior to that the Norm Kirk Government prior to that and the Holyoake Government prior to that—and we can actually go all the way back to when the lights first went on in Reefton—we see that a greater proportion of thermal generation took place under the previous Labour Government than under any of those previous Governments. 
Regarding international comparisons the part I find most extraordinary about Labour’s contribution to this debate is that its members have said that Labour’s record of world leadership is being compromised by this legislation. Let me remind members opposite that I have here the record of the United Nations on increased emissions. Our records only go up to 2006 but my officials advise me that the record for 2007 and through to the end of 2008 is likely to be even worse. Let me compare the records where we have data. To the end of 2006 New Zealand’s emissions grew by 12 percent. Over the same period emissions in Australia grew by 8 percent and emissions in the United States grew by 1 percent. Again let me put the record straight. The record of the last Government on the increase in emissions was 12 times worse than that of the US under George W Bush. In the United Kingdom emissions went down by 3 percent. In Germany they went down by 2 percent. 
The only thing Labour led during its period of Government was an increase in greenhouse gas emissions. 
Hon David Cunliffe 
: So you would want an incentive for renewables? 
Hon Dr NICK SMITH 
: I say to Mr Cunliffe who was a member of the Cabinet for that period that we on this side of the House think a new approach is required. What is that new approach about? 
Hon David Cunliffe 
: What is it? It is promoting fossil fuel burning. 
Hon Dr NICK SMITH 
: I ask Mr Cunliffe why 75 percent of the generation built under Labour was thermal. I ask whether any member opposite can tell me why 75 percent of new generation built while David Cunliffe and Steve Chadwick were Ministers was thermal. 
Let me answer the member’s question about what this Government thinks is a logical approach to this challenge. One of the biggest challenges for renewable energies is getting resource consents. Let me give members an example from this very city. Meridian Energy applied for a consent to build a major wind farm here in Wellington and it took over 2½ years to get consent for that wind farm to be built. I think members on both sides of the House think that that wind farm would be a good thing and that we need to bring it on stream. The truth is that by taking so long to get through the resource consent process the previous Government had to build a lot of thermal generation to keep the lights on in the interim. This Government says it is time for a new approach. We will be bringing amendments to the Resource Management Act to streamline the process for the construction of new renewable energy because that is the logical approach by which we can deal with emissions. 
The question to ask is where we will provide the incentive. The part that is extraordinary about this Act we are repealing is that we could build the Huntly power station under it. I will tell members why. When the Huntly power station—the biggest single contributor of greenhouse gas emissions—was built it was very clear that it was built as a peak-load station. I ask what sort of Act allows a Government to build a massive coal-fired power station as a peak-load station. How does this Act that we are repealing in any way protect the environment when someone could build a massive 1200 megawatt coal-fired power station say it was a peak-load station and get that station exempt? I ask whether a single member of the House really believes that that is logical. 
The last important point I make is that the one area I must say the previous Government did some good work was in developing a pricing instrument. The real way forward is to ensure that in every hour of every day every electricity generator has a clear financial incentive for renewable power over thermal—not when it is built but in every single hour of every single day. That is why I say as the incoming Minister for Climate Change Issues that getting a pricing instrument is a very important priority if we are to do better as a country in this important area of climate change. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 The witching hour is approaching so I will limit myself to just a few remarks and take up the call at 9 o’clock tomorrow morning. 
I address the first remarks made by the Minister of Energy and Resources Gerry Brownlee at the beginning of this third reading debate when he called the Labour Party arrogant. I want to place on the record a rebuttal to those comments. It was not this party but National that decided that the Electricity (Renewable Preference) Repeal Bill would be debated under urgency. It was the Government not the Opposition that set the pace and decided we would be debating until midnight. It was the Government not the Opposition that said that this legislation must not go near a select committee and that it must go through the House the week before Christmas when no one else is listening or taking a care because they are concerned with other matters. The Minister through the entire Committee process did not take a call except by way of interjection at which point he was sat down Mr Assistant Speaker Barker by your very good self. The Minister took those actions yet he calls the Opposition arrogant. That is a case of the pot calling the kettle black if ever there were one. 
The Opposition’s job where it opposes legislation is to fight it to the closure. We have fought this bill to the closure and we will continue to fight it during the third reading debate until the time has expired. That is our way of offering opposition to something that we think is wrong. We take our opportunity to say why we think it is wrong. The Minister on the other hand took no opportunity during the Committee stage to either put his own arguments or rebut ours yet he got up in the third reading debate and said we were arrogant. That is unfortunate. 
I want to say some other things but it depends on the time available. Perhaps I can sneak in a very quick story about Whirinaki power station. Whirinaki was built by the New Zealand Government in the Hawke’s Bay in around 2004 as a 150 megawatt diesel-fired power station. It was built there because until 6 months earlier there had already been a 150 megawatt diesel-powered station at Whirinaki. 
Debate interrupted. 
Sitting suspended from 12 midnight to 9 a.m. (Thursday)