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Emissions Trading Scheme—Cost of Changes

Wednesday 27 August 2008 (advance copy) Hansard source (external site)

Smith6. Hon Dr NICK SMITH (National—Nelson) Link to this
to the Minister responsible for Climate Change Issues

What are the changes to the emissions trading scheme that the Government has agreed to secure its passage, and what is the cost of these measures?

ParkerHon DAVID PARKER (Minister responsible for Climate Change Issues) Link to this

The Government will in due course release a full list of the measures agreed to.

SmithHon Dr Nick Smith Link to this

What is the cost of the compensation package referred to by Jeanette Fitzsimons, which she said would be available to all households when electricity entered the scheme, with the level based on household income?

ParkerHon DAVID PARKER Link to this

I find it somewhat ironic that the party that has been, to be frank, whingeing for weeks that the Government will pocket $20 billion from the emissions trading scheme—which has always been untrue—

ParkerHon DAVID PARKER Link to this

As Dr Cullen says, he wishes. It does not even break even until 2020 and now we have a complaint going the other way. I am sure we can expect questions in the future—

SmithHon Dr Nick Smith Link to this

I raise a point of order, Madam Speaker. I have not complained; I have simply asked a very straight question: what is the cost of the compensation package? National does not make a judgment as to whether it is good, bad, or indifferent. We just want to know what it is. I ask the Minister what the cost is of the compensation package.

ParkerHon DAVID PARKER Link to this

As I said in the answer to the primary question, those details will be released in due course.

MackeyMoana Mackey Link to this

What is the cost of not going ahead with the emissions trading scheme?

ParkerHon DAVID PARKER Link to this

If the emissions trading scheme does not proceed, the cost to the taxpayer of increasing emissions is many hundreds of millions of dollars in the period to 2012 alone. That would be the fate of the country if National were in power. I know that the National Party says it would have an emissions trading scheme promptly if it were the Government, but the editorial in this morning’s New Zealand Herald nailed it when it stated: “That promise is not credible.”

SmithHon Dr Nick Smith Link to this

Where is the money coming from for the $1 billion for home insulation and household compensation, noting that Dr Cullen has said there is no fiscal room without borrowing, or is the Government now borrowing to buy Green and New Zealand First support for the emissions trading scheme?

ParkerHon DAVID PARKER Link to this

I am glad that the member has raised the issue again, because members on this side of the House are proud to stand and say that we will not increase debt as a proportion of GDP to fund tax cuts. Where is the money coming from? That member sat on the select committee. It was only 1 month ago. I expect he would recall that the money is coming from the extra revenue that flows to the Crown through electricity prices.

FitzsimonsJeanette Fitzsimons Link to this

Can the Minister confirm that the principle of recycling of revenue from the emissions trading scheme meets one of the six conditions that the National Party has put forward for an emissions trading scheme—that it be revenue-neutral to Government—and that giving households back, in the form of warm, dry homes, some of what they will pay to the electricity companies is actually a very sensible way to recycle revenue?

ParkerHon DAVID PARKER Link to this

I can confirm my belief in the wisdom of the move. Indeed, I do not think there is any doubt that what is proposed here, if this legislation gets the support that we desire, will constitute the biggest ever investment in household energy efficiency that this country has ever seen. It really is another great example of how the things we do in the name of climate change make such good sense for New Zealand in so many different ways.

SmithHon Dr Nick Smith Link to this

Why did the Minister just tell the House that the package for the Greens is to be funded from the windfall profits to the State electricity companies when Dr Cullen told Parliament on 20 May that “the State-owned enterprises that are anticipating increased profits have already planned to use those increased profits as part of their investment programme in … energy production,” and that without that increased investment there is not the slightest prospect of the Government meeting our renewable energy targets; how come he has now spent the money somewhere else?

ParkerHon DAVID PARKER Link to this

For a start, the issue as to energy efficiency, although it is important to the Greens, is important not only to the Greens but to the Labour Party and to New Zealand First and, I am sure, to other parties in this Parliament that I hope will support the legislation. In terms of some of the revenue that flows to State-owned enterprises being needed for reinvestment in renewables, that too is true—there is no inconsistency between those statements.

SmithHon Dr Nick Smith Link to this

Does the Minister accept what is blindingly obvious to every parliamentarian and political commentator that the only reason the Prime Minister has not sacked Winston Peters is that she is absolutely desperate to get the legislation on the emissions trading scheme through, regardless of what it does for parliamentary or ministerial standards?

ParkerHon DAVID PARKER Link to this

I would say in respect of the minority parties that often support this Government that they have a more responsible voting record in this House than members of the National Party, whether it is increasing support for superannuitants rather than cutting it, like Mr English did when he was Minister of Finance; whether it is support for KiwiSaver, which was backed by the Greens and New Zealand First and opposed by National; or whether it is support for the emissions trading scheme.

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