Smith Nick: Biofuel Bill — In Committee 
Text is incorporated into the Bound Volume 
Smith Nick: Biofuel Bill — In Committee 
[Sitting date: 02 September 2008. Volume:649;Page:18272. Text is incorporated into the Bound Volume.] 
Hon Dr NICK SMITH (National—Nelson) 
: 
 The great disappointment with this Biofuel Bill is that this Clark-Peters Government is ignoring all of the international evidence in respect of concern about biofuels. We are asked to believe that the OECD is wrong that the United Nations is wrong that the World Health Organization is wrong that the British House of Commons is wrong that New Zealand’s own Parliamentary Commissioner for the Environment is wrong and that the only one who has it right is David Parker. Well the Government is mistaken. Rushing through under urgency this flawed bill which will impose significant extra costs on New Zealand consumers at a time when they can least afford it and for very little environmental gain is flawed bad public policy. 
The first key question I have for the Government is this: why impose a compulsion a nanny State “you must do” before putting in place a sustainability standard? Why on earth compel every person who buys liquid fuels to include in his or her purchase a component of biofuel when the Government has not sorted out its biofuels sustainability standard? I think I know exactly why. It is because after 9 years of this Government our greenhouse gas emissions have gone up in every single one of those years. New Zealand has one of the worst records in the world in terms of increased greenhouse gas emissions and in a desperate last-minute bid a few weeks before the election the Government wants to try to get some climate change policy on the record in a hurry. 
Hon Pete Hodgson 
: Oh Nick. 
Hon Dr NICK SMITH 
: That is it I say to Pete Hodgson. That is it. 
Hon Member 
: Where’s the rest of it? 
Hon Dr NICK SMITH 
: Well the thing on which I would challenge Mr Pete Hodgson—the guy who went around New Zealand saying we should ratify the Kyoto Protocol because we would make a billion dollars—[ 
Interruption 
] I say to Mr Hodgson that I have spoken to the officials and he misled Parliament; he knew that New Zealand did not have a surplus and he fibbed and he told porkies— 
Hon Pete Hodgson 
: I raise a point of order Mr Chairperson. Dr Nick Smith has just advised Parliament that he knows that I misled Parliament. 
Hon Dr NICK SMITH 
: That is right. 
Hon Pete Hodgson 
: And he has just said that is right. Not only is that remark out of order but it is flat wrong and I invite him to withdraw and apologise for it. It is entirely out of order. 
The CHAIRPERSON (Hon Clem Simich) 
: The member has requested that the member withdraw and apologise and I would ask him to do that please. 
Hon Dr NICK SMITH 
: I withdraw and apologise. It is a matter of record that for 12 months before Minister Pete Hodgson came clean about the mess this Government had made around Kyoto policy Ministry for the Environment officials advised him that the numbers that he was telling the public were untrue—were false. I would be happy to table the emails and the facts to back up my assertion about that scandal involving Pete Hodgson. 
Coming back to the Biofuel Bill— 
Hon Pete Hodgson 
: Go right ahead. You’re just making it up. 
Hon Dr NICK SMITH 
: Well did the member claim that New Zealand stood to make a billion dollars from Kyoto? 
Hon Members 
: Yes. 
Hon Dr NICK SMITH 
: Yes he did. He got it awfully wrong and officials advised him at least 12 months before he came clean that he was continuing to express a view that we had a surplus when we did not. That is the sort of snaky behaviour I say to Pete Hodgson that we have come to expect from this Government. Whether it is Owen Glenn and his donations to this Government or whether it is Kyoto the dishonesty that this Clark-Peters Government now displays is a tragedy for New Zealand and is one of the reasons there will be a change of Government in a few weeks’ time. 
The Government says we should not worry about the big global debate around sustainability because the Government has put some principles in Part 1. But what is the use of principles if they do not result in regulation? The real flaw in this bill is this: why should we compel people to use biofuels before the sustainability standard comes into place? Can any member of the Government or any of the parties that are supporting this bill answer that very basic question? Why compel the use of biofuels before one has a sustainability standard? 
Moana Mackey 
: Because they told us in their submissions that they wanted to know what would be in those sustainability standards so that they could plan ahead. 
Hon Dr NICK SMITH 
: The Minister in the chair the Hon David Parker is silent but we have the chair of the Local Government and Environment Committee commenting. The officials have said that it will take till 2011 to get a sustainability standard. That is what they advised us in their papers to the committee. So I ask the chairperson of the committee and the Minister why on earth they would want to compel people to use biofuels before then. This is nanny State saying we must do something without it being really sure that there will be an environmental benefit. 
What is really ridiculous about this provision is that there will be a substantive cost—the select committee heard it is about $130 million—in that the fuel companies will have to put in place the infrastructure to be able to deal with the different types of biofuels. Whether it is bio-diesel which has particular technical issues around it being cold so there is a need to avoid blockages or whether it is ethanol in terms of it being water absorbent an investment of about $130 million in infrastructure will be required. But before one invested in that infrastructure would not one want to know which biofuels are OK and which ones are not? The madness the absolute madness is that the Government is going to require the introduction of biofuels before the standard is in place. That is unforgivable; it is mad public policy. 
A further issue is this. Why is the Government providing a huge skewing of the scrum towards ethanol over bio-diesel? The Government says that yes it acknowledges there is a problem. There is no logic to it providing a 42c a litre advantage to the importing of ethanol from Brazil compared with bio-diesel made in New Zealand out of tallow—no good reason at all. The Government accepts that but it says it will put off sorting out that issue until 2012. What nonsense! Why would one introduce a compulsory biofuels requirement today when one acknowledges that the tax rules significantly advantage ethanol over bio-diesel for no good environmental reason and then say: “Oh we can’t sort that out now; we’ll put it off until 2012.”? I tell the Minister that that is not good enough. He should sort out the tax issues and the sustainability issues now before introducing the compulsory requirement. 
I will be asking the Committee to support a very simple straightforward amendment to put the sustainability standard before the compulsory requirement. I want any member of the Committee to please advise why Parliament would not want to do that. Why would we not want to put the standard before the compulsion? The silence is deafening; the silence is absolutely deafening. I tell members that there is only one reason for not doing that and it is political—straight politics. It is because this Clark-Peters Government continually puts its own political interests ahead of what is right for New Zealand. It is desperate to pass any sort of climate change legislation even flawed legislation before the election rather than do what is right for New Zealand. I invite the Committee to support that amendment to ensure that we sort out the sustainability standard and the tax issues before we introduce compulsion. 
The last point I would make is this. Every party in this Parliament agrees that a carbon price and an emissions trading system is the sensible way to respond across the economy to climate change. The problem with the Minister is that in terms of getting an emissions trading scheme he immediately says we need some extra regulation. If biofuels cannot stack up economically why are we going to compel their use? That is the million-dollar question. In respect of the illogical ban that this Government wants to put on thermal generation and in respect of the Biofuels Bill the Government is being a busybody. It cannot help reverting to a nanny State attitude. It wants to tell people how to live their lives rather than just give a price signal. 
Where members on this side of the Chamber differ significantly from the Government on environmental issues is this: we say that we should provide a price incentive and not have a nanny State. We should provide an incentive and provide the right sorts of price signals and let people get on and live their own lives rather than having the nanny State dictates that we get in Part 1 of this bill. This Clark-Peters Government believes that it knows best and National says otherwise.