Sowry Roger: Electricity and Gas Industries Bill — First Reading 
Sowry Roger: Electricity and Gas Industries Bill — First Reading 
[Volume:613;Page:9825] 
Hon ROGER SOWRY (National) 
: 
 I come to this area somewhat as a novice but in the few days that I have been given the opportunity as National’s spokesperson on energy to start to talk to industry groups one thing is certain—they do not like this bill. I can understand why the Minister—who has suddenly had to leave the Chamber— 
Hon David Cunliffe 
: They have had their chance. 
Hon ROGER SOWRY 
: Minister Cunliffe says they have had their chance. I am sure they will be interested in that view. They are saying that this bill is too bureaucratic; that it will result in huge costs and those costs will be passed on to consumers; and that it is using a sledgehammer to crack a walnut. I do not pretend at this stage to go around saying that there is a concerted view and the Minister is not listening to it; that the bill is being driven by Treasury; or—as Minister Cunliffe has implied—that the bill is in the House because the Government is fed up the industry has had its chance so we are going to deal with it. I do not know which of those arguments is right but I intend to find out. 
It is interesting that some 6 weeks out from Christmas with the House sitting for only 3 or 4 more weeks the Minister has decided to have this bill dealt with while the House is sitting. Clearly he has convinced the United Future party that it should support this bill and I hope United Future or someone will tell us whether there is an agreement that this bill will be passed before Christmas. If it is not going to be passed before Christmas then we are being asked to hear submissions in a hurry—effectively trying to shut the industry and business groups out of the submission process along with some of the energy trusts that are pretty fired up about this legislation. Clearly the Government and United Future want to shut out those groups and pass the bill before Christmas or have a hurried submission process and bring it back to the House in March. That seems a bit hopeless. We all know we cannot deal with it in February because we have the Prime Minister’s statement and a whole lot of other stuff going on. So for reasons I do not yet understand the Minister is trying to rush this bill through. 
The bill creates more regulation and in the form introduced it creates more compliance costs. It is interesting that in terms of gas and electricity the bill as introduced and the commentary written by the Government officials state that compliance costs will increase but they are not able to say as yet by how much in each industry. I would have hoped that perhaps the United Future party would have proven to be a bit of a brake on the Government with this but so be it. 
What is interesting is that there is a sword hanging over the gas industry. The Minister has the gas industry out there looking at itself trying to devise some sort of self-regulatory environment and then putting into this bill the ability for the Electricity Commission to take responsibility for gas industry governance if the gas industry’s proposed self-governance arrangements do not work. Before it has even got off the block before it has even started the Minister has a sword hanging over its head with this bill and this regulation. He is saying: “If you don’t get it right then I will be able to come in there and do something to you”. To use Minister David Cunliffe’s line by way of interjection before it has had 2 years and that is why he has had to sort it out. He nods. He is not even going to give the gas industry 2 years. 
In reality I do not know whose bill this. We know that the Minister lost control of the industry during the energy crisis. The Prime Minister suddenly decided that Pete Hodgson was no longer a safe pair of hands. He could not manage it and was losing his rag around the energy companies. He was sidelined and Michael Cullen set up and headed a committee of Ministers. To be fair the ones I talked to had a lot of faith in Michael Cullen running the process. The Minister indicated that it is now back in his hands and that is probably why we have a bit of over-reaction here. There is a lot of bureaucracy a lot of recommendations the commission will be able to decide to do things and the Minister can totally ignore it. From what I have managed to pick up from this Minister that is all part of the bit of revenge that is going on towards the industry. 
In the speech he read to Parliament it was interesting that the Minister went out of his way to state that the commission would not be independent of the Government. He was very determined about that. He said something—as he does—about that being the way it should be. When we look at the Government appointees to the commission we see that Peter Harris the Council of Trade Unions economist is there and before that Michael Cullen’s economic adviser. Michael Cullen has clearly put that person in there so that he has a line into the commission and can keep tabs. This Minister might have his portfolio back but he is certainly on a very short leash. So Michael Cullen has him there and he has former Labour Party city councillor David Close there as well. He is clearly making sure that this body has a pretty good political input into it from the Labour Party. 
But they are not the majority on the commission. Obviously the commission has some good people on it who have industry experience. To make sure they do not have the run over the politics of this issue the Minister has been quite careful to make sure —as he stated in the House—that the commission will not be independent of the Government. By stating that right up front one can assume that if the commission starts recommending things the Government finds politically difficult then the Government will just not act on those recommendations. The bill actually spells out that the Minister does not have to accept the commission’s recommendations and can choose to ignore them. That is an odd thing to put in legislation. I do not know whether there is a precedent for that but if the Minister ignores those recommendations it is at least spelt out that he or she must  
Gazette 
 that. But I am not sure of the time frames around that whether the Minister has to give reasons or how transparent the process will be. 
In the obviously truncated time we have we will work through these things in the select committee but I am keen to see that we have something that is transparent. I am starting to get the smell of a Minister who has set up a commission who says it will solve any future problems with the electricity market and if the gas market does not look like doing what he wants then he will sick the commission on to that as well. But if logic looks like overcoming politics if people in the industry give good technical advice that is not politically palatable to the Minister then he will ignore it. 
We want to make sure that they can give free and fearless advice—something that is becoming a little bit of a rarity when dealing with this Government. Members can ask any of the Government departments about that. I suspect that we will see a commission that is set up in the same way—a commission that will be more political than anything else that will be used by the Minister to control the players in the industry. That is probably why the players are very nervous about that and why they will be even more nervous now that the Minister will try to ram this bill through the House. 
Perhaps the next Labour speaker—I see Mr Cunliffe is itching to get out of his seat—will tell us whether this bill will be passed before Christmas. If it will not be passed before Christmas why is it so urgent; why do we have to put the companies through this on such a truncated time frame? National will oppose the introduction of this bill but we will work in the committee to see if we can get something better.