Boscawen John: Settlement Systems Futures and Emissions Units Bill — Second Reading 
Boscawen John: Settlement Systems Futures and Emissions Units Bill — Second Reading 
[Volume:658;Page:7608] 
JOHN BOSCAWEN (ACT) 
: 
 It is a pleasure to take a call in this debate on the Settlement Systems Futures and Emissions Units Bill. This bill is designed to align New Zealand’s clearing and settlement system with international best practice and to facilitate trading in futures and emissions units. The bill contains various technical amendments to existing legislation and Katrina Shanks listed the three Acts that are being amended. The bill is designed to facilitate the development of markets for emission units. 
The Hon Nathan Guy Sam Lotu-Iiga and Katrina Shanks have already outlined in some detail the inner workings of this particular bill. I do not wish to repeat what they said other than that I would like to acknowledge the work of the officials who diligently attended the Commerce Committee of which I am a member. In particular I thank submitters to that committee because although there were not a large number of them they brought a lot of expertise. However I have to say that in respect of some of them I could not help thinking that they were there out of self-interest. I also acknowledge the work of the chair the Hon Lianne Dalziel. 
I would like to spend the bulk of my speech responding to the comments of Charles Chauvel and David Parker. They used this opportunity to open up the debate to the whole wider issue of the emissions trading scheme. I cannot leave some of the comments of Mr Parker and Mr Chauvel unchallenged. However let me start by saying that certainly in one respect I totally agree with Mr Chauvel. I think it is a disgrace that the legislation to amend the emissions trading scheme is being rushed through this Parliament with such undue haste. It is the role of Parliament to question and investigate the work of the executive and the bills it puts up. Submissions closed on the amendments to the emissions trading scheme on 13 October and the Finance and Expenditure Committee is due to report back by 15 November. In the space of just a month we have to analyse some 380 submissions hear the views of the officials listen to the recommendations and debate those recommendations. 
As a matter of public record certainly in the early stage there were a number of submitters who had less than 24 hours’ notice. Labour members on the Finance and Expenditure Committee regularly asked the submitters to the committee when they had received the advice that they were required to attend. Some of them had been given 12 hours’ notice some even 15 hours’ notice. I think the record was probably 4 hours’ notice. One gentleman took a phone call at 4 o’clock on a Thursday afternoon and was before the committee at 8 p.m. that evening. 
I raise those points because I think the bill to amend the emissions trading scheme is being done in undue haste. Why is that? We all know that New Zealand is a signatory to the Kyoto Protocol and the world community is looking to extend the protocol at the upcoming meeting in Copenhagen. It seems that New Zealand is hell-bent on pushing through its amendments to the scheme before that Copenhagen meeting. But those amendments are based in substantial part on the proposed scheme for Australia. I say “proposed scheme” because the scheme is not legislated for in Australia; it has not been passed. The United States does not have emissions trading legislation. 
Earlier this afternoon Mr Phil Goff in seeking to embarrass the Government made a point about an increase in power prices. He accused the National Government of pushing up power prices. Well nothing will do more to push up power prices which will result in subsidies and huge massive profits than the emissions trading scheme. As Mr Parker said in his speech earlier the emissions trading scheme seeks to put a price on carbon. It seeks to increase the price of energy and therefore every single New Zealander will pay a higher price for electricity. It is already legislated for; the scheme is there. It currently takes effect on 1 January next year. The National Government’s solution is to delay its introduction and to reduce somewhat the costs for the first 2½ years but we will all pay a higher price for electricity. 
But it is worse than that. The generators that generate electricity from hydro sources and from other renewable sources will get windfall profits. So TrustPower which owns a suite of hydro dams and is a company in private ownership along with Genesis and the Meridian Energy which are both companies that are State-owned enterprises and also have a suite of hydro generation and renewable electricity will all have windfall profits. The emissions trading scheme the one that is currently on the books and the one that is in the process of being amended will result in a higher price of electricity. Those generators of electricity that generate at a hydro dam or through a geothermal field will not pay that price of carbon. They will receive a higher price for their electricity and they will make windfall profits. 
The Green Party member commented on Sue Bradford’s valedictory statement made this afternoon when Sue Bradford talked about wanting to be known for more than the amendments to section 59 of the Crimes Act. She referred in part to her desire to reduce the deepening gap between rich and poor. I suggest that nothing will do more to make that gap wider than raising the price of the most basic commodity—electricity. 
I wish this were just an issue of looking to protect the environment—we have signed the Kyoto Protocol—but it is not. We heard from a number of submitters who have forestry interests. In particular we heard from Te Arawa Group Holdings which is owned by a number of iwi who own in excess of some 30000 hectares of central North Island forest. This forest is capable of being converted into pastoral farm for dairying to create wealth and employment for New Zealanders. But Te Arawa Group Holdings is not able to convert that forestry into pastoral land to create wealth for New Zealanders. To do so would require the company to surrender some 800 emissions units at a current market price of $25 a unit or $20000 a hectare. Te Arawa Group Holdings estimated that the cost to it of the current emissions trading scheme on the books is some $600 million. What will the National Government’s amendments to the scheme do? They will increase that cost by a further $30 million. So Te Arawa Group Holdings was up for a cost of $600 million but it will now cost $630 million. 
It would not be so bad if Te Arawa Group Holdings were in a position where it could chop the trees down on the land that was good for dairy conversion and replant those trees on other land. The company would like to do that; it has offered to do that. New Zealand has much terrain that is mountainous and is not suitable for pastoral and intensive farming. The company would like to replant those trees so that in time those trees in their new location would sequester as much carbon as they do right now. Under the terms of the treaty that we signed up to the company cannot do that. If it chops those trees down it is up for a charge of $20000 a hectare. 
I understand that New Zealand is going into the Copenhagen round in the hope of negotiating an offset so that Te Arawa Group Holdings and others—like Wairakei Pastoral—can replace those forests on other land. But there is no guarantee that they will be able to. It is quite likely that many billions of dollars will be taken from Maori in terms of a diminution in the value of land that they have been given for Treaty settlements. Why the rush on this bill? In 5 weeks’ time we will know the outcome of the Copenhagen round. Why the rush? I say to Sue Bradford that she has every right to be concerned about the deepening gap between rich and poor. New Zealand is not a rich country. We are a heavily indebted country yet those 30000 hectares in the central North Island could be converted to dairying and could earn overseas exchange for New Zealand but we have signed up to a treaty that denies those people and others like them the opportunity to do that. 
I could go on to talk about the fact that although amendments are being made to allow an offset or allow a phase-in period—Mr Chauvel was very keen on his scheme—it would put New Zealand industry at a massive disadvantage and would cause huge additional costs and job losses. Thank you.