Clark David: Climate Change Response (Removal of Transitional Measure) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeClark David: Climate Change Response (Removal of Transitional Measure) Amendment Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 26 May 2016. Volume:714;Page:11363. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): This bill warrants the Government a tiny pair of flip-flops. It is a U-turn but with a small “u”. It is a tentative first step. As my colleague Dr Megan Woods noted it is like the first steps of a child and it is a shame we do not have a polaroid camera here to catch the moment when that first tentative step is taken. We support the idea that a tiny pair of flip-flops for that tiny first step should be issued from this side of the House.It is a way for the Government to signal that maybe one day—one day maybe but let us not rush—it may develop a plan to transition to a low-carbon economy. It may signal a tentative—a tentative—tiny incremental signal that it wishes to increase the value of New Zealand’s economy over time by stepping into the high-value space and away from what we have always done. Hopefully—hopefully in the future—the Government is thinking there is another way but it is not really signalling in any strong or assertive way that it is going in that direction.Let us not forget that the emissions trading scheme when it was introduced was the first “all gases all sectors” emissions trading scheme in the whole world. New Zealand once had ambition. New Zealand once wanted to lead the transition to a high-value economy that was low carbon. We wanted to lead. But now we have a Government that has stepped away from that. It has said: “No let’s sit with the status quo. Let’s look after the entrenched interests. Let’s not let the costs lie where they fall. Let’s subsidise polluters.”Well here we have a small step saying: “We’re not going to step away from the $25 cap. We’re not actually going to have a real market. We’re not going to step away from intensive-style agriculture. We’re not going to have a real cap-and-trade scheme. We’re not going to put a cap on it for goodness’ sake. Let’s have a cap-and-trade scheme without a track. We don’t really believe in the market because then we wouldn’t be able to support existing interests.” This is a Government that is taking a tentative first step. It is making a tentative signal that is saying: “One day we might send some stronger signals that we really believe this stuff.”But we will be supporting it because it is important to support those first steps. It is important to get behind them. They may be a precursor to something more significant. We know of course on this side of the House that the way to get to that more significant step is to change the Government. That is the plain and simple way. These few tiny tentative steps are certainly not a big sprint in the right direction.This Government no longer seems to be ambitious for New Zealand. It seems to have lost touch with the aspirations of middle New Zealand. The Government seems to have focused only on the interests of the wealthiest few. We have seen that of course in the Panama Papers. We have seen a Budget that does very little to address the increasing gap between the cost of schooling and the money that comes in from taxpayers to support it. We have seen in this Budget a cap on the operations grant. We know that the real effect of that is that parents will be paying more “donations”—voluntary donations—to keep schools afloat. That is what this Budget means. That is what this Budget means for middle New Zealand. It means more costs for schooling.Of course we know that this Budget also means fewer operations. We have seen a health spend that is below the increase in health costs. Here we have in the space of carbon emissions again something that really does not go the whole way. It is not even addressing the current issue in a serious fashion.The interesting thing if you look through the regulatory impact statement on the bill looking at the analysis that the Government has done on this is that it signals that the cost of this is 0.1 percent of GDP in 2020. That is the level of ambition—0.1 percent of GDP in 2020. Eight hours’ worth of GDP will be sacrificed—8 hours’ worth of GDP. That is the signal we are sending as a country. We are prepared to sacrifice 8 hours of GDP to move our country in the right direction. But in fact it really is not a sacrifice at all because of course we know that as we shift away from that old economy and into the new economy there are some real advantages that could be taken advantage of. There are some real opportunities I should say that can be taken advantage of.But this Government just does not seem to get that. It does not seem to see the opportunities. It seems much more comfortable with managing decline. Of course in the last year we have seen what has happened to wages in New Zealand. Per person wages in New Zealand were absolutely flat last year—absolutely flat. As costs rise there was no wage increase for 43 percent of New Zealanders last year. Across the board per person we have seen absolutely no increase in wages. The only thing that is pushing our economy along right now is immigration—it is the only thing that is pushing our economy along. That is not a plan. That is simply not a plan.Here we have from the Government little timid steps; this is not a Government that will push us in the right direction. As my colleague Grant Robertson has said this Budget is like applying a sticking plaster to a compound fracture—that is what this Budget is. I do not think that he is understating it. In this area it is much the same. We have got a serious issue where we need to transition New Zealand’s economy to the high-value future that is on offer. Instead we are getting further and further and further behind our Western competitors who are out there in front developing the intellectual property rewarding their innovators and seeing the opportunity and grasping it.They are not stuck in the past like New Zealand seems to be under this Government. They are not protecting vested interests and they are not protecting those who are already mega-rich. They are out looking for the brighter future looking to reward those who innovate and looking to make sure the incentives are right for those who innovate. They are looking to take their economies forward so that they can afford the kind of health care they would want so that they can afford the type of education they would want and so that they can afford a secure society with a good rule of law—all of those things that taxes pay for.But is this Government doing that? No. It seems content to manage decline and that is out of line with the aspirations of middle New Zealand who actually want to see themselves better off. We know for example that of the proportion of wages that middle New Zealand received under the last Labour Government as the economy grew—which it actually did in real terms by 25 percent under the last Labour Government—more than 50 percent of the gains went to working people. Under this Government it is down to 37 percent—just 37 percent of the returns from the limited gains are going to working people. The gap between rich and poor is growing. This Government seems in the emissions trading space determined to protect entrenched interests. It seems completely unwilling to help shift to the new economy and to the opportunity that is out there for new technologies.Labour will support this first step but we cannot say that it fixes the emissions trading scheme which the Government broke. Let us remember that as soon as it got into Government it got rid of the renewable preference for new generation because it was not comfortable with the thought that fossil fuel plants might not be added to our energy-generation mix. It got rid of the minimum obligation target for biofuels which was not going to cost the country any more but was going to secure a future for the biofuels industry. Then of course it diluted the emissions trading scheme. Here we have a small step towards reinstating a small part of it.This is a Government that is failing to invigorate the economy. We have seen also today of course in terms of invigorating the economy another Byzantine grant scheme from Steven Joyce that will be about him selecting who gets what for his photo opportunities. The Government simply does not have the gumption to put in place a research and development tax credit scheme like the rest of the world recommends—like the literature recommends. It does not want real innovation; it wants to control where the money goes. Is that not the story of this Government? It wants to control where the money goes and it certainly is not going to middle New Zealand.Most New Zealanders will not find themselves better off as a result of this Budget. Most New Zealanders in the future will not have the opportunities that they could have if this Budget and this bill actually moved us towards an innovative new economy if it gave the right signals about shifting away from our old dependency on carbon and if it rewarded those in the agricultural sectors rewarded those in the forestry sector rewarded those in the technology sector and rewarded anybody who wants to innovate and look toward the new world. Instead it seems intent on preserving existing interests: the interests of the wealthiest few. That is the story of this Government.We will as I said be supporting this but on the basis that it is a tiny tentative first step. It is 0.1 percent of GDP in 2020 that is up for grabs here. The opportunity of course is much bigger if we were to send a stronger signal than this Government is prepared to send. The majority of our emissions are in agriculture. This measure here is a tiny first step. Although we will be supporting it we could be doing so much more as a country that would provide great opportunity for New Zealanders in the future.