Electricity (Renewable Preference) Repeal Bill — Third Reading 
Electricity (Renewable Preference) Repeal Bill — Third Reading 
[Volume:651;Page:963] 
Electricity (Renewable Preference) Repeal Bill 
Third Reading 
Debate resumed. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 Here we are gathered this morning witnessing this nation moving backwards at speed—New Zealand is retro-advancing—and we have been doing this for the past couple of weeks. 
National says: “To hell with the global forces demanding a change of policy on the issue of climate change. To hell with that—we know best. We the New Zealand Parliament know better; we’re going to set up a committee because if we didn’t we would annoy Rodney and that won’t do. So we are going to set up a committee because Rodney doesn’t like the idea of climate change being kind of real or gathering pace so we will set up a committee. We have this legislation which says: ‘Hey to hell with all this stuff around climate change.’ Those scientists don’t really know what they’re going to do. We’re going to have some more gas-burning power stations and we’re going to get rid of the moratorium on that. That is great; that is progress. That is economic growth front and centre; that is turbocharging. We are heading back to the future at a hell of a pace.” 
National members put their heads in the sand and say: “We’re OK. It will all be OK. We don’t even need those biofuels. What the hell do you need biofuels for? What’s wrong with some good old decent oil a bit of petrol and a bit of diesel? It never did anybody any harm and who said it’s going to run out? When? They don’t even know precisely when. Therefore we don’t have to worry about it. Who gives a damn about the fact that people say there’s going to be peak oil everywhere? We don’t care about that. We’re the National Party and we just won a mighty fine election. We’re getting rid of anything that resembles nanny State. We don’t care about any of that stuff.” 
National members also say: “Actually who said you need to go retrofitting houses? For goodness’ sake let’s be practical here. People should just put on another cardie. We don’t need to have retrofitted houses. The fact that our countrypeople die in winter disproportionately—like more than they ever would in say Sweden or the UK—is because they do not put enough attention into putting on an extra cardie and they should put on an extra cardie. We don’t need to retrofit and besides which we’re asserting—because we’re the National Government and we just won a mighty fine election—that we do not even have any money for that. So who gives a damn about that? Actually who gives a damn about technology in general? Let’s get rid of the tax credit on that. We need to give that to some mighty fine people who supported us at the polls. They need an extra few dollars a week in their pocket and we didn’t have enough money to give them so we’ve gone and put a tax increase on to our very best companies and said ‘Sorry guys but we’re going to have to get rid of that tax credit. You have to pay a tax increase because we’ve got to give it to our rich mates.’ ” 
That is roughly what the past 2 weeks has been about and this bill is simply one of the mix. This bill is about a moratorium on thermal generation the details of which meant we could have it for peak-load generation and we could have it if we needed security of supply. It was a very very moderate moratorium but it has to go because it is nanny State. National members would say: “Who says we like moratoria? That sounds like control. We’re not into that; we’re into laissez-faire and if someone wants to put up a gas-fired power station instead of putting up a wind-fired power station well that is fair enough; what’s wrong with that—who cares? The market is going to be good for the environment—consult history. The market has been brilliant for the environment so far we say. So why don’t we just let it rip?”. That is basically the position that National has. 
When National had a go at putting some logic around why it wanted to get rid of a moratorium on thermal generation even as it argued for more renewable generation it failed. National argued for this time and time again. In fact Nick Smith was a cracker. He spent the entire debate saying that he really hates fossil fuel generation and greenhouse gases and that when Labour was in Government it was really hopeless—a terrible lot. But then he voted to get rid of the moratorium. The guy has a doctorate. He argues in one direction and votes in another and we sit there saying “Boy whatever happened to quality of tertiary education?”. This guy does not have logic that is consistent from one sentence to the next. And then we had the Minister Gerry Brownlee. 
Chris Hipkins 
: Did he speak? 
Hon PETE HODGSON 
: The Minister did not speak. He did not speak in the entire Committee stage. He has two books one of which he has not even coloured in yet and he spent the entire time working on the book that he is colouring in— 
Hon Steve Chadwick 
: Trying not to go outside the lines. 
Hon PETE HODGSON 
: —and not going outside the lines. He has probably done some good work but that is what he did—he coloured in his book. When he came to give his third reading address he decided he would give it to Labour because Labour was bad and irresponsible when it came to too much greenhouse gases and bad and irresponsible when it came to too much non-renewable energy—and away he went. 
At one point he decided he would tell us that we had put in some reserve generation—150 megawatts of diesel-fired reserve generation in the Hawke’s Bay—and he railed against the evils of this. He failed to tell us a couple of things. One of them is that it is reserve generation and cannot be used unless we are in trouble. Secondly there used to be a power station in the very same spot that was 150 megawatts and diesel-fired and which had been there for years. It was used as reserve generation but Contact had just sold it and gotten rid of it. Why? Because Max Bradford had been to town and decided that we would have a pure market approach to electricity and the pure market had run the lakes to the lowest level they had been at for many many years. So we are still trying to get through the side effects of the actions of that old man in a hurry Max Bradford who tipped this remarkable sector upside down. 
So here we go—a pretty pass we have reached. At the end of 2 sitting weeks loads of progress on environmental matters over the past 9 years—courtesy of the Labour Government courtesy of a Prime Minister who has a real vision for this stuff courtesy of some assistance sometimes a lot of assistance from the Green Party and courtesy of assistance from other parties including United Future and New Zealand First—is being ripped down and this process is well under way. The environmental vandals are in the hot seat they are going for bust and they reckon that their future is the only way forward. Their future is backwards in a hell of a hurry. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 In my final contribution to the debate on the repeal of the Electricity (Renewable Preference) Amendment Bill I shall try to run through some of the logic from first principles of what it is we are trying to do here. All but five members of this House acknowledge that the world and the future of humanity face a serious threat from accelerating climate change. New Zealand along with all OECD countries signed up many years ago to an agreement to try to do something about it. Since that time successive Governments have talked and done nothing about it until very recently. New Zealand’s greenhouse gas emissions are about five times the world average per capita. We are one of the worst polluters in the world in terms of greenhouse emissions per person. We therefore need to take action. 
In the latter years of the Labour Government it started putting in place a number of measures to try to reduce those emissions. All we hear from National is that emissions rose under the Labour Government—fast—and that is true they did because when no action is taken emissions are pretty much linked to the rate of economic growth. We can decouple economic growth from emissions by being smart. Some of the recent measures have tried to do that but now they have gone. 
So what could New Zealand do to reduce its emissions? We have a different emissions profile from all the rest of the OECD because half of our emissions come from agriculture. An assumption on the Government side of the House is that that means nothing can be done about them. There are actually quite a few things that can be done about them but they are not very easy or fast-acting. So agriculture is the hard bit. We got a soft target in 1997 at Kyoto in recognition of that fact. The rest is carbon dioxide that comes pretty much from burning fossil fuels and the biggest part is from transport. There are some low-hanging fruits in transport that we should be picking. So far there are no measures on the table to pick them although a lot of work has been done under the Energy Efficiency and Conservation Strategy to try to develop that. 
Then if we look at what is left we see we are very different from other countries in that the majority of carbon dioxide emissions in most other countries come from thermal electricity mainly from coal. But that is not the case here. Electricity emissions comprise about 10 percent of our total emissions but they are the easiest bits to fix. They are by far the easiest bits to fix because New Zealand has an abundance a huge wealth of renewable sources of electricity. Transport fuels are much harder. 
A logical decision is for us to tackle what is easy first. Let us tackle the emissions we can reduce at virtually no cost and with virtually no other downside. Electricity used to be virtually all renewable but over recent years mainly because we found an absolutely ginormous gasfield—gas cannot be traded between countries without huge investment in infrastructure which basically was not done when Maui was discovered—and had to use that up somehow in order to meet the take-or-pay agreement. So a number of gas power stations were built to use it up fast. Well Maui is now substantially depleted. We have had some other smaller gas finds but we are heading to the point where gas is going to be scarce for bulk-users like electricity. There is always likely to be some for direct users like homes and industries that use gas directly which is much more efficient than converting gas to electricity. In the meantime geothermal technology has improved wind technology has developed from fringe to mainstream and we have the next generation of renewables—like marine wave and tidal technology—starting to get their prototypes tested and obviously on the way. We also have a lot of opportunities to use direct solar heat for things we currently do with electricity. 
So the logical way to make a step down in our electricity emissions is to build renewable generation and not thermal generation. The first target of course must be to phase out the old Huntly power station—one of its four units at a time putting them on standby for a while before closing them completely. But even that will not get us to the 90 percent we want to get to without closing another gas station as well. So that is easy. There are heaps of renewable energy projects to build so let us get on and build them. 
David Parker and I working together in the last Government got work done by the Ministry of Economic Development and the Energy Efficiency and Conservation Authority to give us a thorough analysis of what the costs would be of going to 90 percent 95 percent and less renewable. We picked 90 percent because the costs of doing that were negligible. If we go to 95 percent we start to raise the costs because of having renewable power stations standing doing nothing in a wet year. We want to use the gas when we need it and not use it when we do not need it. The thing we absolutely do not want is baseload thermal power stations; we want to use them as peaking generation. At the moment the gas is used for baseload power stations. That needs to change. 
So the renewable electricity preference tried to deal with the easy part of our emissions first by establishing that no new baseload gas or coal stations would be built. One might ask why that is necessary if we have all these renewable sources. Well it would not be necessary if we had a single integrated electricity generator as we used to have with a very complex refined computer programme that told it what the next best thing to build was and the next best thing to run. We simply would not have got a Genesis Kaipara power station proposed under that situation. But because we now have a competitive market Genesis—because it has to grow in this business model and has to compete with those who are doing renewable generation and because it is not very good at renewable generation—sees itself as having a commercial advantage in building a gas-fired power station which is not in the interests of the nation. 
So this legislation aimed initially to put a little bit of blockage in the way of that and say that we should build the next best things for New Zealand not just the next best things for Genesis. Ironically the legislation did not really do that because it had in it the big Genesis loophole in subclause (e). When we tried to get that loophole closed we learnt that some of the people on whose votes the Government was relying to pass this legislation insisted that the Genesis clause remain. I find it interesting that none of those people are still in Parliament. That is the irony of politics. 
Hon David Parker 
: The whole thing is going anyway. 
JEANETTE FITZSIMONS 
: Of course the whole thing is going anyway. I also find it interesting to have been told by a very senior person in one of the other generators that had they gone to their board with a business case like the one for the Genesis power station in Kaipara it would have been their last board meeting. But it seems that a State-owned enterprise can put up a business case that is so bad that it does not make any economic sense at all just because it has this kind of business “need to grow need to compete” attitude. 
So this was sensible legislation but not particularly powerful legislation. Under the wrong Minister Genesis could still have got permission to build a baseload power station on the grounds that it was going to back out Huntly just like in the 1990s the Taranaki combined-cycle power station was going to back out Huntly and so got permission and just like e3p was going to back out Huntly and so got permission. I wonder how many power stations we could build in New Zealand on the grounds that they are more efficient than Huntly and Huntly still continue to run. So it is time we put a stop to that. New Zealand could have a brighter future on renewable electricity but the Government has chosen that that will not be the case. 
Mr DEPUTY SPEAKER 
: The question is that the motion be agreed to. Those of that opinion will say “Aye”— 
Hon STEVE CHADWICK (Junior Whip—Labour) 
: 
 I raise a point of order Mr Speaker. Could you make a little bit of an allowance for a new member who wishes to take a call? 
CHRIS TREMAIN (Junior Whip—National) 
: 
 We had moved to a point where a vote was going to be taken and I ask that we move to that point. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 We do have new members in the House. There is also an established order of speaking under which they may think it is not yet their turn to seek the call. So if people do not rise to take a call when it is their turn could you allow just a little leeway for other people to recognise that they can get their call earlier? 
Mr DEPUTY SPEAKER 
: Thank you. I call Stuart Nash. 
STUART NASH (Labour) 
: 
 It has been a long week but could someone please tell me what portfolio Prime Minister John Key has taken? 
Hon Dr Michael Cullen 
: Tourism. 
STUART NASH 
: Tourism—oh that is right; thank you. It really has been a long week. Can someone please tell me what the main marketing line of Tourism New Zealand is again? 
Hon Dr Michael Cullen 
: “100% Pure”. 
STUART NASH 
: That is right—“100% Pure New Zealand”. Tourism New Zealand’s website says: “New Zealand’s spectacularly beautiful landscape includes vast mountain chains steaming volcanoes sweeping coastlines deeply indented fjords and lush rainforests.”— 
Hon Dr Michael Cullen 
: And Gerry Brownlee. 
STUART NASH 
: —and Gerry Brownlee. New Zealand has “a population of only 4.1 million” making it “one of the world’s least crowded countries. It is a haven for those seeking peace rejuvenation and relaxation as well as a playground for thrillseekers and adventurers.” It is funny but it does not say “Come and see our new 1950s thermal power stations polluting our countryside and atmosphere.” So let us hold on for a second—members are telling me that New Zealand markets itself internationally as a clean green country. Are they sure? Why are we marketing ourselves in this way? I will tell them. It is because the image is one of New Zealand’s major international unique selling points. People come here because we are clean and green not because we want to power our cities with thermal energy. 
The Electricity (Renewable Preference) Repeal Bill is in direct contradiction to one of New Zealand’s top earners of foreign exchange our tourism sector—Mr Key’s portfolio because it is so important to New Zealand apparently. Has the honourable member Mr Brownlee actually talked to his Prime Minister and Minister of Tourism about this bill? If so what did he say? It is hard to believe really. How can we sit here and legislate for this type of non-renewable energy power generation when it is in direct contradiction to the image we want to portray of ourselves? Why would Chinese tourists come here to escape their polluted atmosphere? It makes no commercial sense from a countrywide marketing perspective. Why would we do it? There is no reason in my view as a businessman and as a person who has carried internationally and proudly the message of a clean green image. We are a country that is renowned for its stance and its leadership role in the area of “clean green” and “100% Pure New Zealand”. Let us keep this image intact. If we start building non-renewable electricity plants word will travel faster than power down a 100-kilowatt line running through the Mackenzie country. 
The Ministry for the Environment commissioned a report to quantify the extent to which particular New Zealand exports benefited from positive perceptions of our environment. The project focused on three export sectors: dairy which I think we all agree is pretty important to our economy; inbound tourism which is one of the largest earners of foreign exchange; and organic produce which is perhaps the way of the future for New Zealand. The project assessed the potential consumer reaction to an illustrated decline in New Zealand’s clean green image. The work done in this study reinforces the qualitative evidence that our clean green image is valuable and the study provided some useful insights into the size and nature of that value. The results were not definitive; no contingent valuation study can ever be so. But they strongly indicate a significant vulnerability of export value in the event of a degradation of New Zealand’s environment. 
The main findings of this study were as follows: “New Zealand’s clean green image does have a value. Environmental image is a substantial driver of the value New Zealand can derive for goods and services in the international market place. The study suggests that this image is worth at least hundreds of millions possibly billions of dollars—aggregating value elements from dairy tourism and organic produce and extrapolating to other sectors such as meat. New Zealand is relatively clean and green. This is mainly attributable to our low population density resulting in relatively benign environmental pressures. However”—and this is the important part—“there are environmental problems that are sufficient to raise questions about the sustainability of New Zealand’s exports attributable to its environmental image. There is a risk that New Zealand will lose value that is created by the current environmental image if we are not vigilant in dealing with the problems that could threaten the image.” I will say that again for the House: “There is a risk that New Zealand will lose value that is created by the current environmental image if we are not vigilant in dealing with the problems that could threaten the image.” Yet the Hon Dr Nick Smith told us last night that this was only an image—that “clean green” was only an image. I bow to the honourable member’s knowledge of New Zealand landslides but as an international marketer I can tell Dr Smith that globally image is everything. Image is perception and perception is reality. So although “clean green” may be just an image it is our competitive advantage and a unique selling point and we must protect it with all our energy—sorry that is probably the wrong word; with all our collective might—because our image is hugely important and I am sure the Prime Minister will tell the Hon Dr Smith that. 
With this in mind why are we not absolutely focusing on sources of totally renewable energy? I have heard the economic costs of production argument but I have my doubts actually; I would not mind seeing the model on that. But that aside surely the indirect economic benefits of our clean green image are huge compared with the costs and damage that will be incurred if we do not go down the path of renewable energy. Of course we need certainty of power supply. It is a fundamental premise of First World economic development that certainty of supply is simply a given. The Government should in the absence of a robust market or a sustainable alternative take the lead as Labour did. However if this is the case and the Government does take control in the absence of a competitive market which may or may not exist in a country the size of New Zealand then that same Government also has a moral responsibility to its citizens to ensure that the long-term benefits of the country its resources and its future are taken into account—as Labour did. Building a thermal power plant does not meet this test around the Government’s moral responsibility. It does not ensure the long-term sustainability of the country’s resources and it certainly does not take into account this country’s wonderful future. 
In relation to what National and Mr Brownlee are doing all I can say is that Mr Brownlee should Think Big. They say we hark back to the 1990s but goodness me this is going a hell of a lot further back than that. We are a country that leads in many areas but within 2 weeks we have gone from being a world leader in sustainability challenges and clean green growth to being the laughing stock of the developed world. I tell members that I pity Charles Chauvel. He was at a climate change conference in Belgium. I did not pity him when I first heard that he had this trip—we would love to go to Belgium—but I do now. No doubt when he found out about that trip he was rapt. He was heading overseas to represent a party that championed climate change policies and environmental sustainability—a hero. Yet by the time he arrived his face must have dropped. Mr Chauvel went from being a hero to representing a zero—gee thanks I tell Mr Brownlee. We have also heard from the Hon Steve Chadwick that she was at a conference in Viet Nam when New Zealand was the laughing stock of the international market. This is not who we are or what we represent. We are leaders not laggards. We lead; we do not as proud New Zealanders like being the laughing stock. 
For 9 years we represented all that was good and right; in 2 weeks that has gone. It went without any public submissions. I am astounded at this arrogance of passing legislation that can undermine our global reputation built over a 9-year period of consulting internationally and locally undertaking studies of best practice and setting the global standard. I ask Mr Brownlee when he last spoke to ordinary New Zealanders about how they perceive this country. Does Mr Brownlee really believe that New Zealanders want another thermal power station? Tourism New Zealand certainly does not and our exporters certainly do not. Our clean green image is worth billions of dollars to this country. No I tell Mr Brownlee: security of supply yes; thermal power plants no. As well anyone who knows anything about the global nature of the petrochemical or coal industries knows that the long-term cost of meeting such demand for thermal power stations will inevitably increase over and above the price needed to develop long-term sustainable renewable energy. We have seen crude oil prices skyrocket on the back of an international commodities boom. Now we have seen the price drop considerably as part of that commodity cycle but as sure as eggs that cycle will once again turn as it always does. The price of gas and coal will continue to rise as this is simply Economics 101: if demand is greater than supply then the price increases. We cannot see the price of wind or tidal power increasing. Can Mr Brownlee see that? Of course he cannot. 
Hon PANSY WONG (Associate Minister of Energy and Resources) 
: 
 Good morning to you Mr Assistant Speaker and to all my colleagues. I am proud to be part of a hard-working National-led Government and to take a call in the early morning. 
I have to compliment the new member Stuart Nash. It is refreshing to hear a new member come out and admit that Labour is all about image and has no substance. That is what he said in his speech. He said that all Labour cared about was image and that that was why the so-called thermal ban was rushed into Parliament during the last term. Even the Green Party co-leader Jeanette Fitzsimons said that the thermal ban was a sham that one could drive a bus through it that it was useless and that it was actually of no impact. That is exactly what Stuart Nash said but for him that was not a problem because Labour was all about image and no substance. 
Then Stuart Nash said that the Minster of Energy and Resources the Hon Gerry Brownlee should listen to the people. Indeed we have done so and the people spoke on 8 November. National is the party that listens to the people and the people threw Labour out. If the Labour Party continues to believe in image and no substance it will be on the Opposition benches for a very very long time. In contrast on this side of the House we carry out what we campaigned on. The Hon Gerry Brownlee has always made it clear that we would repeal the thermal ban. 
I have seen a new development in respect of the legislation about repealing the mandatory quota sale of biofuel that was passed last week under urgency. Today the biofuels association put out a press release saying that it understood why National passed the legislation that it welcomed it and that it looked forward to working constructively to develop the biofuel industry. 
That is a pragmatic approach to take and we are taking the same approach in respect of this thermal ban. The legislation providing for the thermal ban was rushed. It was introduced at the last minute into the select committee process during the examination of the emissions trading scheme and it was not included in the original bill. Even the Business Council for Sustainable Development was against it. But did the previous Labour Government listen to the submitters? No it rushed the legislation through the House. So it is a pleasure for me to take a call in the third reading stage of another bill of the National-led Government which is fulfilling another election promise. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Another day in this House another bill from this Government denying climate change. It is another sad day for the planet as the Government turns its back on climate change. We have just seen another outrageous attempt by the Government to stifle the debate by shutting it down before members have had a chance to have their say. The Government is embarrassed by the Electricity (Renewable Preference) Repeal Bill and it is embarrassed by its stance on climate change. It does not want the public to have a say on the issue so it is trying to shut down the debate. 
I will run through some of the points that have been raised in the short debate that we have had on this bill. It is a shame that Government members have not felt compelled to take more calls on the bill and outline why they think it is important. One of the things we have talked about is the argument from the Government that this bill will lead to lower power prices. We will definitely be holding the Government to that and we will come back to it in 3 years’ time to assess the impact that this bill has had on power prices. 
Hon Maurice Williamson 
: Just like you guys managed over the last 9 years! 
CHRIS HIPKINS 
: That is right. We know a little bit about what has caused the increase in power prices and for a little bit of a history lesson we will go back to the 1970s—when Rob Muldoon was the Prime Minister the Maui gasfield was being developed and the price of gas from the Maui gasfield was fixed. The price was kept artificially low for several decades which led to lower prices for gas. Then of course the gas started to run out and the price started to go up. But we have not heard any member of the Government engaging on that particular issue. We have heard nothing from National members on Maui and nothing from them on the prudent use of our gas. 
Of course burning gas in power plants is actually a very inefficient way to use it. It is much more efficient to burn gas at the point where it is needed rather than for it to be sent to a power station to be turned into electricity and then to be transmitted across the country where a good chunk of the energy is lost. There was not a word from the Government on that. 
This bill is not needed to shore up security of supply. There was already an exemption in the legislation that this bill repeals allowing for new thermal generation for security of supply where absolutely necessary. It would have given the Electricity Commission the ability to investigate but this bill takes away the ability of the Electricity Commission to do that. So what are some of the things that the Electricity Commission might have considered in the course of those investigations? It might have considered the security of supply impacts which is something the Government claims it is interested in—and we will come back that issue in respect of the Whirinaki power station in a moment because I heard Mr Brownlee talking about that last night. It could have considered the price impacts—what impact the price of thermal generation will have on the overall price of electricity. It seems from the discussion last night that the Government members have a real lack of understanding of how the price of electricity is determined. It is a shame that the Minister did not share with us his knowledge on the price impacts that thermal generation would have. 
The Electricity Commission might have investigated the transmission capacity and the possibility of moving any new thermal generation around the country to points where it was needed and it might have considered whether the current transmission system could have coped with that. It might have considered the transmission upgrade costs for any additional transmission upgrade that would be required through new thermal generation. It might have considered the impact on greenhouse gas reductions that any additional thermal generation might have had but we have just removed the ability of the commission to do that; this bill specifically removes the ability of the commission to investigate those things. 
To come back to the issue of security of supply I say there is already a lot of new generation under development. We have 1400 megawatts under development. How much do we need? Apparently we need about 150 to 200 megawatts per year yet we have 1400 megawatts already under development. So it is clear that this bill is completely unnecessary from a security of supply perspective. 
This bill turns back the clock. We are no longer fast-forwarding to the future; we are retro-charging—we are going backwards as fast as we possibly can. We are retro-charging—we are going back to the future. This bill turns back the clock and says that our future in this country no longer lies with renewable energy. We are going back to using non-renewable energy—environmentally unfriendly thermal generation. It is a slap in the face to the companies investing in renewable technology and in renewable electricity generation. There is significant investment currently being made in renewable generation and this Government does not seem to be the slightest bit interested in promoting that or in encouraging it. We are not turbocharging the future; we are retro-charging. 
As my colleague Stuart Nash pointed out this bill combined with the one on biofuels absolutely sabotages our reputation as a clean green country. How ironic it is that our new Prime Minister is the new Minister of Tourism when one of the first things his Government does is bring to this House two bills to undermine our clean green image and our standing in the world when it comes to issues of environmental sustainability and climate change. We are no longer even fast followers; we have turned around and we are now running the other way. We are running the other way and we are being left behind by the rest of the world. We are being absolutely left behind. We could send John Key over to the UK to argue to the UK Government that it does not need to impose the departure tax but how could he possibly do that? He could not stand up and credibly say that his Government believes in climate change and that it is committed to the environment. He could not possibly say that when two of the first bills that his Government has brought to this House go in completely the opposite direction and undo much of the progress we have been making in the last few years. 
The clean green image is vital to New Zealand. It is vital to our tourism industry which is one of our largest export industries. John Key acknowledged that fact in appointing himself Minister of Tourism. It is a shame that he does not seem to be doing anything to protect that industry or anything to enhance our reputation. The UK departure tax will have a big impact on Air New Zealand but Government members have made no mention of that. They are sitting there quietly intently reading their papers all of a sudden and they do not seem to be the slightest bit interested in having this discussion. 
I turn to the issue of the Whirinaki power station because Mr Brownlee talked about this diesel-fired power station that the Labour Government built to provide security of supply. Mr Brownlee said that Whirinaki had been running flat out. In March this year he made similar comments about Whirinaki running flat out but what did he mean by that? Did he think it was running at 100 percent? If so he would be 96 percent wrong. When Gerry Brownlee said Whirinaki was running flat out it was running at 6 percent of its maximum output. 
Moana Mackey 
: That’s flat out for him! 
CHRIS HIPKINS 
: That may well be flat out for Gerry Brownlee but 6 percent is not flat out for Whirinaki. When he was told he had made an error he said that Contact Energy was trying to put a bit of gloss on a very big turd. 
Hon Dr Michael Cullen 
: No wonder he hates biofuels. 
CHRIS HIPKINS 
: It is no wonder he hates biofuels. 
This bill is being passed undemocratically. The Government is gerrymandering the legislative process so that it can ram this bill through the House and therefore not give a chance for the public environmental groups power companies and scientists to have their say. The Government does not seem to like scientists and it thinks they should not have a say on anything to do with climate change. There is no regulatory impact statement on the bill. This red tape - cutting Government along with the ACT Party and its Minister for Regulatory Reform are ramming this bill through the House under urgency. In fact none of the bills being rushed through the House has had a regulatory impact statement. Where is the Minister for Regulatory Reform? He has been remarkably silent on the lack of regulatory impact statements on any of these bills. Do we have a Minister for Regulatory Reform? 
Hon Dr Michael Cullen 
: He’s “Hide-ing”. 
CHRIS HIPKINS 
: The Minister for Regulatory Reform is “Hide-ing”. 
The New Zealand public has been hoodwinked by this Government. Before the election the National Party told the public that it believed in climate change and that it believed in New Zealand’s clean green image. It even had the blue-greens. The blue-greens popped up and were going to be the way of the future. But now it is just blue—the green bit has gone and it is completely blue. 
Yesterday Maurice Williamson said he had always believed in climate change but he did not use the words “human-induced” climate change. I notice he was very very careful not to use those words. That is such a shame. This bill is yet another example of the National Government’s failure to learn from history. 
CHRIS AUCHINVOLE (National—West Coast-Tasman) 
: 
 I am grateful to Mr Hipkins for his contribution but I would like to join with Pansy Wong and say: “Good morning ladies and gentleman. What a beautiful day it is today. Walking to work it was splendid. The sun was shining the birds were singing and then we come in here and are faced with misery from members on the other side.” This debate has been interesting but I am surprised that Opposition members seem to be hanging the entire credibility of their climate change legislation on this one particular bill. 
Hon Steve Chadwick 
: All three bills; a trifecta. 
CHRIS AUCHINVOLE 
: None of those three bills is crucial or a huge thing. The legislation that this bill repeals has not generated in this debate any definitive points of substance for it to be retained. The reason is that the legislation seems to have been put in as a sort of afterthought to the emissions trading scheme; something to raise credibility to give an image that Labour was against thermal production of energy. That legislation was not carefully thought through. I have not heard anybody opposite say so far that the legislation was carefully prepared and thought through. There is nothing to indicate that was the case. It is almost as though the legislation was designed as a sort of badge for Charles Chauvel to wear during his intensive hard slog at the conference in Belgium. Well no doubt when this bill passes he will choke on his canapés. I say: “Charles tantpis monami nous sommesvraimentdésolées.” 
If the previous Government wanted to do something for image it should have done it well. Frankly this thermal ban has not been done well. No substantive points about it have been brought forward in the debate in spite of the best efforts of Messrs Hipkins and Nash. They were rushed on to the front line of debate and they have done very well. It has been an interesting debate but even the Greens have had difficulty. Jeanette Fitzsimons was trying to establish a reason for keeping the thermal ban while at the same time saying it is toothless it is empty and one could drive a truck through it. 
To sum up because we do not want to spend too long on this Labour had 9 years to do something formative in this particular area of legislation. The legislation that this bill repeals is all image and no substance. It would not have worked. They say it would not have worked. They acknowledge it would not have worked. They could not have made it work. It does not have a purpose to it that will achieve anything. It was do-nothing legislation. It did not do anything it does not do anything and it would not do anything if it were retained so it might as well go. 
The record is not something that Labour can be terribly proud of. Renewable generation is down from 73 percent to 66 percent. Domestic prices are up. Forestry has been decimated. This bill will take away the pretend policies of a failed Government. Thank you Mr Deputy Speaker. 
Hon Dr MICHAEL CULLEN (Labour) 
: 
 I celebrate Mr Auchinvole’s being here because we have been hearing a lot in this Parliament about the number of firsts in both this and the previous Parliament—the first Chinese MP for the Labour Party the first Tongan MP the first Sikh MP and of course Mr Auchinvole is in the 150-odd years of this Parliament the first toff from the West Coast to be an MP in this Parliament. So we have many firsts to celebrate. 
But what did we hear from Pansy Wong who came in here like a small Energizer Bunny Pollyanna and her helper Chris Auchinvole? “The sun is shining.” they told us. The sun was shining as they walked to work and I have to say coming from Hawke’s Bay that when the sun is shining in Wellington it is important the rest of the country knows that fact because it is not always the case in this city. But of course what is their answer—“Let us try to stop this. Let us try to black the sun out. Let us try to block it out from New Zealand by having lots of thermal generation capacity.” Mr Auchinvole is looking for a thermal coal-fired power station to be built on the Wellington foreshore so that when he walks to work he does not have to worry about the problem of getting melanoma at some point in the future. 
What is the rush for this Electricity (Renewable Preference) Repeal Bill? You see at the very moment we are talking in this House there are a whole set of people in the lock-up and already there is not a dry seat in that house as they are going through the Half Year Economic and Fiscal Update. What that Half Year Economic and Fiscal Update will tell us is not that the Government managed to find another $50 million that somehow is not in the Pre-election Economic and Fiscal Update; it will tell us of a massive downgrading of world economic growth forecasts and therefore a significant downgrading of New Zealand’s economic growth forecasts. Therefore the reason why greenhouse gas emissions have gone up so much in the last 8 or 9 years will not be a big problem for the next couple of years for New Zealand. 
We will not have any real economic growth; we will actually have a pause. So we do not need to rush through with this bill because there is to be some big crisis in terms of power supply. Far from that we will not have that issue facing us very much at all over the next year or two. It is what we might call a blessing in disguise or as economists put it: “For every silver lining there is a cloud.” So we do not need the legislation that quickly. This could go to a select committee. It could be thought through more carefully. Just having it thought through would be good. 
The reason the bill is here is the same reason that lots of other things have come here under urgency in the last 2 weeks. The National Party in Opposition thought that its default position would be that if the Labour Government did it then it would say it would repeal it. Then having got there the National Government has to do something. Its 100 days of action have consisted of enormous moves like this: any national standards of education will not be able to be reviewed by a parliamentary select committee. This will drive stronger productivity growth! National says that we will not have to have sustainable electricity generation; that we can add to baseload capacity thermal generation in a plant that might be built in some years’ time and this will somehow drive stronger productivity growth over the short to medium term. It says that we will bypass Pharmac when it comes to the supply of drugs in New Zealand and this will somehow drive greater productivity in New Zealand. 
This has been the dynamic period of action. As I said before this has been the turbocharged Morris Oxford but what I did not realise was that a new gearbox has been put into the Morris Oxford as well with one forward gear and four reverse gears. That is National’s whole plan for the future. 
What about this issue of security of supply? That is an interesting one because any Government has to make judgments at the margin. We can have as much security of supply as we like as long as the country is prepared to pay for it. There is a trade-off at the margin between 100 percent guarantee of security of supply and the cost that the consumer has to pay because there will always be some point at which absolute security of supply cannot be secured without having yet another generating station. And no Government can pretend otherwise around that. That is the difficult trade-off. Actually the Government and the Electricity Commission have changed that trade-off recently to reinforce the importance of security of supply. But security of supply cannot be bought at the cost of other things as well. 
Let me deal with the issue of cost. Mr Brownlee worked himself up to something approaching enormous energy last night in the House. In fact he was so energised that he almost looked like Dr Hutchison when speaking to the House. He somehow blamed the Labour Government for the fact that costs have gone up but let me tell him that the fundamental issue is the structure of the market. The market for electricity is generated created on the basis of a model that says: “The price will be”—ignoring the short-term factors—“over the medium term the marginal cost of the next station being put in place.” Indeed there is a whole circularity. As the price goes up the revaluation of the generators occurs and then of course unless their prices go up again the return on equity falls. 
So there is a peculiar illogical logic that is imbedded into the nature of the market created by the National Government. There is no point in the National Government bemoaning this fact. If it wants to address that issue it actually has to fundamentally change that electricity market. It is an interesting question as to whether we want to fundamentally change that market and to fundamentally change that market almost certainly to having a monopsonistic buyer somewhere within the middle of the system that purchases new capacity but the electricity system as a whole being onsold at average price. As long as we have a marginal price model then almost by definition prices will rise because the next power station will be more expensive than the last one. 
That is particularly true of thermal generation over the longer term because the value of the gas or coal that drives it will continue to rise faster than prices on average and therefore the cost of that power will rise. That is not true necessarily of wind. It probably is true of hydro by and large which is why the previous Government strongly encouraged wind generation because it is our best prospect for reasonably priced sustainable generated capacity over the next 10 to 15-year period. 
The Government says that as long as we have a carbon price we can solve this problem. But the Government passed a resolution through this House last week to have a select committee to think about whether we should have a carbon price at all because it will even think about whether human-induced global warming is actually an issue. We know what Maurice Williamson thinks about that. He thinks that it is not an issue that it is not human-induced and therefore that no action we can engage in will affect that particular matter. If we are in that position then the Government cannot come in here and say: “We are going to have an effective emissions trading scheme quickly that will address that matter.” because the Government is saying it will take more time to think about an effective emissions trading scheme and ironically the slow down in world economic growth will buy some time in that particular regard. 
But what is clear is that if we have thermal-generated capacity—and let us remember that one is ready to go north of Auckland—rather than renewable-generated capacity then that simply shifts the costs of Kyoto Protocol compliance to somewhere else within the economy and to somewhere else within New Zealand. It means we have to strive strenuously and harder somewhere else to reduce our greenhouse gas emissions. What we have done as Ms Fitzsimons quite rightly said is that we decided not to pick the low-hanging fruit. We decided instead that we might stimulate the economy by encouraging the purchase of ladders so that we can go and pick the higher-hanging fruit instead. This is called turbocharging the New Zealand economy. 
Of course if I was being cynical I might consider this as some kind of retirement job for Gerry Brownlee. He clearly does not think he is going to be in the job very long given how he has been going over the last few weeks. I cannot remember a Minister who has had as bad a start as Gerry Brownlee has had over the last few weeks. I think he is looking forward to the creation of some kind of natural gas plant that he will be connected up to in the future so that he can become the motive power for that natural gas plant and that will be his retirement job into the long-term foreseeable future. 
This is a silly bill. If this silly bill was to be considered then it should have gone to a select committee. It goes with the repeal of the biofuels obligation. It goes with the setting up of the so-called high-powered committee with the well-known slogan: “If climate change should be done it should be seen to be done.” which is what the slogan of that particular committee seems to be. It goes with us going cap in hand offshore to discuss climate change absolutely unarmed with no moral authority at all in those important international discussions. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I believe that the moratorium has backfired. The Labour members felt that they had produced legislation that would operate like a well-run machine like a greatly tuned car that was economic and clean burning. But all that has come from it is a big backfire of black soot and I want to tell members opposite what that is all about. 
In New Plymouth we are faced with the prospect of having an liquefied natural gas (LNG) terminal because of the reduction of gas supply that the industry has perceived. The LNG that comes to New Zealand has a carbon footprint 40 percent higher than that of indigenous gas. We can thank the last Government for that. We need to understand that Genesis which proposed this comes under the auspices of the Government. I would like to know why the former Minister did not have anything to say about it. 
I am also quite confused why under the last Government a peak-load station was built that had the capacity to burn 1.1 billion litres of diesel per year. I cannot quite understand where its commitment was given that that happened. Even this year 70 million litres have been burnt; if that diesel were used to fill trucks we would have a quarter of a million trucks full of diesel driving through our country. I cannot understand why the previous Government thought that would be a good thing. 
I support the repeal of the moratorium because at least we will go back to 52 kilograms of carbon dioxide for every gigajoule of energy produced instead of 72 kilograms. In time—because National members do believe in climate change—we will hit the renewable energy goal. Thank you. 
MOANA MACKEY (Labour) 
: 
 All the speeches we have heard from the National members so far seem to indicate that they support the moratorium on thermal generation and that they are great fans of renewable energy which leads us to ask why we are here in urgency again passing a bill that does exactly the opposite of what every single National member has argued for. There is confused then there is really confused. 
But there is one light at the end of the tunnel. I am very pleased that the member who has just resumed his seat Jonathan Young has finally realised that it was a moratorium not a ban. I am pleased about that although it has taken the entire debate for him to realise it. I am glad that he has finally appreciated that his first and second reading speeches were completely wrong— 
Chris Hipkins 
: A quick learner! 
MOANA MACKEY 
: A quick learner; well it has not taken him very long. If there is one bright point in the Electricity (Renewable Preference) Repeal Bill being rammed through under urgency with no public input maybe it is that Mr Young has finally realised that the claims he made in his earlier speeches were completely wrong. I congratulate him on standing in this House to correct the mistake he made earlier on. 
I come back to the point that if the National Party members truly do not want any more baseload thermal generation if they truly believe that renewable generation is the way of the future then why are they passing legislation that repeals exactly that? 
Hon Steve Chadwick 
: In urgency. 
MOANA MACKEY 
: In urgency. The member who has just resumed his seat also questioned Labour’s commitment to renewable generation which is very ironic given that we are sitting under urgency to repeal legislation put in place by the previous Labour Government that promoted renewable generation. I do not know whether the member was confused; perhaps he had not read the bill. It is actually not very long. It would take the member only about 5 minutes to read at the very most. It is not very difficult. The member has Dr Paul Hutchison sitting right in front of him—a very learned man. He could ask him about it. He should not ask Maurice Williamson. He should come down a row and ask Paul Hutchison and he will get a much better answer. Paul Hutchison can probably explain to the member how this bill does exactly the opposite of what he just said in his speech what Mr Auchinvole said in his speech and what Ms Wong said in her speech. 
I know that Pansy Wong is into archaic technology so I am not surprised that she supports this repeal. If she pops by my office which used to be her office she can have back her cassette Walkman which she left in the drawer. So I am not surprised that Ms Wong has a kind of sentimental attachment to the technologies of the past. I can forgive her for supporting this legislation. It is quite nice to have a traditionalist in the party—there is nothing wrong with that. 
Mr Auchinvole’s contributions in debates are always extraordinary. I must admit that I look forward to them and I worry when it looks like he will not take a call. I am pleased that he is to be the chair of the Local Government and Environment Committee because his contributions in this House on those issues during this Parliament are even better than his contributions in the previous Parliament. I think it was in his second reading speech that he was sounding very much like Max Bradford. He got quite wound up quite animated and he started giving the old Max Bradford spiel which leads me to ask whether anyone has actually seen Chris Auchinvole and Max Bradford in the same room. With a little bit of work it could actually happen and I think it is something Mr Power might want to look into. 
Hon Simon Power 
: I will get the officials to look into it. 
MOANA MACKEY 
: That would be a very good idea. 
I come back to process. During the Committee stage the Minister in the chair Gerry Brownlee was surprisingly very low on energy—ironically given the bill. He was yawning throughout the entire process. He was sleeping. My colleague Jacinda Ardern pointed out that he had a picture book in front of him. 
Hon Dr Michael Cullen 
: That was his briefing note made especially for him. 
MOANA MACKEY 
: That is fine—to each their own. I do not pass any judgment on that. But it would be nice if the Minister was here in the House at the winding up of this debate. I suspect he is in his office praying for an energy crisis soon so that he can blame it on the previous Government. He has spent all this year praying for an energy crisis praying that we would run out of electricity constantly questioning the Minister of Energy in the House and hoping that the mere semblance of his asking the question would indicate that there was some kind of crisis coming. He is probably up in his office hoping that within the next few months there will be some kind of energy crisis that he can blame on the previous Government and thereby come up with some kind of reason for having passed this legislation. 
It was disappointing that during the Committee stage the Minister in the chair did not take a call. This is important legislation. It is being rammed through the House under urgency. It does not need to be. There is no rush. There is no reason why this legislation like every other piece of legislation we have dealt with so far under urgency could not have gone to a select committee so that those who are affected those who have an opinion and those who perhaps know a bit more than the Minister God forbid could have their say. I know that Mr Power is very proud that coming up we have the first piece of legislation that the Government is sending to a select committee. If I am not wrong it is Labour Government legislation that has been carried over. 
Hon Simon Power 
: No it’s not actually. You should read it. 
Hon Steve Chadwick 
: Watered down. 
MOANA MACKEY 
: That is right—it has been watered down. I congratulate Mr Power on coming up with the first piece of legislation to go to a select committee. I do not actually think it is something to be proud of which is what the member who just raised that point thinks. I do not think it is something he should tout— 
Hon Simon Power 
: Why did you congratulate me? 
MOANA MACKEY 
: I tell Mr Power that I was being facetious. I do not think that— 
Hon Simon Power 
: Oh really! It’s so hard to tell. 
MOANA MACKEY 
: The member will learn; he will learn. I think it would be easier if Mr Power always assumes I am being facetious unless told otherwise. 
I do not think it is a good idea to stand up and say that it is good that we will soon have the first piece of legislation to go to a select committee. A bill not going to a select committee is meant to be the exception rather than the rule. It would appear that under this new National Government that is not the case. 
This bill which repeals the thermal moratorium is not going to a select committee. All that the moratorium did was provide a 10-year restriction on baseload thermal generation because Labour members think that if New Zealanders are going to stand up on the world stage and talk about climate change we actually need to have done some action and not be all talk. We have heard lots of really nice words in the Speech from the Throne and from members opposite about how much National believes in climate change. Maurice Williamson has actually started emphasising the word “believe” when he says it: “I believe in climate change.” 
Hon Maurice Williamson 
: I believe I believe! 
MOANA MACKEY 
: I am afraid that actions speak louder than words. 
Hon Maurice Williamson 
: Alleluia! 
MOANA MACKEY 
: He has had a road to Damascus experience. But I am afraid that actions speak louder than words and we have sat in a Parliament that over the course of 2 weeks has wound back every single piece of climate change legislation put in place by the previous Government—and not just legislation but policies like the $1 billion retrofitting of houses which would have seen cleaner drier healthier houses. We hear a lot of talk in this House expressing concern about the health of our young people and the way that they perform at school but no one draws a link between that and cleaner drier houses which mean that children are not sick and can go to school and that when they do go to school they are actually able to learn and to benefit from it. 
Hon Steve Chadwick 
: It is common sense. 
MOANA MACKEY 
: It is common sense but members opposite do not see that link. The other advantage is that it is good for the environment. Again one would have to question why the National Government which claims to believe in climate change and claims that it wants to do something about it has wound that back. 
We are not quite sure what is happening with the emissions trading scheme select committee. We are not quite sure whether it has stalled has been suspended or is carrying on. I think that foresters deserve to know exactly what the situation will be and what will happen further down the track. The National Party members say new legislation will be passed by September. Well anyone who has seen the terms of reference of that select committee knows that it will be very difficult for it to do justice to the foresters and report back in time for a bill to be passed by September. 
So what are we seeing? More environmental back-downs. We should not be surprised about that because National Governments have always backed away from the big issues. It has always been Labour Governments that have faced up to the big issues facing the country even though they are not easy to deal with—for example climate change and our lack of savings. What are we seeing in this Parliament? A winding back. I say to members of the National Government that it is very easy to defend the status quo; it is far harder to actually have some vision and deal with the difficult issues facing the country which inevitably are issues that polarise people. We have a National Government that will not take us forward and that at the very best will leave us stagnating where we are. More likely it will have us turbocharging backwards at a rate of knots. 
Hon Member 
: “Retro-charging”. 
MOANA MACKEY 
: “Retro-charging”—I am sorry. I wonder how good that is. 
I listened with interest when Jeanette Fitzsimons was giving one of her contributions after the Hon Dr Nick Smith had spoken. Of course he had given a very energetic—I think that would be a good word—contribution. Jeanette Fitzsimons pointed out that greenhouse gas emissions grew under the 1990s National Government and that they grew faster under the Labour Government—and Dr Smith was enthusiastically nodding—and then she pointed out that that was because of stronger economic growth under Labour. Then Dr Smith started shaking his head so hard that I thought it was going to fly off. He did not get the point. Well it has become clear to me that this National Government’s programme for dealing with climate change is to drive economic growth down. We have seen the removal of the research and development tax credit we have seen the removal of the biofuel obligation which was helping our innovative bioenergy companies and our savings through KiwiSaver have been cut. I bet members—in fact I guarantee—that we will have the Hon Dr Nick Smith standing up in this House and touting a reduction in greenhouse gas emissions because they have damaged the economy so much and claiming that that is a good thing. Well that is a National Government for you. 
The ASSISTANT SPEAKER (Eric Roy) 
: That concludes the third reading of the Electricity (Renewable Preference) Repeal Bill. The question is that— 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. I seek leave for Mr Williamson to give a speech. 
The ASSISTANT SPEAKER (Eric Roy) 
: You cannot do that. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. The Opposition would not object to Mr Williamson seeking leave to give a speech. 
The ASSISTANT SPEAKER (Eric Roy) 
: I do not think we will do that either. 
A party vote was called for on the question  
That the Electricity (Renewable Preference) Repeal Bill be now read a third time. 
Ayes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Bill read a third time.