Mackey Moana: Budget Measures (Miscellaneous Fiscal Matters) Bill — First Reading Second Reading In CommitteeText is incorporated into the Bound VolumeMackey Moana: Budget Measures (Miscellaneous Fiscal Matters) Bill — First Reading Second Reading In Committee[Sitting date: 15 May 2014. Volume:698;Page:18038. Text is incorporated into the Bound Volume.]MOANA MACKEY (Labour): Let us just be clear what the Budget Measures (Miscellaneous Fiscal Matters) Bill actually does. We had a very grandiose speech from Mr Goldsmith but very little of it was based in reality. This bill will save people 35c a year on cheque duty.Sue Moroney: How much?MOANA MACKEY: That is the first thing—35c a year savings by abolishing cheque duty.Sue Moroney: That will fix inequality!MOANA MACKEY: That is what this bill does. That will fix inequality; that is quite right! When it comes to affordable housing there will be $3500 that the Government cannot even guarantee that will be passed on to the people who are building houses. There is no guarantee that the ticket will not be clipped on the way through and that homeowners will actually see the benefit of that but my colleague Phil Twyford will talk more about that in his speech.Let us just put the facts on the table about the last Labour Government. There were nine surpluses in 9 years—nine surpluses in 9 years—and zero net debt. We paid the debt off while National was screaming at us to give tax cuts and we did not. We paid the debt down because we knew that when a rainy day like the global financial crisis came we would need to be prepared. We were incredibly exposed and the only reason we have come through the global financial crisis as well as we have has been the last Labour Government’s economic management. There was the lowest unemployment in the OECD. Labour has committed to getting us back to below 4 percent unemployment; National says that it cannot be done. Guess what? Over 5 years Labour averaged below 4 percent. It can be done if you want to do it if you care enough to do it and if you take economic development and unemployment seriously.But I want to talk about Part 2 of this bill because as my colleague Grant Robertson has said this bill should have gone to a select committee. Had it gone to a select committee it would have given the forestry sector the opportunity to appear before the committee to say: “Why do you hate us so much? Why do you continue the sustained attack on our industry?”. What looks like a very innocuous piece of legislation is actually a vicious attack once again on the forestry sector. It is the only sector in this country that has been doing the heavy lifting on greenhouse gas emissions reduction. The whole reason that we came out of the first commitment period of the Kyoto Protocol in the black was not because of Government policy. In fact as we know Government policy will result in only a 0.4 percent reduction of emissions compared with doing absolutely nothing at all. So we are basically doing absolutely nothing at all. We are doing 0.4 percent better than absolutely nothing. The only reason we came out net positive was forestry so why does the Government keep attacking and undermining the forestry sector?The forestry sector earns New Zealand Units when it plants trees but the Government is stopping the sector from using cheap international units in place of New Zealand Units and then basically pocketing the difference when it deregisters or harvests the trees. Of course we do not want that to happen but the reason it is happening is that there is such a big price differential between the Kyoto unit and the New Zealand Unit. That is the actual problem here and this Government has done absolutely nothing about it for 5 years. It voted against amendments that Labour put up to stop that by restricting cheap international units across the board to everyone which would have helped fix the problem. The Government opposed that but when it comes to the forestry sector it is going to say that that sector does not get access to those cheap units.But guess who does get access to them: National’s big heavy-emitting industry mates. Its mates get access to those cheap units to meet their obligations. They are given a free allocation of New Zealand Units to help transition them into the emissions trading scheme—90 percent. They get New Zealand Units and they can then use these cheap units to meet their pollution obligations and pocket the difference. So it OK for the mates of National to engage in what is called arbitrage but God forbid that forestry should do it the one sector that is actually doing something about reducing emissions.The Minister for the Environment is in the House. I would like to know why this does not apply to everyone. She is desperately pretending to be reading something. Why does this not apply to all people in the emissions trading scheme? Why pick on forestry Minister?Sue Moroney: She doesn’t know.MOANA MACKEY: She does not know. She does not care. We know why: it is because the Government hates forestry and it loves big industry. These are its mates. It is Rio Tinto. It has already given them a big taxpayer subsidy. We should not be at all surprised that the Government is also prepared to let big industry continue to speculate on these emissions units when it is clamping down on forestry.The Minister of Commerce said that this is an unintended consequence of the emissions trading scheme. What a load of garbage. This is not unintended; this is deliberate. It has deliberately let the carbon price collapse it has deliberately let these cheap Kyoto units flood into the country and it has deliberately not stopped that from happening so to say that it is an unintended consequence is deeply deeply misleading and I am being polite when I say that.One of the reasons talked about by members opposite is the fiscal risk to the Crown in not clamping down on this arbitrage and that is true. The Government estimates it as being from about $11 million to $66 million. But when you look at the arbitrage that is being carried out by the other sectors that hold New Zealand Units what is the fiscal risk for that? The fiscal risk for that is $107 million. That is $107 million of fiscal risk from the New Zealand Units held by the Government’s mates versus between $11 million to $66 million of fiscal risk from forestry. Which one of those are we clamping down on today? Is it the $107 million or the $11 million? No we are clamping down on the $11 million so that the Government’s cronies can continue to engage in arbitrage and it will not do anything about it although it is quite happy to once again take a whack at the forestry industry which is crucial to our battle in avoiding the worst—Sue Moroney: Are they not in the Cabinet club?MOANA MACKEY: Apparently the forestry industry is not in the Cabinet club—clearly—because if it was we would not be passing this legislation.Another reason we are doing this is the reputation risk to the emissions trading scheme—that is the risk of the reputation of our emissions trading scheme being defiled by the forestry sector engaging in speculation on New Zealand Units. The biggest reputation risk to the emissions trading scheme is that lot sitting over there. Our emissions trading scheme has no reputation now. It has no credibility it has been completely undermined and it is nothing more than a fig leaf. The emissions trading scheme’s reputation went out the door long ago when this National Government was elected. For the Government to say that it is going to clamp down on one small industry—an industry that is doing very very positive things in terms of climate change—and think that that will somehow restore the reputation of the emissions trading scheme is laughable. It is absolutely laughable.Our emissions trading scheme is designed to put a price on carbon. If it is not going to do that then quite frankly why have it? I bet you that it is costing us more to run than it is actually achieving. The thing is that when the emissions trading scheme was first introduced by the last Labour Government it had a price on carbon of around $20 to $25. That was what sparked off the wind industry in New Zealand. The price on carbon gave it the advantage it needed to really take off. That is entirely what the emissions trading scheme was designed to do. It is not doing that now because this Government has allowed the price of carbon to be completely suppressed. The reason the Government says that it is not prepared to act on that is that it wants to reduce costs to struggling businesses and households. It says that if you have a proper price oncarbon that is going to feed through to electricity and fuel bills. What it does not tell you is that consumers are being charged carbon prices well in excess of the actual carbon price by fuel companies and energy companies.And the Government has done nothing about that. It is quite happy to let the fuel companies and energy companies price gouge consumers. What we know is that the price of carbon is currently about 35c but from what we have heard—and this all comes from anecdotal evidence that we have heard from people—consumers are currently being charged between $15 and $25 for a tonne of carbon at the petrol pump and through their power bills despite the fact that the emissions that they surrendering are 35c. So in fact any benefits from a collapsed price on carbon are not being passed on to struggling businesses and households at all. Again what has it done about that? Absolutely nothing. So what looked like an innocuous piece of legislation is actually the exact opposite. What makes it even worse is here is a sustainable forestry bulletin from the Ministry for Primary Industries telling people how to register and deregister their forests. So the very thing that we are clamping down on today is the same thing that the Ministry for Primary Industries has been promoting as early as February this year.I can understand why the foresters are angry. I can understand why they might have had reason to believe that the Government was OK with them doing this given that Government literature tells them how to do it and gives them tips on things to consider when removing and reregistering. I understand why they are probably a little bit shocked that under urgency this is going through with no select committee process and with no consideration about what the impact might be on the very sector that we are still hugely reliant on to reduce our greenhouse gas emissions because this Government is doing absolutely nothing else.