2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Does he still stand by his comment that “I cannot see why the Leader of the Opposition is so concerned about our emissions trading scheme” following the revelation from Treasury that the effect of his changes to the emissions trading scheme is to increase Government debt by $110 billion; if so, why?
Hon JOHN KEY (Prime Minister) Link to this
Yes, because I do not support that member’s view that the cost of the emissions trading scheme should simply be piled on Kiwi businesses and workers as a money-making scheme for the Government.
Why has the Prime Minister suddenly decided that Treasury’s estimates of $110 billion are nonsense when he was quite prepared to accept the estimate, from the same officials in Treasury, that the cost of his proposals to the New Zealand taxpayer would be $50 billion; or does he accept Treasury advice only when it suits his own prejudices?
I have been consistently of the view that Treasury’s numbers are fundamentally very difficult to predict. For a start, Treasury cannot tell us what the deficit will be in December let alone what the price of carbon will be in 2050, or what the technological changes will be, or what the international obligations will be. But I can say that on this side of the House we do not want to rip $110 billion out of the guts of Kiwi businesses and consumers and call it a profit, which is what Labour is trying to do.
Is the consistency that the Prime Minister talks so proudly about the same consistency that led him a couple of years ago in this House to describe climate change as a hoax, and 18 months later to say that he always believed in climate change?
If there are any changes in my position, at least they take a few years—unlike the Leader of the Opposition. On Tuesday a couple of weeks ago he was saying that travel perks should be gone, and by Thursday Trevor Mallard was at the airport.
Mr SPEAKERThis is getting very untidy. I ask members to show respect. The Leader of the Opposition has been called to ask a supplementary question.
What changes does the Prime Minister intend to make to the emissions trading scheme legislation now that he has been advised by his official advisers that the cost to the taxpayer will not be $50 billion but $110 billion, or does he not care about the risk he is imposing on a future generation of New Zealanders?
Let us just understand a few things. The difference between the Labour scheme and the one proposed by National, which I am confident will be passed into law, is this: members on that side of the House want to double the cost put on the New Zealand taxpayer. Members on that side of the House want to overcharge businesses and farmers to the tune of $110 billion. There is no more cost to the taxpayer. The difference is that members on that side of the House care so little about economic growth that they are prepared to gut the New Zealand economy to somehow feather their nest, which, by the way, is completely different from what they were saying when they were in Government. They were saying that they would recycle all the money, so there never was $110 billion.
Why are ordinary New Zealand taxpayers meeting 84 percent of the cost of carbon emissions and the big polluting industries in agriculture meeting only 2 percent, according to the analysis done by the New Zealand Herald; and how are polluters incentivised to stop polluting when the taxpayer is picking up the tab?
I will put to one side the factual inaccuracies in the question lodged by the Leader of the Opposition, except to say—
—and I am proud for them to have this on TV—that on this side of the House we care about jobs, we care about keeping New Zealanders employed, and we care about the country going forward. Members on that side of the House do not, and that is why they are in Opposition and will be there for a very long time.
I call Jeanette Fitzsimons. [ Interruption] I have called Jeanette Fitzsimons, and I ask both sides of the House to come to order. I realise that members have passionately held views.
Jeanette Fitzsimons Link to this
Why does the Prime Minister think it is economically efficient to encourage future investment into carbon intensive and polluting industries rather than low-carbon, clean industries by protecting industry from the cost of that carbon, not just for its current emissions but also from the emissions of future plant it has not yet built?
The answer to that question is that, firstly, we are trying to send the right messages through the economy. That is the purpose of having an emissions trading scheme. Yes, for the first couple of years there is a cap on the price of carbon, but I think that is important in order to allow the economy to transition into a mechanism for pricing carbon. Secondly, we are strongly in favour of trying to find scientific solutions. That is why we have the Primary Growth Partnership and have also, around the world, been promoting the idea of a global alliance. Thirdly, where we have applied an intensity basis, the reason is that we look at emissions on a global basis. If, for instance, Holcim Cement was to increase its manufacturing here in New Zealand but reduce its imports from overseas, and do so on a less carbon intensive basis, then that would be good not only for New Zealand but also for the planet.
Does the Prime Minister accept the advice given to the select committee by its expert adviser Dr Suzi Kerr that the Government was proposing to spend hundreds of thousands of dollars per job in areas where jobs were not even at risk because of the emissions trading scheme?
Is he still relaxed about the emissions trading scheme that he is proposing when the figures suggest that what he is proposing will load on to each and every New Zealand family a debt of around $92,000, based on the information provided by his official advisers in Treasury?
The answer to that question is no, and the reason is that there is no basis to Treasury’s analysis. [ Interruption] I am prepared to bet quite sizable amounts of money that most of the people on that side of the House have not read Treasury’s analysis, which, I note for the record, works on the assumption that we overtax the economy to the tune of $50 billion and we invest it and get $60 billion. According to Treasury, that has no impact on the economy—but it is completely inconsistent with every other bit of advice that Treasury people tell us when they come into my office.
I have called Jeanette Fitzsimons. Again, I say to both sides of the House, please show some courtesy to members at the back.
Jeanette Fitzsimons Link to this
Are not many of those scientific solutions he says he is looking for to be found in technologies for low carbon production that are known now, which other countries will be adopting and which will pass New Zealand by because we are providing no incentive for people here to invest in low carbon technologies?
No, I would not agree with that. I go back to the statements that I made earlier. If the member looks at things like the Primary Growth Partnership, the global alliance, or other areas where we are working on science and research and development solutions she will see that they are all aimed at trying to make sure we can develop technology. And where we can import technology from other countries and apply it, we will. Ultimately, when our industrial sector faces a carbon charge, it will find the cost to be cheaper in some instances to adopt new techniques than to keep emitting.
Will the Prime Minister guarantee that all forest owners in similar positions will be treated equally under the emissions trading scheme, or, in his desperation to get a deal from the Māori Party, will he give special treatment to forest owners who have iwi affiliations, contrary to the advice of the select committee that said there was no basis for doing so?
I can confirm that everyone will be treated equally, but I can also confirm that this Government is facing the same issue that, by the way, the previous Government did, and that was a potential court case or an action through the Waitangi Tribunal from iwi who signed an agreement believing that they had full knowledge and may not have done so. The member knows that, and if he wants me to point him to the advice he got, I am more than happy to do so.
Dr Russel NormanIn respect of the lack of a price on carbon, does the Prime Minister agree, although he may say that it protects carbon intensive producers in New Zealand, that it punishes those who are clean producers by not having a price on carbon, and that it is those clean industries that are the future of the economy of New Zealand, and that that is what we want to direct our economy towards?
If the member wants to vote with us on the emissions trading scheme, the price of carbon will be in place in the middle of next year.
How can the Prime Minister be relaxed about the process that was followed when his select committee chair tried to limit hearings to just 1 day, when some submitters were given as little as 3 or 4 hours’ notice to present to the committee, when Treasury described the process as inadequate and not commensurate with the significance of what was being proposed, and when even his ACT ally described the process as bizarre and unacceptable?
The Leader of the Opposition is right in that there is an urgency to pass the legislation. It is urgent for this reason: if we do not do it, $400 million will be imposed on New Zealand consumers and businesses, starting from 1 January 2010. That includes a 10 percent rise in power prices. On this side of the House we will halve the cost for consumers; on that side of the House, members will double the cost for consumers. This is no different from their policies of the last 9 years. All they want to do is keep taxing people more.