Hansard and Journals

Hansard (debates)

Climate Change Response (Moderated Emissions Trading) Amendment Bill — In Committee

[Sitting date: 24 November 2009. Volume:659;Page:7967. Text is incorporated into the Bound Volume.]

Tuesday, 24 November 2009

(continued on Wednesday, 25 November 2009)

Climate Change Response (Moderated Emissions Trading) Amendment Bill

In Committee

  • Debate resumed.

Part 1 Amendments to Climate Change Response Act 2002 (continued)

NICKY WAGNER (National) : Today I will talk about Supplementary Order Paper 98, in the name of the Minister for Climate Change Issues, but before I do so I need to clarify some important issues. Yesterday I spoke about the complexity of the emissions trading scheme legislation and about the problems that people have in interpreting the issue. I spoke about the lack of information, partial information, and misinformation. This morning, after watching Phil Goff on the Breakfast television programme, I want to bust a few myths that have been swirling around this legislation, and I will expose some of the misinformation.

Myth No. 1 is that this measure is a limp-wristed, pathetic response to climate change. It is a bill,. like Labour’s, that covers “all gases, all sectors”, and we are the first country in the world to include agriculture. The Rio Tinto smelter in Bluff will be the first aluminium smelter in the world to be under an emissions trading scheme. It is a reasonable, rational response to a difficult issue.

Myth No. 2 is that the public will be subsidising big business. In fact, with the exception of the first 2½ years and the half-priced transition to the system under National to protect our fragile economy post-recession, until 2018 the Labour and the National schemes are very similar. Until 2018 the costs are about the same. After 2018 the schemes diverge. National’s scheme has a much more gentle phase-out than Labour’s scheme.

But the difference between Labour’s and National’s schemes is how they deal with the free international carbon credits allocated to New Zealand. They are allocated to New Zealand because we have committed to a carbon price and we have committed to making changes to our economy. Under National, they will continue to be passed on to our trade-exposed and emissions-intensive companies, to ensure that they and their jobs survive. That is the reason those credits are allocated to us, and that is what this Government will do. In contrast, under Labour’s scheme they would be seized, and the money would be put into the Government’s coffers. So there is no subsidisation; there is only a passing on of allocated carbon credits, and Labour knows that. David Parker himself, when talking about the allocation of international carbon credits in relation to Labour’s emissions trading scheme, refuted the concept, but all the Labour members are talking subsidisation now. The Minister has also made it very clear that the National Government will not be purchasing credits to allocate. Our scheme will be fiscally neutral.

Myth No. 3 is that there is a $110 billion debt for the people of New Zealand. I repeat: there is no $110 billion debt for the people of New Zealand. I thought we had sorted this out. I thought even the most illiterate financial manager could understand this issue, but I saw Phil Goff on Breakfast this morning trotting out the same old misinformation. It is scaremongering at its very worst. Let me explain. The $110 billion figure was obtained by crystal-gazing to 2050. It would apply only if, firstly, Labour’s emissions trading scheme went ahead, and, secondly, if Labour seized the free carbon credits and did not pass them on. That would have produced, maybe, a $23 billion profit at the expense of the people of New Zealand. Thirdly, it would apply only if Labour did not spend the seized credits. We must remember that once the public realised that Labour was making a profit at their expense, it promised to spend them; it said it would spend them on low-carbon initiatives. So they would have been gone. It would apply only if, fourthly, Labour invested the money it had already spent, and had compounded the interest. That is a whole lot of ifs and a whole lot of impossible buts, and this, members should remember, is in the year 2050. People can be assured that there never was and there never will be a $110 billion debt. It was a computer-generated what-if scenario that cannot happen. Besides, there will be regular reviews, starting in 2011, to monitor the process and to make sure that any decisions are for the good of New Zealand.

Now that I have explained that misinformation I want to talk about the Minister’s Supplementary Order Paper 98 and the two policy changes within it. The changes have come out of the submissions process of the Finance and Expenditure Committee, which dispels the myth that the process was so rushed that we did not learn anything from it. The first change concerns tree weeds. Tree weeds and the managing of tree weeds—for example, wilding pines—were of significant concern to submitters. We heard from a large number of organisations, including local government, that wanted to see changes in this area. The amended emissions trading scheme had fixed the problems that had arisen under Labour’s emissions trading legislation, which had meant that organisations and councils that were removing wilding pines were liable for deforestation payments. However, there was a further problem, and, after hearing the latest submissions, National has introduced a Supplementary Order Paper to deal with one further aspect of the situation. The problem occurs when trees have been deliberately planted, often by the Government, as in some parts of Southland and the Marlborough Sounds, and it is from these plantations that wilding pines are being seeded. The changes in the Supplementary Order Paper will deal with this issue.

The second issue I want to talk about is the burning of waste wood. Over the last few years some industries have moved away from fossil fuels to renewable biofuels.

GRANT ROBERTSON (Labour—Wellington Central) : It is interesting to follow on from the member who has just resumed her seat, Nicky Wagner, in the Committee stage of the Climate Change Response (Moderated Emissions Trading) Amendment Bill, and to have clarification that Treasury appears to have a crystal ball that is also a computer. We just heard from Ms Wagner that the computers are to blame. The machines have taken over at Treasury. Nobody is putting any data in; there are no actual people. I do not know what Aaron Gilmore thinks of this. He is a former Treasury person and he must have been part of the crystal-gazing over the road there.

Moana Mackey: He was the crystal ball!

GRANT ROBERTSON: In fact, he was the crystal ball at Treasury. That is what we heard. The problem for Ms Wagner is that Treasury did make this estimate. Treasury made this estimate for 2050, and National has been very, very happy to talk about the emission reduction targets that it has for 2050. It has been very happy to stake its credibility on reducing emissions out to 2050, but suddenly, when Treasury—the brains that drive the financial management of New Zealand—comes up with a projection and National does not like it, it is crystal-gazing. It does not matter any more.

New Zealanders will have to pay for this emissions trading scheme. Ms Wagner shakes her head, but someone has to pay. I quote somebody she knows very well: “Are there fairies at the bottom of the garden with money?”. Somebody has to pay for this, and Part 1 shifts the burden for that payment from heavy emitters to taxpayers. It shifts the burden from heavy emitters to ordinary taxpayers. It shifts the burden from this generation to the next generation. Last night we heard a disgraceful interjection from the National side of the Chamber on one of my colleagues. Jacinda Ardern was speaking about the impact of this bill on future generations and we heard an interjection that said she had no right to talk about that because she did not have children.

Hon David Parker: It was Amy Adams.

GRANT ROBERTSON: That was who the interjector was, I say to Mr Parker. I was appalled by that interjection as I myself am somebody who does not have children. I will tell members of some other people in our history who have not had children and who have made a big influence on this Parliament: Michael Joseph Savage and Peter Fraser. They did not have children, but they cared about future generations. On this side of the Chamber we also care about future generations, whether or not we have children. Part 1 of this bill is pushing the burden for paying for this, for paying for our future, on to future generations without taking responsibility for it now. I believe that that is a great shame.

We need to recap a little on where we have got to. I am a relatively new member in this House so I take the advice of experienced members, who have been here for some time. I want to quote from one of those members: “The importance of getting this legislation right cannot be overstated. [The development of an ETS] represents the most significant economic reform since the deregulation of the economy in the late 1980s. Getting this bill right is also important for the environment. Poor policy can also have unintended adverse environmental consequences.”—I think we can agree with that. The quote continues: “the legislative process has been rushed and inadequate given this bill’s complexity and significance. The public has not had adequate time to examine and submit on the bill, and it is inevitable that serious mistakes will be made that will adversely affect New Zealanders … this process has not been conducive to getting such an important bill right nor in getting the cross-party support needed to ensure the stability and longevity of New Zealand’s ETS.”

Moana Mackey: Who said that?

GRANT ROBERTSON: I will tell members that the Minister in the chair, the Hon Nick Smith, said that, and he was talking about Labour’s climate change legislation last year.

That legislation had had over a year’s worth of work on it, extensive consultation prior to it being introduced, with working groups working alongside the Government throughout the process, and a proper select committee process with a wonderful chair in Mr Chauvel, and Mr Smith told us last year that it was inadequate. I ask members what we are seeing now. We are seeing a process rushed through select committee, legislation rammed through in urgency, and we heard yesterday that the deal with the Māori Party was agreed to 18 minutes before it was announced to the public. Is that the proper scrutiny this bill deserves? Is that the proper scrutiny that Dr Smith was talking about last year?

Paul Quinn: Absolutely!

GRANT ROBERTSON: No, it is not. This bill has been rushed through and this process is a shambles. Over there is Mr Quinn, the politiciser of the Public Service. I wonder whether he will be organising something in association with the Ministry for the Environment in his electorate over this. I do not think so.

This process has been deeply, deeply flawed. This is what the Treasury, which the Government side of the Chamber does not want to listen to, said about this bill: “The level and quality of analysis presented is not commensurate with the significance of the proposals, which represent major design changes to the Emissions Trading Scheme and the Regulatory Impact Statement does not provide an adequate basis for informed decision-making.” Treasury made that comment in all seriousness; the people at Treasury are not frivolous people. The National Party campaigned on respecting the professionalism of public servants, but it has completely failed to do that in this case. Treasury made a serious statement, and it further stated that the changes to the emissions trading scheme “come at a cost to the economy as a whole, by delaying the transition of the New Zealand economy to a carbon constrained world.” [Interruption] I repeat for Mr Quinn’s benefit that the changes to the emissions trading scheme “come at a cost to the economy as a whole, by delaying the transition of the New Zealand economy to a carbon constrained world.”

That is the problem with Part 1. National seems to believe that we can somehow reduce our emissions and meet our international targets without having to really change. Nicky Wagner described Part 1 as a “gentle phase-out”. What that really means is that the people who need to be fronting up—the large, heavy emitters—are being given a gentle phase-out and the taxpayers of New Zealand, out to 2050 and beyond, will shoulder the burden of this legislation. Future generations will shoulder the burden because this Government has not been prepared to front up, take some responsibility, and take some time to develop a scheme that is sustainable and has cross-party support. That is shameful. Part 1 is deeply flawed.

Hon PETE HODGSON (Labour—Dunedin North) : I raise a point of order, Mr Chairperson. I did not raise the point at the time because I did not want to interrupt the flow of the debate, but a member in the Chamber, Mr Paul Quinn, has maintained a running commentary of interjection, which is, I think, disruptive. It is also contrary to the Standing Orders for a person to shift his seat in order to interject. I suggest that if Mr Quinn wishes to continue to scream his lungs out, he is returned to a seat over there, from now on.

Paul Quinn: Mr Chairperson—

The CHAIRPERSON (Hon Rick Barker): No, I do not need any comment. This is a well-worn path; we have been here on many occasions. I say to members that I am very tolerant of these things. If people want to shift around the Chamber and sit closer, down this end of the Chamber, because it intensifies the debate, I think that is a good thing. Interjections are part and parcel of a robust debate in the Committee stage, and both sides have interjected quite robustly. I think it adds to the flow of the debate to have interjections backwards and forwards. I could certainly hear all of the comments being made by the speaker when Mr Quinn was interjecting. The member speaking had the advantage of the microphone. I did not find the interjecting particularly disruptive.

I also say to the member who raised the point of order that a point of order needs to be raised at the time. It cannot be retrospective. If at the time the member feels that interjecting is disruptive, the member must raise the point of order then and there. Once time has flowed, the point of order has gone; it cannot be retrospective.

But I took the member’s point that we should be careful about interjections, and make sure the debate can be heard. I am sure Mr Quinn will take cognisance of that, as will those who have made the loud, robust comments that I have heard from my left-hand side, as well—the many and several, and I will not name them all.

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 Māori 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 Māori 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.

Hon Dr NICK SMITH (Minister for Climate Change Issues) : I am really enjoying the Committee stage of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Out there, members opposite can get their sound bytes and their cheap shots away, but under the blowtorch treatment of the scrutiny of this Parliament we are finding that Labour’s views do not stand up to scrutiny.

Let me go through three areas where I think Labour is making a big strategic mistake. The first is that we have repeatedly heard Labour members use the figure of $110 billion as the cost of the bill. The truth is that it depends on the way the question is asked about those costings. I will tell the Committee where Labour members are tying a noose for their own necks. If they want to apply that sort of approach to the pricing of policies, it will work as follows: for instance, Labour has said that part of its policy is to restore a research and development tax credit worth $400 million per year. But if we apply the $110 billion rule—that is, if we compound the figure over 42 years, the cost of the policy would be $20 billion. I say to Labour members that if that is the approach they want to use for costing, then for every single promise they make up to election day in 2011, I want them to price it on the same rules—that is, the figure should be added up for every single year all the way up to 2050, and compounded at 6 percent each year. That is how the figure of $110 billion is arrived at. I say to members opposite that if those are the terms of their approach, they will blow any credibility they have. There is not a day in this House when they are not making commitments to spend money on this or that cause, so we will now apply that funding approach to their promises, and that will come to bite them very hard in the behind.

The second thing that is really interesting is the way the language changes. You see, when Labour does a deal with the Green Party and New Zealand First to get its emissions trading legislation through, that is MMP politics working well. But when we do an agreement with the Māori Party, then that is a dirty, secret deal. Let me give members another example. When the previous Labour Government made an allocation to industry, the Green Party challenged them; the Green Party said that it was a subsidy for big industry. Mr Parker said that it was not a subsidy. So I say to hang on; I want members of the Labour benches to answer this question: why is it that when Labour makes an allocation to industry, it is not a subsidy, but when National makes an allocation in this bill, it is?

Then we come to some of the other areas around the bill. Let us remember and recite the history. There were 800 amendments tabled a year ago in this House, and what was the reason that Labour wanted to pass that legislation? It was purely political. Labour wanted the legislation through before the election to try to save its skin. Why do we want this legislation through? I will tell members why. We want it through for very practical reasons. What is the biggest issue for New Zealand right now? I tell members that it is the recession and it is jobs. If we do not get this bill through, on 1 January there will be a 10 percent increase in the price of electricity, and there will be a $400 million cost on industry next year.

Do we want to snuff out the recovery in the economy? This is not an ideal process, but members on this side of the House will put the national interest of this country first. The national interest of this country is overwhelmingly in favour of fixing the mistakes in that legislation and getting a sensible and balanced emissions trading scheme in place for 1 July next year. That, in my view, is the absolutely responsible thing for the House to do. I am yet to hear any member set out a realistic and balanced view of an alternative approach.

I will say one other thing. Members ask us just to leave this scheme where it is on 1 January. Well, every member of this House knows that that would be a real shambles for industry. I was advised by officials that even if we rushed to implement the current scheme, the allocation plan could not be done.

PHIL TWYFORD (Labour) : I am speaking against the Climate Change Response (Moderated Emissions Trading) Amendment Bill this morning, and I will follow on from comments made earlier by my colleague Grant Robertson. He referred to the interjection made by a National member last night, a member who told Jacinda Ardern that she had no right to talk about or reference the rights of future generations, given that she had no children. Well, I have a son, and my son will be 60 years old at a time when he will be paying half the costs of the subsidies for high-intensity industry emitters. When my son is 60, he will be paying half the costs of the subsidies for high-intensity industry emitters. Something is seriously wrong with that; there is a very disturbing pattern with this Government to push off the costs of today’s decisions on to future generations.

I will make some comments about process, because there is a direct relationship between the quality of process and the sausage that comes out the other end. The process of this bill has been shambolic, shoddy, and shonky. The result is a piece of legislation that I think quite frankly should not be before this House. If this Government had a shred of self-respect, it would take this bill back to the drawing board. I have been in this House only a year, but I have learned one or two things about parliamentary process. I have watched the progress of two of the Auckland super-city bills as they went through the House, and I thought that they were bad!

There is a strange Alice-in-Wonderland principle at work with this Government. The more important an issue is to the country’s future, the less scrutiny and the less attention is paid to it, and the more rushed its process is. I do not know why that is. Could it be the perpetually relaxed Prime Minister, grinning aimlessly while his coalition partners in major legislation spin off into the ether? Could it be the genial incompetence of Gerry Brownlee and his House management, or has Nick Smith finally blown a gasket and what we are seeing with this emissions trading scheme process is a result of that? At least Rodney Hide has an excuse for his shambolic handling of the Auckland super-city reforms. He was off around the world, going to Universal Studios and attending weddings in London. What is this Minister’s excuse for this shambolic process?

Let us talk about some of the similarities between the Auckland governance process and this emissions trading scheme process. Some things that I think have a very strong parallel between the two processes include the misuse of urgency, which has been another hallmark of this Government’s record over the last 12 months; a rushed and inadequate process; inadequate select committee scrutiny; important decisions made behind the scenes while the committee was actually receiving submissions from the public—and we have seen the sweetheart deal that the Government made with certain iwi in order to get Māori Party support—and shambolic last-minute changes. In the case of the Auckland super-city, it was the panicked last-minute decision to bring the Rodney district into the super-city; in the case of the emissions trading scheme, we have seen very similar things.

Let us continue with this issue of process. We have seen the chair of the select committee try to limit oral submissions to 30 and the hearings to a single day. I ask members how bizarre that is. In the end, submitters were given only a few hours’ notice to appear before the committee—far too short a time to actually speak, prepare, and communicate on issues of this complexity. The Government withheld key documents, including the Treasury analysis of long-term fiscal costs and the details of an agreement with the Māori Party. Treasury officials looked at each other in confusion and had to ask for a break so they could go out and discuss what the real estimates of the long-term fiscal consequences were. It was utterly bizarre, and both Treasury and the Parliamentary Counsel Office said to the committee that they simply did not have the time to do their work properly in order to provide advice to the committee. The process was a shambles, and Government members should be ashamed. To rescue this bill at the last minute, we have seen a cobbled-together deal.

Dr KENNEDY GRAHAM (Green) : This Climate Change Response (Moderated Emissions Trading) Amendment Bill presents perhaps the greatest challenge ever to come before this House in its 150 years, I believe. We are of minor significance in the greater human drama that is unfolding around us, but what we do has an importance proportionate to size. We can never shirk our responsibility to contribute to the common good, which in the 21st century means the good of humanity. This bill holds the mirror up to that responsibility. If our climate change legislation is inadequate, we not only shall condemn our children to a miserable and precarious life but also shall have committed a new crime: the crime of global negligence. As Russel Norman said yesterday, future generations will curse our memory.

Along with the Minister, Dr Nick Smith, I attended the Rio Earth Summit back in 1992. The Minister has recently been wont to recall that attendees at Rio thought climate change could be solved within 5 years, and he cheerfully admitted to having underestimated the challenge. I can attest before members today that Dr Smith was alone in that belief at Rio. No other delegate, not one, thought for a second that climate change would be solved within that impudently short time frame. That is why the United Nations Framework Convention on Climate Change was concluded that year. That is why its Kyoto Protocol was negotiated 5 years later, with its binding obligation to keep our national emissions to 1990 levels, an obligation we are cravenly violating today by 22 percent.

I have scrutinised the framework convention and the Kyoto Protocol, I have read the 2008 Climate Change Response (Emissions Trading) Amendment Act, and I have read the 2009 Climate Change Response (Moderated Emissions Trading) Amendment Bill. I have sat through some of the committee hearings, I have read the committee’s report and the Supplementary Order Papers from the Government, Labour, and the Māori Party, and I have sat through the whole of this debate. What have I learnt? I have learnt that National has scored eight times more solar panels in 1 year than Labour did in 9 years. I have learnt that an allocation is not a subsidy, and that it is. I have learnt, or at least I have been told, that Labour’s emissions trading scheme would cost households $6 per week and National’s only $3 per week. I have learnt that it is unpatriotic for an Opposition member to attend the UN conference on climate change in Copenhagen. Amidst the verbiage I can discern one thing, and that is that any emissions trading scheme, whether the balance of responsibility is by design or accident, weighs most heavily on the New Zealand taxpayer or consumer, the businessman or farmer, the forester or fisherman, whether Pākehā or Māori; it will all ultimately fall on each of us as humans, all breathing the same air, all worrying about our children and theirs.

But at a more fundamental level I have also learnt that humanity is in deep trouble, for as a species we seem to have become afflicted with a cognitive dissonance and have lost our ability to perceive reality with any clarity. We have lost—perhaps never possessed—a true depth of field of historic proportionality. We stare unblinkingly into the void that is the 21st century, mindless of magnitude, oblivious to its portent. In this country, and in this House, we have become so preoccupied with inter-sectoral interests and inter-party point-scoring that we fail to comprehend the truth of what is happening around us. As the beautiful southern icebergs begin their slow and menacing northward drift into our waters, we pretend that it carries no meaning. The searing plight of the polar bear, so far away and yet so near to our fate, we prefer not to acknowledge; we are too busy worrying about our national export earnings. This bill, with its uncapped, trade-intensive, indulgent wink at “New Zealand Incorporated”, constitutes a threat to the global climate and thus to the future of this country.

Let us seek to restore the broader picture that frames the debate we are having in the New Zealand House of Representatives. The global objective of the 1992 climate convention was to protect the climate system for the benefit of present and future generations of humankind. The aim was to stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate quickly enough to allow ecosystems to adapt naturally. The Intergovernmental Panel on Climate Change judges that the critical threshold to avoid catastrophic climate change is 2 degrees above the present, which means a threshold of 450 parts per million volume carbon concentration. The emissions cuts prescribed for that by the rich North are 25 to 40 percent by 2020, and 80 to 90 percent by 2050. The UN Secretary-General urges countries to accept these targets.

Down here on Earth’s last islands, the Government—befuddled with its mantra of balancing economic opportunity with environmental responsibility, as if they were competing weights on the blind scales of justice—talks of doing its fair share in its national contribution to the global interest. So what are its national targets for the global good? They are less than half the prescribed target for 2020, and just over half that for 2050. That is an abject failure to do our fair share, a failure that borders on criminal negligence. It is one to be ashamed of, as, indeed, we shall all be before much time has elapsed.

Last night Kevin Hague described the degraded planet that our descendants may inhabit at the end of the century. To most of us the year 2100 sounds far enough away for political, if not intellectual, absolution. Yet my four granddaughters aged from 3 months to 5 years will, God and Gaia willing, be alive at that stage. I truly fear for their future. Can an agreement be achieved at Copenhagen to avert catastrophic climate change? There is something existentially dysfunctional about 192 nation States, each claiming untrammelled sovereignty, purporting to negotiate a global solution to a global problem through competitive pursuit of the national interest as traditionally perceived. If there is a single global interest, there needs to be a single global institution empowered to identify and enforce the solution. The only legitimate national interest lies in meeting that responsibility.

The underlying issue of sovereignty surfaced recently when Anzac Ministers forewarned that a binding global agreement may not be achieved at Copenhagen, and we should turn to plan B—a schedule of voluntary commitments for cuts. That, of course, would be the ultimate regression to the 19th century. We must never be persuaded to drop global aspirations simply by the siren call of the complexity of the problem.

The Government has provided no causal linkage between its 10 percent cut by 2020 and the impact that it would have on our contribution to the critical global threshold. It follows that the Government is engaging in the obsolete method of policy making of determining a priori its national interest and disavowing the global consequences, rather than accepting the global objective, determining the national obligation from that, then determining how intersectorally we reach it. In New Zealand we have no choice but to meet our national responsibility targets of 40 percent by 2020 and 90 percent by 2050. The 2020 target means a cut of about 48 million tonnes.

The Green Party’s report, released in August, showed that a 36 million tonne cut in domestic emissions is feasible, requiring only 12 million tonnes in international credits to be purchased. The sectoral share of domestic cuts was calculated not on the basis of interminable mutual recrimination and sweetheart deals, but on what is scientifically and economically optimal. That is the rational basis for national salvation. We have studied the environmental ministry’s critique of our report. We adhere, for the moment, to our own calculations, and we are ready to debate the matter constructively.

Each economic sector in New Zealand—business, farming, forestry, fishing, and energy—has a vested sectoral interest that is sub-national. Claims advanced by each of Business New Zealand, Federated Farmers, and the Coalition for Climate Change Policy should, with due respect to each institution, be viewed in that light. It is only the Government that forms policy for the national interest in the context of the global interest. How the Government does that is what this debate is all about. It is about a question of method, and that depends on one’s world view. Jeanette Fitzsimons and I will be at Copenhagen, conducting ourselves in the most patriotic manner of all: seeking to ensure that our Government does this country and its children proud, in this moment of global need.

JOHN BOSCAWEN (ACT) : I have been very disappointed in the performance in this House from the Minister for Climate Change Issues, Dr Nick Smith, on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Last night, in answer to allegations by Jeanette Fitzsimons that this bill generated no net savings in emissions, Dr Smith quite correctly stood up and raised four or five examples of how this bill will reduce emissions. In my view, everything Dr Smith said was absolutely correct. However, this morning we heard from Dr Smith a statement that we should be concerned about the recession. He said that we have a recession and unless we pass this bill, electricity will be going up by 10 percent on 1 January. Dr Smith and the National Government know that that is absolutely incorrect. The ACT Party opposes this bill, and we do so because it is being rushed through before the United Nations Climate Change Conference in Copenhagen. There is no need to do that.

We oppose this bill because it is based in part on following Australia. Australia is not finalised. We oppose this bill because our key trading partner, the United States, has not made any formal, binding commitment, and this bill will put our trade-exposed industry at risk. The ACT Party offered the National Government support in legislation to defer the introduction of the effective date of Labour’s emissions trading scheme. For Dr Smith and the National Government to hide behind this bill as the reason for having to postpone the electricity price increase is nothing more than dishonest.

Last night Dr Smith said that he was enjoying this debate. He commented in particular on the comments of Chris Hipkins on electricity. Dr Smith said that if we remove the two-for-one discount, New Zealanders will pay more for their electricity. Dr Smith is absolutely correct. If we remove the two for one discount, New Zealanders will pay more for their electricity. Under this bill, that discount is removed on 1 January 2013. The Labour emissions trading scheme that was passed last year would have a 10 percent increase in electricity from 1 January. The National Party proposed that we reduce that increase in electricity from 10 percent to 5 percent, and then institute that full increase of 10 percent before 1 January 2013. I stand in this House this morning as one of five ACT MPs, the only MPs in this Parliament who are prepared to stand up and ask why we are increasing the price of electricity by 10 percent from 2013.

Last night the House heard from Hekia Parata, who is a distinguished former public servant in New Zealand. She said that the Māori Party and National should be proud of supporting this bill. I ask Hekia Parata how the National Party and the Māori Party can be proud of supporting a bill that will increase the price of electricity by 10 percent from 2013. How can they be proud? We have heard debate as to whether we allocate fishing quota to the fishermen or to the quota holders. We could argue that is irrelevant; it does not matter. We are talking about only 2½ years of allocations. Dr Smith wrote the National Party minority report on Labour’s emissions trading scheme legislation last year. He said the fishing industry was trade-exposed and energy-intensive, and he questioned why we would not extend support to the fishing industry beyond 2013. He has the chance to do that now, and he is choosing not to do it. I again ask Hekia Parata how she, National, and the Māori Party can be proud to tax the fishing industry $15 million from 1 January 2013. How can they be proud? The ACT Party stands up and represents all New Zealanders who are facing a 10 percent electricity price increase from 1 January 2013.

Hon Dr NICK SMITH (Minister for Climate Change Issues) : Having heard the contribution from both the Green Party and the ACT Party, there are a couple of points to which I would like to respond. Firstly, I respond to the claim by ACT MP John Boscawen that somehow the Government is being dishonest, because I do take offence at that. Let me tell him why. The truth is that the ACT Party does not believe in climate change and does not want to take action. When we had a debate about a carbon tax the ACT Party said no, we should have an emissions trading scheme. Then, when we said we would have an emissions trading scheme, it said we should have a carbon tax. Now, I think the ACT Party needs to be honest with this Parliament and say what it really believes: that we should do nothing.

So right at the very last moment, when it was well speculated in the media that we had reached an honourable agreement with the Māori Party, ACT suddenly fronted up and said we should delay things for 12 months. Let us think that through. Can I be any more confident than I am today that in 12 months’ time National—which believes we should take action on climate change, and which has long said we need to have an emissions trading scheme—and ACT could reach agreement? The honest truth is that I cannot. The truth is that we had a special select committee inquiry. The truth is that the ACT Party’s position at the end of that inquiry was exactly the same as at the beginning, albeit it was a single view. So do I think the right step forward for New Zealand today is to defer things for another 12 months? No, I do not.

John Boscawen says that we are doing this ahead of other countries. Let us think that through. I think Kennedy Graham’s point on this is quite true: that if New Zealand takes the approach of saying we will move only when another country has moved, and if every one of the 196 countries takes that approach, nobody will do anything.

So we have said we want to realign this emissions trading scheme with Australia’s scheme. I have been to Australia three times. Most recently I had a long discussion with Malcolm Turnbull on Monday, so that I could ensure that this legislation took into account the most recent accounts of what is occurring in Australia. The reports continue to be that its scheme is likely to be passed into law this week. Given all the arguments about process, I remind the New Zealand Parliament that the Australian Government has not yet tabled its amendments, and is intending to both introduce them and pass them all in the same week. This issue—[Interruption]

I do want to respond to a point that has been made by Grant Robertson and the likes of him. Those members have said the process is a shambles, but they take no responsibility for their role in that. I will say why they should.

Hon Members: What?

Hon Dr NICK SMITH: Well, let me tell those members this. During the first reading of this bill, Labour members argued strongly that it should be referred to the Finance and Expenditure Committee. I have long held a view that it would be better if National and Labour could reach an accord on this issue. So, in discussion with Gerry Brownlee, we said it was not a big deal and we would allow the bill to go to the Finance and Expenditure Committee. I sought leave to do that. Can members believe that the Labour members voted against it when I sought leave for the bill to be referred to that committee? A large number of technical amendments were agreed to at the select committee. Members of the Labour Opposition agreed with the changes around tree weeds. If they agreed with those changes, why were those amendments not made at the select committee? It is because Labour wanted to make the process as bad as possible, and because it is simply being destructive.

I challenge the Labour members. I say this issue is too important to play those sorts of political games with. This is the sort of issue on which this Parliament should rise to the occasion, rise to the huge challenge, and not be involved in that sort of silly exercise. I say if the Labour members want to make claims about the process, they need to answer to New Zealand on the role they took in the process to make it as destructive as they possibly could. They must bear responsibility for that, and they must eyeball their children and grandchildren about that, as we confront the issue of climate change.

The CHAIRPERSON (Hon Rick Barker): I think we have had so much urgency that we have almost worn the bell out. If members hear this sound in the future, it is the normal bell. We are trying to get it fixed.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : Thank you for that technical briefing, Mr Chairperson. Some of us were wondering whether baked beans had perhaps been on the menu this morning! I make one observation about the Minister for Climate Change Issues, the Hon Dr Nick Smith. We have now reached the point in this debate where that Minister will say absolutely anything. I was astounded by his last contribution. He effectively tried to make a case that New Zealand should show international leadership, should be out there and be one of the first to have an implemented emissions trading scheme, should lead the world, and should do the right thing. I think he asked how we can expect others to do the right thing—and I paraphrase—if we are not prepared to step up to the plate.

I am not allowed to use the “h” word, but I say to that Minister that he is full of it. When it comes to the “h” word, I say that he is the archetypal definer of that word. In Opposition that member stood up and lambasted the then Labour Government for showing international leadership, and for saying we should be out there leading. As we said, we cannot expect others to follow us if we are not prepared to step up to the plate and to put this scheme in place. It was that member, who is now the Minister, who led the charge every day, saying exactly the opposite. He nods his head, because he knows he is the parliamentary definition of the “h” word. He will say anything now, absolutely anything.

Hekia Parata: Keep calling him a hero!

Hon CLAYTON COSGROVE: No, the word is not “hero”; I am not allowed to use the unparliamentary word. What it is about for Hekia Parata is having a different position in Opposition when it lambasted the then Government. The Minister, when in Opposition, asked why New Zealand should be first, why New Zealand should show leadership, why we should be ahead of our trading partners, why we should not wait for the United States and others and the big polluters, and why we should not wait until the large contributors in terms of pollution have got their acts together before we do anything. Yet today, I say to Hekia Parata, the Minister stands up and says exactly the opposite.

The Minister has no credibility, at all. Nick Smith, as Minister for ACC, cannot find any money for accident compensation. His Government cannot find any money for superannuation or for real training for the unemployed. It cannot find any more money for health. It tells teachers that there will be no money next year. But when it comes to a little deal in the back of a darkened room with the Māori Party—a very slippery deal that has never been put under scrutiny and that opens a can of worms around the whole Treaty debate—then, oh, it is all OK! A Treaty clause that was done in 18 minutes, or with 18 minutes to go, is OK! I say to that member that he is a disgrace as a Minister.

I thought that even Nick Smith would not have the gall to get up and say exactly the opposite of what he said not a year ago when Labour’s emissions trading scheme was going through. He lambasted us for it. He said we should not show leadership. He said we should stay behind and do nothing until the great polluters—the United States and the European countries—had got their act together, and today he stands up and says the opposite. He makes the case that his Government is showing leadership. It is appropriate, he says, that his Government is out there as the No. 1 or No. 2 country to put together an emissions trading scheme. I ask the Minister, Nick Smith, how on earth he can exhibit such gall.

The Minister grins away in his boyish way. Does he not realise that these things are recorded in Hansard and that editorial writers and journalists actually listen and report what he says? Does he not realise that embassies around the world and ambassadors, in preparation for Copenhagen, take note of what happens in this place and what Ministers say in this place? There will be Governments, ambassadors, and international officials around the world who are laughing at that Minister. No, they will probably not be laughing; they will be shaking their heads in dismay as we proceed to an international conference that will deal with possibly one of the most important issues of our time and of our generation. That Minister will get up and try to be credible at an international conference. Does he not know that ambassadors and his ministerial equivalents around the world will have read what he said a year ago and will have made file notes to their capitals? As he said, we are the first or second country, possibly, that will do this and some of the eyes of the world look at what happens in this place around this issue.

Hon Dr NICK SMITH (Minister for Climate Change Issues) : Personal denigration has always been Clayton Cosgrove’s approach to such issues.

Hon Clayton Cosgrove: Deal with the facts.

Hon Dr NICK SMITH: I am happy to deal with the facts. Let us go through the facts.

Hon Clayton Cosgrove: What did you say before, when you were in Opposition?

Hon Dr NICK SMITH: Let me quote directly from what National did say in its minority report, and let us compare it with the bill. The first thing I said was that New Zealand should not be leading the world and that New Zealand should be doing its fair share. That is exactly what this bill does. We said in that minority report and in our policy that we should take an intensity approach to allocation. What do we do in this bill? We do exactly that, I say to Mr Cosgrove.

Hon Clayton Cosgrove: You didn’t say that in Parliament.

Hon Dr NICK SMITH: We did indeed say that.

Hon Clayton Cosgrove: You didn’t say that in Parliament.

Hon Dr NICK SMITH: Well, I challenge Mr Cosgrove to read the record. He is a johnny-come-lately to this issue. He was not on the select committee. I challenge him to read our policy, because that is exactly what we said we would do—

Hon Clayton Cosgrove: Read your Hansard.

Hon Dr NICK SMITH: —and that is what is in my Hansard. I also said we should provide a greater level of support for the fishing industry, and we have done that. I said we would provide 90 percent support for the fishing industry—and we have done that. I expressed the view—

Moana Mackey: Not the whole fishing industry.

Hon Dr NICK SMITH: I will come to a point made by Moana Mackey. She will be interested because she has misunderstood a provision, but first I want to finish my comments to Mr Cosgrove. We also said that the 8 percent phase-out rate was too great, and we said we would take a different rate. We said we would align with Australia—Australia is 1.3 percent and we are 1.3 percent—in every key respect, and I challenge members opposite to find a single area in our emissions trading policy that we took to the last election that is not consistent with this bill. We are doing exactly what we said we would.

I now want to deal with a specific point, because I think that Moana Mackey actually does not understand the bill. Moana Mackey made a mistake, and I do want Parliament to know exactly what we are addressing. The question with this bill is whether we are providing the support for the quota holders or the fishing operators. The argument from officials has been relatively balanced, and Moana Mackey said that all the support in the amendments is going to the quota holders, but that is not actually correct. Let me explain why. As a consequence of these amendments the fuel price increase will be halved in that period. Because of the two for one, rather than the price of diesel going up by 7c per litre it will go up by 3.5c per litre. Who benefits from that? The fishing vessel operator. In effect, and if we look at the fiscals that have been provided in the advice, we have the choice of providing the support for the quota holder or providing the support for the fishing vessel operator. The reduction in the increase in the price of diesel is a benefit for the fishing vessel operator. The other provision, which provides the allocation to the quota holder, provides the other benefit.

So the member’s claim is simply incorrect. She does not understand the bill. The reality is that there is a benefit from these amendments to the fishing vessel operators, and that is part of the package of reforms that we have provided for in this bill.

SUE KEDGLEY (Green) : George Orwell coined the terms “newspeak” or “doublespeak” to describe language that makes the bad seem to be good, the unacceptable and the truly terrible seem to be acceptable, and the inappropriate seem to be appropriate. They are the terms for a whole new language, and they seem to me to encapsulate the whole approach of this Climate Change Response (Moderated Emissions Trading) Amendment Bill and what it is about. It is Orwellian. The whole thing tries to make it look as though we are reducing our emissions, when in fact we have a bill that will increase our emissions. This bill tries to make us look good, so that the Minister can to go to Copenhagen and stand up and say: “Look! We have an emissions trading scheme in place. Isn’t it fantastic!”. He will be able to go out to New Zealanders and say the Government cares about climate change and really worries about it. He will also be able to say he has a bill in place, but, when we look at the fine print, we see that it will increase our carbon emissions for at least the next 10, or possibly 20, years. The Minister in the chair, Dr Nick Smith, is shaking his head. The Minister will not tell us for how long emissions will increase but it seems that it will be for the next 10, and possibly more, years.

Here we have a bill that we are pretending will reduce our emissions, when it will increase our emissions. Here we have a bill that basically tells the major industries of New Zealand: “Look guys, it’s business as usual. Just carry on using your coal. Let’s carry on building our motorways. Let’s just carry on as we are. We have this fig leaf, this emissions trading system in place, so we can say to the world and to New Zealanders that we really care about climate change. Let’s just pay for the polluters and just carry on as usual.”

Then we had the extraordinary spectacle of a member of this Committee standing up to say that we should be doing nothing about climate change, and that climate change is all nonsense. It is interesting that my colleagues Moana Mackey and Shane Ardern are here in this Chamber. All three of us went recently to Tanzania for a Commonwealth Parliamentary Association conference. The major issue there was climate change. Were the delegates there sitting around and debating whether climate change was real and whether we should do nothing? No, they were not. There was an intense discussion. Delegate after delegate said they were not discussing in the abstract whether climate change existed; delegates said they were confronting the reality of it every single day. They were horrified by the slow progress of nations like New Zealand, in the face of what they saw as overwhelming evidence of climate change—for example, floods and droughts.

When the President of Tanzania opened the conference, he said that everywhere in Tanzania people were confronted with the effects of climate change. The snow on Mount Kilimanjaro is melting, there is salination of coastal islands, there is coastal erosion in the whole coastal area, and there is desertification. We went on a trip, and everywhere we saw animals—cows—that were starving and so thin that the SPCA would consider them to be cases of animal cruelty. Everywhere there was evidence of desertification. Animals are stressed. Tourists go to Tanzania to see the migration of the magnificent animals, but the animals are very stressed. Because their breeding grounds are affected, people worry that there will be no migration of animals, so the tourists will have nothing to go to see. Those are just some of the examples from Tanzania.

Last year I went with my colleague Steve Chadwick to a Viet Namese seminar on climate change, and I found the Viet Namese were passionate about it. They said that 20 million people who are living in their low-lying coastal areas will be affected, and this could happen in the next few years. The Bangladesh delegates said a 1 metre rise in sea level would inundate 17 percent of their country, displace 15 million people, and so on and so forth. The fact is that everywhere I have been, every developing nation delegate whom I have talked to says—

The CHAIRPERSON (Eric Roy): Before the member proceeds, can I just have a wee go at this bell. I want to see whether I can give it a decent work over. No, so we will be working to a manual system.

SUE KEDGLEY: We can all pretend to ignore the bell and say we cannot hear it.

I want to talk about the idea from the ACT member. It is embarrassing that we have someone sitting here like King Canute, with his head in the sand and pretending that all of this is nonsense. All of us will not just be called to account by future generations but will be called on to assist the millions, probably billions, of people who will suffer if we do not respond to climate change quickly enough. But also, more particularly, there will be the millions—billions—of environmental refugees. They will be heading for New Zealand, and here we are with our heads in the sand.

John Boscawen: Speaking up for the poor. Speaking up for second-class citizens. Speaking up for the underprivileged. Speaking up for the have-nots.

SUE KEDGLEY: Here we have the member saying he is speaking up for petrol users, and about the price of petrol or electricity next year.

John Boscawen: Everyone.

SUE KEDGLEY: Hang on a minute. I presume the member has children. We all say in this Chamber that we are worried about children. We are always wringing our hands about children. But the single most important thing for our children is that they will have a world that is habitable. The idea that we can just sit here and worry about the price of electricity next year, while allowing our children to inherit a world that will be uninhabitable, is, quite frankly, unthinkable. But the trouble with many members of this House is that we think in terms of 1 or 2 years; we do not think about the future.

At the conference on climate change in Viet Nam there was a debate about the idea that countries with the highest per capita emissions—and, of course, we do not need to be reminded that New Zealand has the sixth-worst carbon footprint in the world, per capita—should have added global responsibilities for combating climate change and assisting low carbon - emitting countries. In particular, delegates said that countries with the worst carbon footprint, like New Zealand, should have a special obligation to take in the millions of climate change refugees who will need to find somewhere to live. That is already being debated, so we need to be aware of that. That debate may well develop momentum. We can sit here like the ACT member, saying we contribute only point something or other of one percent of global emissions, but the truth is that we are, on a per capita basis, the sixth-worst country in the world. We may well find ourselves being confronted with an obligation, because we are a high-emitting country on a per capita basis, to take in all of those climate change refugees.

To get back to this bill, I say that most of us in this House accept that there is an issue that needs to be dealt with. That is progress, considering that only a few years ago many members of this House, perhaps most, were denying that there was even an issue. However, what we have now is a bill that makes it look as though we are doing something, when we are not. That is really what it is; it is a public relations bill. It is like a fig leaf that we put in front of ourselves in order to pretend that we are taking action and doing something. But this bill will actually increase our emissions, not decrease them. So it is an Orwellian bill: it makes the bad look good; it makes the unacceptable look acceptable; and it gives the Government and the Minister, Nick Smith, something to talk about. But how can the Minister, in all conscience, come up with a bill that he knows will increase our emissions and will enable the major polluters to carry on polluting?

This bill sends the signal that it is business as usual. In the rest of the world, particularly in Europe, everyone is switching to a low-carbon economy, yet we have no incentive to switch to a low-carbon economy. Because there are no incentives to do so, we will be left behind. If we think of this issue simply from a business perspective, why would we allow New Zealand to be left behind and not give anyone incentives to move to a low-carbon economy? This bill does not make sense. It is Orwellian and is designed simply for public relations purposes. As Russel Norman said, our children and our children’s children will curse us for doing this. Thank you.

The CHAIRPERSON (Eric Roy): The next call will go to the Hon David Parker, but let me make some observations at this point in an attempt to assist the Committee. Firstly, in respect of where the call goes, by convention if a member has had a call or two calls, and someone else has not had a call, the call normally goes to the person who has not spoken. I see affirming glances and assurances from members in the Chamber. That is the process. If a party wants a member to have a second call, when someone else is seeking the call for the first time, that becomes a matter for the party’s whip. It is not for me to rule on that convention, because I would give the call to someone who has not taken a call. That is the first thing. Secondly, Part 1 is very big and contains the substance of the bill, but the debate seems to have developed into a general debate on climate change. It would be very helpful to the Chair, and to everybody else, if members could reference their speeches to the clauses of this large bill, so that we might make some progress. The member indicating to me should not do that; I am just saying where we are going. No one particularly is being accused; I am making a general statement.

Hon DAVID PARKER (Labour) : I would note for listeners that I have been seeking a call for 4 hours. The Minister in the chair, the Minister for Climate Change Issues, has been making accusations that I will not explain the difference between subsidy and transitional assistance. I am grateful for the call in order to be able to respond to some of the issues that have been raised.

For a start, I shall respond to something that Dr Paul Hutchison said last night. He used the example of Hunua and said there are two major sources of employment up there that are affected by emissions pricing: greenhouses that use fossil fuels for heating, and the steelworks. There are two points to be made there. Firstly, in respect of greenhouses, the conversion of their fuel source for heat from coal to renewables is happening. I have had reports recently that woodchip boilers are now close to economic, and they are made economic, in comparison with coal, by this legislation as it stands. Secondly, in respect of the steelworks, it is interesting that, in terms of the ridiculous rate of free allocation, the Engineering, Printing and Manufacturing Union, which represents most of those steelworkers, told the Finance and Expenditure Committee that it was not impressed by the huge subsidy, extending out for many years, in respect of free allocation for industry, because the union knew that it would be to the cost of other members it represents in other parts of the economy.

While Dr Nick Smith is temporarily engaged elsewhere, I will flick quickly to the Treaty of Waitangi issues. Firstly, the process around the Treaty of Waitangi clause was terrible. It did not go before the select committee. We have not had enough time to consider it properly. So far as I have been able to gauge from reading it now, it looks quite a well-drafted clause. It is likely that Labour will support that amendment. I feel a little bit at risk in doing that, because I have not had the benefit of the normal checks and balances of the select committee process in order to ensure that my understanding of it is correct and that I am not making a mistake. None the less we will probably take that risk.

What we do not approve of is the special deal for some landowners of pre-1990 forests. That is an unprincipled decision. There was no withholding of information by the Crown, and there is no justification for the special deal that has been done in respect of those assets. It breaches the full and final settlement Treaty principle.

Paul Quinn: You did the same deal.

Hon DAVID PARKER: We did not, I say to Mr Quinn. That is just nonsense. That is not correct.

I refer members to an amendment that I have prepared on the Treaty issue. It inserts a new section 226, which states: “No additional compensation will be accorded to any pre-1990 forest landowner on the basis that the land was transferred to the owner under a Treaty settlement unless it is proven that the Crown made misrepresentations or withheld material information about emissions pricing at the time of settlement.” So if there was misrepresentation or withholding of material information, then, yes, there should be recompense, but if there was not, there should not be. I encourage all members of the Committee to vote for that amendment, because if, as Dr Smith says, there was misrepresentation or withholding of information, then those landowners can get additional compensation; if they cannot get it, then they are in the same position as any other landowner, in just the same way as everyone is subject to the Income Tax Act, the Resource Management Act, and, now, the emissions trading legislation. That is as it should be. We have not, for example, taken back the windfall gains that come from advantages that were not thought of at the time when the settlement was agreed, such as the advantages that accrue from the New Zealand - China free-trade agreement.

I will just respond briefly on the issue of electricity emissions. We heard Dr Smith saying that giving a discount to major emitters in the electricity field saves consumers money. Well, that is a moot point. That is not clear. The reality is that electricity is heavily influenced by the cost of new generation, and the cost of new generation does not change with that sweetheart deal for the electricity emitters. So I have an amendment to deal with that. It inserts a new section 222C(4), which states: “That before the 2 for 1 emissions discount for electricity emissions is allowed, the emitter must prove”—

The CHAIRPERSON (Eric Roy): I call the next speaker.

Hon David Parker: Mr Chairperson—

The CHAIRPERSON (Eric Roy): No, the member has had two consecutive calls.

Hon David Parker: No, I have not.

The CHAIRPERSON (Eric Roy): I have very exact records.

Hon DAVID PARKER (Labour) : I raise a point of order, Mr Chairperson. My understanding of the agreement is that members were entitled to consecutive calls, and that there is no restriction on the number of occasions that could occur.

The CHAIRPERSON (Eric Roy): Your understanding is incorrect. We had a clear ruling on this yesterday. Members get consecutive calls on one occasion per part. The member had his yesterday. We are still on Part 1.

Hon DAVID PARKER (Labour) : I raise a point of order, Mr Chairperson. The underlying Standing Order says that members are entitled to up to four calls per part.

The CHAIRPERSON (Eric Roy): I do not really need any assistance. What happened yesterday was that leave was taken. Any member could have objected to that leave. It was quite specific. I read it out twice yesterday, and members, I thought, had some understanding of it. I will read the portion to the member again so that we understand it: “The direction of the House allows members to have unlimited calls of 5 minutes each but not more than two consecutive speeches on each part of any provision.” That is quite clear. We have ruled on that, and there is acceptance of it.

Hon Dr NICK SMITH (Minister for Climate Change Issues) : I raise a point of order, Mr Chairperson. I seek leave, because I do have great respect for Mr Parker and he has a number of amendments and considerable knowledge in this area, for him just on this occasion to have the second continuous call so he can speak to his amendments.

The CHAIRPERSON (Eric Roy): Leave is sought for that purpose. This is a one-off. Is anyone opposed to that course of action? No one is opposed.

Hon DAVID PARKER (Labour) : I appreciate it, I say to Dr Smith. While the Minister is in the chair I also acknowledge that in respect of tree weeds, I agree that the amendment that is proposed is appropriate. I thank the Minister for addressing that issue. It is an issue that I came to him about privately, outside the House, as well as raising it through the select committee process, and I accept that the solution is appropriate. But that is about the only good thing in this bill, in my opinion.

I will deal with another of our amendments. We have an amendment in my name saying that if we will not bring in methane, at least we should bring in nitrous oxide at a decent date. My nitrous oxide amendment says that notwithstanding any provision under this legislation, nitrous oxide comes in from 1 January 2013, with free allocation based on 90 percent of 2005 emissions, and any revenue collected between 1 January 2013 and December 2014 shall be used to subsidise the use of nitrification inhibitors.

I want to return to the issue that Dr Smith talked about—the difference between free allocation being transitional assistance and a subsidy. There is a point of principle here, I say to Dr Smith. He has acknowledged that 80 percent of the extra free allocation goes to the agricultural sector—

Hon Dr Nick Smith: 80 percent of the total.

Hon DAVID PARKER: —80 percent of the total—and we know that by 2050, relative to the current scheme, that is approximately 80 percent of $50 billion, which is $40 billion. Including interest—and I know that the Minister disagrees with that—that is responsible for $80 billion of the $110 billion of extra debt. The question is whether that is a subsidy, or whether it is something other than a subsidy. How does one define what a subsidy is? It is not a subsidy if it is a short-term transition assistance for what is already happening. It is a subsidy if it goes on for ever. That is one way in which it becomes a subsidy. It is no longer transitional assistance. It is only abating at 1.3 percent per annum. It is a subsidy.

Another way it is a subsidy is the way Jeanette Fitzsimons articulated it to me last night, and I think she is right. She said that if it is covering existing base emissions, one can actually argue that it is transitional assistance as we move into a new paradigm; but if it is covering new emissions, because there is increased production or a new factory, then that is not transitional assistance; that is a straight subsidy. That answers that point quite clearly, I think.

The reality is that we have now have a “cap and trade” scheme without a cap. There is no cap. That is another point. Dr Smith tried to say that Labour’s scheme had no cap. Of course it did. Free emissions allocation rights were capped. Now they are not. Free emissions allocated rights were capped at 90 percent of 2005 levels. Now they are absolutely uncapped. In the case of agriculture, which does not come in until 2015, emissions growth between now and then is largely not covered by the scheme. So between 1997, when the Kyoto Protocol was signed, and 2015, all the emissions growth in the agricultural sector will be free for that sector. That is just wrong, and it is economically inefficient. As a consequence our country gets poorer rather than wealthier.

The other example the Minister used was the fishing sector. He said that the fishing sector was like the agricultural sector, and that the compensation there was for loss of value rather than loss of production out of the country, because the fishing would, of course, still happen in New Zealand. I absolutely agree. The same would happen in agriculture. The land cannot move, the cows cannot move, the factories cannot move. Production is not at risk of moving. Therefore, the basis of free allocation is not to stop leakage to another country. It is to fairly compensate for lost value as a consequence of the change in value brought about by emissions pricing.

That will not be done until 2050, and even in 2050 more than 50 percent of the agricultural emissions will still be subsidised. It is economic nonsense. It is like supplementary minimum prices. It is like going back to the 1980s and phasing out tariff production but, during the transitional period, instead of having tariffs going down, increasing the protection during the phase-out period. That is what we would be doing if this system were applied to the tariff example. A better example is supplementary minimum prices, where land prices were artificially held up by highly subsidised agricultural prices. That is what is happening here. We have the additional disbenefit here of curbing afforestation, which, of course, soaks up carbon.

Hon Dr NICK SMITH (Minister for Climate Change Issues) : I always enjoy dialogue and debate with Mr Parker, because he is thoughtful and well informed, and I think he has genuinely made a significant contribution to New Zealand in climate change policy by advancing an emissions trading scheme as the Minister responsible for Climate Change Issues under the previous Government. But I also want to debate, in a proper way, a number of the points he raises.

He says that there is no economic analysis on which to base the approach with which we are doing the allocation. I accept that it is a debatable point; there is a range of views. But let me read very clearly the in-depth analysis that was done by the New Zealand Institute of Economic Research and Infometrics in the conclusion of their inquiry. They said: “Our recommendation in the short run is to introduce an ETS with free allocation to competitiveness-at-risk sectors, with agriculture excluded if measurement of its emissions is prohibitively expensive. Free allocation should be output-linked and phased out as competitors adopt carbon pricing. If agriculture is initially excluded it should be transitioned into the ETS as measures become economic.” That is the key conclusion of the major analysis that was done this year in that regard.

I want to cover a couple of other points. I want to deal with the question of economic analysis and how costings are done. I want to make this analogy for Mr Parker and Labour members, so they understand. If they want to argue that the $110 billion figure is the way in which we need to cost policies, that is, we need to add up the cost every year, and if it is a loss of income—because it is a loss in terms of these changes—then we need to add interest at the standard rate, which is what those figures involve. Let me tell members what that means.

Hon David Parker: Or borrowing costs.

Hon Dr NICK SMITH: Labour has said that it will proceed with its tax policy in respect of research and development tax credits. That policy is described as costing $260 million. Labour members mean that there will be foregone revenue of $260 million per year. If we apply the same costing approach that Labour members are adopting, and we run it through to 2050, the cost of that policy is $43 billion. Is it fair, when Labour announces such a policy as we go before the next election, for us to use the same pricing method on a research and development tax credit that results in a loss of revenue in exactly the same way as they would want to use the $110 billion figure? The third point I will make—

Hon David Parker: Then explain away the $50 billion.

Hon Dr NICK SMITH: The member challenges the figure of $50 billion. The real crux—and I have an interesting analysis here that the member may be interested in—and the key sensitivity of that number is the phase-out rate. We are starting the phase-out rate a little earlier. We are doing it in 2013 at 1.3 percent. Agriculture tax starts in 2015 at 1.3 percent. If we change the rate to 2 percent, the number would reduce to $40 billion. It we reduced it to 4 percent, it would be $20 billion. If we phased out at 6 percent per year, it would come out at about zero.

Hon David Parker: We could have compromised with that.

Hon Dr NICK SMITH: Members on this side of the Chamber are saying this, and this is an invitation to the Opposition. I am not sure where international negotiations will go. I am not sure where the carbon price will go. I am not sure where the technologies that we are spending significant money on will go. I am not married absolutely to that 1.3 percent rate. That is why it is one of the key features that will be reviewed in 2011. Our policy position is that that phase-out rate should be in line with our major trading competitors, as per the comprehensive analysis from the New Zealand Institute of Economic Research and Infometrics. When the Government says that the 1.3 percent rate is only in the short term, for Labour members to put great weight on what the implications of that will be in respect of 10, 20, 30, or 40 years’ time is, in my view, quite misleading. When we do the review in 2011, I invite Labour to engage with the Government, because the analysis is very sensitive to that rate. The last point I will make is this: if we scratch the surface of what Mr Parker just advised us, if the allocation is just to 2030—

CHARLES CHAUVEL (Labour) : I want to talk about the issue of phase-out for industry and agriculture, because I have tabled Supplementary Order Papers that would deal with this issue. They set out a position that I really wish the Minister in the chair, Dr Nick Smith, would consider in light of the comments he has just made about the unlikelihood of the 1.3 percent rate surviving. One of those Supplementary Order Papers changes the phase-out of free allocation to industrial emitters to a defined 18-year phase-out, with all assistance ending in 2030. It does that by amending clause 22. It inserts new sections 82 and 85A into the Act. The phase-out rate is too slow. One of the problems is that there is no specified date at which allocation will end. Under the existing legislation in force now, there would be a phase-out of all free credits by 2030, but under the Climate Change Response (Moderated Emissions Trading) Amendment Bill, there will be an indefinite continuation of free credits.

Hon Dr Nick Smith: Same as Aussie.

CHARLES CHAUVEL: We have a completely different emissions trading profile from Australia.

Hon David Parker: Because they’re wrong doesn’t mean we should.

CHARLES CHAUVEL: That is a good point. Just because another jurisdiction is doing something that is flawed does not mean that we ought to copy them. That is one of the problems with harmonisation. I said to the Minister earlier, half-jokingly, that it might be the end of the career of the Liberal Party today or the next day, thanks to the stance he has taken—which I happen to agree with—on its Carbon Pollution Reduction Scheme. It just shows the folly of harmonisation, which is another argument that we will have to have. David Carter was reported as saying the other day that the Government plans to provide free credits for agriculture for 90 years. That seems to be pretty close to the truth, given what others have said. The 1.3 percent per annum phase-out rate for free carbon credits means that taxpayers will still be funding over half of the emissions for high-intensity industry in 2050. According to the Parliamentary Commissioner for the Environment, the phase-out rates will stop the Government from achieving its 50 percent reduction target by 2050. The effect of this absurdly slow phase-out rate on free emission rights, compared with the status quo, is shown in a couple of graphs in the Labour Party minority report.

The comparison between the phase-out of the existing scheme and the scheme that the Minister proposes is quite instructive. Members will see on this graph the point where all assistance would phase out under the current scheme, and under the amendments that the Minister proposes. Basically, for high-intensity industries it continues indefinitely. For medium-intensity industries it continues for a long time.

Compare that with another graph I have here, which shows the situation under the Waxman-Markey Bill, which is the leading proposal in the United States. One can see that at 2030 there is a very steep phase-out for all assistance. For all the Minister likes to say that he proposes the same sort of thing that is being done by our trading partners and our competitors, it is actually not so, because of the design of these amendments.

It is not just industry where we need to be concerned about the phase-out. There is another Supplementary Order Paper dealing with agriculture. Again, the Supplementary Order Paper phases out all assistance for agriculture by 2030, consistent with the industrial allocation amendment that I have just spoken about. It would also return the entry date for agriculture into the scheme to 1 January 2013, rather than 1 January 2015. This is an essential amendment for fiscal responsibility, because it is the ridiculously generous allocation to agriculture in the amendment that causes the blow-out in the accounts that we have had so much debate about in the House and which is so unjustified.

This assistance, as David Carter told us, will go on for another 90 years. The country cannot afford it. The Minister has admitted that it is unlikely to survive reviews. Why on earth we are enacting it and sending the signal to the market that cannot simply be maintained beyond the next review period, is beyond members on this side of the Chamber. It is useful to recall what was said by the select committee on this topic. We said in our minority report that there should not be a change to the current entry date into the emissions trading scheme for agriculture of 1 January 2012. We all know the argument: agriculture contributes nearly 50 percent of all New Zealand emissions. However, under this bill the agriculture sector is required to be responsible for only 4 percent of the total costs of meeting our international obligations. There cannot be any policy justification for delaying the date of entry for agriculture or not dealing to the phase-out.

JOHN BOSCAWEN (ACT) : First of all, I owe you an apology from last night, Mr Chairperson, because I misunderstood the advice I had received from Mary Harris about the consecutive speech motion. When I checked that this morning your ruling was absolutely right on point.

I want to respond to the comments of Dr Smith, who said the ACT Party is opposed to an emissions trading scheme. Yes, it is. But the ACT Party has also made it very clear that if we are to have any sort of tax on carbon, it should be a carbon tax. So there is the option of negotiating a carbon tax with the ACT Party. But Dr Nick Smith also said if he did not do this deal with the Māori Party, there was no guarantee that he could have done a deal with ACT next year. I ask Dr Smith why he could not have done a deal with the Māori Party then. If the Māori Party had more time to consider the implications of this bill, it might well have done a much better deal for itself and for all New Zealanders.

I want to talk a little about the electricity industry. I do this for the benefit of Sue Kedgley. Let me see whether I can explain how the electricity industry works, in the simplest possible terms. Electricity is generated either from renewable sources, like geothermal or water, or from thermal sources, like gas and coal. Essentially, the emissions trading scheme puts a price on the carbon discharges from thermal power stations. So, for example, if Contact Energy was to generate electricity from gas, it would have to pay a tax on its emissions from its thermal power plants. That has the effect of costing Contact Energy—and another example is Genesis Energy, in respect of the Huntly power station—more to generate that electricity. It has been estimated that at $25 a tonne for carbon, it will add about 10 percent to the cost of electricity. But it goes further than that, because that 10 percent increase in the price of electricity is charged across the whole market. Everyone pays more for electricity.

In respect of the power stations that operate from renewable sources, from hydro and from geothermal generation, they do not pay that carbon tax, and that increase in the price of electricity is a windfall gain. In other words, Contact Energy, TrustPower, Mighty River Power, and Meridian Energy, which all own hydro stations, will be able to charge more for their electricity and it will not cost them any more to produce it. That will result in windfall profits. If Sue Kedgley takes objection to the ACT Party being the only party that is prepared to stand up and speak out about a 10 percent increase in the price of electricity from 2013, I wonder whether she actually understands what she is talking about. Essentially, she is condoning a massive increase in profits and a massive windfall gain, not just to State generators but to privately owned power operators. I ask Hekia Parata, again, how she can support a bill that will increase the price of electricity and have massive windfall gains going to those companies.

Let us come back to fishing. Officials have calculated that the diesel that the fishing industry uses to drive its trawlers and its operations will generate some 600,000 tonnes of carbon. It has to pay for those emissions. It will get a 90 percent allowance for those emissions. But from 2013 it will need to pay for the full cost of those 600,000 tonnes of carbon. At $25 a tonne, that is $15 million a year. That is despite the fact that New Zealand gets an allocation of free units under the Kyoto Protocol because our fishing industry was generating carbon emissions in 1990.

The CHAIRPERSON (Eric Roy): I thank the member for his acknowledgment. It was not necessary, but I thank him for it.

Hon PETE HODGSON (Labour—Dunedin North) : At its heart the Kyoto Protocol is designed to take a problem that is environmental in its essence and turn it into a challenge that is economic. That is what a “cap and trade” system does. The Kyoto Protocol has also managed the awkwardness of only a few of the Western nations in the world signing up, by inventing the so-called flexibility mechanisms, the joint initiatives, and the cleaner development mechanisms. It does not work in practice, I freely can see that, but at least in theory we have a chance of the world moving along the cost curve at the same time. That is the idea of the Kyoto Protocol. For it to work, the full marginal price of pollution needs to be faced by the polluter. That is the essence of it. The full price at the margin has to be faced by the polluter in question. That is the case in theory.

In the Climate Change Response (Moderated Emissions Trading) Amendment Bill we do not see anything of the sort. We see the right price not being put in place in a timely manner. There are no right signals to the right players at the right time. That is as a result of an admixture of phase-outs and of arrangements that have come into play and distorted the original theory of the Kyoto Protocol and the original idea of “cap and trade” to the point where it is now well short of what it could be. That is a shame. The essence of our opposition to this legislation is around that.

Let me put it to the Minister in words of one syllable. If we as a nation have the goal of reducing our greenhouse gas emissions by 50 percent by 2050—if we will halve them in the next 41 years—how come we are about to adopt legislation that does not have a complete phase-in of the economic signals until 2090? If we are supposed to be getting ourselves to halfway by 2050, why are the signals not fully coming in until 2090? Under the Parker legislation, which will now be repealed, that 2090 date would have been 2030. There is much more that I could say about that in the detail, but instead of going on about the environmental shortcomings of it, I want to speak of the social shortcomings.

This Kyoto Protocol and emissions trading legislation seeks to transfer wealth. That is the guts of it. If there is no change in signals from a non-polluter to a polluter, then there will be no reaction by the polluter, which of course includes all of us. In this legislation, in short, the big end of town is winning. It does not matter whether it is the big end of “white town” or the big end of “brown town”, the big end of town is winning. The corollary to that is that the small end of town, both white and brown, is losing.

Last night we heard Jeanette Fitzsimons giving a careful anatomy of the sell-out of the Māori Party. She did it more in sadness than in anger. But she looked at the criteria that the Māori Party used to vote against the Parker legislation and put the same criteria against the current legislation. She said that she was bewildered, she was sad, and she was confused. She was really saying that the Māori Party has lost its principle. Let us leave aside the fact that Ngāi Tahu has a deal for its trees, or that there are another few thousand houses in the mix. That is the essence of it for the Māori Party, and for Māoridom that will not work. Māoridom will be subsidising Comalco and other big polluters—foreseeably. That is not OK. Māori are disproportionately at the small end of town; relatively few Māori are at the big end of town. Therefore, nearly all Māori will be worse off under this legislation than under the Parker legislation. The Māori Party said that the Parker legislation did not go far enough for them. It is now supporting legislation that goes nowhere near as far as the Parker legislation did, and that has caused the Green Party to express its bewilderment. I say, in a much more direct way, that it is a sell-out and that the small end of “brown town” loses. They are taxpayers. They are trying to make their way as families year by year, and they will not see a reduction in their taxes—they will see an increase in their taxes—as a result of this legislation.

CHRIS HIPKINS (Labour—Rimutaka) : I am happy to take my first call on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. The people in my electorate whom I have spoken to about it over the last few days have had one question for me: why should we pay through our taxes or through a lower level of public services in order to subsidise the big polluters? Their question is very simple. We can get engaged in all of the detail of the debate here, but the people in my electorate want to know why they should pay higher taxes or have a lower level of public services, so that the big emitters, such as Rio Tinto and its Canadian and Chinese owners, can make a larger profit and be subsidised by the Government for their emissions. Fundamentally, that is what this is all about.

I want to respond to some of the comments made last night by Te Ururoa Flavell from the Māori Party. He accused me of not listening to him, but I assure him that I listened very carefully to everything he said. I found his speech about the principles of the Treaty of Waitangi and the need for a Treaty clause in legislation quite interesting. I do not think members on this side of the House have ever had the level of difficulty with those ideas that the party he now sits beside on the governing side of the House has had with them. It was the party he now sits with that talked about the drift towards racial separatism and that ran the “Iwi/Kiwi” campaign. It is no wonder that the Māori Party’s core supporters, on seeing the Māori Party voting for a bill like this, which was introduced by the National Government and which the Māori Party is now supporting, have gone into an absolute revolt, as we have discovered from the news stories that have been coming out in the last half-hour or so. They say that the Māori Party’s national council is having a special meeting this afternoon to discuss whether it supports the position taken by the Māori Party leadership to support this bill introduced by the National Government.

This bill will increase the costs on some of the lowest-income New Zealanders. Of course, we know that National would rather tax people at the lower end of the income spectrum, because the very first thing that it did when it came into Government—and the Māori Party voted for it—was to increase taxes on the lowest-income New Zealanders so that it could give bigger tax cuts to those on the highest incomes. That has direct relevance to this debate. If National’s proposed amendments to the emissions trading scheme go through, the taxpayer—and, because of the way that National has structured the tax system, the lowest-income taxpayers now pay a higher rate of tax than they otherwise would have—will end up footing the bill for emissions.

I say to the Māori Party that it is not too late. I know that National’s junior whip sitting over there with them there is trying to make sure that National still has the votes to get this legislation through the House, but I tell the Māori Party members to listen to their members, who are having meetings as we speak. They have called meetings to tell the Māori Party leadership not to do this to Māori voters. I tell the Māori Party members to listen to what their members and supporters are saying. They are saying it is not too late to vote against this bill. I encourage the Māori Party members to listen to what they are saying. As one of the Māori Party members said: “Even though there is a signed deal on the table between the Maori Party and National, the third and final vote is yet to be taken,”. It is not too late for the Māori Party members to say that, no, they made a mistake; that they stand by the minority report that they wrote in the first place that said that Labour’s scheme did not go far enough and they wanted something tougher; and that they will not vote for something that waters down the scheme and gives Māori an even worse deal than what they would have got previously.

The Māori Party members could stand up; it is not too late for them to change their minds, vote against this bill, and stand up for the people who voted for them. As is now being reported in the media, “The Māori Party membership are becoming increasingly aware of the huge debt that our people are going to have to pay, despite all the window dressing going on by the leadership about deals struck with Iwi and the $4 per week being saved with cheaper petrol and electricity prices … That figure fails in comparison with a 40 year debt of anything between $110 and $220 billion.” That is what the Māori Party’s membership is saying to the leadership. It is not the Labour Party’s position; it is the Māori Party’s grassroots membership saying that. I tell Te Ururoa Flavell to listen to what those people are saying. It is not too late. The final votes—

Te Ururoa Flavell: The foreshore!

CHRIS HIPKINS: He can talk about the foreshore and seabed, but this issue is the biggest sell-out by the Māori Party since it has been in Parliament. His membership will desert his party over it, if the reports coming through now are anything to go by. The Māori Party will be abandoned by its membership if it goes ahead and votes for this bill. Māori Party sources calculate that Māori will pay $500 million to $1 billion a year through the cutting of services, increases in taxes, or the sale of assets. How on earth can the Māori Party justify that?

Hon Dr NICK SMITH (Minister for Climate Change Issues) : I really enjoyed that contribution from Chris Hipkins. It was a truly remarkable contribution given the news release that he put out on Sunday, where he said that he had had a rush of constituents to his office concerned about—

Hon David Cunliffe: I raise a point of order, Mr Chairperson. It is certainly a convention in this House, if not binding under the Standing Orders, that the Minister in the chair in the Committee stage of a debate is there to serve the Committee by responding to the questions that it poses on the policy in the bill. It seems to me to be at odds with that convention that the Minister has launched into an attack on a member of this House about a press release from the previous week on an arguably unrelated aspect of business. I ask you to restrain the Minister and bring him back within the normal conventions—

The CHAIRPERSON (Eric Roy): The Minister in the chair was responding to an issue raised by the member, and I am prepared to hear the argument at this stage.

Hon Dr NICK SMITH: A key part of the amendments we are making to the emissions trading scheme is to prevent a 10 percent increase in the price of power on 1 January, and to put in place on 1 July next year a lesser increase, while having a responsible climate change policy. I challenge Mr Hipkins to say how he can challenge the Māori Party about integrity, when on Sunday he said: “I’m going to Parliament this week to do all I can to fight power-price hikes.”, and then his own colleague tabled a Supplementary Order Paper to reverse changes in those amendments, which would put power prices up. I say to Mr Hipkins that he is an embarrassment to his electorate, and to himself, if he is going to run those sorts of lines and then challenge the Māori Party about impacts on low-income earners.

The advice is absolutely consistent. The changes the Māori Party is supporting will result in the lesser cost of $165 per year on every single New Zealand household. That is absolutely consistent in the advice. The real question for Mr Hipkins is whether he will support the Māori Party and the National Party in reducing that price impact. The very first issue that the Māori Party put on the table in its negotiations was the same issue that Chris Hipkins raised: lower impact costs on households. So I simply say to Mr Hipkins that he should be supporting the Māori Party, and he should be thanking it for helping not only Māori but all families in reducing the impact of the emissions trading scheme on those households by $165 per year. If he is true to his word, he will be voting with the Māori Party and National for these very sensible amendments.

Hon MARYAN STREET (Labour) : I want to go back to some of the entry points for the Climate Change Response (Moderated Emissions Trading) Amendment Bill. I did not come into this House to make life worse for my daughter, her peers, and any children whom she might have in the future. I did not come here for that purpose, and one of the reasons why we as the Labour Party are voting against this legislation is that it does nothing to advance the future for New Zealand.

National has always been the party of the status quo. What we have here is spin upon spin upon spin, layered on what is, essentially, a status quo document. The National Party has always been the party of big business. It is only recently that its members have discovered Māori big business, but it is still the party of big business.

We are concerned—deeply concerned—about this legislation, because of not only its content but also its process, which I will come back to in a moment. The content of this legislation does nothing to incentivise our producers—it does not matter whether they are agricultural producers or industrial producers—to do things differently: to build a new economy, and to build a new productive base in this country on the basis of new methods. It does not help to build productivity and economic output for this country, based on new methods that are sensitive to not only the environment that we are blessed to live in, in this country, but also the needs of the planet’s environment. That is the fundamental concern for us in Labour. This legislation provides no incentive to reduce emissions.

If there is nothing else that National understands about climate change, can it please understand this? This watered-down scheme—it is, in effect, a return to supplementary minimum prices—panders to the corporates by giving them vast handouts, and it does nothing to incentivise them to change their behaviour in order to reduce greenhouse gas emissions. At least that is what we all understand; surely, we all understand that. The public knows that greenhouse gases need to be reduced if this planet is to survive in any kind of reasonable condition for our children and their children. So it is absolutely essential that some of the amendments that have been put up get proper consideration and support. If I am allowed to take a second call in a moment, I will go over some of those Supplementary Order Papers.

But I also want to talk about the process around this bill. The Government would not be in such distress now about the numbers, or be in such a shambles about the passage of this legislation, had it simply taken a breath and done it in a more consultative way. To give legislation of such importance as this only 6 weeks in front of a select committee is a travesty of the process. This Government has prostituted the processes of Parliament in order for the Minister for Climate Change Issues to say there is legislation with his name on it when he goes to Copenhagen. That is not a good enough reason for doing that. I say to Dr Smith that this legislation is not about him; it is about the future of New Zealand. It is about our contribution to the reduction of global warming, which is a man-made phenomenon.

If this bill had gone through a proper process and had taken some time, we might have arrived at legislation that was durable—at an emissions trading scheme that was durable. Instead of ramming through these completely inadequate—worse than that; destructive—clauses in this legislation, all that the Minister needed to do was, in fact, to extend the implementation date for the previous Labour Government’s emissions trading scheme. All that he had to do was to delay the implementation of our scheme, give it a greater hearing, and let the Māori Party work out whether it was going to be advantageous to its people—that is, not simply advantageous to five iwi corporates, but advantageous to Māori and Pākehā families in the lower socio-economic brackets in our country. This legislation will not do what the Government is trying to spin that it will do. It will not reduce power prices as it stands. It will require taxpayers to foot the bill for subsidies to large emitters to carry on with their emissions. Those large emitters will not only carry on but also increase their emissions. They will be allowed to increase their emissions; there will be no progress.

This issue is not meant to be about the Minister’s ego in Copenhagen. He could easily have said New Zealand has an emissions trading scheme in place—he could have said that in Copenhagen. He could even have said we were still in discussions about amending it. This is not about going to Copenhagen with nothing; we have something in place, so we could have held our heads up. When the first soundings of this legislation were broadcast through the diplomatic channels in the pre-Copenhagen conference, people laughed—people laughed. The Minister thinks he is going to achieve something by way of reputation by having this bill—this legislation with his name on it—held up in Copenhagen. But when people look at it closely, they will continue to laugh. This legislation will do nothing to reduce greenhouse gas emissions, and, worse than that, it will require the low-paid, the low-income households, to pay for this scheme through a reduction in services—whether they be reductions to education, to health, to other infrastructure, or to public services that they draw on and require in order to live with dignity in our country.

I ask the Māori Party members not to be influenced by National sending its Māori members to cuddle up with them on their benches right now. They just need to be aware of what the Māori Party’s membership is saying. They should be aware that the party’s membership has dropped to the fact that this spin is completely transparent, and that this bill will not deliver the kinds of relief wanted by low-income Māori households—relief that they would wish that their party would represent for them in this Parliament. It is time for the Māori Party to withdraw its votes and to listen. It is not too late. It is time now for the Māori Party to withdraw its votes on this bill and to vote it down.

We have an emissions trading scheme in place. Let us spend more time on achieving a durable consensus around that. It was the Minister who walked away from the bipartisan talks—from the multiparty talks. It was the Minister who walked away, thinking he could sew up the Māori Party votes on this bill and get it passed. That is not good enough. It is a travesty, it is an abuse of parliamentary process, and it is not what, I would suggest, many National members came into this House to do. Regardless of the issue, surely they would not subscribe to that kind of abuse of process. This is the moment for the Māori Party to withdraw its votes on this bill, to listen to its membership, and to understand that what has been said by the Government, in terms of relief for low-income households, has been just spin.

Let us take time. Let us build, I say to the Minister, a durable consensus around the emissions trading scheme. This bill is a shambles. This process is a shambles. It is now getting to the point where the votes in support of the bill are at risk. The best thing that the Minister could do is to withdraw this bill, rather than suffer the ignominy of a defeat. He could withdraw it and say “All right, let us go back. Let us see if we can gain some multiparty consensus.” The last thing that our farmers need is instability around the emissions trading scheme.

JEANETTE FITZSIMONS (Green) : I will begin by just briefly awhi-ing the Māori Party, which is a membership-based, grassroots party like the Greens. We know what that means. We know that it leads to some difficult internal decisions. We know what it is going through at the moment. The Māori Party members should not withdraw their votes because Labour has asked them to, and they should not withdraw their votes because the Green Party has asked them to; they should listen to their members and do what their members are asking them to do, because that is who they are accountable to.

I want mainly to talk now about what I think is the primary reason for the unease that is being caused to members of the Māori Party, to the Greens, and to most other people who oppose this legislation. It all comes down to the intensity basis for the allocation. That is what creates the huge inequities and the huge debts going forward into the future that this legislation creates. There has been a lot of talk about the phase-out rate of free allocation. Nobody seems to have twigged that under this legislation there is no phase-out. The 1.3 percent is a complete mirage. Any industry getting an allocation that grows by more than 1.3 percent a year gets no phase-out at all.

Let us look at the dairying industry for a moment. Dairying output has been growing by 4.4 percent a year recently. That is a huge rate of growth, and the National Government and Fonterra want it to go on for ever. I do not know where they will put the cows, I do not know what they will do about the rivers, etc., but the fact is that is its output growth, and the free allocation depends on output. So we will get a 4.4 percent increase each year in the basis for the allocation, then a 1.3 percent decrease, leaving—if my school maths serves me well—a 3.1 percent increase in free allocation to the dairy industry every year. There is no phase-out. If Comalco manages to increase its production by more than 1.3 percent a year, it gets no phase-out, either. If Methanex manages to ramp right up to full production in two plants, it gets a massive increase, as well. The free allocation goes on, then, for ever.

The key difficulty with it is not what happens in the next few years. It is not about how much we might help people with sunk investment in existing plant transition to a new world. What it means, though, is that new investment decisions—people building new plants that will be trade-exposed, or existing plants significantly expanding in the trade-exposed area—will not take the price of carbon into account in making those investment decisions. Investors who are looking at a choice between a low carbon investment and a high carbon emissions investment will have no encouragement at all to take the low carbon investment, because the intensity-based allocation says “You go for it, and the taxpayer will cover 90 percent of your increase in emissions, virtually for ever.”

The other thing the intensity allocation does is it takes away what limited cap there was in the existing legislation. We had some argument previously between the Minister for Climate Change Issues and David Parker about whether there was a cap in the existing Parker legislation. In a sense there was, and in a sense there was not. The Act that is law now has no cap on emissions. Emissions can continue to grow, but at the full cost of carbon. What it does cap is free allocations, and that is what creates the full cost of carbon for growth in emissions. But that cap on allocation is taken away in this legislation, so in this bill neither emissions nor free allocations are capped. There is no sense at all in which it could be called a “cap and trade” scheme.

Let us go back to the fisheries management system of individual transferable quotas, which is often held up as the ideal “cap and trade’” system. Imagine a fisheries system with no total allowable catch: fishers had quotas and could trade them, but there was no total allowable catch. That is how stupid this is.

Hon SHANE JONES (Labour) : Kia ora anō tātou e te whanau. Tēnā koe e te Heamana. There is a famous story in Te Ao Māori. It is about a kahawai—not unlike the Māori Party—and a great white shark. The great white shark said to the kahawai: “Let’s learn to live together. Let’s swim in a common current, and get the feel of the environment.” So the kahawai joined the shark, and they were swimming, cavorting, etc. But the shark got tired of that and said “Let’s get even closer.” The kahawai came closer, and said “How close?”. The shark went “Gulp!” and said “That close!”. This is the day the great white shark consumed the Māori minnow.

As the Māori Party minnow disappears down the long throat of the great white shark, we can hear the shrieks of anguish from its membership. Some of those shrieks have been brought to our attention. Supporters are leaving the party as the real issues behind this legislation are becoming known by the wider public. This legislation could spell the end of the Māori Party. Actually, that happened when the Māori Party entered into a tawdry deal to reward the gentrified 1 percent of Māori with a foul settlement with a narrow group in the South Island, leaving the vast majority of Māori taxpayers to bear that burden for 40, 50, or 60 years. Does the member for Te Tai Tonga think she will not go the way of Tūtekawa Wyllie, who pulled a similar stunt, believing that he would save the interests of South Island Māori by going against the interests of wider Māori? He disappeared in 1999, never to be heard of again. That road lies before that member, because of this dreadful sell-out in this House.

Fortunately, the amplification of the Māori Party’s perfidy has captured the attention of the media. The supporters of Hone Harawira have now got hold of the guillotine he brought back from France, and they are applying it to the real culprits in this wretched affair—the leadership of the party, who have taken the proud name of Māoridom into this House and debased it. They have debased it through supporting this dangerous, anti-Māori, anti-public emissions trading legislation. That point needs to be made, because the burden for bearing the costs of this wretched scheme does not fall on the gentrified elite. It falls on the hard-working, garden-variety, living in “Struggler Gully”, Māori families who can ill afford to bear the burden of those expenses whilst at the same time finding dough for whānau ora, finding the money for hospitals, and finding the money for education, which has been slashed.

It is bizarre. The Māori Party is willing to acquiesce and bring this legislation into the House that is an embarrassment for our entire country internationally. It defeats and negates every single ethic of kaitiakitanga. How dare those members stand and use those proud Māori terms in this House, whilst their actions indicate that although the mouth might say something—kei ngā ngutu he kōrero engari, kei raro te rahurahu—every other element of their anatomy is doing the opposite. That is what we have seen today.

This is a very sad day not only for the country, and not only for taxpayers, because it is a reversion to the terrible days when taxpayers subsidised negative producers in the economy; this is the day when Māori voters realise they made an egregious error when they placed their trust in that party, which for a trivial amount of money, something like $25 million, has turned round and imposed $110 billion worth of bills on future generations. Why did those members think the proud legacy of Māori environmentalism, stewardship, and belief in future generations should be passed off for such a trivial, miniscule amount of money? Up and down the country people have viewed the emissions trading scheme as something that is largely international and hard to understand, but, boy, they smell betrayal and they recognise treachery when they see it. This bill, as a consequence of this new development, shows that that party has decided to be treacherous to the interests of their own people, to not stand for the legacy of Māori environmentalism, and to sell out their own people.

History must record that even if this bill does pass, it passes because of an act of deceit, an act that abrogates the very reason that Māori were sent to this House. They were not sent to this House so that the people who are ruining the environment can be paid to do so. They were not sent to this House to turn their backs on struggling families, struggling youth, and communities looking for a remedy to climate change. No, they were not sent here to do that, but that is what we see today.

It is a sad development that the Treaty of Waitangi settlement process has been held to ransom and actually lacerated as a consequence of this legislation. When society invests goodwill and trust into the process of settling historical grievances, it wants the nation to move on from that epoch and for all of us to be able to absorb and stand in the face of our international competitors as equally patriotic. Why should the Māori Party go around listening to the mischief-making lawyers and their deluded, gentrified Māori clients—a very narrow band, who have no concern whatever for the majority of Māoridom, and are concerned only for their own specific agenda? They have ruined Māori credentials of a patriotic nature. When we stand as Māori with our fellows, whether they are Pākehā, Asian, or whatever their ethnicity, we should all face equally the obligations of meeting our international duties, and we should not use the Treaty of Waitangi to deepen and feed the mentality of victimhood and grievance.

The whole theory and the spirit underlying the Treaty settlement process is for Aotearoa to move on, but National was keen to open that wound again. It was keen to use simple trinkets, hiriwa, pieces of gold and silver miniscule in form, to open up the prospect that there can never ever be full and final settlements. Whenever a Government feels that it is expedient to go back and open up those historical wounds, it will do it. National does this to the shame of Doug Graham and to the shame of Jim Bolger, who took heroic steps. They never lied to Ngāi Tahu; this nonsense that there was a great conspiracy to devalue their settlement, to defraud them of their assets, etc., is absolute rubbish. Dr Cullen himself hired an eminent Queen’s Counsel, and not a skerrick of evidence was found that that level of larceny or villainy might have taken place. Doug Graham was a proud and honourable man, unlike members on that side of the House who on this particular issue use grievances as a crutch, deepening the grievance mentality that keeps the Māori Party alive.

Craig Foss: I raise a point of order, Mr Chairperson. The member is in full flight, but he did question whether members across the House were honourable, and I take offence at that.

Hon SHANE JONES: I used the context of this issue. However, I am pleased—no drama—to withdraw and apologise. The point is taken.

Not only is the Māori Party membership abandoning the Māori Party because it does not listen to its members; unfortunately for its leadership, its only member of Parliament who at this stage is listening to the membership is the person it is trying to sack. But no doubt he will be back. I predict that if that party survives, that man will take it over. Then we will see. [Interruption] We are hearing profane emissions from the descendant of Ngāi Tahu over there, but that is another matter. I will leave Mr Harawira and the Māori Party to the side, and I will come back to the bill.

The emissions trading legislation, in the unlikely event that it does pass, will not stand the test of time. It will be taken internationally as a watered-down, hackneyed version of something that could have been created had there been a grand coalition. Our colleagues made multiple entreaties. They were rejected at every particular point in the process. That is why this legislation not only is bad for the Treaty of Waitangi, not only is bad for Māori, but, in particular, is fatal for the Māori Party and the sell-outs from National.

Hon DARREN HUGHES (Labour) : I seek leave to table this document, which states: “to avoid taking decisions and approaches that lead to division and disharmony within the organisation;” The document is the Māori Party constitution.

The CHAIRPERSON (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is objection.

Hon RODNEY HIDE (Leader—ACT) : Once again I find myself in complete agreement with the Hon Shane Jones. Maybe I will not use his great oratory to reinforce the point, but I say that what we have here is good Government making atrocious policy and also following an atrocious process. I just want to pick up the point that the Hon Shane Jones made, which I think is a very serious one for this Parliament to consider—that is, the Government, by this decision in this Parliament, is saying that there is now no such thing as a full and final settlement. This bill is saying that any settlement can be reopened and relitigated, if the Government ever makes a decision that might somehow have a cost on an iwi that has had a settlement. Everyone knows that there was no underhand business in the settlement of the Ngāi Tahu deal, but back then we never knew we would have an emissions trading scheme. God knows we never thought the country would be so stupid! But there we go. This means that if any Parliament makes a decision about the Resource Management Act, or anything like that with an impact on an iwi that has had a settlement, then suddenly the iwi will come back to Parliament, there will have to be some cash go across to it, and there will have to be some resources go across to it, because presumably the Government says there is no such thing as a full and final settlement. That is one of the real tragedies of what we have seen here today.

I think we all know in this Committee that that is not true. We know that the Government is not doing this because of the principles of the Treaty; it is doing it because it needs five votes. The Government has gone across to the Māori Party and asked what is necessary to get its support through all stages of this bill. That has meant that they have had to construct the idea that somehow a Treaty settlement has been breached, when in fact it has in no way been breached. That is not me saying that; that is Crown law saying that. So this is simple pork-barrel politics, which means that we have bad policy and bad process.

There has also been a transfer of wealth to a particular iwi. Pre-1990 forest owners have not been treated in the same way, so the settlement is actually for just five iwi. Māori owned a lot of forests pre-1990, but unless those Māori are part of the five iwi they will completely miss out, like everyone else. So it is not particularly a race issue. It is not about Māori benefiting to the exclusion of Pākehā; it is actually about five iwi benefiting to the exclusion of all other Māori, and of all other New Zealanders. We have a policy there that is not about affirmative action for Māori or anything, or a special case for Māori; it is a special case for just five iwi, and it is saying that all the other iwi can go to hell. It is saying that all the other forest owners can go to hell—they will not get a deal.

We also have National agreeing to take its emissions trading scheme and insert into it the principles of the Treaty of Waitangi. I ask members to ask themselves what on earth the principles of the Treaty can inform us about climate change. Nothing, actually—nothing! And National knows it. Why does National know it? Because in 2005 National pointed out that we could not have the principles of the Treaty in education legislation, or in resource management legislation, because what on earth was it informing decision makers about? It was nothing, because the principles had not been defined. We do not know what that means; its vague and woolly thinking is setting us up for endless litigation.

So we now have a poorly constructed emissions trading scheme that has been hacked around in the select committee, with businesses trying to make it somehow palatable by having a pound of flesh taken off everyone equally. Then the scheme has been hacked around to get the support of five iwi, so that they benefit but no other iwi in the country does. On top of that, we have inserted the principles of the Treaty of Waitangi.

No one in the National Government is prepared to stand up and say what those principles are, and to put them on the record so we know what this amendment is all about. I would quite like a member from the Māori Party to take a call to say what the principles are. I am looking at my friend the Hon Parekura Horomia, and I am asking him how many principles there are. Are there three, are there five, or are there 10? Let us say there are 10. We need to stand up and say: “Here are the 10 principles of the Treaty, and here is what that means for climate change policy.” That is what I would like to hear.

Why could we not just have a clause that states: “to give effect to the Treaty”? That was what was signed. Actually, I would vote for that, because the Treaty is about citizens being equal in New Zealand, it is about respecting every New Zealander’s property rights, Māori included, and it is about having one Sovereign—not a bunch of five iwi who can run the Government ragged because they can somehow determine five votes in this Parliament. That is what the Treaty is about. Why do we not put in “Let us have regard to the Treaty”, not some airy-fairy principles that can never be defined? The National Party knows that. Why? In 2005 it was National’s campaign promise. But if we jump ahead 4 years, we see that not only is National not ridding us of the principles of the Treaty in all the legislation on the statute book but it is reinserting it into legislation on the emissions trading scheme. So I say that we have atrocious policy, we have an atrocious process, and we have a process that is empowering and enriching five iwi to the exclusion of other Māori.

What else do we find? Not surprisingly, when we go to the Stuff web page we find that the Māori Party’s ruling council is in revolt. We do not know even now whether the Māori Party will finally vote for this legislation, because members of its council are saying publicly that the Māori Party should not do so. I ask the Government why it does not take this legislation, with its amendments, and send it to a select committee for public scrutiny, and for parliamentary scrutiny, so that all Māori can see what it says—not just the five iwi but all Māori—and, more particularly, so that every New Zealander can look at it, and every member of Parliament can have the debate, so that we do not have a decision that was hatched between the Māori Party, the five iwi, and this Government 18 minutes before it was made public and the day before it was being passed into law. In God’s name, how can that be good lawmaking process? It cannot be. It is a disgrace.

CHRIS TREMAIN (Senior Whip—National) : I move, That the question be now put.

TE URUROA FLAVELL (Māori Party—Waiariki) : Kia ora tātou katoa. I will respond to some of the issues that have been put before the Committee this afternoon. I happily sat and listened to some of the comments. The first thing I would like to do is thank Shane Jones for issuing a press release on behalf of the Māori Party this afternoon. Unfortunately, he got his facts wrong.

Hon Shane Jones: I raise a point of order, Mr Chairperson. I want this Committee to know that I have not been releasing press releases. Hone Harawira has been doing that himself.

The CHAIRPERSON (Lindsay Tisch): That is not a point of order; that is a debating point.

Hon Rodney Hide: I raise a point of order, Mr Chairperson. I think it is important not to show that there is any confusion about this process. It is morning.

The CHAIRPERSON (Lindsay Tisch): I understand the comments at this hour of the debate.

TE URUROA FLAVELL: I confirm that the Māori Party will stay with its stand, and that there is no discussion on the part of the national council in respect of the Climate Change Response (Moderated Emissions Trading) Amendment Bill today. The second thing I will say is that I have found some of the comments made today a little bit sad, in the sense that Mr Hide all of a sudden has a view about the Treaty that has been raised by the Māori Party for the last 4 to 5 years on the issue of its principles. In fact, I spoke about them last night, so I will not go back and reiterate those comments. They concerned cases from the Court of Appeal and the Waitangi Tribunal, which are there for anyone to read. They are a good starting point in respect of how to move forward.

The third thing I want to say is that the Māori leadership group has been hung out in the public forum as being a select few. I am not going to debate that; suffice it to say I was at Hopuhopu when a large number of the tribes came together to provide a working party to give a view in respect of the emissions trading scheme. I cannot remember whether Mr Jones was present, but they put forward a view, and they represent, for better or for worse, a large number of people. The fourth point I want to make is that getting lessons from the Labour Party about Māori Party members going back to speak to their leadership is, I think, a little bit rich. Members should bear in mind that, about 3 or 4 years ago, there was a particular bill before the House, and a large number of people made their views clear in terms of what they thought of it at that time. Did some people listen to that? No, they did not—they did not, actually. So we have that to think about.

CRAIG FOSS (National—Tukituki) : I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63 New Zealand National 58; Māori Party 4; United Future 1.
Noes 58 New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.
Motion agreed to.
  • The question was put that the following amendments in the name of Rahui Katene to the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to add to new section 2B in new clause 5 the following subsection:

“(4)Before recommending the making of an Order in Council under section 2A(8) or (9), the Minister must consult, or be satisfied that the chief executive has consulted, persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the order.”; and

to insert the following new clause:

5BNew section 3A inserted

The following section is inserted after section 3:

“3ATreaty of Waitangi (Te Tiriti o Waitangi)

In order to recognise and respect the Crown’s responsibility to give effect to the principles of the Treaty of Waitangi,—

“(a)with respect to section 2B (which relates to Orders in Council in relation to Part 5 of Schedule 3), before recommending the making of an Order in Council under section 2A(8) or (9), the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the order:

“(b)with respect to section 76 (which relates to consultation on a pre-1990 forest land allocation plan), before making a recommendation under section 73, the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the pre-1990 forest land allocation plan:

“(c)with respect to section 77 (which relates to consultation on a fishing allocation plan), before making a recommendation under section 75, the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the fishing allocation plan:

“(d)with respect to section 161 (which relates to the appointment and conduct of a review panel),—

“(i)the Minister must, when appointing members to a review panel under section 160(6), ensure that the review panel has at least 1 member who, in the Minister’s opinion, has the appropriate knowledge, skill, and experience relating to the principles of the Treaty of Waitangi and tikanga Māori to conduct the review; and

“(ii)the review panel must consult with the representatives of iwi and Māori that appear to the panel likely to have an interest in the review; and

“(iii)the terms of reference for the review panel must incorporate reference to the principles of the Treaty of Waitangi:

“(e)with respect to section 161G (which relates to regulation-making powers in relation to eligible agricultural activities), before recommending the making of a regulation under section 161G(1), the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation:

“(f)with respect to section 162 (which relates to regulations adding further activity to Part 2 of Schedule 4), before recommending the making of a regulation under section 162(1), the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation:

“(g)with respect to section 163 (which relates to regulations relating to methodologies and verifiers), before recommending the making of a regulation under section 163(1), the Minster must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation:

“(h)with respect to section 164 (which relates to regulations relating to unique emissions factors), before recommending the making of a regulation under section 164, the Minster must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation:

“(i)with respect to section 224 (which relates to the gazetting of targets), before the Minister responsible for the administration of this Act may set, amend, or revoke a target, the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the target:

“(j)with respect to section 225 (which relates to regulations relating to targets), before recommending the making of a regulation under section 225(1), the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation.”

  • Amendments to the amendment agreed to.
  • The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to insert before the definition of animal welfare export certificate the following definition:

1990 baseline means the level of New Zealand emissions in 1990”;

to insert after the definition of animal welfare export certificate the following definition:

Committee means the Climate Change Advisory Committee established by section 245”;

to insert after the definition of Crown holding account the following definitions:

emissions for which New Zealand is responsible, in relation to a period, means net New Zealand emissions reduced by the quantity of Kyoto Units retired during that period

intermediate target means a target set for the level emissions for which New Zealand is responsible for a target period under section 225

New Zealand emissions means emissions of greenhouse gases from sources in New Zealand

New Zealand removals means removals of greenhouse gases from the atmosphere due to land use, land-use change or forestry activities in New Zealand

“net New Zealand emissions in respect of a period means the amount of New Zealand emissions in the period reduced by the amount of New Zealand removals in the period”; and

to insert after the definition of solid biofuel the following definitions:

“target for 2050 means the target set for the level emissions for which New Zealand is responsible in 2050 in section 224

“target period means each succeeding period of five years beginning with the period 2013-2017”.

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendments to the amendment not agreed to.
  • The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 82(1) the formula “” and substitute the following formula:

; and

to insert after the definition of “OSY” in new section 82(1) the following definitions:

EBis the total emissions produced by eligible industrial activities in the baseline year of 2005

ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the specified year, as determined in accordance with regulations made under this Act.

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendments to the amendments not agreed to.
  • The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 82(1) the definition of “LA” and substitute the following definition:

LAis the level of assistance for the activity for the specified year, being,—

(a)for a moderately emissions-intensive eligible industrial activity,—

(i)0.6 in 2010, 2011, and 2012; and

(ii)in each year after 2012 and before 2030, the level of assistance from the previous year less 0.033 (the phase-out rate for a moderately emissions-intensive eligible industrial activity) (expressed to 2 decimal places):

(b)for a highly emissions-intensive eligible industrial activity,—

(i)0.9 in 2010, 2011, and 2012; and

(ii)in each year after 2012 and before 2030, the level of assistance from the previous year less 0.05 (the phase-out rate for a highly emissions-intensive eligible industrial activity) (expressed to 2 decimal places).

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment to the amendments not agreed to.
  • The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 84(1) the formula “” and substitute the following formula:

; and

to insert after the definition of “OSY” in new section 84(1) the following definitions:

EBis the total emissions produced by eligible industrial activities in the baseline year of 2005

ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the following year, as determined in accordance with regulations made under this Act.

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendments to the amendments not agreed to.
  • The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 85A(2) the definition of “LA” and substitute the following definition:

LAis the level of assistance for the activity for the specified year, being,—

(a)for a moderately emissions-intensive eligible industrial activity,—

(i)0.6 in 2010, 2011, and 2012; and

(ii)in each year after 2012 and before 2030, the level of assistance from the previous year less 0.033 (the phase-out rate for a moderately emissions-intensive eligible industrial activity) (expressed to 2 decimal places):

(b)for a highly emissions-intensive eligible industrial activity,—

(i)0.9 in 2010, 2011, and 2012; and

(ii)in each year after 2012 and before 2030, the level of assistance from the previous year less 0.05 (the phase-out rate for a highly emissions-intensive eligible industrial activity) (expressed to 2 decimal places).

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment to the amendments not agreed to.
  • The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 85A(2) the formula “” and substitute the following formula:

; and

to insert after the definition of “OSY” in new section 85A(2) the following definitions:

EBis the total emissions produced by eligible industrial activities in the baseline year of 2005

ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the following year, as determined in accordance with regulations made under this Act.

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendments to the amendments not agreed to.
  • The question was put that the following amendment in the name of Charles Chauvel to the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 86(2) the formula “” and substitute the following formula:

; and

to insert after the definition of “OSY” in new section 86(2) the following definitions:

EBis the total emissions produced by eligible industrial activities in the baseline year of 2005

ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the following year, as determined in accordance with regulations made under this Act.

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendments to the amendments not agreed to.
  • The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 86(2) the definition of “LA” and substitute the following definition:

LAis the level of assistance for the activity for the specified year, being,—

(a)0.9 in 2013; and

(b)in each year after 2013 and before 2030, the level of assistance from the previous year less 0.053 (the phase-out rate for an eligible agricultural activity) (expressed to 2 decimal places).

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment to the amendments not agreed to.
  • The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 160(3)(a)(ii) “5” and substitute “3”; and

to omit new section 160(4).

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendments to the amendments not agreed to.
  • The question was put that the following amendment in the name of Dr Kennedy Graham to the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to clauses 43 to 49 be agreed to:

to omit new section 188(1)(c)(i) in new clause 46 and substitute the following subparagraph:

“(ii)the post-1989 forest land in respect of which the application is submitted contains no areas with significant numbers of tree species that are identified as a pest or unwanted organism under the Biosecurity Act 1993.”

A party vote was called for on the question, That the amendment to the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment to the amendment not agreed to.
  • The question was put that the following amendment in the name of Charles Chauvel to the amendments set on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit new section 222A.

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment to the amendments not agreed to.
  • The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit new section 222B.

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment to the amendments not agreed to.
  • The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 222C(2)(a)(ii) “$25” and substitute “$100”;

to omit from new section 222C(2)(a)(iii)(B) “$25” and substitute “$100”; and

to omit from new section 222C(2)(b)(ii) “$25” and substitute “$100”.

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendments to the amendments not agreed to.
  • The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to”

to omit from new section 222D(1) “$25” and substitute “$100”;

to omit from new section 222D(1)(a) “$25” and substitute “$100”;

to omit from new section 222D(2) “$25” and substitute “$100”;

to omit from new section 222D(3) “$25” and substitute “$100”; and

to omit from new section 222D(3)(a) “$25” and substitute “$100”.

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendments to the amendments not agreed to.
  • The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 222F(b) “4” and substitute “2”; and

to omit new section 222F(d).

A party vote was called for on the question, That the amendments to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendments to the amendments not agreed to.
  • The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to insert the following new section:

“222GA Transitional provisions regarding prohibition on banking of New Zealand Units

“(1)Despite anything in this Act, no New Zealand Unit issued in the period 1 July 2010 to 31 December 2012 may be surrendered after 31 December 2012.

“(2)Despite anything in this Act, the Registrar must not convert any new Zealand unit issued in the period 1 July 2010 to 31 December 2012 into a designated assigned amount unit for the purposes of transferring that assigned amount unit to an account in an overseas registry.

“(3)The Registrar must not transfer to an account in an overseas registry under section 18C any New Zealand unit issued in the period 1 July 2010 to 31 December 2012.

“(4)This section does not apply to New Zealand units—

“(a)received in respect of removals for an activity in Part 1 of Schedule 4; or

“(b)transferred following a determination of the Minister under sections 78 or 79 in accordance with an allocation plan providing for the matters in section 73.”

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment to the amendments not agreed to.
  • The question was put that the following amendment in the name of Hon David Parker to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit new sections 222C and 222D.

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment to the amendments not agreed to.
  • The question was put that the following amendment in the name of Hon David Parker to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to add to new section 222C the following subsection:

“(5)That before the 2 for 1 emissions discount for electricity emissions is allowed, the emitter must prove to the satisfaction of the Commerce Commission that but for the 2 for 1 discount, electricity prices would have been higher.”

A party vote was called for on the question, That the amendment to the amendments be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment to the amendments not agreed to.
  • The question was put that the amendments as amended set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to.

A party vote was called for on the question, That the amendments as amended be agreed to.

Ayes 63 New Zealand National 58; Māori Party 4; United Future 1.
Noes 58 New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.
Amendments as amended agreed to.
  • The question was put that the amendment set out on Supplementary Order Paper 90 in the name of Dr Russel Norman to insert new clause 10A be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.
  • The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to insert new clauses 11A to 11D be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.

The CHAIRPERSON (Lindsay Tisch): We have an amendment to new section 70 in the name of Jeanette Fitzsimons as set out on Supplementary Order Paper 91. This is out of order as being inconsistent with a previous decision.

We now move to Charles Chauvel’s amendment to new section 70 as set out on Supplementary Order Paper 94. This is out of order as being inconsistent with a previous decision.

We move to Rahui Katene’s typescript amendment to new section 77(1). The question is that the motion be agreed to.

A party vote was called for on the question, That the amendment be agreed to

Ayes 116 New Zealand National 58; New Zealand Labour 43; Green Party 9; Māori Party 4; Progressive 1; United Future 1.
Noes 5 ACT New Zealand 5.
Amendment agreed to.

The CHAIRPERSON (Hon Rick Barker): The amendment set out on Supplementary Order Paper 97 in the name of Charles Chauvel to insert a new section 86A in clause 22 is out of order as the Clerk has ruled it is outside the scope of the bill.

The amendment set out on Supplementary Order Paper 89 in the name of Russel Norman to clause 23 is ruled out of order as it is inconsistent with a previous decision of the Committee.

  • The question was put that the amendment set out on Supplementary Order Paper 97 in the name of Charles Chauvel to insert new clause 23A be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.
  • Result corrected after originally being announced as Ayes 53, Noes 69.
  • The question was put that the following amendment in the name of Charles Chauvel to clause 38 be agreed to:

to omit from new section 160(5)(g) “including (but not limited to) Australia’s carbon pollution reduction scheme”.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.

Hon DARREN HUGHES (Senior Whip—Labour) : I raise a point of order, Mr Chairperson. Could I just check with you, for the vote cast before the vote we have just dealt with, what the voting tally of the Māori Party was, as there is some understanding that five votes were cast but I understood that they were casting only four votes today.

The CHAIRPERSON (Hon Rick Barker): It is recorded that the Māori Party cast five votes on Mr Chauvel’s amendment on Supplementary Order Paper 97.

Hon DARREN HUGHES: The whip for the Māori Party might want to correct that figure, because the trouble is it might not be correct.

TE URUROA FLAVELL (Whip—Māori Party) : I thank Darren Hughes. The Māori Party vote should have been recorded as four against. That number has been consistent throughout the morning.

The CHAIRPERSON (Hon Rick Barker): Is the member seeking leave to change the vote from five to four?

TE URUROA FLAVELL: I seek leave to have our vote changed accordingly.

The CHAIRPERSON (Hon Rick Barker): Leave is sought. Is there any objection to that course of action being followed? There is none. The vote is now amended and the Ayes recorded as 53 and the Noes as 68.

  • The question was put that the following amendment in the name of Rahui Katene to clause 38 be agreed to:

to insert in new section 161(5) the following paragraph:

“(ab)must consult persons (or their representatives) that appear to the panel likely to have an interest in the review; and”.

  • Amendment agreed to.

The CHAIRPERSON (Hon Rick Barker): The amendment set out on Supplementary Order Paper 92 in the name of Dr Kennedy Graham to new section 160 in clause 38 is ruled out of order as being inconsistent with a previous decision.

The amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to new sections 160 and 161 in clause 38 is ruled out of order as being inconsistent with a previous decision.

The amendments in the name of Charles Chauvel to amend subsection (2), omit subsections (6) to (8), amend subsection (9), and add new subsection (10) in new section 161A in clause 38 are ruled out of order as being inconsistent with a previous decision of the Committee.

  • The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to insert new clause 41A be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.
  • The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to insert new clause 41B be agreed to.

A party vote was called for on the question, That the amendment be agreed to

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.

The CHAIRPERSON (Hon Rick Barker): On clause 44, Jeanette Fitzsimons’ amendments set out on Supplementary Order Paper 102 are out of order as they are inconsistent with a previous decision.

  • The question was put that the following amendment in the name of Charles Chauvel to clause 57 be agreed to:

to omit from new section 217(1)(d) “1 January 2015 to 31 December 2015” and substitute “1 January 2013 to 31 December 2013”.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.

The CHAIRPERSON (Hon Rick Barker): Charles Chauvel has amendments to clause 61 set out Supplementary Order Paper 95. These are out of order as they are inconsistent with a previous decision.

  • The question was put that the following amendment in the name of Charles Chauvel to insert new clause 61A be agreed to:

to insert the following new clause:

61AComplementary Measures

The following new section is inserted after section 223:

“223CComplementary Measures

“(1)This section establishes a fund for the purpose of reducing greenhouse gas emissions through the promotion of complementary measures additional to the Emissions Trading Scheme (the Complementary Measures Fund).

“(2)The annual appropriation for the Fund shall be at least:

“(a)20,000,000 New Zealand Dollars per year; or

“(b)10 percent of all revenues accruing from the Emissions Trading Scheme

whichever is the greater.

“(3)The Complementary Measures Fund may be used for purposes that included (but are not limited to) the delivery, marketing and promotion of, and provision of grants or loans relating to—

“(a)incentives for households to improve energy efficiency; or

“(b)incentives for businesses developing renewable energy projects; or

“(c)incentives to replace energy inefficient home appliances with energy efficient ones; or

“(d)incentives to purchase fuel efficient, low emission vehicles; or

“(e)investment funding to help quickly commercialise new lower-emission technology invented in New Zealand; or

“(f)assistance to sell New Zealand emissions reduction technology to other countries.

“(4)The Minister—

“(a)must, as soon as practicable after this section comes into force, determine the criteria for the use of the Complementary Measures Fund; and

“(b)may re-determine the criteria at any time.

“(5)Before determining or re-determining the criteria for the use of the Complementary Measures Fund, the Minister must seek and consider the advice of the Energy Efficiency and Conservation Authority.

“(6)When advising the Minister on the criteria for the use of the Complementary Measures Fund, the Energy Efficiency and Conservation Authority must have regard to—

“(a)the degree to which any measure will reduce New Zealand’s long-term emissions pathway, including by encouraging broad technological change; and

“(b)the cost-effectiveness of expenditure from the Complementary Measures Fund in relation to the purpose of the Complementary Measures Fund; and

“(c)any other matters that the Authority considers relevant.

“(7)The Energy Efficiency and Conservation Authority must manage and administer the Complementary Measures Fund in accordance with the criteria determined by the Minister.”

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.
  • The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to omit clauses 62 and 63 and substitute new clause 62 be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.
  • The question was put that the following amendment in the name of Rahui Katene to insert new clause 62A be agreed to:

to insert the following new clause:

62AGazetting of targets

Section 224 is amended by inserting the following subsection after subsection (2):

“(2A)Before the Minister sets, amends, or revokes a target, the Minister must consult, or be satisfied that the chief executive has consulted, persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the target.”

A party vote was called for on the question, That the amendment be agreed to.

Ayes 72 New Zealand National 58; Green Party 9; Māori Party 4; United Future 1.
Noes 49 New Zealand Labour 43; ACT New Zealand 5; Progressive 1.
Amendment agreed to.
  • The question was put that the following amendment in the name of Rahui Katene to clause 63 be agreed to:

to insert in new section 225 the following subsection:

“(1A)Before recommending the making of an Order in Council under subsection (1), the Minister must consult, or be satisfied that the chief executive has consulted, persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the order.”

  • Amendment agreed to.
  • The question was put that the following amendment in the name of Hon David Parker to clause 63 be agreed to:

to add the following section:

“226Compensation to pre-1990 Forest Owners

“(1)No additional compensation will be accorded to any pre-1990 forest landowner on the basis that the land was transferred to the owner under a Treaty settlement unless it is proven that the Crown made misrepresentations or withheld material information about emissions pricing at the time of settlement.”

A party vote was called for on the question, That the amendment be agreed to.

Ayes 58 New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.
Noes 63 New Zealand National 58; Māori Party 4; United Future 1.
Amendment not agreed to.
  • The question was put that the following amendment in the name of Hon David Parker to clause 63 be agreed to:

to add the following section:

“226Nitrous Oxide

“(1)Notwithstanding any other provision in this legislation, nitrous oxide emissions from agriculture will be included in the scheme from 1 January 2013 with free allocation based on 90% of 2005 emissions.

“(2)All revenue collected under subsection (1) between 1 January 2013 and December 2014 shall be used to subsidise the use of nitrification inhibitors.”

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.

A party vote was called for on the question, That Part 1 as amended be agreed to.

Ayes 63 New Zealand National 58; Māori Party 4; United Future 1.
Noes 58 New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.
Part 1 as amended agreed to.

Part 2 Consequential amendments

CHARLES CHAUVEL (Labour) : I understand that there is going to be a wide-ranging debate on the title and commencement of the legislation, and that it is unlikely that calls will be taken on this part. I just wanted to advise the Committee of that understanding.

The CHAIRPERSON (Hon Rick Barker): If there is no further debate on Part 2 we will move to the amendments.

Hon Steve Chadwick: Do we vote on Part 2?

The CHAIRPERSON (Hon Rick Barker): Yes. I am moving to the amendments. That is why I said to the Committee that we are now moving to the amendments, which means we will have a vote. Unusual for the House, I know, but brace yourselves, members.

  • The question was put that the amendment set out on Supplementary Order Paper 98 in the name of Hon Dr Nick Smith to Part 2 be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 63 New Zealand National 58; Māori Party 4; United Future 1.
Noes 58 New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.
Amendment agreed to.
  • The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to add new clause 67 be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 53 New Zealand Labour 43; Green Party 9; Progressive 1.
Noes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Amendment not agreed to.

A party vote was called for on the question, That Part 2 as amended be agreed to.

Ayes 63 New Zealand National 58; Māori Party 4; United Future 1.
Noes 58 New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.
Part 2 as amended agreed to.

New schedule

  • The question was put that the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to add a new schedule be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 63 New Zealand National 58; Māori Party 4; United Future 1.
Noes 58 New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.
New schedule agreed to.

Clauses 1 to 3

Hon DAVID PARKER (Labour) : It gives me no pleasure to rise after we have just voted through those terrible amendments to the emissions trading scheme. Effectively, they have rendered largely ineffective New Zealand’s main response to our growing emissions.

Hon Steve Chadwick: A sad day.

Hon DAVID PARKER: It is a terribly sad day. The effect of that decision on future generations is that our children and their children will have visited upon them many billions of dollars, and emissions will grow more than they would otherwise have done. I think it is timely to record the fact that if a country like New Zealand, with our comparative wealth—we are one of the richest countries in the world on a world scale; we are not as rich as Australia, but we are still very wealthy—with our good environmental ethic, which is not held by the National Party or the Māori Party but generally held by most New Zealanders, who think we should do our bit for the environment; with the benefit of the rule of law; and with our wonderful scientists and our understanding of these things, cannot do this right, what hope is there that the world will do it right in time? What hope is there that the world will get on top of these problems in time for them not to be catastrophic? I am not a man of hyperbole—I do not use the word “catastrophic” often in this Chamber—but scientists warn us that if the world does not reduce its emissions very soon, then the climate change effects will see millions of people displaced by rising sea levels, changing patterns of food production caused by drought, and, conversely, terrible storm events, meaning that millions of people will not have enough food to eat, and that thousands of species that currently exist on our planet will be lost. I think that is very sad.

I will move on to why I disagree with something that the ACT Party contributed at the end of the last part of the debate on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. An ACT member said that we had to protect property rights. That member was saying what Business New Zealand said in its submission to the Finance and Expenditure Committee, which was that there is a property right to pollute. I might not agree with much that the Minister in the chair, Dr Nick Smith, has done on this amendment bill, but I hope that he agrees that there is no property right to pollute. We have to stand down that notion in this country. There is no property right to pollute—whether it be the right to pollute a river; whether it be the right to pollute with ozone gases, destroying the ozone layer; or whether it be the right to put lead in petrol because it was cheaper for oil companies. There was no property right to do that. There is no property right to pollute in any area.

It is not a private property right to pollute. That is where the business lobby has made a fundamental error in its logic. I correct myself: not all of the business lobby is wrong, but the Business New Zealand business lobby is fundamentally wrong. I think it is such a lazy error; it is so patently wrong. There is no property right to pollute. We did not have to compensate oil companies when we took lead out of petrol. We did not have to compensate refrigeration companies when we took out ozone-damaging substances from their refrigerants. We do not have to compensate farmers when they are told not to pollute rivers. We did not have to compensate councils when we stopped them pouring raw sewage into harbours. We did not have to compensate factories when they stopped polluting rivers with the freezing works blood and guts that they used to just dump in them. We do not have to compensate businesses to do what this country and the world needs to be done when it comes to reducing carbon emissions into the atmosphere.

This principle needs to be reiterated. I ask the Minister in the chair to state clearly that he disagrees with Business New Zealand, and that he disagrees with the ACT Party’s notion that there is a property right to pollute. That is what lies behind the right-wing agenda of those who say that we should protect property rights in this bill. That is what they mean. They say it should protect their property right to pollute. I disagree with that in principle, but even if Dr Smith disagrees with it in principle, he is doing it in practice with this bill.

Some of the amendments that I have put up change the name of this bill to more properly reflect what it is. It could be the “Greenhouse Gas Emissions (Property Rights Creation) Bill”. It creates that property right. It entrenches those rights to create, and persist in creating, carbon pollution well past 2050. In fact, the emission abatement curve is so slow that it does not abate fully for 80 years. We will all be dead and gone. Actually, most of our children will be dead and gone by the time the free emissions rights completely abate under this bill. It effectively creates such a long period of tradability of that pollution right that one could not but say that in practice it creates a property right to pollute.

In doing so, we know that it increases Government debt. It increases Government debt because the free emissions rights that are given to major emitters long after they had a fair adjustment period are so enormous that Government gives away an extra $50 billion worth of emissions right. We can argue with the Minister as to whether it is proper to include the interest on that increased Government debt, as Treasury did, to get the figure of a $110 billion increase in Government debt, but there is no doubt that it substantially increases Government debt. So an alternative name is the “Climate Change Response (Increased Government Debt) Amendment Bill”.

At question time yesterday the Minister wriggled and wriggled and tried not to answer the question about Brian Fallow’s statement in the New Zealand Herald that the effect of this bill is to delay the date when New Zealand’s emissions peak, and to have a higher peak before they go down. We now know, on the record, that even the Minister agrees that the effect of this bill is to increase New Zealand’s emissions. So the “Climate Change Response (Increased Emissions) Amendment Bill” might be a more proper name for it. We could give various other names to the bill. The “Permanent Pollution Payments Entrenchment Bill” would be a fair name for this bill.

Members can choose between those names, but the sad effect of this bill is to severely undermine the environmental effectiveness of the scheme. It causes irresponsible fiscal cost to be put on the taxpayer and on future generations, who will have to repay that cost. It does nothing to improve New Zealand’s contribution to fixing this problem. Editorials up and down the country, commentators, Treasury, the Ministry of Economic Development, and the specialist adviser to the Finance and Expenditure Committee, Dr Suzi Kerr, all say the same thing. But according to the Government they are all wrong. Dr Smith is wrong. This bill is fatally flawed and it should not have the name that it masquerades under currently.

Hon Dr NICK SMITH (Minister for Climate Change Issues) : The first thing I point out to Labour and Green members is that Labour was entrusted with this issue for 9 years, and in every one of those years emissions went up. They did not just go up; they went up by ever-increasing amounts. I will give members some of those areas. The first is with regard to the electricity sector. During the term of the previous Labour Government, emissions from the electricity sector increased threefold. We all accept that forests are an important part of the Climate Change Response (Moderated Emissions Trading) Amendment Bill, but the last 9 years were the worst since World War II in terms of deforestation. That is the first point I wish to make.

The second point I make is on whether I accept that business has a right to pollute. No, I do not. What is behind the changes to make the emissions trading scheme affordable and workable is a really difficult problem. We want to make progress on climate change in New Zealand—we do—but, equally, we do not want to implement policy in New Zealand that exports industries, jobs, and emissions offshore. All the analysis says—

Charles Chauvel: Show us the evidence!

Hon Dr NICK SMITH: I will show members the evidence. The report that was commissioned by the New Zealand Institute of Economic Research made plain that the approach of a production-based method was the best way in which to respond to climate change without simply increasing emissions offshore. I tell members opposite that they might feel good if the cement, steel, and aluminium industries in New Zealand closed down and those goods were manufactured in China or some other part of Asia, but it makes no practical difference to the environment, and it costs an awful lot of New Zealanders jobs. That is the dichotomy that we have been working through.

Mr Parker again used the figure of $110 billion. It is nonsense. I challenge David Cunliffe, Labour’s spokesperson on finance, on this basis. I tell members what sort of outcome there would be if we took the approach of adding every single year’s cost—and remember it is a loss of revenue, not a cost—and then adding the compound interest on the basis that we would have invested that lost revenue. Labour’s policy is to reinstate a research and development tax credit. That would result in a loss of income of $260 million per year. Most of us in the Chamber would say that that policy costs $260 million. But if the members applied the approach that they are taking to their criticisms of this bill, it would be correct to say that that research and development policy costs $43 billion—if we add it up each year and apply exactly the same approach. I challenge Phil Goff and David Cunliffe. If they are not going to be in the business of misleading New Zealanders on an issue as important as climate change, and they want to adopt that approach to the assessment of numbers, then they should be consistent. They should talk about their research and development policy costing $43 billion, installing a huge debt of $43 billion on our children, and increasing Government debt into the future by $43 billion. That is for a policy that in any one year would cost $260 million.

The further point I make is on the controversy over the phase-out rate. We campaigned on a policy and we said that we would phase out industry support in line with our major trading partners. Australia has chosen a rate of 1.3 percent; we have set that rate for a period of 5 years through till 2018. A large amount of the argument is about what occurs beyond 2018. This bill will reduce emissions over its first 10 years, according to the advice I have received, very little—about 10 million tonnes is the reduction in emissions that it will cause over that first 10 years of the scheme. I say to the members opposite that making a big deal about what that phase-out rate will be into the future is pretty slippery ground to stand on. Every member of this House knows that there will be negotiations in Copenhagen, that legislation is going through the United States Senate, that legislation is going through Australia, and, most important, that this bill will have a review in 2011, which is only 2 years away, and another review in 2016. Even if we take the shorter phase-in and start the phase-out period a little earlier, it is not until 2021 that there is any key difference in the approach. We all know that things will be reviewed and debated further down the track, so for this Committee to be ripping its guts out and for us to have all of these quite personal and derogatory statements around a debate that is as far out as that undermines a pretty broad consensus about the way forward.

Charles Chauvel: Why did you put it in?

Hon Dr NICK SMITH: Mr Chauvel asks why we would put the 1.3 percent rate in. We have said we will put 1.3 percent into the law. We will review it in 2011; we will review it again in 2016.

Charles Chauvel: How are businesses supposed to plan?

Hon Dr NICK SMITH: I say to the member Charles Chauvel that this is a key difference. Let us say where it is at. We are saying to business that the phase-out rate will be in line with our major trading partners. I have to say that I have given notice in many business speeches that if our major trading partners give a stronger phase-out than other countries, it is our intention to increase the phase-out rate. Equally, I have to say—

Charles Chauvel: Nonsense!

Hon Dr NICK SMITH: Charles says this policy is nonsense. I ask him to ring Senator Penny Wong, the Australian Minister in charge of their climate change legislation. Australia has exactly the same provision in its law—

Hon Darren Hughes: They don’t have a law!

Hon Dr NICK SMITH: Well, neither do we have a law yet. We will be a few days ahead of them. In my view, Mr Chauvel needs to get on the phone and make all the derogatory comments he has made of me to her. He will not, and that shows the duplicity.

Moana Mackey: Why? You’re the Minister in our country!

Hon Dr NICK SMITH: I say to Moana Mackey and Charles Chauvel that they may not have noticed, but climate change is a global issue, so what other countries are doing is relevant.

I have really enjoyed the Committee stage of this bill because we have been able to pop, one after another, the fragile balloons that Labour has put up as excuses for opposing this bill. I think those Labour members know in their heart of hearts that we are doing the right thing. I think they secretly admire the Māori Party because it was able to achieve what Labour could not—that is, a sensible agreement on the way forward on climate change.

The last point I make is that all the behaviour I see from Labour members is like that of a spurned bride. They get awfully bitter and twisted, and that is because—

Hon Darren Hughes: Have you looked in a mirror lately?

Hon Dr NICK SMITH: I have to say that we wanted to get an agreement with Labour. That was my first preference. Time got tight and—unlike my discussions with the Labour Party, which leaked all over the place—our discussions with the Māori Party were totally confidential. The key difference was that Labour assumed there was only one deal, and that it was with Labour.

Moana Mackey: No, we didn’t!

Hon Dr NICK SMITH: Labour did. After we did the deal with the Māori Party, we said that we had introduced the bill only to the select committee. We wanted to build as broad a consensus as possible for this legislation, and Labour walked out. This issue deserves better than that, and I again say to Mr Cunliffe and Labour members that my door is open any day, any week, and any month to do what we should always have done—that is, build a broader consensus of policy around this important issue for New Zealand and for the world.

Hon DAVID CUNLIFFE (Labour—New Lynn) : I appreciate the opportunity to correct for the record some of the gross—I am trying to find a parliamentary word—untruths that have been contained in the comments of the Minister for Climate Change Issues, the Hon Dr Nick Smith, from the floor. I begin with the last one he made: that Labour somehow walked out of good-faith negotiations with the Government. Let me remind the public of what actually happened. The negotiations were proceeding well. We were down to three sticking points, and the major one was around the use or not of a global emissions cap. We had indicated that we would accept a variant of intensity-based emission charges, and that was a major concession for the Labour Opposition. The nature of our offer is set out on the public record in the Finance and Expenditure Committee report.

But something happened, and it was not the deal with the Māori Party; it was the Labour Party conference in Rotorua. That is relevant because a source close to the National Party has told us that the polling indicated that Labour support grew by 5 percent and our leader’s popularity grew by the same amount in that week. The pollsters said to John Key: “Thou shalt not allow a deal with the Labour Party on climate, lest they be seen as statesmen.” So the word went out to the Climate Change Iwi Leadership Group and the financial backers, few in number though they be, of the Māori Party. And Hone Harawira, who had opposed the previous bill because it did not go far enough, was reined in. It is ironic—it is silly—for the Minister to raise that in the Chamber because today that has come full circle.

This morning we heard from the media that the Māori Party council would be called together later today in an emergency meeting to discuss the issues and to raise their concerns about the costs on ordinary Māori. Māori Party sources calculate that Māori would have to pay $500 million to $1 billion a year through cutting services, increased taxes, or the sale of assets. On the other hand, under the deal with the Government five iwi would get $2 billion, but some in the Māori Party insist it does not offset the money all Māori will have to repay over 40 years, which they calculate at between $21 billion and $42 billion. We see full circle today the Māori Party being sacrificed on the altar of Business New Zealand and Fonterra.

That brings me to Fonterra, because word has reached me that Fonterra is none too happy because its deal implied an allocation being made in Australia for agriculture. Although the scheme in Australia is uncertain, I understand that agriculture is being left out, and there is no free allocation to the competitors of Fonterra across the Tasman. So there has been some late-night work in the Beehive to determine whether late amendments could be submitted or whether the Minister will use his discretionary powers under this bill to cut a subsequent deal for some of our largest industries over and above the shabby, tawdry deal that has been brought to this House already.

That brings me back to process. I do not need to be lectured by Nick Smith on financial rectitude, thank you very much, when that Minister has refused the public a right by withholding under the Official Information Act critical pieces of the analysis that go to the financial estimates around this bill, and when the Minister has officials who have, through no fault of their own, had to admit to the Finance and Expenditure Committee that they had not done sensitivity testing around the financial costs of this bill. They could not produce for the committee a range of scenarios and tell the committee the assumptions on which they were based. Treasury’s own regulatory impact assessment unit therefore had to conclude that the analytic base of this bill was insufficient for a matter of this importance. So we do not need to be lectured by National members on fiscal prudence. From now until the next election National members will never be able to look New Zealanders in the eye and say that they are the custodians of fiscal responsibility, because today they have sold our children, and their children, down the creek.

I do not need National members trotting out the old refrain of “You had 9 years; what did you do about it?”. They were 9 years of the longest post-war economic expansion in New Zealand’s history, years when we saw an enormous boom in the dairy sector, and forestry conversions came into that. But, of course, we recognised that the matter of putting an overall global cap on emissions was essential. It was because of the difficulty we experienced—and I give due credit to the former Minister responsible for Climate Change Issues, David Parker, who spoke so eloquently just a few moments ago—that we understand the difficulties of this problem. We have been there before. That is precisely why we know that a global cap is essential. It is precisely why we are very hesitant to embrace any form of intensity-based “control”. It is precisely why we know that industry will take everything that the Minister for Climate Change Issues has so generously given it in this deal, and then tomorrow he will wake up and it will want more—it will want more and more.

That is also why I want to acknowledge a PhD thesis by Dr Rick Boven, who is now the director of the New Zealand Institute. He is a very eminent economist. He modelled the political economy of climate change against the Intergovernmental Panel on Climate Change’s projections of global warming. He looked at the political economy of when democracies are likely to adjust. The problem is that 50 years after we limit emissions, the planet stops warming as a result of the emissions we let go a generation before. There is a real risk that if the planet warms by more than 2 or 3 degrees Celsius, we could set up self-reinforcing processes that mean that it is virtually impossible to stop global warming. The outcome of the econometric modelling by Dr Boven showed, essentially, that the planet is going to fry, and that fundamental disruption to human civilisation is likely, because of the 50-year lag time, combined with the reluctance of democratic governments to take the steps required to rein in industry. That means that our children face horrific consequences. They will look back on us, as David Parker so eloquently said, and they will ask us why we looked over the brink. Did we not know? Were we not informed? Did we not understand the problem of the lags? Were we not prepared to have the courage to look at the future and say “Now we must start to turn it round.”?

I am sad today for our children, because I know that they will face tougher decisions than those we have not faced up to in this Chamber today. It will not be just about climate, because the Government is making a habit of passing our hard problems on to our children. They will have the burden of superannuation to catch up on, because the Government has cancelled pre-funding so there will be fewer than half the taxpayers per retiree paying to catch up. [Interruption] I hear a member opposite ask why that is relevant to the bill. I will tell the member why. The Minister for Climate Change Issues has had the gall to say that the fiscal liabilities, the $50 billion to $110 billion in this bill, are not real money. Well, of course they are real money. They are an offset that could have been used in part to cover the costs of superannuation, or the costs of adaptation to catastrophic climate change, or the costs of educating our children how to live in a future that we would not dare live in, or the costs of sending them to some other planet because this one is ruined. So please do not tell us that somehow the $100 billion does not matter because we are not sending all of it to the United Nations. Of course we are not sending all of it to the United Nations. But it is a real liability, and it is a real offset that must be met against expenditure, or increases in taxes, or debt. It is not appropriate to ascribe to one piece of expenditure one item of revenue and square it off. It all goes in the same pot, and the write-offs go to the country’s largest polluters, the multinationals that own part of our energy sector, as well as the Crown—and the Crown ought to be ashamed. Those debits will come back to haunt our children.

I do not want to export jobs, but the Minister for Climate Change Issues has made no evidence available to the Finance and Expenditure Committee that that prospect is substantial; nor has any logic been demonstrated as to why, if it was a real issue, the bill has been designed as it is. Let me give several examples. If we wanted to stop exporting jobs, why would we not impose the carbon liabilities on the actual fishermen burning the fuel, or the actual farmers who could change their crops or their herds to a lower-emitting standard? Why would we not have a demonstrable logic related to carbon intensity between sectors?

METIRIA TUREI (Co-Leader—Green) : In this debate today—and I know it is the title debate—I am wondering whether we should call this bill the “Brown Wash Bill”. Although I think the Māori Party has been engaging in “greenwash”, I suspect and will accuse the National Government of engaging in a “brown wash” over the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Like my colleagues, I have been very disappointed in the Māori Party’s support for this legislation, especially given that it is so contrary to the Māori Party’s original view in the Emissions Trading Scheme Review Committee. How it could shift its view so radically from one side to the other is very difficult to understand.

I am also disappointed in the Māori Party, at the way it has allowed the National Government to skew the public debate against Māori, against whānau and hapū, by its use of this legislation and the deal it has done with National. The justification for supporting this bill is supposedly that Māori have obtained some benefit as a result of the negotiations. Let us have a look at the bundle of supposed gains that Māori have made through the deal done by the Māori Party. None of them are new, and none of them are innovative.

The forestry deal, which has been such a major distraction, should have happened anyway. In fact, the Green Party was working with Ngāi Tahu last year on the same issue, to try to get some support from the previous Labour Government about dealing with this Treaty settlement question. It is a Treaty settlement issue around forestry; it is not an emissions trading scheme issue. It should have been resolved in any event. At some point this Government, like any Government, would have been required to deal with the issue, whether it was because of the threat of legal action or for whatever reason, but it has nothing to do with this business. It is neither new nor innovative.

The 6 months’ reprieve that Enviroschools have for their funding cut is meaningless. It gives the 210,000 schoolchildren who are involved in the Enviroschools programme no security at all. The Minister of Education has confessed that the programme will be reviewed in 6 months’ time, anyway. What is the point? Where is the gain for those 210,000 children if the programme gets 6 months’ reprieve? How could the Māori Party give over those children’s future and lumber them with a $24,000 debt for the rest of their lives, in exchange for 6 months of a school programme that should have continued, anyway.

Enviroschools is the one programme in this country that has had major success in teaching children not only numeracy and literacy, but also environmental sustainability, and the economics of that environmental sustainability. That programme deserves support, anyway. The Māori Party should have been supporting Enviroschools and the continued funding for it, not giving it a 6 months’ reprieve from the axe. Those children do not want to be lumbered with a $24,000 debt, in exchange for 6 months of the programme.

I turn to the little extra that has been provided for home insulation. We know that two-thirds of the people who are already accessing the home insulation fund—the Green Party home insulation fund, I must say—are community services card holders. We know that those low-income families are already getting access to the scheme. That $24 million is a good amount of money but in 4 years’ time who knows what will happen. There is no guarantee, at the end of the day, because 4 years is a very long time in politics. The Māori Party has nothing extra for the people today who need access to the home insulation fund, because they are already accessing it. There is no added benefit to the Māori community.

The Māori Party has promoted a Treaty clause in the legislation. The Greens will support a Treaty clause because we think it is good to have recognition of the Treaty in legislation. But let us be real about what this Treaty clause actually does. It is simply an arrangement between the Government and Māori business. If we look at it in detail it is a very complicated clause. It is very narrow in its approach, and essentially provides a means by which—it should happen, anyway—Māori leaders of iwi and Māori organisations, which are large business organisations, can talk to the Government about the things that they are doing. It is a consultation agreement, but that is all it is. It does nothing for hapū. The Treaty is about respecting whānau and hapū, and the Treaty clause does nothing to do that. I have an objection to even calling it a Treaty clause, quite frankly. It is a business agreement between the National Government and some Māori businesses. And as for sending negotiators to the Copenhagen Climate Change Conference, I mean please! We knew months ago that National was taking them. Everybody knew that National was taking them. There is nothing new. They have been given nothing.

Hon Darren Hughes: They are constantly being tricked.

METIRIA TUREI: I wonder whether it is a trick or whether there is some other need for maybe the Māori Party to feel that it needs to make some gains. It has been shafted continually by this National Government over the Māori seats. I understand there was something of a gentleman’s agreement by John Key that Māori seats would occur, but that was shafted pretty quickly. Nowhere has the Māori Party made any substantive gains into serious political issues that it has been trying to pursue. So maybe that is what is behind it. But none of the gains that it has supposedly made here can justify the wealth transfer from the poorest families, many of whom are our own whānau, to the richest international corporates from around the globe.

National has managed to cobble together a whole series of little bits and pieces—nothing new, nothing innovative, nothing that we did not already know about—to get the Māori Party on board for this legislation. I want to know what Māori get out of it. What do Māori whānau get out of it? They get nothing but the blame, supported by the Māori Party. The forestry deal has been a distraction. National has played up the forestry deal in order to distract attention from the wealth transfer from the poorest to the richest.

In effect, National can say that it has given Māori lots, and that is what it is saying in the public realm; that it is able to deliver all of this benefit to the Māori community through the Māori Party, and that thereby justifies the environmental degradation and wealth transfer under this legislation. The public rightly understand and object to that massive public subsidy to corporates, and rightly object to the environmental degradation that this legislation will incentivise, and they need somebody to be angry at. National has delivered them the Māori Party, and the Māori Party has delivered Māori communities to the public, who are angry at the bill and the Māori community. That is what we are seeing outside this Chamber. The public are angry at this legislation. Who are they blaming? They are not blaming National—National has managed to divert it—but they are blaming the Māori Party and Māori whānau.

Maori will bear the burden of the stink of the wealth transfer of public funds to these international corporations. Māori communities will bear the stink of the environmental degradation inherent in this legislation.

Hon Darren Hughes: They were tricked again.

METIRIA TUREI: Well, I ask whether it is a trick or is it just the Māori Party being prepared to put the interests of the few ahead of the interests of the many, even its own communities. I suspect that is more likely what the decision is about.

The legislation is a tragedy for Māori communities. It is a tragedy for Māori whānau. Perhaps, if it was just about the business, if it was just about the wealth transfer, if it was just about supporting Māori business, it would not have such an impact. In fact, it has turned into a public debate about why Māori are getting heaps of stuff and why everybody else has to pay. That is creating in the minds of the community an anti-Māori sentiment that is promoted by the Māori Party’s support for this bill. That is what is happening outside this Chamber.

That is the risk the Māori Party has been prepared to take with its own communities and with its own people, backed by National, because National can avoid all of the distraction and all of the blame. National can just get on with its interest groups that have always been about business, and we all know that. National can justify what it is doing because it is supporting the Māori Party and it needs those votes. The Māori Party has allowed itself to be used in this way.

  • Debate interrupted.
  • Sitting suspended from 1 p.m. to 2 p.m.