Does he stand by his comment that Treasury estimates that the Government’s emissions trading scheme could cost taxpayers $110 billion are “nonsense”; if so, what is a more accurate estimate?
Yes; a more accurate estimate is that the Government’s emissions trading scheme will be broadly fiscally neutral.
Why was Treasury’s advice not “nonsense” when Cabinet relied on its figures in a Cabinet paper to approve the legislation before this House, but wrong when exactly the same people revised those figures, acknowledged that they had got it wrong, and told him that the scheme would actually impose a debt on New Zealand of $110 billion and on each and every New Zealand family of $92,000?
Although I will not take the House’s time to dispute what are arguable points raised as facts in the question from the Leader of the Opposition, the fact is that whatever figure one might like to strike is entirely dependent on the price of carbon. In the case of the $110 billion, it was because Treasury chose at that time to raise the price from NZ$25 per tonne of carbon to NZ$50 per tonne; that is very imprecise economics. We can tell members that the Government’s emissions trading scheme will be, broadly speaking, fiscally neutral.
What is the Prime Minister’s response to his former chief of staff Richard Long’s comments this morning that the legislation was a “dog of a bill” and that he should “pull the plug” on it; and when his friends are saying that as well as his opponents, is it not time that he started to listen to them?
The response to Mr Long’s comments and to the question of the Leader of the Opposition is to ask him to come in and we will talk about it.
Why does he disagree with respected economics commentators like Brian Fallow when they state strongly that the message of this legislation to polluters is “Go for your life … Don’t worry about the cost of those emissions. Someone else will pay for almost all of it.”?
All of the assumptions around the future cost of the emissions trading scheme depend on the price of carbon. It is very important that New Zealand has a system that puts a price on carbon in the first place. The Leader of the Opposition would, of course, react negatively to the suggestion that if we stuck with the Labour law that is there at the moment, jobs will be exported from exactly those people to other countries where there are less pernicious regimes. We do not think shutting the New Zealand economy down is the way to go. We think a fair balance, which this bill achieves, will be good for New Zealand, and will keep us on a growth agenda—something Labour agreed to.
In rejecting the advice of Helen Aikman QC, the foremost expert in this area, to the Crown Law Office, that “there is no evidence of a breach of the Crown’s obligations under the deed of settlement”, what legal advice did he rely on when he decided to offer millions of dollars from the taxpayer to five iwi incorporations in order to obtain Māori Party votes to pass this legislation?
I ask the Leader of the Opposition what is wrong with an arrangement that recognises the good-faith aspect of Treaty settlements. No one could have known some years out exactly what an emissions trading scheme was going to do to the value of iwi assets. I think we should be acknowledging the relative generosity of iwi in accepting that they will take over responsibility for planting indigenous forests on otherwise vacant conservation land.
Can the Prime Minister confirm that the figure on the cost of carbon emissions that was relied upon to reach the settlement with the iwi corporations was exactly the same figure given by Treasury that he rejected in a question a moment ago?
What are the cost estimates that he has received for the concessions made to the iwi corporations over the lifetime of those concessions in order to get Māori Party support for this legislation?
Let us be very, very clear about this. The life of this particular project is 70 years. Anyone who expects to make an accurate prediction over 70 years is seriously deluded. The experience of the previous Labour Government is that it could not predict the deficit from one year to the next, so I do not think that the call for accuracy is in any way reasonable. I tell the member that in today’s dollars, whatever those might end up becoming, it is $25 million.