Shaw JamesHon JAMES SHAW (Minister of Climate Change): Mr Speaker I'm very sorry to cut Mr Andrew Bayly off because he was just getting into his stride. DEPUTY SPEAKER: I call the Hon James Shaw. Hon JAMES SHAW: Thank you Mr Speaker. He was just getting into his stride at the 9 minutes and 58 seconds mark. Mr Bayly says that we should be more like Australia. Well let me tell you something Mr Bayly: Australia has a higher top tax rate than New Zealand does and a capital gains tax. So if he wants us to be more like Australia I welcome his support for higher taxes on those who earn more money and capital gains taxes because if he thinks that New Zealanders are going to up sticks and move to Australia on the basis that somehow they'll be better off on those bases he's incorrect.Mr Bayly said a few other things in his opening comments that I thought were quite brilliant—that in Koru Clubs all over New Zealand loyal National Party supporters are saying to him that this Labour Budget is a bad thing which is not terribly a surprise really. He also said that they need a pathway back to prosperity and given that only one in four people vote for National these days he's right. They do need a pathway back to prosperity because it's going to be a very long time before he's able to be in a position where as Treasurer or finance Minister or some combination of those things he's going to be able to do what Australia does and impose higher taxes and a capital gains tax. I look forward to the day when that happens.I'd like to draw attention to a few things in Budget 2021 in relation to climate change because one of the characteristics of climate-related spending is that it is distributed across many other parts of the Budget and it's not sort of packaged together. But this was actually quite a significant Budget in terms of expenditure on initiatives that will help to reduce New Zealand's greenhouse gas emissions. The total actually comes to about $2.3 billion of both capital and operating expenditure in Budget 2021 much of which is directed at reducing our transport emissions which is of course the one area that has seen relentless increases year on year over the course of the last 20 years. So we are investing money in the worst part of our emissions problem trying to arrest the increase in our transport emissions and to start to bring those back down. The expenditure included an additional $1.3 billion worth of rail about 80 percent of which will end up helping to move freight from the roads and on to the rail network. That will have a significant impact.There is $302 million for shall we say electric vehicle (EV) incentives which will be announced in the coming weeks as to the precise form of that. But obviously that's been a topic of much discussion over the years and that's helped to sort of start to transition our light-vehicle fleet around the country from internal combustion engine vehicles to electric vehicles. There is $56.7 million to implement the Clean Car Standard. That is because we and I think Russia are the only two countries in the OECD that do not have tailpipe emissions standards. Minister Michael Wood has brought those in. It's taken us a long time to catch up with the rest of the OECD on that and so we'll be bringing those in.There is $6 million to implement the biofuels mandate or to bring back the biofuels mandate that David Parker brought in under the Helen Clark Labour Government but which was then thrown out by the incoming National Government on the basis that it might do some good. The biofuels mandate will help to ensure that every litre of fossil fuels that go into our transport network will have a biofuels component and therefore over time will bring down the emissions profile of those existing internal combustion engine vehicles into the fleet.So you can see that there is a comprehensive plan for how to start to reduce emissions from transport. There was also an additional $120 million to extend the Warmer Kiwi Homes programme which does have a long history of bipartisan support and it's made a huge difference in this country—Hon Gerry Brownlee: Who started it?Hon JAMES SHAW: —and of course $300 million—and I'm hearing from Mr Brownlee here Who started it? Who started it?" Well under an agreement between the Greens and the incoming National Government that Minister there brought it in. I want to acknowledge the work that he did doing that and also the fact that he actually went out and got more for that programme than was asked for. So it's like I said a long history of bipartisan support for that programme.The other thing I wanted to draw attention to is the $300 million that is going towards Green Investment Finance Ltd which is the vehicle that we set up in the last term of Government to help to direct capital towards the green economy. At the time we put in a minimum viable proposition of $100 million that was really to ensure that we were just doing kind of proof-of-concept work. It wasn't a lot of capital and so there are certain deals that it hasn't been able to participate in. Now what we've done is we've quadrupled the size of that fund which will enable it not just to do more but also to participate in larger deals as well. So that was a pretty significant component in Budget 2021 but actually the thing that I really wanted to draw the House's attention to is the commitment that from next year 100 percent of revenue that's brought in under the emissions trading scheme (ETS) is going to be recycled into the transition to a low-carbon economy. That is something that we have been working towards for a number of years and I'm delighted that the Minister of Finance made that announcement as part of the Budget package this year so that people can see that it's coming.Now we'll be working on the shape of that during the course of the second half of this year as part of the decisions that Cabinet has to make around the emissions reduction plan which agencies are working on but will really fire up from late next week once we've tabled the advice of the Climate Change Commission which will come out next Wednesday at midday.One of the things that the Minister of Finance said in his Budget speech is that the way we do public finance in Aotearoa has some useful disciplines but it is very poorly designed to deal with complex distributed multigenerational challenges like climate change. We have seen that and I've experienced as both a Minister of Climate Change and as Associate Minister of Finance in the last term that it is not well-suited to be able to respond in a comprehensive way over multiple generations. So the Minister of Finance and I will be working on as part of the work on the emissions reduction plan how we need to reorganise public finances to be able to cope with that long-term challenge. That is underpinned by the announcement that that revenue from the ETS will go towards recycling of that revenue.So we have said that we're not waiting for the emissions reduction plan. Like I said this Budget does include $2.3 billion worth of new money that will help to reduce New Zealand's greenhouse gases and of course we've signalled a long-term pathway from Budget 2022 onwards. But I do want to say we have spent a lot of time and effort over the course of the last few years putting in place a comprehensive plan for how we deal with climate change.Over the last 3½ years we have ended new offshore oil and gas exploration we passed the zero carbon Act with bipartisan support and we've become one of the first countries in the world to put the 1.5 degree global warming threshold under primary legislation. We established the Climate Change Commission and we will soon have our first three emissions Budgets. We've overhauled the emissions trading scheme and put a sinking lid on emissions for the first time. We've overseen the more than doubling of the carbon price since we got into office from $17 a tonne to $37 a tonne. We've started planting a billion trees and invested $1.2 billion in Jobs for Nature creating permanent carbon sinks all over New Zealand.We've invested billions of dollars into buses and trains cycling and walking infrastructure. We've invested in EV charging infrastructure around the country. We've started to replace the Government fleet with zero-emission vehicles. We've brought in vehicle emissions standards for new imports for the first time in New Zealand history. We've brought back the mandate to include biofuels in the petrol that we'll still include in our cars for years to come. We've set up a new energy research centre in Taranaki to kick start the hydrogen economy. We're helping businesses to switch to clean energy with the Government Investment in Decarbonising Industry Fund. We've started replacing our own coal boilers in our schools our hospitals and our universities with clean alternatives. We've made Green Star six the minimum build standard for all new State homes. We've started the Building for Climate Change programme to cut emissions from building and construction. We've increased subsidies for home insulation.We've conducted the first nationwide climate change risk assessment and committed millions of dollars to flood defences in some of our most vulnerable communities. We've published climate change curriculum resources for schools doubled our climate change - related aid to the Pacific declared a climate emergency and committed the Public Service to be carbon neutral by 2025. We've paid back every single one of the dodgy hot air units that entered New Zealand under the hot air scandal of the mid-2010s. We've become the first country in the world to legislate for a price on agricultural greenhouse gas emissions and we're currently building the world's only farm-level emissions measurement management and pricing system and we're the first country in the world to introduce legislation to require all listed companies and large financial institutes to report on their climate-related risk. We have done more in the last 3½ years to prevent the climate crisis than the last 30 years of Governments combined and I'm very proud of the track record that we've got. Is it enough? It is absolutely not. That is why we must build on this work and keep going from next year onwards."