Brownlee Gerry: Urgent Debates — Electricity Industry 
Brownlee Gerry: Urgent Debates — Electricity Industry 
[Volume:608;Page:5852] 
GERRY BROWNLEE (NZ National—Ilam) 
: 
 Today’s announcements by the Government are nothing more than spin and offer absolutely no solution. Not one person in this country will be spared power cuts if they are needed later this winter as a result of this announcement and not one community will be spared hot water cuts if they are needed later this winter as a result of this announcement. But what we can be certain of is that the coffers of the Government will swell in the next 12 months by some $200 million levied against those shivering consumers. 
It is amazing that we have just broken the Budget debate to talk about this new announcement. The Budget was hailed not only as a somewhat bland document but also as one that did not introduce any new taxes for New Zealanders. Well what have we had in this House in the last couple of weeks? The first thing we had was the sherry tax—the tax levied on those elderly New Zealanders who like to have a glass of sherry in the evenings. That was levied by Helen Clark and her Government against those people. Today we have another $200 million tax levied against consumers of electricity simply so that the Government can hold its head up and say: “How clever we are! We’ve come up with some solution to this 1-in-60-years crisis.” Taxing people for future electricity needs is not an answer. 
Today in the House the Minister of Energy stood up and said that some 1400 megawatts of new generation would come on stream during his time as Minister. If that is the case I think it begs the question: under what conditions were the investment decisions made for those 1400 megawatts of generation to be commissioned? The reality is that those decisions were made in the current environment without any suggestion that there might be some other Government body that would subsidise such investment in the future. 
It seems just incredible to me that the Minister can say that the Government has all these proposals and expects them to come on stream over the next few years but that it needs a bit extra so it is going to make New Zealanders pay over the odds for that extra bit of generation. If in fact we need more generation and if companies have in the current environment committed themselves to it why do we need this new bureaucracy? Why do we need this new tax? Well I think it is just a precursor to a whole range of changes coming into the electricity industry. I think today’s announcements when they are fully published will show in the detail the devil of this decision. It seems to me unrealistic to suggest that a Government can set up a bureaucracy—this new commission for electrical energy—and expect that body somehow to solve all the problems that exist in very unusual circumstances. All that that body can do is tax. That is the power that this authority is given today. 
I am thinking about why no new generation to speak of has come on stream in New Zealand in the last few years. Between 1996 and 1999 some 1250 megawatts of new generation were put in place but since the year 2000 only 166 megawatts of new generation have come on stream and more than 105 of those were from the second tail race at Manapouri which was begun under the previous Government. So we have had massive under-investment in generating capacity at a time when our economy has been growing strongly and the population of the country has been expanding. Who is to blame for that? Well the blame lies squarely with the Government and the policies of the day that have prevented that investment. 
Those policies include allowing the Resource Management Act to become so cumbersome that it now takes years and years and millions of dollars for anyone to get a new generation proposal off the ground. They also include the Conservation Act and the discretion it gives to Ministers who would far rather protect patches of scrubby gorse than allow a development that might make some parts of the country more self-sufficient in hydro-electricity. They have also to do with the commitment this very bad Labour Government has made to the Kyoto Protocol. New Zealand has 1000 years of current energy requirements stored in the ground as coal yet can it be used? It can but only if people are prepared to pay somewhere between $52 and $80 per tonne in Kyoto Protocol tax on top of the cost of extraction and sale. Effectively that commitment doubled the cost of one of New Zealand’s few natural resources. Members can sit there shaking their heads. I would too. Clearly they are incredulous that their Minister could be so stupid as to so quickly sign us up to something that our near neighbours our trading partners—Australia the United States and others—have yet to commit to. 
It is also about the lack of gas supply in this country. We have a dreadful situation looming in 2004. If people think we have problems with hydro storage now they should wait until about this time next year when there will be a real scramble for the remaining Maui gas. It is evident that there is no large gasfield coming on stream before 2006 or 2007 so there will be a period when there is quite considerable constraint on the ability of generators to rely on gas supply and that points to another crisis within perhaps 12 months. These decisions today will make no difference to that whatsoever. 
It is also a little bit concerning that despite the assurances of Helen Clark the Waitangi Tribunal is now taking a rather unhealthy interest in the gas and oil reserves that this country may have. It simply begs the question: if we are already running short of supply in those areas because over a period of years there has not been the sort of exploration that there should have been why would any private company come here to make substantial investments when it would not know what the ultimate cost of extraction would be because it might have to pay some sort of levy or royalty through the decisions of the Waitangi Tribunal? We cannot trust Helen Clark when she says it is not going to happen because she is the same Prime Minister who said there would be no new taxes and who in the last 2 weeks has had us here in the House inflicting new taxes on New Zealanders. 
The way forward for New Zealand is quite clear. There needs to be a commitment to shorten the process of getting resource consent for these projects. Where a national interest like this is involved there is a need for people to be able to go directly to the Environment Court—not in any way to get away from their environmental responsibilities but simply to get a defining hearing much much sooner than would normally be expected. There is also a need to recognise that with so much coal in the ground and with the capacity these days to burn that coal cleanly with emission levels way below World Health Organization standards perhaps it is time for us to say that maybe the Kyoto Protocol is not such a good idea for New Zealand. There is also a need to encourage much more gas and oil exploration in our potential offshore and onshore fields. 
I am disappointed by the Government’s response today. This is a tax grab. It is a headline. It is nothing but spin. New Zealand consumers are going to pay $200 million a year year after year for reserve capacity that will not be in place any sooner than 2007 or 2008 if ever. Then according to the Minister’s own press release these reserves will be withheld from the market until those dry years when they will be released into the market at a higher price. So New Zealanders are being asked to pay twice and anyone who thinks that is a good idea does not deserve a place in this House. New Zealanders can be well disappointed with the way the Government has handled this crisis. It was evident from all the signals last December and January that we were heading for this. The Government did nothing and it has done nothing today.