Cullen Michael: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
Cullen Michael: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
[Volume:651;Page:809] 
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