Dunne Peter: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — First Reading Second Reading 
Dunne Peter: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — First Reading Second Reading 
[Volume:651;Page:771] 
Hon PETER DUNNE (Leader—United Future) 
: 
 As I have sat here listening to the debate this evening I have been struck by a remarkable sense of déjà vu. In September we debated a biofuels bill and many of the arguments that have been run this evening were put back and forward across the House at that time. As I listen to the debate this evening I think that nothing much seems to have moved on from that point. Those who favoured the bill in September continue to favour its retention. Those who opposed that legislation then continue to oppose it tonight by supporting the repeal. I was one who supported the bill in September and I do not support its repeal tonight for the reasons that I will state. 
I think it is important to put this whole issue into some sense of perspective. Whatever happens in the short term at least there is not going to be a major biofuels industry in New Zealand. We are talking about a fledgling move. We are talking about meeting a need that will develop when we start to think about how we are going to use tallow for instance. We have three or four market players who are interested in developing an industry. They need some certainty and they need a framework within which they can make the investment decisions they will require to make their industry a viable one long term. When we think about it we know that that was all the original legislation sought to do. It was to set up the framework for the development of a domestic industry. 
Along the way some issues were given thorough consideration. There was the question of the source of the biofuel itself and there was the legitimate concern raised about using product that might be available for food development but instead might be used for fuel development. The original select committee dealt with that issue by putting in a sustainability clause. There was the debate we have heard a lot of reference to this evening—about the position of the Parliamentary Commissioner for the Environment—but again the original select committee in its report back dealt with the concerns that the parliamentary commissioner had been expressing. 
So I suppose we come back to the one unresolved issue as it were that has featured prominently in tonight’s debate—that is the question about whether the Government imposes by legislation a requirement or adopts an incentive-based approach through a tax adjustment. The reason why the original proposition was developed was as the previous speaker so correctly said to give a fledging industry a sense of certainty so it could commit to the investment that was going to be needed to develop what might become a larger industry in due course. It was as simple and straightforward as that and when members talk about “the market should decide” they should remember that ultimately whatever system is put in place the market will decide and it will decide by virtue of consumers determining what it is they are going to purchase. So I do not have a great deal of sympathy with the argument that says that by imposing a requirement we are in effect removing an element of market choice an element that would be preserved if we were to go down a tax incentive path. I do not think we are talking about an industry at this stage that is in any shape or form to be so determined. 
So we end up with a bill this evening that overturns what was an essential first step in the development of an industry. I think there is a red herring about the time that the legislation was to take effect and the time that the standards were being developed because again that is part of the ongoing work in progress. The negotiation and the discussion that would occur between those industry players and the regulators in terms of the development of those standards are part and parcel of the normal process. By going back to square one tonight we are effectively saying to those who have an interest in developing a domestic biofuels industry “Not yet. Go away.” And we know that giving that signal means most of them will go away. So when the time comes that we decide that maybe it is right that we should now start to make a much greater emphasis on the use of biofuels domestically those potential investors and those technologies will not be available to us. I think that is the big loss here. It is not as though we have got ourselves into a situation where the changes that were made just 3 short months ago have proved unworkable; they have not even had a chance yet to be proven that they are going to be able to work. 
It is not as though we had a rushed piece of legislation originally. I cannot recall how long the bill was at the select committee but it was a considerable period of time. I recall having a number of discussions with the then Minister about some of the issues that have been canvassed in the debate this evening and I do recall a sense emerging at the end of that process that many of the issues that have been raised were satisfactorily addressed in the original legislation. 
So I have some difficulty this evening when I see a bill put forward to repeal a piece of legislation that was very much in its infancy. I think that is a mistake. I think that is something we will regret. I do not buy entirely into the argument that the whole world is watching and will see this as a retrograde step on New Zealand’s part. There is an element of that but I think that is being over-exaggerated. I just think that in terms of an opportunity that was available to New Zealand to start to give some credibility to those who wanted to develop a domestic industry to use a product effectively that we had available here as a by-product of our agricultural production this legislation stymies that opportunity. I think that is a sad mistake and for that reason United Future will not be supporting this bill through its passage tonight.