Chauvel Charles: Climate Change Response (Emissions Trading Forestry Sector) Amendment Bill — Second Reading In Committee Third Reading 
Chauvel Charles: Climate Change Response (Emissions Trading Forestry Sector) Amendment Bill — Second Reading In Committee Third Reading 
[Volume:655;Page:4744] 
CHARLES CHAUVEL (Labour) 
: 
 I take just a brief call in this compressed Committee stage. I comment first on some of what we have just heard from the previous speaker Craig Foss. I think it is a long bow to draw to suggest that this amending bill is somehow the result of the design principles that were set out by the National Party in objection to the emissions trading scheme that was passed by the previous Government. 
It is interesting to have a quick look at those design principles. The first one is that an emissions trading scheme “must strike a balance between New Zealand’s environmental and economic interests. It should not attempt to make New Zealand a world leader on climate change.” Well the world has moved on. The latest news from the Australians today is the Liberal Party saying that it will propose constructive amendments in the Senate rather than simply trying to block the legislation as it has done to date. 
Legislation is about to go through some crucial stages in the United States Congress to set up a “cap and trade” scheme—the mirror image of the sort of scheme that was passed in our last Parliament. We have the European response mirrored in domestic legislation of member nations of the European Union such as the UK most notably for our purposes. There are also countries like Japan. No way could we be described as a world leader any more even if that was an accurate description back in September last year which I do not think it was. 
We have the principle that the scheme should be fiscally neutral. Well it was always Labour’s intention to recycle revenues gained from for example the auctioning of permits to pay for the vital complementary measures that are the other equation in dealing with climate change. We have the emissions trading mechanism—the financial mechanism that puts a price on carbon at the margins so that we do things like disincentivise people who put an inappropriate dairy development on a marginal land and we incentivise them instead to afforest that land which is much more in the national interest and is the logical consequence of putting a price on their pollution and their emissions rather than having the taxpayer bear it. But we need those complementary measures as well and it was certainly always going to be the case under Labour’s scheme that they would have been paid for from revenue from the scheme. 
Then there is the principle that there should be close alignment with the Australian Carbon Pollution Reduction Scheme with where possible common compliance regimes and tradability. Well that outcome is entirely feasible as far as technical harmonisation is concerned without waiting for Australia to develop every last detail of its scheme. It is feasible under the legislation as it is designed at the moment. In respect of the principle that technology should be encouraged to improve efficiency and reduce emissions’ intensity nobody could argue with that; it is the motherhood and apple-pie principle that again is consistent with the scheme as it currently exists. 
Then there are the final two principles. First with regard to the principle that we need to recognise the importance of small and medium enterprise to New Zealand again no one would argue with that but the Minister needs to get on and decide issues like thresholds so that small and medium sized businesses know where they sit in the scheme and what their allocation regimes will be. Second in respect of the need to have flexibility to respond to progress in international negotiations the scheme is designed to do exactly that. It is basically a set of broad legislative principles that allow the Minister and his officials to get on and fill out the detail. As far as the international developments are concerned it is a ground for review under the existing scheme. Those principles have to be treated with a great degree of caution and I would remind the previous speaker Craig Foss of that. 
The other thing I will say is that there was a comment in the second reading speech made by the Green member Jeanette Fitzsimons. I think she made some assumptions about what Labour might or might not be willing to do in respect of dates and compromise for other sectors coming into this scheme. All I would say in response is that we have been scrupulous about not discussing in public our talks with the Minister and I intend to continue that course. The member should not speculate—neither should anybody else—on what we might or might not be willing to agree with the Minister. 
I wonder in the time remaining whether I could ask the Minister in the chair the Hon Dr Nick Smith to respond to two quick questions: one relates to clause 4; the other relates to clause 5(2). The amendments to the clauses are recommended in the committee’s report to the House. The questions are simply these: given that the committee has recommended firm deadlines as opposed to dates to be set by Order in Council for the doing of things that are required under those paragraphs I ask whether there is a prospect in his view that those things might be done sooner than the statutory deadlines which are set out in both cases on 1 July 2010. If so I ask whether he has a view as to when those things might be done on an earlier date than 1 July 2010 and I ask what the conditions are under which those things might occur. These are my questions and I would be very grateful if the Minister took the opportunity to address them. Those are my comments at this point.