Norman Russel: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeNorman Russel: Oral Questions — Questions to Ministers[Sitting date: 09 December 2014. Volume:702;Page:1196. Text is incorporated into the Bound Volume.]2.Dr RUSSEL NORMAN (Co-Leader—Green)to the Minister of Finance: Does he have confidence in Treasury’s economic projections?Hon BILL ENGLISH (Minister of Finance):Yes. However I note that all projections are subject to uncertainty and in some cases considerable uncertainty—for instance the Greens’ projections about the very large vote that they would get in the 2014 election—Mr SPEAKER: Order!Dr Russel Norman: Does he accept Treasury’s projection in its briefing to the incoming Minister released just last month that continued failure to reduce New Zealand’s greenhouse gas emissions could result in a bill to the Government of up to $52 billion?Hon BILL ENGLISH: No because that was not Treasury’s projection.Dr Russel Norman: Does he understand that Treasury is advising him in this briefing to the incoming Minister that the Government will have to buy up to $52 billion in carbon credits on the international carbon market to cover the projected increase in New Zealand’s greenhouse gas emissions if he continues down the current path?Hon BILL ENGLISH: No I do not accept that. The projection the member is using is not Treasury’s projection. All matters related to climate change are subject to considerable uncertainty. For instance 3 years ago Treasury projected we would be collecting around $1 billion in revenue from the emissions trading system and I think this year we are going to collect pretty much nothing. So it was at least $1 billion out just over that 3-year period—the main reason being that the world carbon price has come way down because emissions have dropped much faster than Treasury expected.Dr Russel Norman: Does he think Treasury got it wrong in the briefing to the incoming Minister released just 1 month ago when it told him that if we continue down our current path there is a huge cost to pay by the taxpayer if we do not reduce our greenhouse gas emissions?Hon BILL ENGLISH: It is implicit in an emissions trading system that if the carbon price rises that puts a further impost on households and businesses. That is why we have an emissions trading system—precisely to send that kind of price signal but exactly what that price is going to be is a subject of great uncertainty. As I said no one really predicted as recently as 3 years ago that the current carbon price would be close to zero.Dr Russel Norman: Does the Minister not understand that in Treasury’s briefing paper on page 8 where it is referring to the forecast price for carbon prices it is not referring to the domestic price; it is referring to the international price because New Zealand will be 315 million tonnes over its target and it will have to buy carbon credits on the international market to cover 315 million tonnes and if the price is $10 a tonne it is over $3 billion?Hon BILL ENGLISH: No I do not agree with that because there are a whole lot of assumptions involved in it. If the Greens are worried about us getting into a hole then I think the leader of the Greens should follow his members’ advice from the beach campaign in Timaru where his members went down to the beach and one of them said: “I put a plastic bag in the hole so I did not get sand in my ears.” That might be very useful advice for him.Dr Russel Norman: Instead of making jokes—[Interruption]Mr SPEAKER: Order! The member has a right—[Interruption] Order! The member has a right to ask his question.Dr Russel Norman: Has he seen this graph from the Ministry for the Environment his own Government graph in which the blue line is going up because the blue line—Hon Members: Yay!Dr Russel Norman: It is our greenhouse emissions you idiots—Mr SPEAKER: Order! Order! As I have just risen to my feet earlier and said the member has a right to ask his question and he certainly has a right to use a visual aid if that is helpful to him in asking that question. I want less interjection from my right-hand side. I invite the member to repeat his question.Dr Russel Norman: Has the Minister seen this Ministry for the Environment graph that shows New Zealand’s projected emissions going up—the blue line that is right—and big increases in New Zealand’s greenhouse emissions under this Government’s policies; the green line of course being our target to reduce our emissions and the gap between the two will have to be covered by buying carbon credits on the international market a cost that his own Treasury says will be up to $52 billion on the taxpayer?Hon BILL ENGLISH: Yes I have seen the graph. The Government is fully aware of the implications of the emissions trading system. However we are not as certain as the member is about the projections as indicated by the ways extrapolated—the costs mentioned by Treasury. New Zealand has a pretty enviable track record in high levels of renewable energy and investing in technology to reduce agricultural emissions and we remain pretty optimistic that we will continue with the relative success we have had in recent years with our contribution to reducing climate change.Dr Russel Norman: Does he think it is responsible economic management to expose the New Zealand Government to a carbon bill of up to $52 billion for the period 2021 to 2030 as Treasury is projecting and does he believe it is responsible environmental management to increase New Zealand’s net greenhouse gas emissions by 50 percent over the next decade?Mr SPEAKER: The Hon Bill English can answer either of those two supplementary questions.Hon BILL ENGLISH: I just do not agree with the assertions that the member has made. Certainly as a responsible Government we would not want to expose New Zealanders to such large-scale liabilities if we believed that was the case and we do not.