Mackey Moana: Biofuel Bill — Second Reading 
Text is incorporated into the Bound Volume 
Mackey Moana: Biofuel Bill — Second Reading 
[Sitting date: 02 September 2008. Volume:649;Page:18259. Text is incorporated into the Bound Volume.] 
MOANA MACKEY (Labour) 
: 
 I am tending to get a sense of déjà vu. Here we are with another major climate change bill in the House the Biofuel Bill and we have had another speech from the National Party which claims to support any kind of legislation or policy that reduces greenhouse gases yet all we got was a speech full of excuses about why National could not vote for another climate change policy brought up by this Government. I say to the Hon Dr Nick Smith who is a member of the Local Government and Environment Committee which I chair that I wonder why he did not listen to the Parliamentary Commissioner for the Environment on the Climate Change (Emissions Trading and Renewable Preference) Bill which she said absolutely must go ahead and why he is now accusing the Government of not listening to her on the Biofuel Bill. I suspect it is yet another story of what is good for the National Party being no good for anyone else.  
I say to the Hon Dr Nick Smith that obviously he has been very well influenced by the huge business lobby against biofuel and against this legislation. Obviously he has been lobbied. I wonder whether any donations have gone into the Waitemata Trust from people who oppose this legislation. The select committee worked incredibly hard on this bill. We worked hard on it because we know the climate change issue is a reality for New Zealand that this measure is doable for New Zealand that some of it is very low-hanging fruit and that if we put a bit of time and energy into sustainability standards and into making it clear which biofuels would qualify and which would not we could do this. We are an agricultural and a horticultural nation. We have by-products from that. We have tallow and we were told that China is already looking at lowering some of its trade barriers to American and Canadian tallow. We also have ethanol derived from whey as a by-product of our dairy production.  
We heard the submitters who came before the select committee. As always they were from both sides. We had the oil companies on one side who did not want to do it at all and on the other side we had the biofuel producers who wanted us to go miles in the other direction because they have an interest too. It was the role of the select committee to look down the line and find a good compromise: one that is good for New Zealand and good for the environment. What response did we get from the National Party? Its response was that the free market would provide. Well the free market has been fantastic for the environment over the last 30 or 40 years has it not? It has been wonderful! The fact is that until this bill came into the House and was being seriously looked at Mobil Oil did not have biofuels. Before the bill is even passed in the House it has now said it will go down that path and that is because of this legislation.  
I thought it was astonishing that the Hon Dr Nick Smith said that because no one else has implemented this measure New Zealand should never try to do it. The National Party believes that we should just accept that we are not as good as everyone else that we cannot think for ourselves and that we are not smart enough to come up with this kind of legislation. A group of European parliamentarians actually came here to speak to the Local Government and Environment Committee specifically to look at what we had done on this bill. The select committee worked hard. We worked long hours to try to come up with something that indeed the Europeans are also working on. In the Labour Party we say we will always try to do the best that we can in the legislation in front of us to benefit the people of New Zealand. The fact that Europe or America has not managed to do something is never an excuse for Labour members of Parliament to say we will not even try to do it which is the excuse we had from the National Party.  
I thank the officials who worked on this bill. When they walked into our select committee room for the first time we wondered whether they were interns because they were so young and fresh-faced. But they were incredibly knowledgable and provided us with very timely advice. I was extremely impressed with the quality of their advice and I thank them for it. I thank all the submitters who came along to the committee. They often faced very robust questioning and I thank them for all the supplementary information they were able to provide at very short notice so that we could get on with our deliberation. I thank the members of the select committee. I thank the Green member Metiria Turei for all the work she did on the sustainability standards. I also thank the National members of the committee who despite declaring their hand pretty early on in the process and saying they were not going to vote for the bill did stay and work hard with the committee in order to make sure we did all that we could do. I am sorry that they declared their hand as soon as they did. I believe that they might have been able to accept parts of the bill but unfortunately they could not accept them because they had already stated they were going to vote against the bill before some of our deliberation had finished.  
The Hon Dr Nick Smith raised a number of important points in his speech and one of them was about the issue of the relative tax treatment of fuels. We tried very hard to work out whether that was something we could address. I believe that we genuinely agreed that it needed to be addressed properly not as a tag-along to the Biofuel Bill. We stated clearly in the commentary on the bill that we believed as a committee that the treatment of ethanol as a fuel that has zero excise duty should end in 2012. We stated that in the commentary in order to send a clear signal. The National Party also believed as we did that a number of people had expected that that tax treatment would continue until 2012 and had made investment decisions based on that. So it would have been unfair of us to change that and if we had changed it we would have needed to grandparent that zero excise duty for companies such as Gull Petroleum which had believed that it would continue. We clearly stated in the bill that we thought not just biofuel but also other forms of fuel such as compressed natural gas and liquefied petroleum gas and electric cars should be dealt with in terms of the relative tax treatment of fuels for environmental purposes.  
Before I finish I just want to touch on the issue of price. It is very very difficult for us to guess what the price impact of this legislation may be because there are many different variables. We do not know how the oil companies will implement their biofuel requirement. For example— 
Hon Dr Nick Smith 
: You should know. 
MOANA MACKEY 
: I say to Dr Smith that we do not know because they are private companies and we have left the bill very very flexible because we believe that that is the best thing. We know that overall by 2012 of the total fuel sold in New Zealand there will be a 2.5 percent biofuel component and we have left it up to the people who sell that fuel to decide how they are going to get there. If we had not done that Dr Smith would be yelling at us and saying this was a case of nanny State telling private companies what to do. We have said to the companies that they can decide on how to do it themselves. They can do it through the pumps across the whole country or just in Auckland just in Wellington or just in Christchurch or they can sell 100 percent direct to customers so that it does not even have to go through a service station—they can get their reduction in that way. All of this will— 
Hon Dr Nick Smith 
: How much will this cost the consumers? 
MOANA MACKEY 
: Well interestingly enough Gull Petroleum which already includes biofuel in its product is cheaper than the rest of the oil companies. It is cheaper than the rest of the oil companies and it already sells an ethanol blend. So for Dr Smith to stand up and say fuel will be 7c a litre more expensive which is what the oil companies said it would be is wrong. Another oil company said it would be 4c a litre dearer but our officials told us that if they looked at recouping the entire cost of the infrastructure upgrades that may be required by oil companies using the oil companies’ figures the cost would come out as being no more than 0.2c to 0.4c a litre more expensive and it might even be cheaper than it is now I tell Dr Smith. 
Hon Dr Nick Smith 
: Why make it compulsory? 
MOANA MACKEY 
: Oh because the free market has worked really well up till now I tell Dr Smith. I know the National Party just thinks the invisible hand of the market will deliver for the environment will deliver for poor people will deliver for the hospital system and will deliver for the education system. Dr Smith can just sit back and say he does not have to do anything because the invisible hand of the market is doing it all for him. That makes it really easy to be a National Minister. But I am afraid that on this side of the House Labour members believe in actually taking action against climate change rather than sitting in an office as Dr Smith does thinking of as many excuses as he can to vote against every single piece of climate change legislation that comes before this House.  
Well Dr Smith should be ashamed of himself because he knows—he was on the select committee with us—that what he is saying is not true. Yet he will go out there and try to terrify the people of New Zealand. Dr Smith apparently knows what the exchange rate will do what the price of oil will be and what the price of ethanol will be—all the things that will be relevant to the overall price of biofuel production in New Zealand. But Dr Smith does not know that. Apparently Dr Smith is saying that the National Party will never support a biofuel obligation unless it can be certain about the international price of oil unless it knows what the exchange rate will be and unless it knows exactly how the oil companies will implement that obligation. I say to Dr Smith that those are excuses excuses excuses—again again again! The people of New Zealand can see through that.  
This is a good bill. I thank the select committee for all its hard work.