O'Connor Damien: Climate Change Response (Moderated Emissions Trading) Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
O'Connor Damien: Climate Change Response (Moderated Emissions Trading) Amendment Bill — In Committee 
[Sitting date: 24 November 2009. Volume:659;Page:7970. Text is incorporated into the Bound Volume.] 
Hon DAMIEN O’CONNOR (Labour) 
: 
 When I was in the Chamber last night I heard an interjection from the Minister in the chair the Hon Nick Smith and I thought it important to clarify that comment this morning before I get into other points in my speech. He accused my colleague Chris Hipkins of double standards I guess for raising the point of the outrageous rise in power prices because he said Labour was campaigning for changes to the Climate Change Response (Moderated Emissions Trading) Amendment Bill that might increase power prices. Well there is some truth in both of those statements. What Mr Hipkins has been raising is the outrageous rorting of the system by State-owned enterprises by dominant players. That point has been clearly identified in reports in this country and Mr Hipkins has every right to point out the reality that the Minister is part of a Government that is demanding more return from power companies. Unless we raise that concern no doubt the Minister Nick Smith and his mates will extract more money from the State-owned enterprises through excessive electricity prices. 
On the other hand we know that the impact of this bill will mean increasing costs for any area of energy utilisation. That is the reality of the emissions trading scheme legislation. We cannot shy away from that. But we have to ask the question why we are doing it. Members on the other side of the Chamber say they are great champions of the market. They believe that market signals will determine behaviour. Well that is fairly true I have to acknowledge so where we have increasing costs we will have decreasing demand or so the saying goes. The emissions trading scheme is designed to apportion climatic costs environmental costs on to the whole economy so that we will change our behaviour reduce our emissions and become more efficient in the utilisation of hydrocarbons or any form of energy. The Minister in the chair the Hon Nick Smith nods his head. I think that is what we are trying to achieve here. But the issue Labour members are raising is whether this amended legislation will give effect to what we want which is to reduce international emissions. 
I will concentrate on New Zealand because I speak on behalf of the agricultural sector a sector that will have the lion’s share of concessions along with the fishing industry and along with some sectors in our society that are into forestry. There is an inherent unfairness here because what we are seeing is a shift in wealth; low-income New Zealanders—people who do an ordinary job work hard and try to look after their families—will be paying more. Treasury gives us forecasts for many areas—accident compensation for example. The Minister has been happy to use forecasts from Treasury on accident compensation moving out to 2030 to say that the scheme is broke. Well I challenge his assumption but he is happy to use forecasts there. Contrary to Nikki Kaye’s assumptions we have to rely on forecasts from Treasury in other areas. When we come back to the emissions trading scheme the Treasury forecasts say that we may be shifting wealth from ordinary New Zealanders to some polluters—to some major emitters—to the tune of $100 billion. That is a huge transfer of wealth. The question is whether it will assist our achievement of the goals of meeting our international obligations and ultimately reducing our emissions into the atmosphere. It is about having some positive effect on global warming on climate change—call it what you like. That is what we are trying to do here. 
What Labour members say is that the compromises and the sweet deals between the Maori Party and the Government including shifting out the inclusion of agriculture from 2013 to 2015 are the kinds of deals that will reduce the effectiveness of the legislation we put in place last year. We say that this bill is a sham. In fact it is not just a sham from the point of view of ordinary New Zealanders who will pay another $100 billion; the major beneficiaries of the Government’s wheeling and dealing—arguably the forestry sector and the farmers—also think it is a sham a shambles and a mess. So if the major beneficiaries of the Government’s wheeling and dealing think this whole legislation is a shambles then perhaps it begs the question of whether we should be passing it at all. Sensible New Zealanders—the few who are listening to this debate and a few more who might have been listening last night—who are starting to understand what the emissions trading scheme is for know that we have to be part of an international movement to try to reduce the human contribution to climate change and that if we are not part of it we will not be able to sell anything to the members of that movement and we certainly will not be able to sell anything to the high-value markets. The farmers will not be able to get rid of their goods. Those countries that currently buy our goods will say that we are not part of the international effort to reduce climate change so they will not want our goods which may have been produced in an unsustainable way. 
Labour brought into this House legislation that moved us in that direction. It was a compromise all round. It did not go so far as to put at risk our world trade obligations by providing a huge subsidy to farmers that might have undermined our efforts and our moral high ground in asking for freer trade around the world. We had reached that compromise. The question I have for the Minister is whether his shifting out of the date of the inclusion of agriculture puts at risk our position in world trade negotiations in that we are seen to be giving a huge subsidy to agriculture and thereby undermines our ability to get free-trade agreements with Europe and other high-value markets. This scheme might put that at risk which may be one of the reasons that Don Nicolson the president of Federated Farmers says this bill is a sham and a shambles we should step right away from it and maybe he says we should go back to a carbon charge. 
Hon David Parker 
: That would be silly. 
Hon DAMIEN O’CONNOR 
: That would be silly. I have to say that I thought the carbon charge idea was a good step in the right direction when we discussed it and introduced it. However who campaigned against it? Federated Farmers. They called it a “fart tax”. Well with the wisdom of hindsight or call it what one likes—a road to Damascus moment or whatever; I do not care—Federated Farmers— 
Hon David Parker 
: You know why they liked it? Because they didn’t have to pay. 
Hon DAMIEN O’CONNOR 
: Of course they do not want to pay any more than they have to but they are now coming to the realisation that to trade long term into high-value markets they must be part of an international effort to reduce climate change. The question is why they would think this legislation that Nick Smith with his Ministers and Cabinet has negotiated with the Maori Party will work. Sweet deals have been offered to some iwi groups. Sweet deals have been offered to quota owners—but not for catch not for fishermen. The quota owners will get all the benefit of the transfer. The Minister in the chair shakes his head. In fact 50 percent of the fish caught in this country is caught by foreign vessels and they will not have any impost from our emissions trading scheme; the fishing industry and the quota owners will have further incentive to use foreign boats to catch fish in New Zealand waters. That is an outrage along with most of the things that this Government has negotiated behind closed doors in dark rooms to try to get this flawed legislation through the House. 
If farmers who are the greatest beneficiaries of this change think it is a sham then maybe the rest of the country is justified—and the Opposition certainly is—in saying that this change to the legislation that Labour introduced to the House is a waste of time. It will not give effect to what we really want from the scheme which is to incentivise people to change their long-term behaviour in order to reduce their emissions. Yes there will be an additional cost on electricity and on all other hydrocarbons. That is the reality. The Minister knows that. Whether it is his legislation or sensible amendments from the Opposition yes there will be additional costs. They must be affordable and they must ultimately give the right signals to people who emit. The problem is that National has done enough sweet deals to not leave in place incentives for the major emitters to use technology and use science to try to reduce emissions over time. In fact the Government halved the amount of money that the previous Government had put in place for agricultural research. It is an outrage.