Hudson Brett: Energy (Fuels Levies and References) Amendment Bill — In CommitteeText is incorporated into the Bound VolumeHudson Brett: Energy (Fuels Levies and References) Amendment Bill — In Committee[Sitting date: 11 February 2015. Volume:703;Page:1495. Text is incorporated into the Bound Volume.]BRETT HUDSON (National):It is a pleasure to rise and speak on this bill particularly because it is a bill that has very broad support across the House although we might disagree on some perspectives. It has been well canvassed of course that this is all about New Zealand meeting its oil stockholding treaty obligations.I think a very positive sign on it—and I will come to what Mr Tabuteau had to say about how it might be paid for—and the fundamental change here that is very important is that not only does it bring about a more sustainable way of funding our obligation it is actually a far fairer way because it is actually setting the costs of that obligation against the users of the product the fuels. If you take the current way we have done it for some time under general taxation—and I take the point that Mr Hughes raised earlier that you have got people riding on electric trains or electric buses or who are using shared transport like a bus so their actual consumption of these fuels is much lower. But because it is through general taxation they are actually being taxed disproportionately to pay for it so making it a user-pays thing on fuel is a very sensible way of doing it.It is a 90-day stockpile—the stockpile in this case is not a physical stockpile but a virtual stockpile—that is based on your actual consumption needs. By tying it to the litres that are consumed we are actually matching our expenditure on the 90-day stockpiling with our actual consumption. That changes over time. You need only look at the gas-guzzlers of the 1970s and compare them with the nippy little fuel-efficient cars of today to know these things change over time. I tell you what I am unfortunate enough that I can remember the gas-guzzlers of the 1970s like the Mark III Zephyrs the Mark III Cortinas and also the little Escorts which did not take too much fuel but were nowhere near as efficient as the modern cars of today. So I think it is a very very good thing that we are moving to a per-litre based charge.I would now like to cover this part that Mr Tabuteau raised about who should pay for that. Obviously if you look at pretty much anything else that is consumed the consumer pays for what they consume. But New Zealand First seems to be saying that it thinks it is the producer that should pay for the thing that you are going to consume so it is a very interesting 1970s way of approaching the problem.In itself it would have some inherent unfairness because not all oil companies in New Zealand and not all retailers are the same. They do not all produce or import the same amount of fuels into New Zealand and they certainly do not all sell the same so the only way the New Zealand First model could actually work is if it regulated precisely how many litres of what type of fuel each of the oil companies and/or retailers could actually sell. This is really going back to the days of the very visible hand of Government where you think you can control the entire economy. You certainly cannot.Stuart Nash: But they’ve got all that data already.BRETT HUDSON: Putting a small levy against those who consume the fuels is definitely the right way to go. But thank you Mr Nash because I would like to speak to the point that you raised. In Part 1 Section 14 amended (Purpose of levies) new section 14(3) inserted by clause 4(2) to change that word “may” to “must” would serve no practical purpose other than to constrain Governments current and into the future. If it is a must then any levy collected over any time can be applied only without further legislative amendment to that specific purpose. You need only look at the point of where we are today and you need only look at what has happened in the market for oil and petrol at the pump over the last recent months to know that it can be quite a volatile thing.We could have a situation Mr Nash where we could accumulate quite a bit of levy—levy that we are not actually having to consume in total—and it sits there in an account doing nothing. Well it is not really the best use of an accumulation of Government funds. But what the word “may” means is that it can be applied to that very purpose which is exactly what we want. Changing it to “must” would achieve nothing except to place an unnecessary constraint upon the Government.The other point I would like to just touch upon briefly—because again it was raised by Mr Tabuteau—is the regulations that can be made by Order in Council. Quite frankly we have a system here and these fuels are going to remain a part of our landscape—our “drivescape”—for many many years to come. It makes complete sense that we do not want to be tinkering with legislation every 12 months or so. By permitting certain regulations to be made by Order in Council it allows the Government the Government of the day—I hope it remains us; we are certainly working very hard and will continue working very hard to continue with that—to make changes to the levy the rate of the levy or the formula for the levy in a way that best suits the nature of the consumption of the day the usage of the day and the requirements of the day. It makes absolute sense as in fact do I think the provisions across Part 1. Having said the part that I wanted to say I will stop there and allow other members to speak on the other part.