Cunliffe David: Climate Change Response (Moderated Emissions Trading) Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Cunliffe David: Climate Change Response (Moderated Emissions Trading) Amendment Bill — In Committee 
[Sitting date: 24 November 2009. Volume:659;Page:8019. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I appreciate the opportunity to correct for the record some of the gross—I am trying to find a parliamentary word—untruths that have been contained in the comments of the Minister for Climate Change Issues the Hon Dr Nick Smith from the floor. I begin with the last one he made: that Labour somehow walked out of good-faith negotiations with the Government. Let me remind the public of what actually happened. The negotiations were proceeding well. We were down to three sticking points and the major one was around the use or not of a global emissions cap. We had indicated that we would accept a variant of intensity-based emission charges and that was a major concession for the Labour Opposition. The nature of our offer is set out on the public record in the Finance and Expenditure Committee report. 
But something happened and it was not the deal with the Maori Party; it was the Labour Party conference in Rotorua. That is relevant because a source close to the National Party has told us that the polling indicated that Labour support grew by 5 percent and our leader’s popularity grew by the same amount in that week. The pollsters said to John Key: “Thou shalt not allow a deal with the Labour Party on climate lest they be seen as statesmen.” So the word went out to the Climate Change Iwi Leadership Group and the financial backers few in number though they be of the Maori Party. And Hone Harawira who had opposed the previous bill because it did not go far enough was reined in. It is ironic—it is silly—for the Minister to raise that in the Chamber because today that has come full circle. 
This morning we heard from the media that the Maori Party council would be called together later today in an emergency meeting to discuss the issues and to raise their concerns about the costs on ordinary Maori. Maori Party sources calculate that Maori would have to pay $500 million to $1 billion a year through cutting services increased taxes or the sale of assets. On the other hand under the deal with the Government five iwi would get $2 billion but some in the Maori Party insist it does not offset the money all Maori will have to repay over 40 years which they calculate at between $21 billion and $42 billion. We see full circle today the Maori Party being sacrificed on the altar of Business New Zealand and Fonterra. 
That brings me to Fonterra because word has reached me that Fonterra is none too happy because its deal implied an allocation being made in Australia for agriculture. Although the scheme in Australia is uncertain I understand that agriculture is being left out and there is no free allocation to the competitors of Fonterra across the Tasman. So there has been some late-night work in the Beehive to determine whether late amendments could be submitted or whether the Minister will use his discretionary powers under this bill to cut a subsequent deal for some of our largest industries over and above the shabby tawdry deal that has been brought to this House already. 
That brings me back to process. I do not need to be lectured by Nick Smith on financial rectitude thank you very much when that Minister has refused the public a right by withholding under the Official Information Act critical pieces of the analysis that go to the financial estimates around this bill and when the Minister has officials who have through no fault of their own had to admit to the Finance and Expenditure Committee that they had not done sensitivity testing around the financial costs of this bill. They could not produce for the committee a range of scenarios and tell the committee the assumptions on which they were based. Treasury’s own regulatory impact assessment unit therefore had to conclude that the analytic base of this bill was insufficient for a matter of this importance. So we do not need to be lectured by National members on fiscal prudence. From now until the next election National members will never be able to look New Zealanders in the eye and say that they are the custodians of fiscal responsibility because today they have sold our children and their children down the creek. 
I do not need National members trotting out the old refrain of “You had 9 years; what did you do about it?”. They were 9 years of the longest post-war economic expansion in New Zealand’s history years when we saw an enormous boom in the dairy sector and forestry conversions came into that. But of course we recognised that the matter of putting an overall global cap on emissions was essential. It was because of the difficulty we experienced—and I give due credit to the former Minister responsible for Climate Change Issues David Parker who spoke so eloquently just a few moments ago—that we understand the difficulties of this problem. We have been there before. That is precisely why we know that a global cap is essential. It is precisely why we are very hesitant to embrace any form of intensity-based “control”. It is precisely why we know that industry will take everything that the Minister for Climate Change Issues has so generously given it in this deal and then tomorrow he will wake up and it will want more—it will want more and more. 
That is also why I want to acknowledge a PhD thesis by Dr Rick Boven who is now the director of the New Zealand Institute. He is a very eminent economist. He modelled the political economy of climate change against the Intergovernmental Panel on Climate Change’s projections of global warming. He looked at the political economy of when democracies are likely to adjust. The problem is that 50 years after we limit emissions the planet stops warming as a result of the emissions we let go a generation before. There is a real risk that if the planet warms by more than 2 or 3 degrees Celsius we could set up self-reinforcing processes that mean that it is virtually impossible to stop global warming. The outcome of the econometric modelling by Dr Boven showed essentially that the planet is going to fry and that fundamental disruption to human civilisation is likely because of the 50-year lag time combined with the reluctance of democratic governments to take the steps required to rein in industry. That means that our children face horrific consequences. They will look back on us as David Parker so eloquently said and they will ask us why we looked over the brink. Did we not know? Were we not informed? Did we not understand the problem of the lags? Were we not prepared to have the courage to look at the future and say “Now we must start to turn it round.”? 
I am sad today for our children because I know that they will face tougher decisions than those we have not faced up to in this Chamber today. It will not be just about climate because the Government is making a habit of passing our hard problems on to our children. They will have the burden of superannuation to catch up on because the Government has cancelled pre-funding so there will be fewer than half the taxpayers per retiree paying to catch up. [ 
Interruption 
] I hear a member opposite ask why that is relevant to the bill. I will tell the member why. The Minister for Climate Change Issues has had the gall to say that the fiscal liabilities the $50 billion to $110 billion in this bill are not real money. Well of course they are real money. They are an offset that could have been used in part to cover the costs of superannuation or the costs of adaptation to catastrophic climate change or the costs of educating our children how to live in a future that we would not dare live in or the costs of sending them to some other planet because this one is ruined. So please do not tell us that somehow the $100 billion does not matter because we are not sending all of it to the United Nations. Of course we are not sending all of it to the United Nations. But it is a real liability and it is a real offset that must be met against expenditure or increases in taxes or debt. It is not appropriate to ascribe to one piece of expenditure one item of revenue and square it off. It all goes in the same pot and the write-offs go to the country’s largest polluters the multinationals that own part of our energy sector as well as the Crown—and the Crown ought to be ashamed. Those debits will come back to haunt our children. 
I do not want to export jobs but the Minister for Climate Change Issues has made no evidence available to the Finance and Expenditure Committee that that prospect is substantial; nor has any logic been demonstrated as to why if it was a real issue the bill has been designed as it is. Let me give several examples. If we wanted to stop exporting jobs why would we not impose the carbon liabilities on the actual fishermen burning the fuel or the actual farmers who could change their crops or their herds to a lower-emitting standard? Why would we not have a demonstrable logic related to carbon intensity between sectors?