2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
When he said in the House yesterday that the Government was interested in “making sure that our scheme is affordable”, what specific cost estimates, if any, has he received from officials on the extra costs to the New Zealand taxpayer of the changes to the emissions trading scheme over the full phase-in period?
Hon JOHN KEY (Prime Minister) Link to this
I have received specific cost estimates from officials in the Ministry for the Environment, the Ministry of Agriculture and Forestry, and Treasury relating to a variety of options considered by the Government for amending New Zealand’s emissions trading scheme. The official cost estimate of the changes to the emissions trading scheme during the phase-in period was $415 million. Of that figure, $162 million is for the 6-month delay in the entry of the stationary energy and industrial processes sector, a change that Labour had agreed to. The bulk of the remaining cost is for the 50 percent obligation during the phase-in period, to halve the cost to electricity and fuel users. There is also a cost of several million dollars for the additional allocations to the fishing industry.
In arriving at those costs did officials rely on the lowest-possible likely market price for carbon, and did they do so in order to hide the true cost of what the Kiwi taxpayer will be spending to subsidise heavy polluters?
Did the Government in fact use an estimated carbon cost of $30 a tonne to calculate the cost of the subsidy; if so, why, when Nick Smith, in his recent announcements, has been using costs as high as $100 to $200 a tonne? How does the Prime Minister explain that discrepancy?
All I can say is that I would be very surprised if the cost of carbon was $100 a tonne at any time in the foreseeable future.
To what degree are the Treasury estimates inconsistent with the estimates worked out by the Sustainability Council and used on radio this morning, indicating that the impact of what he is changing will be to double the taxpayer’s subsidy to Rio Tinto from $1 billion to $2 billion by 2030?
I will say a few things. Firstly, I did not hear the comments from Peter Neilson this morning. I was busy speaking to a large audience of New Zealand businesses, which, I have to say, were overwhelmingly positive and grateful that their industries would remain in New Zealand. What confuses me is that when the Leader of the Opposition was roaring into his conference last Friday, he got up and said he cared about low-income New Zealanders and the price impacts of electricity—
I raise a point of order, Mr Speaker. As you will recall, the question was quite straightforward. It asked to what extent the Treasury estimates were consistent with the estimates of the Sustainability Council. The Prime Minister has, as yet, not attempted to answer or even address that question.
Mr SPEAKERI think the Prime Minister indicated that he was unaware of the Sustainability Council’s statements on the matter, but I think he has gone on long enough.
Hekia ParataTēnā koe, Mr Speaker. Has the Prime Minister seen today’s reports from Charles Chauvel saying he wants Phil Goff to write to Mr Key to reopen talks with the Government; if so, what would his response be?
Yes, I have. I welcome those reports. In reaching an agreement with the Māori Party, the Government has no reason to cease discussions with other political parties. I have long held the view that it would be a good thing to build a broad consensus around this difficult and long-term policy area, and if the Labour Party wishes to re-enter negotiations with the National Government, we will be more than happy to do so.
Has the Prime Minister, or his officials, estimated what the extra subsidy from Kiwi taxpayers will be for major multinational companies like Rio Tinto, Holcim Cement, the oil companies, and the farming sector; if so, how many billions of dollars does that represent by the end of this process, and is that fiscally sustainable?
I have not seen any analysis specific to those companies. I will make one thing clear. [ Interruption]
We campaigned on an emissions trading scheme that would be fiscally neutral, not one that would rip $23 billion off the taxpayers of New Zealand. That is precisely what we have delivered. We are also in the process of delivering an emissions trading scheme that will keep Kiwi jobs, will keep New Zealanders employed, and will make sure that New Zealander can afford their electricity bills and can fill up their cars. I call that a success; the Labour Party does not.
David GarrettIs it correct that the deal the Prime Minister announced with the Māori Party on Monday is only an agreement to get the bill to a select committee, not into law; if so, what does he think it will cost to consummate the deal?
That is absolutely correct. I am actually extremely confident that over time we will reach a long-term agreement, with the Māori Party’s support and the support of United Future, to see the legislation passed into law. The reason for that—
Hon Trevor MallardThere is one thing I do not want to do, and that is consummate anything with you, Trevor; that is for sure. I cannot imagine what the holidays would be like—not a hell of a lot of fun, I would have thought.
Will the Prime Minister acknowledge that the results of this deal that he has reached will impose, over time, billions of dollars of subsidies, which will go to wealthy multinational companies like Rio Tinto; if so, how will he pay for that? Will it be by extra taxes, or will it be by cutting further areas of valuable social expenditure?
No, I will not acknowledge that, because it is absolutely incorrect. The Government has made changes to the long-term reduction of assistance to industries big and small.
I say to that member that he should listen to the answer for just 2 seconds and see whether it satisfies him. You never know, you might learn something.
The point is that we have reached an agreement to reduce New Zealand’s emissions by 50 percent by 2050. The situation beyond 2012 is quite uncertain, but if agreements are reached in line with the Government’s 2020 policy announcement, there will be no taxpayer subsidies to industry, because support will be reduced in line with New Zealand’s reduced emissions target. That is the whole point of having a “50 by 50” target, not a scheme that reduces those credits by 100 percent.
Te Ururoa Flavell Link to this
Tēnā koe, Mr Speaker. Kia ora tātou. Ki te Pirimia—[ Interruption] Hoihoi tahi. What proposals does the Prime Minister have for the implementation of a modified emissions trading scheme to mitigate the cost impact on families, and how will he ensure that low-income households are also able to benefit from energy efficiency assistance?
We are looking at two things. Firstly, there will obviously be an impact on inflation from the emissions trading scheme, and over time that will flow through the CPI and into benefits. We are taking a closer look at the timing of that.
That is actually the law. Secondly, we have received strong submissions and advocacy from the Māori Party to ensure that there will be a 100 percent subsidy for low-income families when it comes to home insulation. That is a recommendation that we are looking very favourably on.
In denying that the changes to the scheme will cost billions of dollars over time, as he said in his last answer, why will he not tell New Zealanders what it will actually cost; is it because he does not know that, or is it because he will not tell ordinary New Zealand taxpayers that this will cost them literally billions of dollars, when at the same time he is cutting superannuation and adult education and is doing very little to help those who are out of work?
For a start, we have not cut superannuation, so let us get a few things right. In fact, we have raised superannuation and left the floor at 66 percent. Secondly, as I said, subject to the negotiations at Copenhagen and the adoption of the “50 by 50” target, I am reasonably confident that those costs will be neutral. The third point I would make is that if Phil Goff wants to have, as his badge of honour, forcing out industries from New Zealand, putting Kiwis on the dole, and making sure that New Zealanders pay very over-inflated electricity and fuel bills, he can go ahead. But he should stop going to conferences on his motorbike or his high horse and telling New Zealanders that somehow he will cut costs for them, when he is trying to double them.
Is it correct that still to be agreed with the Māori Party is the exact wording of the Treaty clause in the legislation, the number of Treaty settlements involving trees that must be renegotiated and the extent to which they must be renegotiated, and the number of carbon credits to be allocated to iwi fishing quota holders; if not, what is still to be decided?
What is true is that we have not agreed on the final wording, but I can confirm that Crown Law has had an initial look at it and is comfortable with it.
What, specifically, did the National Government offer to the Māori Party to get its agreement, and for the Māori Party to utterly contradict the claimed principled position that it held in its minority report and as recently as last week?
Firstly, I refute that it utterly contradicted the Māori Party’s minority report. Secondly, there are a number of things. One of the things was the Treaty of Waitangi. [ Interruption] Well, actually if one looks at the instance of a fixed-rate—[ Interruption] There are a number of things. They have been well documented, including a Treaty clause. Certainly, we are looking at a 100 percent subsidy for some low-income New Zealanders for their insulation. We are looking at a number of issues around forestry.
I seek the leave of the House to table two documents. The first is a transcript from a Q+A interview with Nick Smith on 26 July, where he answers with figures based on a carbon price of $200 per tonne, not $30 per tonne.
The second document I wish to table is a document from the Ministry for the Environment, in which the Minister makes estimates based on a carbon price of $100 per tonne, not the $30 per tonne—
Leave is sought to table that document from the Ministry for the Environment. Is there any objection? There is no objection.
Hon Dr Nick Smith Link to this
I seek the leave of the House to table the last fiscal estimates under the Labour Government, which included exactly the same carbon price that is being used by this Government.
Leave is sought to table that document. [ Interruption] The House is not clear on it. Would the Hon Dr Smith make clear exactly what the document is.
Hon Dr Nick Smith Link to this
Last year the last Budget that was presented by the Labour Government had a price for carbon that is exactly the same as the price methodology used for the carbon price today.
The member has made it clear now. The member is seeking leave to table a document from last year’s Budget. [ Interruption] Just as I have to do for others, I have to put the leave request. Members can refuse it if they wish to. [ Interruption] Leave is sought to table that document. Is there any objection? There is.