Foss Craig: Climate Change Response (Moderated Emissions Trading) Amendment Bill — Procedure Second Reading In Committee 
Text is incorporated into the Bound Volume 
Foss Craig: Climate Change Response (Moderated Emissions Trading) Amendment Bill — Procedure Second Reading In Committee 
[Sitting date: 24 November 2009. Volume:659;Page:7936. Text is incorporated into the Bound Volume.] 
CRAIG FOSS (National—Tukituki) 
: 
 Firstly I am quite offended by the implication and insinuation from the previous speaker Dr Russel Norman who said that this House may be opening itself up for corruption if this Climate Change Response (Moderated Emissions Trading) Amendment Bill is passed. I think that all members should take offence at that. I note that he was trying to word it carefully but the implication was quite obvious. It might make good headlines but I for one was quite offended by it. However I let the member speak. 
There is another point to note while we are talking about independent analysis which a member opposite recently questioned in his speech. The Finance and Expenditure Committee—and any member of this Parliament actually—has access to all the analysis studies submissions and whatever one likes from the two select committees that looked at this issue previously. In 2007 the Finance and Expenditure Committee examined the emissions trading scheme bill and a special committee reviewed the legislation earlier this year. In terms of the latter committee the New Zealand Institute of Economic Research and Infometrics did some substantial in-depth work on most of the issues that are before us right now. If members want to take a static snapshot of where we are now then I guess they are technically correct—at least the previous speaker was—but actually all the information is available. As we said constantly during the select committee process this bill rests on the work of the members of those other committees and their advisers. 
I shall now touch base on the allocation. The words “free allocation” were used by Dr Norman and he talked about people’s money being given away as part of it. We have to remind ourselves that there is a whole lot of free allocation under the existing legislation. That message is getting a bit lost with some members trying to put the word out there that some vast cheques are going to be written. It was interesting that during the select committee process some Labour members were getting up to speed on their own existing legislation although they must have seen the Cabinet papers when they were in the previous administration. 
We have to ask why the previous administration even considered and brought in free allocation and why the current administration is continuing it. The arguments were about the execution of it its timing and some other points that other members have raised to be fair. It is quite simply because as an exporting nation New Zealand is very exposed. We are trade-exposed job-exposed credit-exposed or whatever one likes. Yes the previous administration had ambitions to be carbon neutral and all sorts of things and other members have canvassed those issues but the point was to put in a framework to get New Zealand out of the starting blocks. We wanted to have in place a framework and a scheme to have in place a price for carbon emissions—be it the marginal price the full price or whatever it is. Yes we will be arguing for a wee while about the speed of it but that is actually it. But the risks were also acknowledged. The risks were quite simply that if New Zealand was to do it without having some kind of compensation or if the Crown was to keep all the units allocated to New Zealand then if our major industries our major employers our major processing industries did not pack up and leave by the dozen they would at least drive down or kill off their production lines. That is simple economics. Quite simply—and the previous administration also acknowledged this—we compete with Australia mostly with regard to most of what we produce and if our competitors are not facing the same cost inputs that we are they will be able to penetrate and sell to our markets at a lower price or to take larger profits than we can. At the end of the day who would be the loser? It would be “New Zealand Inc.” What is “New Zealand Inc.”? It is the Crown and the private sector and therefore jobs would be lost. 
The whole argument that we have heard today and I am sure we will hear it again tonight we will be quite— 
Hon Maryan Street 
: This is too simplistic for words. 
CRAIG FOSS 
: Quite simplistic? It will not be as simplistic as that member’s history as a Minister but we will not go there at the moment. I cannot recall seeing that member at the select committee; maybe she was there. 
Why is the free allocation there? We have got the 1.3 percent per annum phase-out rate in this bill. We must remember that agriculture alone has had an efficiency gain of about 1.5 percent per annum for the last 10 to 15 years or maybe for even longer. People in the sector are doing it anyway. 
My point is quite simply that we should acknowledge what is in place already. Yes there are these crazy headlines that other members are talking about but the free allocation is about saving New Zealand jobs holding on to what we have and growing our economy. It is as simple as that. I cannot quite see why other members get up to try to argue that point. I am yet to be convinced. Let us have a debate about what this particular bill is putting in place without as some members are doing ignoring what is in place now. Thank you.