10. Hon Dr NICK SMITH (National—Nelson) Link to this
to the Minister responsible for Climate Change Issues
Does he stand by his statement in the House last Thursday that “the emissions trading scheme does not create any cost for the economy”?
Hon DAVID PARKER (Minister responsible for Climate Change Issues) Link to this
Yes. As I went on to say, and as I have said on many occasions, the emissions trading scheme minimises the cost of New Zealand meeting its obligations under the Kyoto Protocol. That cost arises from the need to reduce emissions. Our share of the global cost is set by the Kyoto Protocol, which National agrees with. The emissions trading scheme is a mechanism that both reduces that cost and distributes it fairly rather than both increasing the cost and leaving the whole cost with taxpayers.
Hon Dr Nick Smith Link to this
Does he agree with the analysis by his officials that the Government would receive a windfall gain of at least $7 billion and up to $21 billion from the sale of emission permits, and in stating there is no cost to the economy in that, has he become a recent convert to the Social Credit movement?
This is, for those who want to inquire into it, yet another billion-dollar bungle by Dr Smith. The advice of officials to the select committee is not as he characterises it. There is no great surplus to the Government, and there is no windfall to the Government.
Hon Dr Nick Smith Link to this
Is the Minister telling Parliament that there are no windfall profits for the Government from the emissions trading scheme in the first commitment period to 2012?
Yes. Indeed, I think that is abundantly clear from the revised net position report that was tabled in Parliament last week, which shows that even with the emissions trading scheme there is a deficit for the Government.
Jeanette Fitzsimons Link to this
Does the Minister support the view expressed by many submitters to the committee, and by some other political parties, that we can fix climate change with an emissions trading scheme where no one has to pay anything—or, at least, not them—and where all business and personal behaviour continues exactly as before; and if that were true, why would we need a price on carbon at all?
That question really does cut to the nub of the matter—it really does. One cannot change behaviour through prices without changing the prices. Of course, the intention is to create an incentive to reduce emissions and discourage increases in emissions.
Hon Dr Nick Smith Link to this
Why did the Minister just tell the House that there were no windfall profits from the emissions trading scheme, when the emissions trading scheme Cabinet paper states: “The increased revenues for Government associated with the increased costs of electricity will give windfall profits to the Government of an estimated $450 million to 2012.”; and is it not time for the Minister to be honest with the public about the fact that this scheme is designed to profit the Government by many millions of dollars, at the expense of homeowners and businesses?
It is true than an increase in electricity price results in additional revenue to electricity companies, some of which flows to the Government. We have never hidden that; that is one of the issues that lie behind considerations of what needs to be done in terms of compensation for those vulnerable people who pay electricity bills. But that is no excuse for the member’s party to back away from the truism that he previously expressed, which was “The sooner we get an emissions trading scheme in place, the sooner we can make progress on climate change.”
Hon Dr Michael Cullen Link to this
Can the Minister confirm 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 renewal energy production, and that without that increased investment there is not the slightest prospect of meeting our targets?
It is true that one of the sources of emissions in New Zealand is from electricity that uses thermal generation. In order to reverse the trend we have to build more renewables, as we are doing this year. In order to build renewables we have to spend money, and that money from State-owned enterprises comes from the revenues that they collect from people who buy electricity from them.
Peter BrownNoting the earlier answer to Dr Smith about a change of prices, what does the Minister expect will change as a result of imposing an emissions trading tax on New Zealand ships but letting foreign ships off scot-free?
The issue there is whether there would be some competitive disadvantage for New Zealand - based ships facing a cost of carbon on their fuels, compared with foreign-based ships that might have picked up their fuel overseas. That is one of the issues that will be considered by the Minister of Transport in respect of the support for coastal shipping, which of course is part of our transport strategy.
Hon Dr Nick Smith Link to this
How can the Minister—[ Interruption] Settle down, Winston. How can the Minister pretend that he is being upfront with New Zealanders about the cost of the emissions trading scheme, when only today he has denied in the House that there are windfall profits for the Government in the emissions trading scheme—a point reinforced by the Minister of Finance—and when the Cabinet paper states: “Estimates of the windfall profits that are likely to be received by the SOEs are in the order of $150 million per year.”?
I have already addressed the substance of that question, and I would note that some of the figures that the member bandies about are just incredible. He was, just a couple of weeks ago, suggesting that the surplus to the Government was between $13 billion and $24 billion. That is just being in cloud-cuckoo-land.
Hon Dr Nick Smith Link to this
I have the official estimates here from the Government on the surplus, which use those exact figures. They show that the surplus ranges from a maximum of $22 billion. I seek leave—
Madam SPEAKER
Rt Hon Winston Peters Link to this
I raise a point of order, Madam Speaker. With respect, that is not a way someone should seek leave to table a document—making a short speech with no reference to it whatsoever. You asked the member whether he was seeking leave to table the document, and he said yes. That is not the way he should be allowed to conduct business in this Parliament.
I perfectly understand what is happening. People are using points of order to table documents in order to make extra speeches. That is not what is intended in the Standing Orders. So I just remind members that of course they have a right to know what the document is that is being tabled, but the strategy of giving a long explanation and then saying “I table it.” is not appropriate. As I said, when members are tabling documents they should seek leave, give the purpose for the leave, and then identify the document they wish to table so that other members can make an informed judgment on whether they should accept that. That is my understanding of what the Standing Orders and Speakers’ rulings say, and that is what I will be applying.
Gerry BrownleeI raise a point of order, Madam Speaker. We are delighted to have that clarification of a ruling from you today, because for a long period members have noted that if they used the words “I wish to seek leave”, the leave was put before there was any explanation of what the document was.
No, that is not true, actually. I went through Hansard, because I know that that has been the feeling of members of the Opposition. The trouble is that members give long speeches and use the point of order as a mechanism for a point of debate. All members in this House must in fact succinctly identify the document that they wish to have tabled in the House. If they do that, they will certainly be able to do it without any intervention from the Speaker.
Hon Dr Nick Smith Link to this
I am in a difficult position, in that the Minister responsible for Climate Change Issues has challenged the correctness of the figures I have used. So, again, I seek leave to table the report of the Emissions Trading Group on its advice on the flow of revenue to the Government under the emissions trading scheme.
I seek leave to table Dr Smith’s press release that states “The trading scheme in place, the sooner”—
Hon Dr Nick Smith Link to this
I seek leave to table Cabinet paper No. 58907, which shows that the expected windfall profits to the Government from the State-owned enterprises are $150 million per year.