“For the ETS to have any semblance of credibility the Government must first clarify its purpose and whether that purpose is achievable.  There must also be some benchmark against which progress can be measured,” Mr Boscawen said.

“Dr Wright was also wrong when, in her submission to the ETS Review Panel 2011, she urged the Government to ensure that agriculture is included in the ETS in 2015.  Agriculture is New Zealand’s primary industry, and it would be extremely foolhardy to undermine the foundation of our economy by including it in a scheme that has no clear purpose.

“In fact, ACT’s submission to the Panel identifies no fewer than nine different instances where the purpose of the ETS is unclear – in speeches by Climate Change Minister Dr Smith, in the legislation itself, and in the Panel’s consultation document.

“ACT’s submission also highlights the fact that the ETS should be both measurable and achievable but actually lacks an explicit and achievable purpose, as well as benchmarks against which progress can be assessed.

“This being the case, the ETS should be completely scrapped.  At the very least, Dr Wright’s exhortations should be ignored and agriculture excluded – the Government cannot afford to further disadvantage our increasingly fragile economy by forging ahead with an ETS more prohibitive than those of our major trading partners,” Mr Boscawen said.

ACT’s submission to the ETS Review Panel 2011 can be read at http://www.act.org.nz/files/Submission_ETS_Review_Panel.pdf

“ACT lodged written Parliamentary Questions about the implications of the 2050 target on jobs, GDP, our relative status as a polluter, and our ‘clean green’ image.  The Minister’s response was that modelling wasn’t possible due to the number of uncertainties, and a reliance on other countries to also reduce their emissions,” Mr Boscawen said.

“Put simply: the Government has set a target for reducing emissions without having any clue about the effects it will have on the country – in fact, Dr Smith cannot even say with certainty whether or not the scheme will help the climate.

“Once again we see the Minister acting irresponsibly on climate change and emissions – despite the massive uncertainties surrounding his target he proposes to publish it in the ‘New Zealand Gazette’ and formally commit New Zealanders to achieving it.

“New Zealanders already face challenging economic conditions, and are struggling with the cost burden imposed by the implementation of the ETS.  The last thing we need is to risk an unknown economic outcome for a scheme that won’t even do what it’s supposed to.

“It is completely untenable for the Government to commit us to this target and I urge Dr Smith to scrap it.  At the very least, he should delay committing us to it until New Zealand families can be safely assured they will not be hurt by the Government’s climate change aspirations even further,” Mr Boscawen said.

Mr Speaker,

It is a pleasure to rise on behalf of the ACT Party to respond to the Prime Minister’s speech, and I take this opportunity to acknowledge and congratulate the Government on much of what it has done during its first term.

I say “much”, but not all.

Among the achievements have been the reform of the Resource Management Act, which the ACT Party has participated in; the rationalisation and streamlining of various Government departments; and I should also say the passing of ACT’s ‘Three Strikes’ law, which has already started to make New Zealand citizens feel safer in their homes and on their streets.

I say that it is ACT’s ‘Three Strikes’ law because no one can deny that that law would not be on our statute books but for its promotion by the ACT Party.  The Prime Minister freely acknowledges that the ‘Three Strikes’ law would not have been passed without the ACT Party nudging and cajoling the National Government every step of the way.

The ACT Party and National have also implemented, and then expanded, the 90-day trial period for employment contracts.  This has helped to align our employment practices with those of the rest of the developed world.  But, more important, it has given employers the opportunity to take on new employees with the confidence to know that, if they are making a mistake, they are able to find an alternative.  It is important to give confidence to employers so that new employees can be taken into the workforce.

The ACT Party was instrumental in getting that policy extended to cover – not just employers of fewer than 20 employees but – all employers in New Zealand, to give them the opportunity to improve their productivity and employment of New Zealanders.

Although unemployment at 6.5 percent is higher than Australia’s, we can take some comfort from the fact that it is not around the levels of the US and the UK of around nine and 10 percent.  We are told informally that if we included those people who are looking to work full-time in the US, the level would be closer to 15 percent.

The fact that our unemployment rate is higher than Australia’s should be a concern to us.  Already we have seen in the past week the ‘New Zealand Herald’ reporting that net outwards immigration to Australia is already back on the increase.  We need to be focusing continually on our relationship with Australia because, unless we do – unless we move to reduce the income gap between New Zealanders and Australians – we will see ever greater numbers of New Zealanders move overseas, and move overseas permanently.

It is a fact that, for generations, young New Zealanders have travelled overseas to gain experience – to gain job experience – and to seek out new endeavours and new experiences.  Traditionally they have always returned to New Zealand but, increasingly, they are not.  That should be a concern to all New Zealanders as more and more of our children and grandchildren grow up in countries other than New Zealand.

It was this concern for the declining living standards of New Zealand versus Australia that caused the ACT Party to campaign on reducing that gap, making it a fundamental plank of our 2008 election campaign.

In fact, we put out a 20-Point Plan to reduce that gap and – as part of our Confidence & Supply Agreement with National – got National to commit to the concrete goal of reducing that gap, eliminating that gap, and bringing our living standards alongside those of Australia by 2025.

The ACT Party was, once again, instrumental in nudging National and convincing it to appoint the 2025 Taskforce chaired by Don Brash.  It is a big challenge.  As the Taskforce pointed out in its most recent report last November: if we continue on as we do now, we face the risk that a further net 400,000 New Zealanders will leave our shores for Australia by 2025.

It is interesting then that we have in this morning’s ‘New Zealand Herald’ an editorial titled ‘National needs new policy for closing the gap’.  The ‘New Zealand Herald’ reminds us that, from the convenience of Opposition, National was able to make promises and criticise the then Labour Government’s position on the economy.  It points out that the challenge to raise our living standards is still there.  It says that the Government knew, and certainly knows now, that the comparative success against Australia would require bold and disruptive interventions.  The ‘New Zealand Herald’ says that National is making that commitment in standing up.

Making that commitment to a concrete goal of lifting our living standards to Australia’s requires bold policies and courage.  ACT has always led the way in promoting policies to align and to raise New Zealand’s living standards with those of our closest neighbour.  The editorial concludes by stating: “For its own sake, New Zealand needs bold economic initiatives that will position the country for sustained growth.”

Let me repeat that to the members in the House from the National Government tonight: “For its own sake, New Zealand needs bold economic initiatives that will position the country for sustained growth.”
It is the role of the ACT Party to advocate for those bold initiatives and to promote those policies.  When I first rose this evening I congratulated the National Government on much of what it has done.  Tragically, there are some things the National Government has done that have not been helpful for the economy; that have not moved the country in the direction of reducing that gap.

I think of youth rates – of the National MPs voting against Sir Roger Douglas’ Private Member’s Bill to reinstitute youth rates.  I will remind Members for a brief minute of that debate.  We saw the previous Labour Government legislate to abolish youth rates, legislate to require employers to pay 16 and 17-year-old young people the minimum wage.  What is the natural reaction of an employer when faced with employing someone who is 30, who has life experience, who has jobs, who has skills experience or employing a 16 or 17-year-old?  It is a lay down misere.  It is obvious.  Anyone who has spoken to employers knows that an employer will go for the most experienced person.

Young people are being denied the chance to get on to the bottom rung of the ladder.  This Parliament has denied young people the chance to go out and get a job at $10 or $11 an hour, or whatever their economic value is to their employer.  The Government has said that it will throw them on the scrap heap and give them the Unemployment Benefit of $4.50 an hour.  How does that help raise New Zealand’s productive capacity?  How does it raise our prosperity?  We have seen that with the significant increase in youth unemployment since the Labour Government first passed that legislation abolishing youth rates.

We have also seen a very significant cost to the economy in the Emissions Trading Scheme.  This scheme was introduced by the previous Labour Government, came into effect on January 1 2008, and operates as a massive subsidy to foresters.

What the previous Labour Government essentially put in place was a massive grant that gives tree planters a one-off gain of about 230 tonnes of carbon – around $5,000 a hectare. 

The previous Labour Government put into place a grant system that requires New Zealanders to pay some $500 million a year more in electricity and petrol to subsidise those massive subsidies.

Nothing annoys me more – nothing makes me laugh more – than to hear Labour Leader Phil Goff stand up and talk about the price of electricity and petrol going up.  Mr Goff knows full well that the Emissions Trading Scheme under the previous Labour Government would have resulted, not in a five percent increase but, a 10 percent increase in the price of electricity.

While we can be thankful that the scheme was modified by National, the fact is that it should not be there in the first place.  It should not be operating as a $500-million-a-year subsidy to foresters.  The previous Labour Government put into place a system to pay massive subsidies to foresters, which required the National Government to carry it on.  Anyone in the industry who was smart knew that.

All New Zealanders are paying for that with their electricity and their petrol.  If anything is contributing to that gap between New Zealand and Australia, it is the Emissions Trading Scheme.

Thank you.

“Like the Copenhagen summit before it, the Cancun conference will consist of nations doing a lot of talking – but ultimately coming to no agreement,” Mr Boscawen said.

“In fact, of all the nations represented in Cancun, only New Zealand jumped in where angels fear to tread – implementing a comprehensive ETS forging ahead with it at a time when all other countries are abandoning theirs.

“In 2009 I warned Climate Change Minister Dr Nick Smith that, with the ETS, he was gambling with our economic future.  I urged him to scrap the ETS or, at the very least, delay it and retain the commonsense ‘wait and see’ approach that National promised in 2008.

“But Dr Smith ignored my calls and, as we can clearly see, the gamble did not pay off: New Zealanders are burdened by significant extra costs for no environmental benefit; our exporters are at a disadvantage in the international market; and we are completely isolated from our major trading partners of China, Japan, Australia and the US.

“Cancun will show us that we’re also cut off from the rest of the world and that this won’t change – both Dr Smith and Minister Responsible for International Climate Change Negotiations Tim Groser have already admitted that Cancun will yield no global agreement, especially since the US has abandoned its own planned emissions trading scheme.

“I urge Dr Smith not to ignore this overwhelming international evidence and to do the right thing upon his return to New Zealand: repeal the ETS, remove the burden from New Zealand families, and prevent New Zealand from falling even further behind the rest of the world,” Mr Boscawen said.

“Dr Smith’s indication that the inclusion of agriculture may be further delayed is a victory for ACT and for commonsense.

“The reality is that we shouldn’t even be considering the inclusion of agriculture while the technology to reduce agriculture emissions is still being developed, and there is currently very little that farmers can do to reduce their emissions levels. 

“This is particularly so, as no other country in the world has incorporated agriculture into an emissions trading scheme. 

“I now call on Dr Smith to look again at the provisions of the ETS that affect forestry.

“Since July 1, New Zealanders have been forced to pay higher prices for electricity and fuel.  Under the current system that money is going directly to foresters, to whom the ETS grants enormous subsidies.

“This is completely unfair.  Times are tough enough as it is and many families are struggling.  They should not have to pay more of their hard-earned money so the Government can subsidise foresters,” Mr Boscawen said.

ACT Deputy Leader and Climate Change Spokesman John Boscawen and ACT Mana candidate Colin
du Plessis today questioned how the National Party could claim to care about the people of Mana when it is going to force them to pay tens of millions of dollars through the Emissions Trading Scheme (ETS).

“When asked in Parliament today about the cost burden that the ETS would impose on the people of Mana, Climate Change Minister Dr Nick Smith would not rule out a figure of $20 million over the next three years,” Mr Boscawen said.

“The ETS is exorbitantly expensive for absolutely no environmental benefit. More and more New Zealanders say they don’t want it, no other nation in the world has one, yet the Government refuses to scrap it. It defies belief.”

“What also defies belief is the way in which National Mana candidate Hekia Parata claims to work in the interests of Mana residents, but supports a scheme that taxes locals to subsidise foreign-owned plantation forests around New Zealand,” Mr du Plessis said.

“The Government would do better to leave that $20 million where it belongs – with the people of Mana who, I’m sure, would put it to much better use.

“Mana has enough issues to deal with; unemployment is a big problem and many families are struggling to put food on the table following the recent increase in GST. And this is how National wants to help them – by taking away tens of millions of dollars.”

“ACT always predicted that the ETS would hurt New Zealanders, and this shows that it is hurting those who can afford it the least. National has two options: scrap the ETS, or admit that it truly does not care about the people of Mana,” Mr Boscawen and Mr du Plessis said.

“The climate change survey released today shows more and more New Zealanders are of the view that there is no point in continuing to pour money into the ETS,” Mr Boscawen said.

“Our emissions levels are miniscule compared with those of other nations, yet we’re the only country with a comprehensive ETS.  In the absence of meaningful international action, our ETS will not affect the climate – in fact, National may as well start dumping money into the ocean for all the good that its ETS will do for global weather.

“And, as I predicted, the cost of the ETS is causing public opinion to turn even further against the scheme.  While New Zealanders want action on climate change, they don’t want it to be in the form of a scheme that imposes a significant cost burden for absolutely no benefit.

“ACT predicted that the ETS would harm New Zealand, which is why I campaigned so strongly to have it scrapped or at least delayed.  Thanks to the ETS we are now isolated from our major trading partners – Australia, China, Japan and the US – and our standard of living is at risk.

“And things will only get worse – no other country will implement an ETS, next week’s climate change talkfest in Cancun will achieve nothing, and New Zealanders will continue to pay for a policy that is nothing more than a meaningless gesture.  I urge the Government to listen to the public and scrap the ETS,” Mr Boscawen said.

“National originally claimed that New Zealand would be a fast follower on climate change: we would wait to see what our major trading partners – the US, China, Japan and Australia – would do before we implemented an ETS,” Mr Boscawen said.

“But, like Helen Clark before him, Climate Change Minister Dr Nick Smith became blinded by the desire to be a world-beater; to make New Zealand the first country to implement a comprehensive ETS – no matter the cost to the nation.

“Common sense gave way to economic recklessness.  The Government discarded the responsible ‘wait and see’ approach and became hellbent on implementing the ETS on July 1 – even after Australia’s April announcement that it would delay its own ETS until 2013.

“As a result, New Zealanders are burdened by significant extra costs for no environmental benefit; our economy has been distorted by the misallocation and redistribution of resources for no reason; and our exporters are at a disadvantage in the international market.

“Not that this comes as any surprise.  I predicted this outcome when campaigning to have the ETS scrapped – or at least delayed – but, then, the Government was more interested in being a world first than looking to the welfare of its citizens.

“Now New Zealand is reaping what National sowed – and it will only get worse.  I just hope that this latest development in the US is enough to open the Government’s eyes and show it that the ETS must be repealed before it is too late and even more damage is done to our economy,” Mr Boscawen said.

“I predicted that the ETS – which is designed to increase energy and fuel costs – would harm businesses, but National ignored my calls to scrap the scheme and pushed ahead with implementation on July 1,” Mr Boscawen said.

“Since then a number of greenhouse vegetable growers have been forced to close, and some horticulturalists are now also following suit.  These enterprises are just the tip of the iceberg.  Inevitably, other energy-intensive businesses will have to close to avoid being smothered by the added costs of this damaging scheme.

“It is impossible to understand how the Government can credibly validate retaining the ETS.  It cannot be justified in an environmental sense – the Prime Minister’s own Chief Science Advisor Professor Sir Peter Gluckman himself has said ‘anything we do as a nation will in itself have little impact on the climate – our impact will be symbolic, moral and political.’ 

“Neither can it be justified as being in the best interests of New Zealanders – unless it is in the country’s best interests to see businesses going under, people losing their jobs and everything becoming more expensive.

“National got what it wanted by becoming the first government in the world to implement such a comprehensive ETS.  Now that it has this out of its system it should admit it made a mistake and quickly scrap the ETS before it can hurt New Zealand even further,” Mr Boscawen said.

“We are now guaranteed to be at a competitive disadvantage with our closest major trading partner for at least another two years, if not more. How many jobs are we going to lose overseas and what damage will be done to our economy, before Australia, US, Japan and China get on board – if ever?” Mr Boscawen said.

“National has been vocal about its efforts to compete against Australia for business – announcing in the Budget 2010 its intention to drop New Zealand’s company tax rate to a lower rate than Australia’s. Yet, any benefit this may have had for our economy will be lost due to the costs imposed on New Zealand based businesses by the ETS.

“National has been far too hasty in implementing this complicated and far-reaching ETS legislation. Australia is well aware of the risks and as we can see from the announcement today, is taking a far more level headed approach to addressing climate change – one that does not put their economy in jeopardy.

“Unfortunately it is New Zealanders who will ultimately pay the price for National’s foolish mistake,” Mr Boscawen said.