Nash StuartCLIMATE CHANGE RESPONSE (EXTENSION OF PENALTY TRANSITION FOR FORESTRY ACTIVITIES WITH LOW VOLUME EMISSIONS LIABILITIES) AMENDMENT BILLSecond ReadingHon STUART NASH (Minister for Economic and Regional Development) on behalf of the Minister of Climate Change: I present a legislative statement on the Climate Change Response (Extension of Penalty Transition for Forestry Activities with Low Volume Emissions Liabilities) Amendment Bill.ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website. Hon STUART NASH: I move That the Climate Change Response (Extension of Penalty Transition for Forestry Activities with Low Volume Emissions Liabilities) Amendment Bill be now read a second time.I'd like to begin by saying that it's great to see this bill back before the House. I would like to thank the Environment Committee for accommodating the reduced time frame that the bill requires. Notwithstanding its long title this bill serves an important function by ensuring that small forestry participants in the New Zealand emissions trading scheme—the New Zealand ETS—are safeguarded from possible disproportionate outcomes if they were to incur the three to one penalty. For context the three to one penalty set at three times the price of carbon—with no ability to reduce despite the regulator—came into force for most New Zealand ETS participants at the beginning of 2021.For forestry participants of the New Zealand ETS this penalty usually arises when forests are harvested deforested or deregistered from the scheme and the resulting unit liability is not paid back on time. Its application was deferred for small forestry participants—being those with liabilities of less than 25000 units on average per year—until the end of this year in recognition that it could cause serious financial harm to these participants. This is due to the size of the three to one penalty compared to the cash flow meaning that their personal assets—for example the home or the farm—could be at risk if they were unable to pay their liability by the due date and therefore incur the penalty. Two years on and the risk to small forestry participants remains and increases as the price of carbon rises.I'm pleased to report that the work on a revised penalty that is more proportionate for small forestry participants is under way and will be progressed through separate legislation. This bill contemplates and supports that work by number one extending the period of the existing transitional provisions which will give effect to the transitional arrangement for small forestry participants to align with the scheduled commencement date of a revised penalty being 1 January 2025 and number two ensuring adequate time for participants to be educated on what the revised penalty for small forestry participants will mean in practice before it comes into force making for a smooth transition.The bill has been reported back to the House with no amendments. The committee received just one submission which did not address the substance of the bill.The shortness of my speech reflects the nature of this bill: a simple amendment to the existing transitional provisions in the Climate Change Response Act 2002 to maintain a layer of protection for small forestry participants in the New Zealand ETS until a more proportionate penalty is finalised. To conclude it is great to see this bill making swift progress through the House. I look forward to the discussion today and to debating the bill in more detail during the committee of the whole House. I commend this bill to the House.ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.