I have been very disappointed in the performance in this House from the Minister for Climate Change Issues, Dr Nick Smith, on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Last night, in answer to allegations by Jeanette Fitzsimons that this bill generated no net savings in emissions, Dr Smith quite correctly stood up and raised four or five examples of how this bill will reduce emissions. In my view, everything Dr Smith said was absolutely correct. However, this morning we heard from Dr Smith a statement that we should be concerned about the recession. He said that we have a recession and unless we pass this bill, electricity will be going up by 10 percent on 1 January. Dr Smith and the National Government know that that is absolutely incorrect. The ACT Party opposes this bill, and we do so because it is being rushed through before the United Nations Climate Change Conference in Copenhagen. There is no need to do that.
We oppose this bill because it is based in part on following Australia. Australia is not finalised. We oppose this bill because our key trading partner, the United States, has not made any formal, binding commitment, and this bill will put our trade-exposed industry at risk. The ACT Party offered the National Government support in legislation to defer the introduction of the effective date of Labour’s emissions trading scheme. For Dr Smith and the National Government to hide behind this bill as the reason for having to postpone the electricity price increase is nothing more than dishonest.
Last night Dr Smith said that he was enjoying this debate. He commented in particular on the comments of Chris Hipkins on electricity. Dr Smith said that if we remove the two-for-one discount, New Zealanders will pay more for their electricity. Dr Smith is absolutely correct. If we remove the two for one discount, New Zealanders will pay more for their electricity. Under this bill, that discount is removed on 1 January 2013. The Labour emissions trading scheme that was passed last year would have a 10 percent increase in electricity from 1 January. The National Party proposed that we reduce that increase in electricity from 10 percent to 5 percent, and then institute that full increase of 10 percent before 1 January 2013. I stand in this House this morning as one of five ACT MPs, the only MPs in this Parliament who are prepared to stand up and ask why we are increasing the price of electricity by 10 percent from 2013.
Last night the House heard from Hekia Parata, who is a distinguished former public servant in New Zealand. She said that the Māori Party and National should be proud of supporting this bill. I ask Hekia Parata how the National Party and the Māori Party can be proud of supporting a bill that will increase the price of electricity by 10 percent from 2013. How can they be proud? We have heard debate as to whether we allocate fishing quota to the fishermen or to the quota holders. We could argue that is irrelevant; it does not matter. We are talking about only 2½ years of allocations. Dr Smith wrote the National Party minority report on Labour’s emissions trading scheme legislation last year. He said the fishing industry was trade-exposed and energy-intensive, and he questioned why we would not extend support to the fishing industry beyond 2013. He has the chance to do that now, and he is choosing not to do it. I again ask Hekia Parata how she, National, and the Māori Party can be proud to tax the fishing industry $15 million from 1 January 2013. How can they be proud? The ACT Party stands up and represents all New Zealanders who are facing a 10 percent electricity price increase from 1 January 2013.
JOHN BOSCAWEN (ACT) : First of all, I owe you an apology from last night, Mr Chairperson, because I misunderstood the advice I had received from Mary Harris about the consecutive speech motion. When I checked that this morning your ruling was absolutely right on point.
I want to respond to the comments of Dr Smith, who said the ACT Party is opposed to an emissions trading scheme. Yes, it is. But the ACT Party has also made it very clear that if we are to have any sort of tax on carbon, it should be a carbon tax. So there is the option of negotiating a carbon tax with the ACT Party. But Dr Nick Smith also said if he did not do this deal with the Māori Party, there was no guarantee that he could have done a deal with ACT next year. I ask Dr Smith why he could not have done a deal with the Māori Party then. If the Māori Party had more time to consider the implications of this bill, it might well have done a much better deal for itself and for all New Zealanders.
I want to talk a little about the electricity industry. I do this for the benefit of Sue Kedgley. Let me see whether I can explain how the electricity industry works, in the simplest possible terms. Electricity is generated either from renewable sources, like geothermal or water, or from thermal sources, like gas and coal. Essentially, the emissions trading scheme puts a price on the carbon discharges from thermal power stations. So, for example, if Contact Energy was to generate electricity from gas, it would have to pay a tax on its emissions from its thermal power plants. That has the effect of costing Contact Energy—and another example is Genesis Energy, in respect of the Huntly power station—more to generate that electricity. It has been estimated that at $25 a tonne for carbon, it will add about 10 percent to the cost of electricity. But it goes further than that, because that 10 percent increase in the price of electricity is charged across the whole market. Everyone pays more for electricity.
In respect of the power stations that operate from renewable sources, from hydro and from geothermal generation, they do not pay that carbon tax, and that increase in the price of electricity is a windfall gain. In other words, Contact Energy, TrustPower, Mighty River Power, and Meridian Energy, which all own hydro stations, will be able to charge more for their electricity and it will not cost them any more to produce it. That will result in windfall profits. If Sue Kedgley takes objection to the ACT Party being the only party that is prepared to stand up and speak out about a 10 percent increase in the price of electricity from 2013, I wonder whether she actually understands what she is talking about. Essentially, she is condoning a massive increase in profits and a massive windfall gain, not just to State generators but to privately owned power operators. I ask Hekia Parata, again, how she can support a bill that will increase the price of electricity and have massive windfall gains going to those companies.
Let us come back to fishing. Officials have calculated that the diesel that the fishing industry uses to drive its trawlers and its operations will generate some 600,000 tonnes of carbon. It has to pay for those emissions. It will get a 90 percent allowance for those emissions. But from 2013 it will need to pay for the full cost of those 600,000 tonnes of carbon. At $25 a tonne, that is $15 million a year. That is despite the fact that New Zealand gets an allocation of free units under the Kyoto Protocol because our fishing industry was generating carbon emissions in 1990