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Third Readings

Wednesday 3 September 2008 (advance copy) Hansard source (external site)

ParkerHon DAVID PARKER (Minister of Energy) Link to this

I move, That the Energy (Fuels, Levies, and References) Amendment Bill, the Customs and Excise Amendment Bill (No 5), the Tariff Amendment Bill (No 2), and the Local Government Act 1974 Amendment Bill (No 2) be now read a third time. These bills were previously parts of the Biofuel Bill.

The legislation introduces a biofuel sales obligation, and makes other legislative changes to provide for biofuels in the New Zealand fuel market. Record oil prices have compounded the environmental imperative to facilitate alternative transport fuels. The challenge of responding to climate change means that those fuels must be sustainable. Oil companies will be obliged to sell biofuels as a proportion of their overall fuel sales, starting at a rate of 0.5 percent by calorific value this year and rising to 2.5 percent by 2012. Decisions on what type of biofuel to supply, whether bio-ethanol or diesel, how much is blended with fossil fuels, and where industries purchase it—from New Zealand or overseas—will be left to the industries, so as to provide the most cost-effective and appropriate options to consumers.

Of course we know that not all biofuels are created equal, and the sustainability of biofuels has come under increasing scrutiny. However, just because some biofuels are not good does not mean to say that all are bad, and the positive of many biofuels is not in doubt. Biofuels in this category already produced in New Zealand include bio-diesel from tallow and waste cooking oil, as well as some amounts of ethanol from whey. This legislation will provide sustainability requirements, and will ensure that biofuels qualifying for the obligation will reduce greenhouse gas emissions relative to fossil fuels and avoid negative impacts on food production and biodiversity.

I say one other thing in respect of the frequently misrepresented assertions as to cost. We are advised that the cost of the additional infrastructure that oil companies need in order to blend and deliver these biofuels is between 0.2c to 0.4c per litre of fuel delivered, assuming that the cost is recovered over a 4-year period. The overall cost to consumers, including that infrastructure cost and the fuel cost, of course will depend upon the future price of oil, the future cost of biofuels, and the exchange rate. The range of estimates provided to the select committee suggested a price impact between an extra cost of 1.3c per litre, on average, at one end of the range, and at the other end of the range a saving to consumers of 4c per litre.

It is clear that New Zealand does need to make a transition towards cleaner fuels and towards renewable fuels, for both environmental and cost reasons. We have to start. Further delay is the National Party’s suggestion, but it would be the wrong course to take. I thank the other parties in this Parliament for their indications of support for the legislation. I commend the Energy (Fuels, Levies, and References) Amendment Bill, the Customs and Excise Amendment Bill (No 5), the Tariff Amendment Bill (No 2), and the Local Government Act 1974 Amendment Bill (No 2) to the House.

CarterJOHN CARTER (National—Northland) Link to this

The Government is asking tonight for this country to embark on a great big unsubstantiated experiment, and it is asking this Parliament to support it: “Let us have a shot at biofuels. Let us introduce a bill that will make them compulsory, and let us see if it works.” But during the whole debate that we have had this afternoon and this evening, the Government has not been able to put forward one substantive fact to back up its argument that we should move forward on this in the manner it is suggesting. The Government is saying: “Let us have a go.”

The Government has looked at all the evidence, as the select committee did. We looked at the evidence that had been given to the OECD. We looked at the advice given by the UK House of Commons environmental audit, the G8 conference of legislators, and other worldwide august bodies. All of them, without fail, said there is great doubt about the introduction of biofuels into a country. They said, and we have heard it said tonight, that the worry in countries where biofuels have been developed, for example in Europe, is that African nations have been asked to provide biofuel at the expense of feeding their populations; people are going hungry as a consequence of other countries getting involved in biofuels.

We have heard tonight that this Government has already admitted that it knows there is no absolute evidence that this sort of legislation will work in this country. The Government can point to no evidence. There is not one iota of evidence anywhere to say that this sort of legislation has been proven. But the Government tonight is asking this Parliament and this country to embark on an experiment and its reason is that we have to start somewhere. The Government says that it is certainly the Greens’ argument and United Future’s argument that we have to get off the ground and get going somewhere, so we might as well do it. Well, that is all very well. Why does this experiment have to be in New Zealand? Why does it have to be on the people of New Zealand?

HideRodney Hide Link to this

No one else is stupid enough.

CarterJOHN CARTER Link to this

I think that is actually the nub of the issue. The fact is that no one is arguing about using biofuels; we are saying to let competition introduce it, because it will then get on and it will be accepted. But where its introduction has to be forced, where that has to be done by rules and regulations, it is bound to fail.

The co-leader of the Green Party said: “Well, of course we don’t have to worry about all those things overseas. We don’t have to worry about the negative impact that it might have on African countries.”, as did the member from New Zealand First. He said: “We had a look at it. We know that it has a negative impact—that people will starve because of the introduction of biofuels—but we can’t do anything about it so we won’t worry about that. It’s OK. We’ll do it here. It doesn’t matter if they starve over there, because it will happen anyway. We can’t do anything about it, so we won’t worry about it.” Actually, we do have a responsibility. The point is that if we look at biofuels just from a New Zealand perspective, the impact we will have worldwide is virtually zilch.

HideRodney Hide Link to this

Virtually? It’s totally zilch.

CarterJOHN CARTER Link to this

Well, we might be able to mount an argument that it might have a sliver of impact somewhere.

HideRodney Hide Link to this

I have got more hair on my head than that.

CarterJOHN CARTER Link to this

Ha, ha! That is the very point. In fact, we should use the member’s head as an example of how the experiment will not work, because quite honestly we can’t grow hair where it ain’t going to grow. We are not going to make an impact where it ain’t going to happen.

The sad thing is that are asking New Zealanders to pay for this unfortunate experience. With this unfortunate experience we are saying to New Zealanders: “Look, we will have a bit of a go, but we know it will cost you money.” The Minister said in his third reading speech that he thought there might be a bit of a cost, or that there could be some saving. Well, he actually contradicts the Minister of Finance, who said it will cost this country money. He said that it will cost this country money. In every bit of evidence that came before the select committee, no one said that they would make a saving, or that some people would be better off. No one anywhere suggested that from a financial perspective this was a positive. Everyone argued, to a greater or lesser degree—the amounts we debated in the select committee ranged between 1.5c and 7c; those were the amounts put forward—but the fact was that no one said: “By the way, we can save you some money. Jibe up with us and we will fix it up, and you will be better off.” Nobody argued that, at all. That is the problem. The Minister of Finance acknowledged in his contribution in the Committee that the legislation will cost this nation money. It will cost the people of this country more money out of their hard-earned income. I say that quite honestly, that is not acceptable.

Finally, we have the matter of making the legislation compulsory before we have set the standards, which is absolutely nuts. You know, there is no reason why we have to rush into this. Nobody has stood up—maybe some speakers, maybe Peter Brown will stand up and convince—

HideRodney Hide Link to this

If you pay him.

CarterJOHN CARTER Link to this

Well, I do not know—people will pay for this, so maybe that is what happens. But the point is that no one has been able to put forward an argument to convince us that we should make it compulsory and then worry about setting the standards later. I have to say that that is the dopiest thing I have ever heard. In all the time I have been in this House I have never yet seen legislation that puts the horse before the cart, but this bill does. All we will end up with is a biofuels issue that backs right up and rolls over itself. That is what will happen. It will roll right over itself. It will not work, and I have to say that no convincing arguments, at all, have been put forward by anybody in this debate tonight to say why we should be the country that embarks on this experiment.

I say again that no one is arguing about the use of biofuels—no one is arguing about that—but the issue is the way we are going about it. People will argue, and I know that Jeanette Fitzsimons will argue, that we need to get started. Peter Dunne came down and said “Let’s get going.” Well, no one is arguing about the fact that we should address these issues; it is just a matter of how we go about it. The fact is that this legislation will just set us off on the wrong track. It will set us off on a way that will actually end up being a negative. Instead of something that could have been positive for our nation, and positive for our people, we will end up with some legislation that will be to the detriment of this country and to the detriment of those things we are trying to achieve. I say tonight that if this bill is passed, this country will be the poorer for it.

MackeyMOANA MACKEY (Labour) Link to this

I am happy to stand and support the third reading of these bills. The member who has just taken his seat, John Carter, is actually the deputy chair of the Local Government and Environment Committee that worked on the Biofuel Bill. But one would not guess that, because he clearly did not listen to a single submitter who came to the select committee, or read a single paper produced by the officials. All the statements he has made in this House have been total misinterpretations and deliberate misinterpretations of what was said at the select committee. Some submitters said that this would save consumers money; it is not true to say that none did. Some biofuel producers said—and people may say that they may well say this—that when they had done their figures and looked at the oil prices, they believed that their product could save consumers money. The fact is that they came and said that, and it is completely untrue to stand in this House and only give the opinion and the submissions of the oil companies. We need to represent all the submitters who came and submitted to the select committee.

It is also completely not true—and saying this shows that the member did not read his papers—that we are the only country using biofuels. That is a completely ridiculous statement. In fact, submitters from international biofuel production companies came to the select committee to tell us about the targets or obligations in other countries that they were currently meeting. So again it is completely wrong to say that we were told at the select committee that we are the very first country in the world ever to use biofuels. Of course, biofuels are also already being used sustainably in New Zealand, and the very strong message we had from that industry was “Please give us some certainty. We have this little bit going but because of the uncertainty in the sector we cannot grow our domestic biofuel industry without a biofuel obligation.”

This bill has not been rushed through the House. The select committee reported back on 23 June. The Hon Dr Nick Smith had more than 2 months to consult parties in this House on his amendment to the Biofuel Bill, but he chose not to do that; he chose not to talk to us.

CarterJohn Carter Link to this

He put it in the select committee.

MackeyMOANA MACKEY Link to this

That does not matter, I say to Mr Carter. He did not tell us that he would be reintroducing it in the House. I believe he actually introduced it at the select committee at the last minute, as well. But the important point is that he could have come and talked to us about this, and he chose not to.

I have said that my issue with Dr Smith’s amendment is that it is a very convenient excuse to never have a biofuel obligation if one says one will have one only if there are sustainability standards. Mr Carter has talked about putting the cart before the horse; I suggest that if Dr Smith’s amendment had passed there would be no cart—there would absolutely be no cart. He would come under pressure to never produce the sustainability standard, and we would never have a biofuel obligation.

I go back to the point I made earlier. One of the important reasons for having this bill is that we need to create some certainty for biofuel producers in New Zealand. They said to us quite clearly when they heard about this amendment that had been raised at the select committee: “Please, don’t do that. It just reintroduces all the uncertainty and we will never know when we will have an obligation. We may never have an obligation and we will never see the investment coming into New Zealand to build that domestic biofuel industry that we know there is the potential for.”

That is a very good reason to pass this legislation. Another good reason—as has already been raised in earlier debates—is that at the moment there are no sustainability standards. The sustainability principles in this legislation are a huge step forward. We have said over and over again that this legislation is not a silver bullet. No one voting for it has said that they believe it is a silver bullet. But it is an important step on the road towards sustainable biofuels. We all know that second and third-generation biofuels are likely to be far better than the ones we are dealing with at the moment.

The fact is that the time for excuses has long passed. We have worked on this bill for a long time, and it has been reported back from the select committee for a long time. The National Party has had plenty of time to consult other parties in this House if it wanted to bring amendments, but Dr Smith chose just to dump his amendment in the Committee on the night. I do not think that he can reliably stand up and accuse the rest of us of not voting for it because we are terrible people and we hate the people of New Zealand, when he did not give us the opportunity to even consider the Supplementary Order Paper that he brought into this House.

The legislation clearly spells out sustainable principles. The sustainability principles in there already will leave some of the biofuel sellers in absolutely no doubt about which biofuels are absolutely off the table. As we have said before, if we are going to put some kind of sustainability principles in the legislation, they told us that they would like to know what they will be like so that they will know, when they go into their long-term agreements with biofuel producers, whether in 9 months’ time those will be knocked out by the sustainability principles in the legislation when the methodology and mechanisms are done by Order in Council. The principles are already there and they are quite clear. It is the methodology and the mechanisms that will be done by Order in Council.

The Minister has already referred to the price. The oil companies came to the select committee and quite fairly said they thought it would be 3c to 7c, and the biofuel producers came and said they thought it could save us a lot of money. We got our officials to do some work on it to find out what we thought it would be. We were told that the large portion of the costs would come from the infrastructure investment that was required. Our officials came back and told us that, based on the figures provided to them by the oil companies, it would be 0.2c to 04.c a litre for 4 years if they recouped all that cost in 4 years, which of course they will not. That was the basis for the infrastructure costs. We found, when we looked at a table based on possible prices of oil versus possible prices of biofuels, that our officials told us that a 1.3c a litre increase was at one end, and at the other end was a 4c per litre savings for the consumer, primarily because of the rising price of oil.

So, in fact, on balance, this legislation is more likely to lower that cost than raise it. But one would not guess that from the speeches made by the National Party members, who all have this information, because they were on the Local Government and Environment Committee, and they have the same reports that we have, but who choose to mention only the range that was quoted by the oil companies, not that given by our officials or any of the other people who came along to the select committee hearings.

I will point out one other thing to the National Party members who get up and say how much they care for mums and dads: they did not care about mums and dads when they told us they were going to lift the cap on general practitioners’ fees. They did not care about superannuitants when they slashed superannuation. They did not care about mums and dads when they opposed Working for Families, or when they opposed 20 hours’ free early childhood education. They seem to care about mums and dads only when it is a convenient excuse to vote against legislation like this. I also say to those members that although I am very pleased to see they have discovered that there are poor people in the world—

PowerSimon Power Link to this

That’s a disgraceful thing to say.

MackeyMOANA MACKEY Link to this

—it is very difficult to sit here and listen to them go on about it when they only ever mention it, I say to Mr Power, as an excuse to vote against the Climate Change (Emissions Trading and Renewable Preference) Bill and any climate change legislation in this House. Some consistency would be nice, and then we might take them seriously on that point.

I say to those members that they should read the sustainability principles. We have been clear that biofuel crops cannot compete with food production, and that they cannot be grown on land of high production value. We have addressed that issue in this bill. Read the legislation, I say to National members, before standing up and giving another speech that completely misrepresents what this legislation does.

WagnerNICKY WAGNER (National) Link to this

Why are we rushing this legislation through the House now?

MackeyMoana Mackey Link to this

Oh, did you even listen?

WagnerNICKY WAGNER Link to this

Just wait, I say to the member. It is not because it is good legislation. It is because the Government has to be seen to be doing something now about climate change, after 9 long years of inaction.

There has been much debate tonight and, in fact, right round the world about the environmental benefits of biofuels. We have heard from dozens of world experts who are concerned about the use of biofuels, and who debate the actual benefits of them. But Labour knows that those experts are wrong. There has been much debate about the cost of introducing the legislation, and we have heard Moana Mackey, the chairperson of the Local Government and Environment Committee, going through those costs just now. A whole series of economists and people who work in the industry have given us their estimates. Moana Mackey is concerned that we in the National Party are considering what the oil companies say, but the oil companies do work in the industry, so that is significant as well. The Labour Party knows that those people are wrong, and that this will not add costs—in fact, experts right across the board are wrong in that respect.

There has been much talk about the New Zealand Government requiring sustainable biofuels, and about the Order in Council that will provide the criteria for these fuels, and Moana Mackey just suggested that we look at the principles that are in the Biofuel Bill. So let us have a little look at them. They are in new section 34GA(3) in clause 9 of Part 1. The principles of sustainable biofuels are as follows. The first principle is less greenhouse gas: “Sustainable biofuels emit significantly less greenhouse gas over their life cycle than obligation engine fuel.” We agree with that. That makes sense—over their life cycle, we should get less greenhouse gas. But the bill goes on to state that “the Order in Council must—(a) specify a methodology for life cycle assessment of greenhouse gas emissions from obligation engine fuels;”. That is an enormously difficult exercise. We know that people have tried to do that right round the world, and no one has been able to come up with any sensible way to do it effectively.

Paragraph (b) of this principle states that the Order in Council must “specify minimum levels of no less than 35% greenhouse gas emission reductions for qualifying biofuels …”. If we have a problem focusing on and sorting out how much that life cycle of greenhouse gas emissions is, how can we possibly discover whether it is 35 percent less? So, yes, in principle that makes sense, but in practice it is going to be enormously difficult to do.

Let us look at the second principle, which is to do with food production. “Sustainable biofuels do not compete with food production and are not grown on land of high value for food production.” The problem with that is that this will also be enormously difficult to assess, to monitor, and to ensure that sustainable biofuels are involved. They must not be by-products of food production—the ethanol from sugar cane grown in circumstances described by the Order in Council—and they talk about rotational oil seed crops. Again we have to come up with a methodology to figure out whether this will be good for biofuel and not food production.

We are also saying here that they must come up with a mechanism that recognises the particular land, and that includes land outside New Zealand. Can members imagine the amount of work that has to go into analysing land not only in New Zealand but also land outside New Zealand that would be used for high-value food production? It would be an enormous task.

Let us look at Principle 3, which is to do with biodiversity and land with high conservation value. We have the same problem as with the assessment of land for food production. We have to come up with a mechanism to recognise this particular land both inside and outside New Zealand. When we look at those three principles, yes, they all make sense, and yes, we agree that that would underpin sustainable biofuels, but to come up with that assessment and methodology will be enormously difficult. The bill also states that the Minister must recommend the Order in Council by 30 June 2009. That means there is just over a year and a half to do that—it is not quite as long as that—and we are really concerned that the Minister will not be able to do it. So, yes, in principle the principles behind the idea of sustainable biofuels make sense but in practice it will be very difficult to do.

Let us go back to why we are rushing this legislation through the House under urgency. I am a little confused by some of the debate that has gone on tonight. One of the things that David Parker has been saying is that we need to introduce this legislation because unless we do, oil companies will not be prepared to build infrastructure to underpin the use of biofuels. Without compulsion, they will not build the infrastructure. Then, on the other hand, he states that the cost of building infrastructure is minimal—0.2c to 0.4c per litre over 4 years. That will not be a huge amount of money to build that infrastructure and it will not affect the cost of biofuels in the long term. So on the one hand the Minister is saying that there has to be compulsion because the cost of infrastructure will not be met otherwise, and on the other hand he says that it is very cheap.

Gull has already introduced biofuels to New Zealand and Moana Mackey tells us that Gull’s biofuels are actually cheaper than fossil fuels. So we have a situation where a company has already voluntarily introduced biofuels. Earlier today I spoke about a biofuel trial that went on in the bus fleet in Christchurch, whereby a bus company was voluntarily and keenly using biofuels until the price of tallow went up and made the cost of the fuels prohibitive. The argument here is circular. If the infrastructure demands are not great, and one company is already selling biofuels, why do we need this legislation at all? Thank you, Madam Assistant Speaker.

KingCOLIN KING (National—Kaikoura) Link to this

It has been the Government’s point of view that the biofuels legislation, as presented to us, has been the best possible outcome; it will be best practice, and world leading. But on this side of the House we say that that is rubbish, when we see the shell, the flimsy framework that makes up the legislation. For instance, if we look at the principles we start to understand the issues and narrow-minded thinking of this Clark-Peters Government in its last days. As a nation, we export 85 percent of what we produce, and we can boast about being the very best protein producers of produce from a grass-fed farming source. That being said, this legislation is presented in a wholly different light. Regardless of the notion of sustainability, which in actual fact probably brought onside the Greens, New Zealand First, United Future, and, for that matter, the Māori Party, a whole lot of rubbish is made out of that claim that sustainability is the appropriate measure by which to have a biofuels law to underpin infrastructural development, in the context of that notion of growing 0.5 percent in the first year, growing through to 2.5 percent in the fourth year, and then growing onwards.

Whether or not we like it, we live in a global village, and by supporting this legislation to go through the House into law, the Government in actual fact is interfering and creating an otherwise perverse effect. That perverse effect means that unless we create biofuels out of tallow, whey, or waste, we will be producing them on land that we could more efficiently use to produce the proteins for which the world is clamouring. That is no better than the experiment that has occurred throughout the developed world, whereby Governments have sought to create, by tax and other perverse incentives, a biofuel industry within their own countries.

We have heard the arguments from the Government that we have to get started—“Let’s get on with it!”. But that mentality is a fortress mentality, a fortress New Zealand mentality—that we will inhabit New Zealand in isolation, just amongst ourselves, and become totally efficient. That in my view is a very weak argument. Effectively, that brings us very much back to the question of what a leader nation in this field would do under these circumstances. Well, I will tell the House what a world leader would do. It would get about to partner with international research and development companies, or other nations that are doing research and development, and identify the best solutions going forward. That is not a new idea. In actual fact, when we look at many of the biosecurity risks around farm animals, be they bovine spongiform encephalopathy or foot and mouth disease, we see that this is what is occurring. New Zealand recognises that it does not have the ability, the scientific machine, to do these things on its own, even though it is a pastoral farming leader. It cooperates with Europe and with America, it goes into partnerships with cooperative research centres in Australia, and there is the multiplying effect of a good outcome.

On that basis, we are taken back to the arguments that were clearly articulated from this side of the House. We listened to the Minister when he got up and spoke to the second part of the Biofuel Bill, and he made it sound as if this was just so rosy. There was not going to be a problem, and it was not going to cost anybody anything, but all of that flew in the face of a number of the submitters. It also flew in the face of a number of the expert scientific explanations from those countries that have endeavoured to set up a sustainable biofuels industry. It left members on this side of the House with the feeling that there was another agenda in behind all this, which was borne out by the implementation date.

The implementation date is 1 October 2008, which has to be considered in the context that it is planned for New Zealand to have a standard of sustainability by July 2009. Even that date is pretty flimsy, because best expert advice has said that it will more likely be 2011. So we can see there is a determination to push this legislation through. Again, we have seen MMP in operation, whereby deals are done to make it politically expedient to be supporting such a notion. Then the numbers are there, and the deal is done. This is standard form for the Clark-Peters Government in its last dying days. It was quite compelling, in my view, to have Nick Smith’s amendment about lining up the date of the implementation of this bill—should it pass into law—with the date of the ability to supply a sustainable standard, an accurate standard. There was some concern expressed about that by the Government, because in its truth of truths it understands just how really difficult it is to find an answer to this. That is borne out by the expert advice.

When we look at the situation here of the biofuels legislation, we see that, clearly, the record from this Government has been abysmal. As far as the Kyoto Protocol obligations go, from 2001 to 2008 we have had some incredibly poor performances. The Government’s performance has been totally underwhelming, to say the least. This legislation is very difficult, and I was disappointed that the Minister did not take the opportunity to explain to members on this side of the House why biomethanol was given a 42.5c advantage or favouritism over bio-diesels. It would suggest to me that there was a very strong and compelling reason for picking winners like that. I do feel that we have rushed this situation. It seems to me to be a political answer in the face of a common-sense way forward. The legislation is certainly something that will come back to this House, because when we go through it, we find that it becomes very complex. There are heaps of regulations and a lot of Orders in Council, and I believe that the Regulations Review Committee will be confronted time and time again with the interpretation of what, indeed, is sustainable—what in actual fact is 35 percent less, by way of carbon emissions in a lifetime, compared with the biofuels produced.

It is with great disappointment on this side of the House that we are at this time of night—9 o’clock in urgency—pushing through legislation that will only have to come back to this House to be tidied up, cleaned up, when there was the opportunity of doing something collaboratively and internationally, and genuinely solving a problem. Thank you.

HideRODNEY HIDE (Leader—ACT) Link to this

It is typical that in the dying days of a teetering Government, under urgency on a Wednesday night, we are rushing through legislation that sets down—to the hundredth of 1 percent, graduated over time—how much biofuel we are to have in our fuel. This Government wants to tell us what we can put in our kids’ tucker boxes, it wants to regulate our light bulbs, and it wants to regulate every little part of our lives and every part of the value chain of a modern economy. Why do Government members want to do that? There are two reasons. The first is that they love the exercise of power. They love telling people what to do, how to do it, and when they can do it, and they love telling people what they cannot do. They love the moral superiority that power gives them, so this legislation tells oil companies and consumers how they have to mix their fuel.

The legislation is like the Electoral Finance Act, which regulates political expression, but of course none of the rules ever apply to the Government. That is the amazing thing. It seems that the Electoral Finance Act does not apply to the Labour Party. The financial disclosure regime does not apply to New Zealand First; it is just for everyone else. The Government can break the law and the rules at will, because it is morally superior. It is everyone else who is corrupt and crooked, and who needs to be told what to do and how to do it. Everyone else needs the finger wagged at them. Even simple principles of common jurisprudence, such as being innocent until proven guilty, apply to the Government when it is in trouble but not to anyone else. It is typical of this legislation, and of the Government’s telling us how to live our lives, that Helen Clark said that a man was an honourable man and innocent until proven guilty, when Judge Dalmer had found, in a court of law in relation to Cushing v Peters, that the man was a liar, and a malicious liar at that. Yet the Serious Fraud Office was guilty. The Serious Fraud Office was guilty of what?

BrownPeter Brown Link to this

I raise a point of order, Madam Speaker. I am sure that this is very interesting but I think the member should go back to the legislation. I for one am interested in ACT’s viewpoint on this legislation, but I am beginning to conclude that it does not have one. I believe that Mr Hide should be instructed to go back to the legislation. He can have a wide-ranging debate on the legislation, but the Serious Fraud Office and judgments of years gone by are really not part of it.

HobbsThe ASSISTANT SPEAKER (Hon Marian Hobbs) Link to this

Mr Brown, you must have been reading my mind, because I have just opened up the Speakers’ rulings on relevancy. I was trying to find what, in Mr Hide’s speech, was relevant. Mr Hide, please speak to the legislation before the House.

HideRODNEY HIDE Link to this

I am happy to, Madam Assistant Speaker. I was just drawing a long bow about the busybody nature of the Labour-Helen Clark-Peters Government.

MallardHon Trevor Mallard Link to this

Here we go again!

HideRODNEY HIDE Link to this

I ask Trevor to pipe down.

HobbsThe ASSISTANT SPEAKER (Hon Marian Hobbs) Link to this

Can I have order from both sides, please. Would you continue with your speech, Mr Hide.

HideRODNEY HIDE Link to this

This legislation reflects the busybody nature of this Government. Under this legislation, we will start off with 0.53 percent of biofuels in 2008, and each year the percentage will increase until we end up, according to this bill, at an upper level of 3.4 percent in 2012.

BrownPeter Brown Link to this

I think the member should read the amended bill.

HideRODNEY HIDE Link to this

Well, I am just reading the obligation as set up. I ask Mr Brown how much it should be.

BrownPeter Brown Link to this

Oh, for goodness sake, Mr Hide, read the literature.

HideRODNEY HIDE Link to this

How much should it be?

HideRODNEY HIDE Link to this

Oh, you see, the level started off at 3.4 percent but the Government members sat around at the Local Government and Environment Committee and decided, with the wisdom of ages, that the level of 3.4 percent was a little high and that it should be put back to 2.5 percent. That is how these guys think we make fuel—that we sit around in a political committee and decide the composition of fuel. The Government knows so much! The level started off at 3.4 percent, but Government members sat around in the select committee and decided, after getting expert opinion from engineers, after hearing all the cost-benefit analysis, and with their super knowledge of the world climate, that the level should be—what was it, I ask Mr Brown—2.5 percent. But that is just the start, because each year the level will be ratcheted up a wee bit. But the Government cannot tell us what the environmental benefit of it is.

BrownPeter Brown Link to this

I’ll bet you Jeannette Fitzsimons can.

HideRODNEY HIDE Link to this

I bet she cannot, actually, because I promise members that we do not know what the resource costs of the scheme are at the margin, and what its impact on the environment will be. If Mr Brown thinks that the environment and the economy are such simple things that we can set a simple percentage, crank it up by 0.5 percent each year, and suddenly achieve a net gain, then he is under a massive misapprehension about the complexity of an economy, the complexity of social interactions, and, in particular, the complexity of the environment. It is not a system that can be easily engineered. It is not a mechanical system where one can push here and get a result over there. It is far more subtle and far more complex than that. Indeed, I ask Mr Brown why, if the Government has confidence in its emissions trading scheme, he is debating this bill.

BrownPeter Brown Link to this

I’m sure you don’t want me to answer that, Rodney.

HideRODNEY HIDE Link to this

I look forward to Mr Brown taking a call to tell us whether he has confidence in this bill.

I heard Mr Brown, and some Government speakers, say that the fuel companies were against the bill but that the biofuel suppliers were in favour of it. Well, that is a surprise. Why not do this for other things? Why not do it for carrots? Why not say that when we eat dinner, 2.5 percent of it must be carrots? I am sure that if we did that, the carrot growers—

RichKatherine Rich Link to this

Brussels sprouts.

HideRODNEY HIDE Link to this

Brussels sprouts will be next. Government members will sit around and debate what percentage of our food intake should be carrots and what percentage should be brussels sprouts, because they know best. Here is the interesting thing: if we did that, carrot suppliers would probably come along to a select committee and make a submission, saying that they thought the percentage should be a bit higher and that it would be good for the environment. Even that great arch-interventionist, Sir Robert Muldoon, never got down to this level of detail and specificity—never—because he was not that vain.

CosgroveHon Clayton Cosgrove Link to this

Speci-what? Can you say that again?

HideRODNEY HIDE Link to this

Clayton Cosgrove has opened up. How interesting! I ask him how the real estate bill is going.

CosgroveHon Clayton Cosgrove Link to this

Hold on; help is on the way, Rodney.

HideRODNEY HIDE Link to this

He must have sorted out Mr Peters, because he says that help is on the way.

EnglishHon Bill English Link to this

He went on the list because he knows he’ll lose Waimakariri.

HideRODNEY HIDE Link to this

He has got on the list? What an admission.

HobbsThe ASSISTANT SPEAKER (Hon Marian Hobbs) Link to this

Please come to the legislation.

HideRODNEY HIDE Link to this

After all these years—

HobbsThe ASSISTANT SPEAKER (Hon Marian Hobbs) Link to this

Could we come to the legislation, please?

HideRODNEY HIDE Link to this

I am sorry, but if Mr Cosgrove is chipping at me about the English language, am I not allowed to respond? Is that now against the rules, too, Madam Assistant Speaker? Is it only allowed to be all one way in this House?

HobbsThe ASSISTANT SPEAKER (Hon Marian Hobbs) Link to this

The member is trifling. Would the member sit down, please; I am on my feet. There was a chip, there was an answer back, and then we started up a conversation there that was totally off the legislation. The member had 1 minute to go, and he now has 30 seconds to go. Would the member please complete his call.

HideRODNEY HIDE Link to this

I just wish that Speakers would actually let a person speak, and not let it be all one-way traffic from that—

MallardHon Trevor Mallard Link to this

I raise a point of order, Madam Speaker. The point of order is one that is absolutely obvious. The member is now commenting again on your ruling. Clearly that is in breach of Speakers’ rulings over many, many years.

HobbsThe ASSISTANT SPEAKER (Hon Marian Hobbs) Link to this

I thank you, Mr Mallard; I doubt whether I need much help at the moment. The member has 15 seconds still to go, please.

HideRODNEY HIDE Link to this

It is going quickly. Anyway, it is for those reasons that we oppose this legislation, we oppose this Government, we oppose Clayton Cosgrove in Waimakariri—it is good news that even he has given up—and we oppose New Zealand First.

FitzsimonsJEANETTE FITZSIMONS (Co-Leader—Green) Link to this

This legislation provides certainty for business investors who are poised to invest significant money in infrastructure in this country. It is the sort of certainty that the National Party often demands for investors, but it is not voting for this legislation. It will allow investors to set up a plant to use low-value by-products—like tallow, whey, and, eventually, waste wood and algae—to reduce our dependence on imported oil. The legislation is a small step towards reducing our oil dependence and carbon emissions, but the investment will create the infrastructure that will allow us to build on those quantities and to make a more substantial contribution in the future, when new resources and technologies become available with second-generation biofuels. But the National Party is not voting for the legislation.

The arguments we have heard against this legislation this afternoon and tonight are based on a mixture of such overwhelming, mind-boggling ignorance by some, and on an absolute determination by others to ignore all the facts no matter how many times they are put in front of them, that it is actually very hard to know where to start to reply to the nonsense that has been thrown around the House tonight. My colleague Russel Norman said this afternoon, when I just happened to catch the end of his speech, that a little knowledge is a dangerous thing, and I think that has been demonstrated by a number of the speakers here tonight. We had John Carter saying that this is an experiment, and asking where the evidence was that it would work. Well, it has been working in Brazil for 40 years. Is that long enough for Mr Carter? For 40 years the Brazilians have been blending biofuel with their petrol, and in the process they have become less dependent on imported oil and have had more security of fuel supply.

HideRodney Hide Link to this

That’s why Brazil flies along—it’s so prosperous.

FitzsimonsJEANETTE FITZSIMONS Link to this

Brazil is growing faster than New Zealand is, if that is Mr Hide’s measure. Many other countries also have proven biofuel blends. It is not rocket science, it is not hard, and it is certainly not an experiment.

Nick Smith said that ethanol from sugar cane in Brazil is displacing the Amazon rainforest. Well, I am sorry, but sugar cane does not grow on the sort of land that grows the Amazon rainforest. It is grown in an entirely different part of the country. It is soy beans and cattle that are displacing the Amazon rainforest. If, in fact, at some future time Brazilian ethanol was shown to be displacing some kind of forest and biodiversity, then this legislation creates the regulatory mechanism to keep it out of New Zealand, whereas at the moment we cannot.

John Carter said that biofuels are being grown in Africa and are causing starvation because they are grown on land that should be growing food for humans. He is right. It is one of the great, outrageous tragedies of the world at the moment that the rich are filling the tanks of their sport utility vehicles with grains that ought to be filling the stomachs of the poor. But John Carter knows that this legislation will not allow any fuels of that kind into New Zealand. He knows that, because we have said that repeatedly in the House in front of him. He knows it, because the Greens have required the introduction of section 34GA, which is to be inserted in the Energy (Fuels, Levies, and References) Act by this legislation, and which sets out very clearly the sustainability standards that fuels must meet before they are allowed into New Zealand.

Actually, if the Greens had been designing this legislation from scratch, we would have made it much simpler than it is. We would have set up a framework for biofuels to be grown in New Zealand, and we would not have had any imports, because the ones that will meet our standards are pretty much all New Zealand - grown anyway. But because of deference to the world trade system, the Government was not prepared to say we would not have imported biofuels because they are mostly junk, they are mostly unsustainable, they are a bad idea, and we should do our own thing better and do it here. So instead we had to come up with the sustainability standard.

Nicky Wagner is so worried about the sustainability standard that she says we cannot do life-cycle analysis for carbon reductions from biofuels. Well, I am sorry, but the tables exist. The Parliamentary Commissioner for the Environment presented them to the Local Government and Environment Committee. A whole lot of international biofuels have been analysed for their life-cycle carbon reduction and for their effects on food growing and on biodiversity. So, once again, a little knowledge is a dangerous thing.

Nick Smith says it is to be 9 whole months before we will have any regulations, and during that time the country could be flooded with unsustainable biofuels and the regulations will not be in place. Well, first of all, I say he did not believe in his own remedy enough to discuss his amendment with us in advance. We might well have said there was a point there and asked to look at his amendment, but instead he just tabled it in the Committee because what he was trying to do was to make a political point that nobody would vote for it. So he had to make sure that he did not tell us about his amendment first, in case we did vote for it. Nick Smith also knows that there is a reporting obligation on anyone who brings biofuels across the border during that 9 months to state and to publish where they come from. He does not trust the New Zealand public enough, after all the articles there have been in the popular press about the damage that is being done to food supplies in poor countries and the damage that is being done to biodiversity, especially in South-east Asia, to say they will not buy the brand of fuel that has been created by knocking over South-east Asian rainforests. And that is quite apart from the fact that during that 9 months the quantities of biofuel coming into New Zealand will be so tiny that they will hardly be the cause of world starvation.

This Saturday the National Party is holding a conference on Waiheke Island called the Bluegreens conference. This is where the National Party claims to have the answers for the environment. National members are trying to paint themselves as the environmental party. What they have demonstrated tonight is that they are mostly too ignorant to even do a good job of misleading the public about the biofuels legislation. The people on Waiheke Island on Saturday will not buy the rubbish that we have heard tonight; they are far too well informed for that. They know that right now there is nothing to stop the import of the biofuels that cause starvation in Africa, and that Nick Smith says he wants to perpetuate that situation by not passing this legislation. They know that at the moment there is nothing to stop the import of biofuels made from palm oil in South-east Asia after the rainforests have been knocked over, and that Nick Smith wants to perpetuate that situation by not passing this legislation. They know that this legislation will stop those unsustainable biofuels coming into New Zealand, that it will create a new, profitable industry in New Zealand—which is surely something that we want—and that the Greens have achieved that through section 34GA, which sets the sustainability standards.

We should all be passing this legislation and getting on with it.

BrownPETER BROWN (Deputy Leader—NZ First) Link to this

When this legislation was first introduced, New Zealand First was of the opinion that biofuels would be of some advantage to our environment, but to what degree? Well, frankly, we did not know, and we thought that some of the concerns we had would outweigh those advantages.

The first thing we questioned was why we should be world leaders in this sort of issue and with this sort of legislation. But when we checked on that we found that we were not. The USA uses biofuels. Brazil uses biofuels and has been doing so, according to Jeanette Fitzsimons, for some 40 years. Canada, most European countries, Australia, China, India, and Thailand have all used biofuels for quite some time, as I understand. Frankly, Gull is selling biofuels at this moment in Auckland. So we are not world leaders.

ParkerHon David Parker Link to this

And at less than petrol prices.

BrownPETER BROWN Link to this

And at a lower price than petrol—that is very interesting. So that addressed our concern.

We were concerned about the effect on car engines, and whether the engines would have to be modified. When we checked into that we found that most cars could easily run on a modest or low amount of biofuel, be it diesel or petrol. So that was another hurdle that was overcome. We were concerned that bio-diesel might become clogged in engines in cold weather. We understand that tests have been done on that and they have come through quite well—no problems at all, in fact. We were concerned that biofuels could get into aeroplane engines with ethanol in the tank—we know that ethanol absorbs water. But the Minister addressed that question in the House this very evening when I put it to him. We were equally concerned about water in outboard motors in leisure boats—that if they were compelled to use biofuels, they would hit problems and malfunction and stop, but the Minister addressed that in the House tonight. We were concerned that productive land would be used to grow crops on to make bio-ethanol, but the Local Government and Environment Committee addressed that and amended the bill accordingly.

We were concerned about the cost. We have heard figures ranging from 4c to 7c a litre on bio-petrol, but the officials tell us that it ranges from 0.2c to 0.4c a litre. And, if the price of oil goes up, it could well make biofuels cheaper than normal ordinary petrol. That is the cost, according to the Minister, when spread over 4 years, and if spread over a longer term, it will be even less.

So, one by one, all the concerns that New Zealand First had were addressed. We came to the conclusion that the advantages do outweigh the concerns, so New Zealand First will accept that there are advantages to our environment from using biofuels. We understand that to develop them the industry needs certainty, and it needs certainty to invest. The only way we can achieve that is by passing this sort of legislation. New Zealand First supports this legislation.

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