Nash Stuart: Energy (Fuels Levies and References) Amendment Bill — Third ReadingText is incorporated into the Bound VolumeNash Stuart: Energy (Fuels Levies and References) Amendment Bill — Third Reading[Sitting date: 17 February 2015. Volume:703;Page:1644. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier): Before I start on my speech I would like to echo a number of tributes to Celia Lashlie. Most have talked about her contribution to a book on boys but I remember having a conversation with Celia Lashlie around prison reform. I said to her that I had heard an interview where she said that she believed that in all her time in the prison service she had come across only six men whom she believed could not be rehabilitated. She said to me—Hon Ruth Dyson: Couldn’t?STUART NASH: Could not be rehabilitated. These were six people who should be locked up and the key thrown away. And she said to me: “Did I say six? It’s probably only two.” So she was a great advocate for prison reform. The Sensible Sentencing Trust and everything that that group advocates was anathema to her to be quite honest. She was a very fair woman and she will be missed.But back to this bill. This is a piece of legislation that we do agree on for a number of reasons. First and foremost Labour understands that we need to honour our international obligations—of that there is no doubt—and very rarely will this side of the House argue against a piece of legislation that ensures we do enforce our international obligations. Of course as the Minister talked about we have got to ensure fuel security—there is no doubt about that as well. There are a couple of points though that we brought up during the Committee stage. One in particular that I would like to allude to is the fact that the legislation actually says that the levy recovered in the application of this bill “may be applied for the purpose of meeting the reasonable costs and expenses incurred by the Crown …”.The concern we have on this side is that when a piece of legislation uses the word “may” there is wriggle room to take any extra money that may be gathered from the taxpayer and put it to other purposes or to put it in the consolidated account. I personally would have loved to see—well I think we should have seen—the word “must” there but it is “may” and I guess we will deal with that. And I guess what we have to do is trust the Government when it says the money that will be raised from this levy will actually be used for the purpose that this legislation is about.There are a couple of other things. There is a slight concern of course with petrol that there are levies upon levies and taxes upon taxes and I know New Zealand First is probably going to elaborate on this. It is a slight concern but when you put it in context if you are filling up a 60-litre tank of gas it comes to about 3c to 4c. So it is not a huge imposition. The Minister of Energy and Resources said that it is user-pays. I suspect that that will not be passed on. I suspect that the oil companies will wear that.One thing that I would be very very concerned about is that once this bill passes which will happen tonight at some point then tomorrow or the next day or by the end of the week we will see oil companies put out a press release that says that the price of petrol is going up at the pump because Parliament passed an Act of legislation that increased the levies we have got to pay. That would be very disingenuous. As mentioned it is about 3c to 4.5c per 60-litre fill-up so there is no excuse whatsoever for petrol companies to put up the price of petrol at the pump because of this piece of legislation.One of the things that the Minister talked about was environmental best practice but one thing he did not talk about was world’s best practice in terms of the operational excellence that we require in this country in terms of oil drilling. The literature is full of examples of how things have gone terribly wrong and the effects that that has caused. That is the last thing that we want in this country; in fact it would go a long way to destroying the global competitive advantage that we have worked so hard over the years to build up and that is “clean green”.However if we start talking about world’s best practice what we find is actually that the companies that are at the forefront of a lot of this exploration in New Zealand like this. The reason I say that is the Todd Corporations of this world for example already operate using world’s best practice but in our country there does not have to be economic development or environmental responsibility. They should go hand in hand—in fact we must demand that they go hand in hand—and this is why we say that any form of extractive industry must use world’s best practice and there are a number of examples around the world where this is put in place. So we are not advocating anything on this side that is world-leading but it is world’s best practice.The other thing that I would like to hear the Government and the Minister speak a little bit more about is what is going to happen to the royalties from oil exploration. Norway is often held up as a country that has done amazing things with the royalties it has earned from oil. In fact I am told—Norway has about 4 million people; similar in population to us—that its wealth sovereign fund funded from oil makes every Norwegian on paper at least a millionaire. It has been very very prudent in the way that it has invested the royalties that come from the oil sector and I would love to see that implemented in this country.There are a couple of other things that I would like to talk about and one is the price of oil at the pump. We have heard from the oil companies in the press that as the price of crude oil has dropped so has the price at the pump. Well between about 2005 and 2010 according to Ministry of Business Innovation and Employment statistics the importer margin on oil was about 13c per litre. Well it dropped as low as 3c per litre at one point but in December of 2014 the margin of the importers got up to 40c per litre.To look at the graph of crude oil in New Zealand dollars versus the price at the pump the gap has widened to such an extent that I believe at some point good hard-working Kiwis who fill up their car at the pump are getting ripped off. They are absolutely getting ripped off. As I mentioned in 2005-10 the average was about 13c per litre and in 2010-14 the margin was about 28c a litre. In the last 6 months of 2014 the importer margin according to ministry data was 33c per litre.I have spoken to some of the oil companies about this and asked what is going on here and they have said to me: “The retailers make only about 4c per litre at the pump.” The other thing they have said is that they do not trust the ministry data that is coming out. So at some point we need to get a level of transparency and accountability into this process. What I would actually like is the Finance and Expenditure Committee to undertake an inquiry into the price of oil and the margins all the way along that supply chain. The reason I would like to do that is that I believe there are some points along that supply chain where there are super-profits being made—where there are probably monopolistic profits being made—and we have no idea.When the dollar dropped recently within about 3 days the oil companies had raised the price of petrol. They came out and said: “The dollar’s dropped. Our price has gone up.” Well I can tell you that as someone who imported and traded in petrochemicals for about 8 years the signals in this market are very very clear. When the price is going down it is pretty obvious that these guys should be hedging short; when the price is going up they buy long. This is not a rocket science industry; it is a pure commodity. Everyone knows what the Organization of Petroleum Exporting Countries is doing and everyone knows what is coming out of the United States but for some reason New Zealanders have been sucked into the public relations of the oil companies that says that when the price drops they have hedged long. It takes a long way for that to filter through. But when the price increases within a week the price goes up. I do not think that is fair. I do not think that is transparent. I actually think Parliament has a role to play in finding out what is going on.So what we are going to ask the Finance and Expenditure Committee to do is make an inquiry into this and if Chairman Bennett allows this—and I am sure he will because there is no politics in this. This is about good hard-working Kiwis—good hard-working Kiwis of whom I know there are a number in his Hamilton electorate. If we find that there is some skulduggery going on then there will be no hesitation—will there Mr Bishop—over going to the Commerce Commission and saying: “You need to come down on these guys very very hard.”But just to wind up we do support this piece of legislation partly because it does allow us to meet our international commitments which is very important. There are a few concerns we have. They are not major concerns; they are just a few concerns. I think we have outlined them but I will leave my other colleagues to talk about some of those. But yes we will support this bill and see how we go. Thank you very much.