Watts Simon; O'Connor GregSIMON WATTS (National—North Shore): Thank you very much Mr Speaker. It is a pleasure to make comment in relation to the Climate Change Response (Late Payment Penalties and Industrial Allocation) Amendment Bill in its second reading. I wish to acknowledge the Minister in regards to this bill. While I've attended a limited number of the select committee deliberations in regards to this bill it has been a process I think led by the Hon Eugenie Sage that has taken into account a wide-ranging amount of feedback from a number of stakeholders and I think has ended up in a place in which National will be supporting in its second reading.As the Minister has outlined the bill makes two key adjustments and provisions: one in regards to the changes in terms of the allocation baselines around industrial allocations the other one in regards to the penalty regime in particular for small forestry participants when they fail to surrender or repay emissions trading scheme (ETS) units. Both amendments within this bill are from National's perspective reasonable and pragmatic changes and we continue to support this bill through all remaining stages.It is a pleasure to speak as National's climate change spokesperson. National are committed to achieving our net zero commitments by 2050. We also strongly support and endorse the role in which the ETS plays in order to assist us to achieve those goals. These changes within this legislation enable us to strengthen elements of that mechanism which will no doubt ensure that we can meet those obligations in the future which is so critically important.It is good to see that the Government has taken on board the concerns and feedback particularly from small forestry participants in regards to this. We heard a number of those submissions through the select committee process. Equally it is good to see that the Government has taken on board the feedback in regards to some of the industrial emitters because this is—and we do share with them some of the concerns that were raised in regards to the implications that this bill is changed. Of course it is positive that in this instance we are seeing the Government work constructively with the sector and not against them as we proceed through this basis.As we noted the Environment Committee had 107 submissions of which 27 submissions were heard. I wish to thank all of those submitters in regards to the comprehensive nature of feedback that they provided. It is heartening to see that a number of those submitters whose feedback was provided have been taken into consideration and adopted in regards to changes in this bill. That is how our democracy should operate in regards to that select committee process and it is good to see that.There were a number of changes made and by and large they were made unanimously across the committee. That is important recognition in terms of those changes. But we do recognise that there still remains a number of key aspects that need to be improved if you consider the broader Government's climate change policies and in particular the actions required by the Government in order to support emission reduction within our economy and get us on a glide path in order to meet those 2030 and 2050 obligations. It is the desire of National and into the future the opportunity that arises with us as a National-led Government to see a step change and a step change in the pace in which those actions are implemented to reduce emissions in order to meet our obligations.In regards to the industrial allocations elements as has been noted by the Minister the select committee did make a number of changes in regards to that. That is important. It is interesting to note in the regulatory impact statement at sections 119 to 121 that there were issues raised in regards to the implications on both the regional economy and economic activity of adverse consequences on a number of these industrial emitters particularly where we've got industrial emitters such as in the fertiliser space—in particular one in New Zealand—and the implications around that business. If that business shuts down then New Zealand would potentially lose around 30 percent of its ability to produce nitrogen and that would then have to be imported primarily from overseas and primarily from China.So there are considerations around ensuring that we get the balance right in terms of protecting the elements of industry within this country but also acknowledging the fact that they also need to in effect for many of those industries undertake a transformational reduction in regards to the way in which they reduce their emissions profile. For many of those businesses they do face significant challenges quite simply because the solution the technology and the options to actually achieve that at the pace which is required do not currently exist in all instances. So we need to acknowledge that for some of those industries they are at a different phase versus others and that is just the reality of where we are. But we are confident with the challenges in front of us and that with the appropriate research and development and technology and focus solutions will be found to those problems as we proceed in the future. In the interim we should focus on the opportunities that are available for us immediately.In regards to the changes on the industrial allocations it is important to say that a number of the changes have been made in order to make it clearer within the legislation and making sure that the changes that were fed through by the select committee actually do work appropriately for industrial allocations. As a result I think the changes ensure that we've actually made the ETS able to perform better than what was previously the case which is important. It also deals with the reality that things have moved on over the past 10 years and we are using this opportunity to rebalance or level up that aspect which provides a much more solid footing going forward.I think the reality is that again in regards to the industrial allocations and those large emitters this is going to continue to be a conversation—a dialogue. And I commit to those industries within our country that a National-led Government will work with you not against you in order to work through those challenges because we need to find a position in which we all are able to achieve the outcomes that we need to. We need to work with each other not against each other. That is the expectation on this side of the House.That's pretty much all that I wish to cover this evening. As is outlined National will be supporting this bill and through all stages this evening. I acknowledge again the work of the Minister and the work of the select committee who I think all in all worked very constructively in regards to putting in place this legislation. We commend this bill to the House.DEPUTY SPEAKER: The question is that the motion be agreed to.