Mackey Moana: Energy (Fuels Levies and References) Amendment Bill — First ReadingText is incorporated into the Bound VolumeMackey Moana: Energy (Fuels Levies and References) Amendment Bill — First Reading[Sitting date: 05 March 2014. Volume:696;Page:16386. Text is incorporated into the Bound Volume.]MOANA MACKEY (Labour): Even for that member Kanwaljit Singh Bakshi that was a ridiculously short speech. If he really thinks that what Andrew Williams was saying was so wrong maybe he could have taken a bit of time to earn his $140000 a year salary and to actually put the counterfactual to it rather than saying: “That was rubbish. I commend this bill.” Unfortunately that is the quality of debate we have cometo expect from the National members. Labour will be opposing this piece of legislation. What we have seen—Hon Todd McClay: A racist comment.MOANA MACKEY: What was that Mr McClay? I am sorry. I raise a point of order Mr Speaker. I take deep offence at being told by Mr McClay that I am being racist.Mr DEPUTY SPEAKER: Did the member say that?Hon Todd McClay: Speaking to the point of order—Mr DEPUTY SPEAKER: Well I am asking the member a question. I did not hear it. Did he use those words?Hon Todd McClay: Not directed at that member no.Mr DEPUTY SPEAKER: Did you use those words?Hon Todd McClay: But—Mr DEPUTY SPEAKER: Well the member will withdraw and apologise.Hon Todd McClay: I withdraw and apologise. I raise a point of order Mr Speaker. I was talking about something someone else said. It was not directed at that member. She should not be so—Mr DEPUTY SPEAKER: I do not care. Would the member please sit down. If the member was using those words in the House it was inappropriate.MOANA MACKEY: As I said Labour will be opposing this piece of legislation the Energy (Fuels Levies and References) Amendment Bill. We do agree that it is important that we uphold our international obligations of which this is one but there were a number of options on the table for the Government in terms of how it meets those obligations.The user-pays approach that has been chosen is enormously regressive. Currently it is funded out of general taxation. The benefits of being signed up to this International Energy Agency agreement mean that all of New Zealand benefits. I have heard Ministers speaking and say that this protects our economy from price shocks there are reasons why we do this and we are hugely reliant on oil in this country. Well that to me says that this is a public good. This is not just about people who drive cars; this is actually about our entire economy. As such I do not think it is unreasonable therefore that the funding for this—and the funding is increasing and does need to increase—comes out of general taxation.Whenever we in the Labour Party see something like this we like to pass what is called an equity ruler over what we are doing. This will hit people who have no alternative to driving their car to work. I am thinking of the shift worker who lives in a part of provincial New Zealand where public transport is not very widespread and it certainly does not run at night. Even in the cities there are limitations on when public transport runs. They have a car because walking or cycling that late at night when you are doing shift work is not an option. Well this bill will put the price of their petrol up. It is regressive. It is incredibly regressive for the poorest families. It is the same thing that we saw with GST—again a very regressive approach.But in fact the benefits of having these stockpiles are there for all New Zealanders. It is ridiculous to say that it is only people who drive cars who get the benefit of this. I tell you what if we ended up in some really big oil price shock people with cars would be the first people being told: “You can’t drive them. Actually these reserves are going to be used for running other things in our economy.” You know if we think about the carless days back when we had the last price shock we know that it is actually the people who drive the cars who will be the first to be asked to stop using oil. So why are they the ones who are then going to be paying for it? From our perspective in the Labour Party we cannot understand the arguments for burdening a small group of NewZealanders when the benefits are actually applicable to all especially when at the same time the Government is also doing nothing about the apparent price-gouging that is already happening in terms of the price of carbon.We heard evidence at the last Emissions Trading Scheme Review Committee from Gull which has to purchase its fuel from the other four big oil companies that it is being charged carbon prices hugely in excess of what the market is currently pricing carbon at and that there is no transparency around that. As long as they do not say that they are charging something different they are perfectly entitled to make a profit off carbon. This Government has sat on its hands and done nothing about the increases in electricity prices and fuel prices that are a result of that price gouging and that has hurt some of the poorest families as well. So from our perspective this is a national good. Having this energy security is a national good so it should be general taxation that covers it not a levy targeted at people who drive cars.There have been two points that Government members have made. One is that this is about our international reputation and we absolutely agree. We cannot be reneging on these kinds of agreements. Why is it though that National members care about our international reputation only when it comes to how much oil we are keeping in the country? When it comes to our polluted waterways when it comes to our complete inaction on climate change and when it comes to the consistent undermining of our clean green image they are nowhere to be seen. International reputation does not matter then but God forbid it gets pointed out that we do not have enough oil in the country. Then suddenly those members are all about our international reputation. A little bit of consistency from National members would be nice when they are considering our standing on the world stage and how we are viewed in that respect.So the second point that Government members have made has been that this is why we need more oil and gas exploration. This is based on our net imports so the more that we export the cheaper these levies are going to be. But if you read the regulatory impact statement there is another alternative: we could stop using as much oil. We could reduce the need to import as much oil. We could support the biofuels industry. We could develop alternatives that would give us energy security in our own right in New Zealand—far more energy security than we have currently being hugely reliant on a product that we overwhelmingly have to import. But the Government’s plan is that we will just keep trying to find more oil and as we have seen so far this is a high-risk area.There are no guarantees that we are actually going to find commercial yields of oil but we do know that there is a lot of low-hanging fruit there in biofuels and alternative energy sectors that we could be capitalising on right now. I say to National members that you could do both. This does not have to be an either/or. You could do both. If the Government was to do both then that would reduce the cost of these levies so it comes down to the question of why oh why we are taxing biofuels as part of this bill. Why are biofuels one of the energy sources that are going to be levied? It is extraordinary. How are we going to incentivise the production of biofuels if we make them more expensive by levying them to pay for more oil? Why would we not exclude biofuels when they actually help us reduce the cost of these levies and reduce the amount that we need to import into the country?That beggars belief especially when you see just how many exemptions there already are under this particular levy. So at the moment jet fuel for domestic use is not targeted and other petroleum products are not targeted. Let us be quite clear: we use oil in this country for a lot more than just energy. Most of our world is made of oil. So this is not just about energy but none of those other applications or uses of petroleum are going to be targeted by this levy. Liquefied petroleum gas (LPG) is not going to be targeted by this levy and neither are bitumen solvents or as I said jet fuel fordomestic use. There are all these exemptions so why can we not exempt biofuels? I want the next National Party speaker to answer that if we can exempt all those other things.And let me remind you that in the regulatory impact statement the Government said that the lack of exemption is because at the moment there is not a lot of biofuel production in New Zealand so it is very small. Well there is not going to be any production if we keep taxing it out of existence to pay for more oil. Interestingly enough the reason given for why LPG production is not included in this particular levy is that the size is so small as to not be worth it. That argument can be rolled out for other fossil fuels but for biofuels no they are included and they are taxed despite the fact that they actually help us reduce the amount of oil that we need to import which would ultimately reduce the levy that needs to be paid.Finally I want to come to another worrying part of the bill which is that it introduces a regulation-making power that would give the responsible Minister the ability by Order in Council—so without having to come through Parliament—to actually increase this levy. At the moment the fuels that can be levied are specified in the Energy (Fuels Levies and References) Act as is the maximum levy rate. The proposal is that the Act be amended to provide for the Minister of Energy and Resources to make regulations that specify the fuels that can be levied and the levy rate. At the moment there is a maximum levy rate there in the legislation. This bill is going to be doing away with that. So I predict that we will see more levy rate increases in years to come more targeting of one group of people whilst exempting a whole lot of others for no good reason more levies put on biofuels—one of the very industries we want to support—and once again no move towards energy independence or energy security for New Zealand as a whole.So yes we do need to do something about this. No one is suggesting—that I am aware of—that we renege on our international obligations but there were options open to the Government that could have reduced the impact on the poorest households and recognised the public good for everyone of energy security and therefore have it come out of general taxation rather than a targeted levy. Those options could have supported our biofuels industry rather than adding another tax to it which will make it harder for the industry to develop and for us to achieve the kind of energy security we need in this country. That would support our international reputation not just in terms of how much oil we have stockpiled but in terms of how much we are doing to live up to our “clean green” and “100% Pure New Zealand” brands. This bill does nothing to achieve that.