Fitzsimons Jeanette: Questions for Oral Answer — Questions to Ministers 
Fitzsimons Jeanette: Questions for Oral Answer — Questions to Ministers 
[Volume:623;Page:18318] 
3.  
JEANETTE FITZSIMONS (Co-Leader—Green) 
 to the  
Minister of Finance 
: Does he stand by the statement in the December Economic and Fiscal Update 2004 that: “By the end of the forecast period the oil price is projected to reach US$35 per barrel” when today’s price for Brent crude is around US$44 per barrel? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The forecast is just that: estimates of what will happen in the economy based on the best information available at the time. If anybody in the House is certain of what the oil price is going to be in mid-2008 I would suggest that person retire now and make his or her fortune. 
Jeanette Fitzsimons 
: Can he confirm that Treasury has revised its medium-term oil price upwards from $19.50 a barrel to $35 a barrel in the last 6 months and how confident is he that Treasury has it right now given that the futures market—in which Treasury places a great deal of faith—shows oil prices as being above US$40 a barrel for the rest of the decade? 
Hon Dr MICHAEL CULLEN 
: As I said forecasts are precisely that. What I can say is that the volatility around oil prices and other economic inputs reinforces the wisdom of running a conservative fiscal policy because of the buffer that creates against external shocks. 
Jeanette Fitzsimons 
: Has this Government made any assessment at all of how climate change and oil prices will affect “the future of our dreams” and why are the Treasury and the Government largely silent on the economic risks that those global threats pose? 
Hon Dr MICHAEL CULLEN 
: Neither the Government nor the Treasury is silent on the economic risk posed by climate change by volatility around oil prices or by other forms of international volatility. We comment on those issues with great frequency. 
Jeanette Fitzsimons 
: Can the Minister confirm that the local price of petrol and diesel is being kept in check at present only by the high exchange rate of the New Zealand dollar and what plans does he have to reduce our dependence on oil in order to prepare for the time when the dollar falls fuel prices rise and wages stay virtually static? 
Hon Dr MICHAEL CULLEN 
: The Government has a policy around sustainable development and around an energy policy for the use of sustainable resources where possible. It has encouraged gas exploration and gas exploration in New Zealand in New Zealand dollar terms would have a higher value if the exchange rate of the New Zealand dollar falls. However I would have thought that the Green Party would welcome high energy prices for non-renewable resources. 
Peter Brown 
: Will the Minister give the House an assurance that he will not impose the additional 5c a litre levy on petrol which the Customs and Excise (Motor Spirits) Amendment Bill will allow him to impose when it is passed until oil and petrol prices have stabilised at a relatively low level; if he will not give that assurance can he tell us what criteria will need to be in place before he does impose the 5c levy? 
Hon Dr MICHAEL CULLEN 
: I cannot. I do note that at the pump prices are now lower than they were when I said we would change the implementation date. 
Jeanette Fitzsimons 
: With average household transport costs rising 16.4 percent over the last 3 years and families now spending as much on transport each week as they do on food how does he expect them to cope let alone save in a decade of even higher costs unless the Government takes the lead in reducing our dependence on oil? 
Hon Dr MICHAEL CULLEN 
: The Government has a range of policies but one policy that is quite important in terms of shifting from non-renewable to renewable resources is actually that of having higher prices for the non-renewable resources. I would have thought that the market mechanisms that send signals around shifting production from one form to another would be welcomed by the Green Party.