Norman Russel: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeNorman Russel: Questions for Oral Answer — Questions to Ministers[Sitting date: 13 May 2014. Volume:698;Page:17739. Text is incorporated into the Bound Volume.]5.Dr RUSSEL NORMAN (Co-Leader—Green) to theMinister of Finance: Will he have any specific initiatives to support investment in green technology in his budgeton Thursday given a report by PricewaterhouseCoopers for New Zealand Trade and Enterprise that shows the potential market share that New Zealand could capture of the green-tech industry would be worth between NZ$7.5 billion and NZ$22 billion to the New Zealand economy?Hon BILL ENGLISH (Minister of Finance): The member will have to wait for the Budget on Thursday. If he visited businesses around New Zealand he would see them investing in green technology all the time. The largest freezing works in New Zealand in my electorate has spent tens of millions on a plant that recycles all the waste dries it and then burns it to meet the energy needs of a very large industrial site. It did not need a green bank or any other particular subsidy to make a sensible investment decision. The Government of course funds research which is under way in areas of new technology vehicle fuel-economy labelling improved efficiency of commercial fleets encouraging alternative forms of transport that are less carbon intensive—among any number of other initiatives. This is all part of the Government’s Business Growth Agenda which is supporting businesses to take advantage of New Zealand’s green growth opportunities.Dr Russel Norman: Has he heard as I have heard on my many visits to businesses around New Zealand support for a green bank initiative and will he adopt the Green Party’s Green Investment Bank initiative to establish a fund to partner with the private sector so that we accelerate investment in green technology and pave the way towards a smarter greener economy?Hon BILL ENGLISH: There are any number of businesses that would be quite happy to I think play with taxpayers’ money at low or subsidised interest cost and quite possibly lose it because it is not their money. No doubt the Greens are being lobbied by those businesses and in fact probably have received a large donation from a member of the public who is advocating—Mr SPEAKER: Order! That will not help the order of this House.Dr Russel Norman: With regard to having large amounts of taxpayer money to spend on its favourite projects how is the Government’s $400 million irrigation slush fund going? [Interruption]Mr SPEAKER: Order! I will allow the Minister a fair bit of licence.Hon BILL ENGLISH: The irrigation fund has I think made a commitment of some $8 million to the irrigation company out of an appropriation of around $400 million and that $8 million is subject to some pretty strict commercial terms. We would expect to get the money back.Dr Russel Norman: Does he think the Conservative Party Prime Minister of Britain David Cameron made an error when he set up a green investment bank which has over £3 billion to invest in green projects?Mr SPEAKER: As far as there is ministerial responsibility the Hon Bill English.Hon BILL ENGLISH: Of course it is up to any other Government to follow its own policy. But I think I would say to the member that in the first place where these investments add up New Zealand businesses are making them all over the place. The Green Party does not have any monopoly on environmental efficiency. Good straightforward New Zealanders do these things when they make sense. Secondly we would be quite wary of setting up some kind of bank subject to political direction because the track record of those things and the track record of so-called higher-profile greentech investment seems to be pretty poor and you would almost certainly lose the money.Tim Macindoe: What reports has he received on recent investments in so-called green technology companies?Hon BILL ENGLISH: I see a range of reports but one could characterise Meridian Energy Mighty River Power and Genesis Energy as companies that have invested intensively in renewable electricity to the point where New Zealand has one of the highest rates of renewable electricity in the world and around about 200000 people took the opportunity to buy shares in those companies. That has been a very positive report—much more positive than what I see is a notably risky investment done by the Green Futures Superannuation Fund. It is allowed to take its punts like everybody else. Unfortunately by investing in Windflow Technology we are told it lost most of its money. That is not to say that every green investment loses money. Many of them are quite successful. It just seems to be that those that have the most political advocacy tend to be the riskiest.Dr Russel Norman: Is he aware that Australia’s Clean Energy Finance Corporation which has nearly half a billion dollars invested in low-carbon energy projects is getting an average return of 7.3 percent over the life of the projects it is investing in?Hon BILL ENGLISH: No I was not aware of that. I would agree with the member that investment in renewable energy for instance can yield significant returns. That was part of what attracted 200000 new shareholders to our renewable energy companies. The point I suppose I am making is that the high-profile symbolic greentech investments with political support tend to be very risky. I would also point out that some of those investments in Australia will be made for instance in wind farms. In New Zealand we have I think the only unsubsidised wind farming industry in the world which operates very successfully generates returns on investments and certainly meets the member’s criteria for green technology investment but does not need a Government subsidy to succeed.Dr Russel Norman: Can the Minister explain why it is OK as the Government has promised to spend $400 million subsidising irrigation projects but the Government does not wish to provide any support in the form of a green investment bank or anything else in clean technology which is not only good for us economically but good for us environmentally?Hon BILL ENGLISH: I simply do not agree with the member’s assertion that the Government provides no support for green technology. We have an extensive science and research programme that is publicly funded and a significant chunk of that spending is precisely on better environmental technologies and understanding the environmental impact of current or new technologies. So the Government is quite open to better suggestions about where more money could go for environmentally balanced economic growth. We have just found that the track record of some of these more politically driven greentech investments is pretty poor. In fact if a politician strongly backs them it is almost certainly the case that they will lose money.Dr Russel Norman: Why is the Government subsidising the oil and gas industry to the tune of about $46 million and subsidising the irrigation industry to the tune of about $400 million?Hon BILL ENGLISH: As I think I pointed out before the actual amount that has been invested in irrigation schemes is $8 million and that investment has been done on a commercial basis. In respect of the oil and gas industry it is actually fairly significantly taxed and I am not sure what subsidy the member is referring to. That tax is paid by every household in New Zealand. I am sure that it would prefer that it was not penalised as an industry with significant taxes on its products but we believe that reflects the right balance of user-pays for roads and pricing the environmental externalities of those products.