Court SimonSIMON COURT (ACT): Thank you Mr Speaker. Two problems this bill tries to solve: the issue that for small foresters who have cut down their trees; trees that were in the emissions trading scheme because at some point during that forest lifecycle the landowner thought it was a good idea to enter the emissions trading scheme offer their trees up as carbon soakage only to discover many years later when they go to harvest the trees that the cost of harvest for a small wood lot often outweighs the price they get at the mill. By the time you get timber off a remote farm or remote property sort it out on site and get it to the mill it hardly covers their costs. So then they say Well why would we replant when it hardly covered our costs?" Now for those people who entered the emissions trading scheme some years ago if they don't replant they have to pay a penalty and what this bill recognises is that while participants in the scheme should be required to honour their obligations to continue taking carbon out of the atmosphere the penalties were excessive. So ACT supports that aspect of the bill.But there's a part we don't support and that is the way that carbon emissions from New Zealand's major industrial facilities—and we don't have many in New Zealand because there's only 5 million people. We're not industrialised like Northern Europe or the United States or Japan or Korea is. We only have a few industries but they employ tens of thousands of people in extremely high paid jobs in towns and regions where there are not a lot of well-paid jobs. You might think of Taranaki for example. You might think of Ballance Kapuni which makes a nitrogen-based fertiliser from natural gas one of New Zealand's most valuable and precious resources. Or you might think of a big pulp mill making pulp for paper and all kinds of other packaging products in the central North Island. It also relies heavily on natural gas as a fuel in order to turn trees into pulp so they can export that pulp earn really good export revenues pay people well and employ people in a place like Tangiwai in the central North Island where there are very few high paid jobs as an alternative. What this bill attempts to do is to look back in time and say "In 2008 2009 2010 these industries were emitting carbon dioxide in a way that created a baseline."—fine; I accept that. Now 2023 a lot of them have decarbonised. They've invested in more efficient plant and equipment. They might have decided "Hey instead of a gas-powered compressor we'll have an electrical-powered compressor even though we still use natural gas in our industrial process to create very high heat to turn those very stiff lignin fibres into wood pulp or to turn natural gas into literally urea fertiliser—an amazing piece of scientific technology right there in Taranaki at Ballance Kapuni. These businesses came to select committee and said "We have decarbonised. We will accept a rebaselining opportunity where we get to submit our data to the Ministry for the Environment whatever agency you like and we will accept the rebaselining now in 2023 or 2024." But what this bill proposes to do is to give the Minister of Climate Change that all-powerful deity the opportunity to call in their business and have their emissions rebaseline reassessed every five years. And what these businesses told us was "Look we're happy to embark on a deep carbonisation pathway out to 2050. No problem. A lot of the kit we're going to replace our existing plant and equipment with is very very expensive though." For example a $200 million piece of equipment that was described as being able to deliver 20 percent reduction in emissions at Ballance Kapuni in other words reducing by 20 percent the emissions produced to make that urea fertiliser that goes on our farms all around New Zealand a 20 percent reduction in emissions—that's phenomenal. I mean that should be celebrated. But what they said was that if we make that investment at a cost of hundreds of millions of dollars on the basis that our industrial allocation is essentially fixed between now and—you know give us a good 15 years' payback period. I mean no one is going to go to their board and say "Hey Mr Chair can I have $200 million for a piece of equipment? But by the way I don't know if actually we're not ever going to get the payback period on it. We might have the rug pulled out from us from some climate deity otherwise known as a climate Minister five years from now." They said we would never get permission to make that investment in decarbonisation. ACT listened to these submitters which is why unfortunately—despite the good things in this bill—overall we have to oppose it because it does not address that fundamental issue. How do we retain New Zealand industries here which employ highly paid people in regions like Taranaki and the central North Island who are people who didn't necessarily have to complete high school who may not have had a perfect past and who may not have university degrees but they get to go to work and work in industries which pay them as well if not better than if they did. That is something that we used to call the Kiwi Dream. But if this bill passes as written part of that Kiwi Dream is not just at risk but it may well be on life support until a future Green Minister pulls out the plug. This bill risks the de-industrialisation of New Zealand and the extinguishing of high-paid jobs in the provinces and regions and it will set New Zealand's decarbonisation efforts back by a decade or more. Why would businesses domiciled in countries like Japan or Korea or the United States continue to invest in New Zealand when this bill proposes to pull the rug out on their long-term decarbonisation investments? Now the purpose of the primary legislation is not just to create a test for industrial allocation—in other words how many credits should an industry give based on its emissions intensity. The other part of this bill is the trade-exposed part—emissions-intensive trade-exposed industries that compete with either goods manufactured overseas or that want to manufacture goods in New Zealand and export to overseas markets. Either way New Zealand wins if our businesses here are competitive and are paying people well to make manufactured products here in New Zealand. Whether it's methanol whether it's fertiliser whether it's wood pulp whether it's turn recycled glass bottles back into glass like O-I Glass do in Penrose using natural gas—all of those industries are at risk if we get this wrong. If this Minister of Climate Change James Shaw gets this wrong if Labour gets this wrong if National gets this wrong all these industries are at risk and yet it appears that this Government and those supporting the bill are quite happy to put the ship "New Zealand" on autopilot and let the zero carbon Act guide us to an uncertain impoverished and a highly unlikely to be low-carbon future. What has the Minister done to make the case that these amendments in this legislation are necessary and that they're going to work? Well what he's done in the past few months is completely undermine the premise of this bill by going around the country and handing out green bucks—sorry money taken from consumers under the emissions trading scheme. He's been taking that money which could go back to consumers in the form of a carbon dividend—I mean that's what ACT says would be the most effective way to establish the credibility of the emissions trading scheme as an enduring way to put a price incentive on emissions. He's gone around the country the Minister of Climate Change and his comrades in the Labour Party. They've gone to visit a whole lot of businesses handing out green bucks: $140 million to BlueScope Steel at Glenbrook to decarbonise and to buy an electric arc furnace as if a $2.7 billion profit - making Australian company couldn't afford to buy its own furnace. That's right silence—you've got no answer for it. What this Minister has done and what Labour have done through the Government Investment in Decarbonising Industry Fund and all these other interventions is undermine the rationale behind this bill. They risk introducing a corruption of the spirit into New Zealand business which will become dependent on a future Minister here green bucks here and red bucks here. ACT has a different approach. We say that we should cap our emissions at the same level as our top five trading partners managed to reduce theirs by last year. That would allow the emissions trading scheme to discover the price. That price will be the world price and that's what our industries should pay. That'll keep jobs here and that'll keep New Zealand going."