Boscawen John: Third Readings — 
Text is incorporated into the Bound Volume 
Boscawen John: Third Readings — 
[Sitting date: 20 May 2010. Volume:663;Page:11186. Text is incorporated into the Bound Volume.] 
JOHN BOSCAWEN (ACT) 
: 
 What a great place that is to start from because we have just heard from Mr Norman that the central greatest challenge that we face as a country is climate change. He reminds me of Kevin Rudd who said just last year that the greatest moral dilemma facing the world was climate change. That is what Kevin Rudd said. And what did he do? He planned to introduce an emissions trading scheme then less than a month ago he said he would not introduce an emissions trading scheme until at least 2013. The impact of that is to put New Zealand right out in front; we are the first and the only country to have an emissions trading scheme which will put our businesses and our exporters at risk when our three largest trading partners Australia China and the United States do not have an emissions trading scheme and do not put a tax on electricity and petrol in the same way that we will be doing. I challenge Mr Smith to name one country in Europe with those same costs in relation to its three largest trading partners. I say to Mr Norman that to suggest that the great challenge is climate change puts him in the same place as Kevin Rudd. 
There is much to commend in this Budget. One of the great tragedies of the last 10 years is that it has been a period of wasted opportunity. It started off in December 1999 when the then new Prime Minister Helen Clark imposed an envy tax. She increased the top marginal rate from 33c in the dollar to 39c in the dollar and what did that do? That spurred out best and our brightest to commit their time and resources to tax evasion and tax restructuring. We had a whole growth in trust developments and tens of thousands of new family trusts were formed to take advantage of that gap that opened up between the 33c and the 39c rates. On this occasion the National Government has moved to reduce that top marginal rate from 38c to 33c. That is one thing to congratulate this Government on. It has also moved to lower marginal tax rates. 
It has reduced the rate of company tax from 30c in the dollar to 28c in the dollar. The Prime Minister was very proud yesterday—indeed he should have been—that our company tax rate is now lower than Australia’s. What he did not say however was that we have an emissions trading scheme tax on electricity. Our electricity is already more expensive than electricity generated in Australia and we will make our electricity even more expensive. So it is little wonder that we need to reduce our company rate of tax from 30c to 28c to enable our businesses and our exporters to compete. 
I want to focus on just three groups of people affected by this Budget. I turn first to farmers because National has been very good at saying farmers are affected by this Budget or by the emissions trading scheme no more than the average New Zealander. That is simply not correct. Meat and Wool New Zealand has calculated that the cost of the emissions trading scheme for the average dairy farm will be $10200 by 2015. Those costs fall into three categories. First they fall into the cost of electricity and petrol which most New Zealanders would pay and Meat and Wool’s estimate of the cost to the average dairy farmer is $1300 from 1 July this year. 
Second dairy farmers are faced with the costs of Fonterra: Fonterra’s processing costs and the costs incurred by other dairy processors—that is electricity and the emissions they have to pay for on gas and coal that they purchase to create steam that is necessary for processing milk. The costs that Fonterra and other dairy processors are expected to incur come to $2600 from 1 July with a further $2600 coming in 2013 and those costs are borne by the dairy farmers. Fonterra is a cooperative of dairy farmers and those costs fall to dairy farmers. So the cost that dairy farmers will face in the first year of the emissions trading scheme is $3900. 
I notice that Mr Mallard was quoting from the tax tables in this morning’s  
Dominion Post. 
 The newspaper also states that dairy farmers would need to be earning in excess of $150000 for them not to be worse off as a combination of the emissions trading scheme tax and this Budget. The same can be said of beef and sheep farmers. They do not incur costs to the same extent but they certainly incur far more than the average New Zealander and they incur them not just for electricity and fuel—diesel and petrol. I say to the farmers of New Zealand that there is only one party here that is prepared to stand up to fight the emissions trading scheme because this Budget was a real opportunity for the Government— 
Hon Dr Nick Smith 
: What did you tell the foresters? 
JOHN BOSCAWEN 
: I say to Mr Smith that I will come to foresters. This Budget was a real opportunity to suspend the emissions trading scheme. I explained earlier that Australia has put off its emissions trading scheme until at least 2013 and the reason Mr Rudd gave for that was simply the fact that no other countries were following. Australia was not prepared to lead the world. Our Prime Minister promised that he would not lead the world and that is exactly what we have done; we have been catapulted into world leadership. Unlike the countries of Europe unlike the countries of the European Union which put costs on themselves to equally disadvantage each other this country has put costs on businesses and exporters that none of our three largest trading partners are incurring. 
Let us look at foresters. Mr Smith asks what we are going to do with regard to foresters. 
Hon Clayton Cosgrove 
: Dr Smith. 
JOHN BOSCAWEN 
: Dr Smith told this House if I heard him correctly less than a month ago that this Government will allocate $1.1 billion of credits to foresters who have planted trees since 1989—$1.1 billion. I spoke to Dr Smith’s officials the day after that and I am very grateful to him for making his officials available to me. They explained to me that it was actually not $1.1 billion for forests planted since 1989; it was $685 million for forests planted since 1989 and some $400-odd million for forests planted before 1990. 
That is a very important distinction because foresters who have planted trees since 1990—and there have been hundreds and hundreds of hectares of New Zealand planted in forest since 1990—did not plant those forests in the expectation of subsidies from this Government. They did not plant them in the expectation of $1.1 billion worth of subsidies. Let me quote what a newsletter from Greenplan a company based in the Taumarunui - Te Kuiti area says to its investors: “When most of you invested in Greenplan the ETS wasn’t known about and global warming had just started to become a buzz word. The prospectus didn’t mention who would get what if ever we sold carbon credits. In fact carbon credits didn’t become common jargon until after the turn of the century.” 
There is a real reason that the income tax cuts in this Budget are not greater and that we have to have a 2.5 percent increase in GST and it is that this Government is determined to give $1.1 billion of credits to people who were not even expecting them. By their very own words Greenplan’s newsletter to its forest investors says: “You guys have never had such a good deal. You will get a windfall gain and all we ask is that you give us 10 percent and you as clients can keep 90 percent.” It is an absolute tragedy because unless this emissions trading scheme is suspended before 30 June we will give up $1 billion to $2 billion. 
I see Mr Mallard listen interestingly. I ask him whether there is anything that the Labour Opposition can do to stop this massive transfer of wealth—not to millionaires so that they can buy more property but to owners of forests so that they can plant more forests. I understand that Dr Smith is concerned about our Kyoto Protocol obligations and there is a very real way we can ensure that we keep within our limits. The trees that are being harvested right now at the end of their 28-year growing life are trees that were planted in 1982 1983 and 1984. There may be some smaller trees that have been taken for thinning but essentially they are trees planted in the early 1980s. There is a financial disincentive on foresters to harvest those trees without replanting them. It would be absolutely possible to amend the emissions trading scheme so that those people continue to have that financial disincentive. 
I could go on to talk about the fact that there are superannuitants who will not be fully compensated. This Budget which has achieved so much could have done so much more.