Energy (Fuels, Levies, and References) Amendment Bill

I move, That the Energy (Fuels, Levies, and References) Amendment Bill be now read a second time. What a great way to finish the year. I would like to thank those who took the time to make submissions and the members of the Commerce Committee, for their work in considering this bill.

This bill amends the Energy (Fuels, Levies, and References) Act 1989 in order to provide a sustainable funding source for New Zealand’s International Energy Agency oil stockholding treaty obligations. A secure supply of energy is critical, and this Government has prioritised a range of measures to improve oil security through the Business Growth Agenda. An important part of those measures is sustainable and user-pays funding of our oil stockholding obligation with the International Energy Agency.

💬 Grant Robertson: Used to be the future.

So did you, sunshine. The stockholding obligation helps mitigate the market power of large oil-producing nations, and is an important contribution to global oil security. The International Energy Agency system helps protect New Zealand and its trading partners from economic harm that could result from a sudden increase in oil prices. New Zealand’s oil demand has grown steadily since the mid-1980s, and, as with most OECD countries, this has been driven primarily by demand for transportation fuels, petrol, diesel, and jet fuel.

Although the Government continues to undertake a range of initiatives to improve the operating environment for the oil and gas sector, and to encourage further exploration and production of oil in New Zealand, as well as promoting energy efficiency measures to help make our fuel use more efficient, we can also make our imported sources of oil more secure. The petroleum or engine fuel monitoring levy currently covers the cost of monitoring fuel quality and costs related to the International Energy Agency, such as acquisition of energy data. This bill will create the scope of the levy to fully fund the Crown’s oil stockholding obligation with the International Energy Agency. In doing so, it will provide a sustainable funding source and an enduring financial commitment to global oil security that will ultimately benefit New Zealanders with a more secure supply of transport fuels.

The Commerce Committee received four submissions on the bill. There were some useful suggestions for improvement, and the committee recommended that the bill be passed with two amendments. The committee recommended limiting the scope of the levy by clarifying that it is for the Crown to meet the reasonable costs and expenses of compliance with New Zealand’s obligations under article 2 of the International Energy Agency to maintain the emergency reserve commitments set out in that article. The revised purpose makes it crystal clear that the levy will be used for maintaining New Zealand’s contribution to global oil security. I commend this bill to the House.

Labour is supporting this bill, for the reasons that the Minister of Energy and Resources, Simon Bridges, just outlined—or for a number of them. But I must admit that Mr Bridges must be quite a tired gentleman. That was a speech that was read with no passion whatsoever. Take a long holiday, mate, and come back all refreshed. Maybe you could put a bit of energy into it.

We understand the reason for this bill. We are talking about an obligation of about $10 million by 2016-17, and a shortfall of around about $20 million over the next 3 years. We have got to meet our obligations under these treaties, and it is important that we do that as a good global citizen; so we will.

There are a couple of concerns that I do have about this particular bill. One is that, according to the bill—in new section 24, which is inserted by clause 5—the levy will be collected by the New Zealand Customs Service, and it will be paid by the oil companies. It is at a very small rate. It is at about 0.045 cents per litre, so it probably will not be noticed at all. But we are still talking about $20 million out of taxpayers’ pockets over the next 3 years. When I say “out of taxpayers’ pockets”, the levy on this actually has to be paid by the oil companies, but the concern I have is that what will actually happen—the rate, as mentioned, is 0.045 cents per litre—is that the oil companies will say: “We have this new levy, we have to pay for it”, and, therefore, they will pass it on to the consumer through the petrol pump, and they will whack another cent per litre on. I see this as potentially just another way for the oil companies to make extreme monopoly-rent profits out of a piece of bad news that will come along. I hope it does not happen, but I can just see how it could.

This is at a time when petrol companies are making record profits. They seem to have us over a barrel—pardon the pun.

💬 Hon Member: Oh, that is weak. That is weak.

Thank you; someone is listening. Fantastic!

💬 Hon Member: Roll out the barrel.

Terrible—I know. However, the oil companies are very, very quick to put up the price when something like this comes along, but very slow to drop the price. We have seen a little bit of a fall in the price recently—there is no doubt about that—but not at the rate that international prices are dropping around the world.

The one interesting thing about this is that I was looking through the regulatory impact statement, and it is something that MPs use—as the Assistant Speaker himself knows very, very well—to get a little bit of a background about the bill, what it is about, and the process it has gone through. It is a very important document. I was looking at the risks, because it tends to be the first thing I look at when I am assessing a new bill, and I was surprised to see that there were a couple of sections that were deleted under the Official Information Act. I am just a little surprised, because we need to know what this is about, and certainly when it comes to the risks, why you would take a chunk of those risks out so MPs cannot assess them.

I am pleased Clare Curran will be talking on this, because she was on the Commerce Committee, and maybe she can just allude to a couple—[Interruption]—yes, she will allude to just a couple of the risks—

💬 Clare Curran: Yes, I shall.

That is good to hear, and she shall. We are supporting this legislation, but the final point I would like to make—I have made it before, but I would like to make it again—is that I just hope that what we do not see as a result of this bill going through is a disproportionate increase in petrol prices at the pump, for good hard-working Kiwis, who are really struggling to make ends meet at this time of growing inequality. On that note, I do wish everyone a very merry Christmas and a safe and enjoyable New Year. We commend this bill to the House.

I rise to support the second reading of the Energy (Fuels, Levies, and References) Amendment Bill. This bill was looked at by the previous Commerce Committee. I would like to commend the work of the previous select committee chair, Jonathan Young, and also the members of the committee before the 51st Parliament. They returned the bill with the following amendments, amending clause 4(1)(ba) to state that the purpose of the levy is for the Crown to meet the reasonable costs and expenses of compliance with New Zealand’s obligations under Article 2 of the International Energy Agreement, among other things. As the member of the Opposition who previously spoke said, meeting our international obligation is a good thing, and the purpose of this bill is to enhance New Zealand’s ability to cope with international oil supply disruptions.

When I think about the disruptions that we have had, recently there was an electricity failure in Auckland. I should not actually mention that, but as a mother and a person who never really keeps any candles in the house, you look at something like this and having a supply when there is a disruption is actually a good thing. The purpose of this bill is to allow the cost of meeting New Zealand’s oil stockholding treaty obligations. As a signatory of the obligation, we are supposed to keep enough supply for 90 days, Mr Robertson—

💬 Grant Robertson: 90 days of candles?

—90 days of net imports—and having that kind of supply is actually a good thing. When people think about having a failure in the supply of the petrol, knowing full well that we have 90 days of supply is a good thing. The bill provides for a petroleum or engine fuel monitoring levy to be extended so it can be used to meet the costs associated with the Crown’s compliance with the oil stockholding treaty obligation, as I said earlier. New Zealand contributes to global oil security by holding oil stocks as agreed under the Agreement on an International Energy Program. This stockholding obligation helps mitigate the market power of large oil-producing nations and is an important contribution to global oil security. It protects New Zealand and its trading partners from the economic harm that could result from a sudden increase in oil prices, and having 90 days of stock will actually help with that situation. This is a good bill. I commend it to the House.

I have to say that it is a tumultuous way to end the activities of the House to be able to stand up here on the last day of Parliament for this year and speak on the Energy (Fuels, Levies, and References) Amendment Bill.

💬 Grant Robertson: It’s life changing.

It is life changing. Thank you, Mr Robertson. As other speakers have said, this is an obligation that we have with the International Energy Agency. It enables us to stock fuel in case there should be an emergency. We have signed that agreement, and therefore this is the way that we will see it put into action. There is a small cost as a result of that, and this is something that Stuart Nash talked about. There is about 0.045 a litre that will be passed on to people who use fuel—mainly motorists. That will enable us to fulfil our requirements with the treaty. That is not a lot of money, but I think it was a fair point that Stuart Nash made that we should monitor this so it is not used as an excuse to bump up fuel prices any further. It is a lot cheaper than the 9 cents a litre people will remember from last year that Bill English put on to fuel prices just before Christmas, as a Christmas present, in order to get his Budget across the line and into surplus. It was the only reason it got into surplus and he was able to trumpet that at the election this year. If it had not been for that, he would have been in deficit. So we all put our hands in our pockets and paid more money for our petrol in order to save him that embarrassment. Now it looks almost impossible for him to be able to reach a surplus this year with the falling dairy prices.

All I can say is that this is a second reading. I am very pleased we are rushing it through today and that we can manage to have a say on this important bill. This will be my final statement in the House this year, but before I finish can I wish you, Mr Assistant Speaker Mallard, a happy Christmas. To my parliamentary colleagues, I wish you a merry Christmas, a happy New Year, and a restful holiday. To all those people around the precinct who help us every day in various forms, I wish them a very happy Christmas and a restful holiday as well.

It is a momentous occasion to stand to speak on this Energy (Fuels, Levies, and References) Amendment Bill in its second reading. Of course, it has already been canvassed and covered that this is primarily to ensure our compliance with our oil stockholding treaty obligations. Despite what members on the other side have said, a really important and very positive part of this amendment is that it is realigning the existing funding mechanisms so that oil consumers, rather than general taxpayers, are apportioned the costs of meeting these obligations. The Green Party, I am sure, will warmly welcome this because it means that all of those people who are using public transport, and particularly electric public transport, will, of course, be paying less, whereas those of us who do choose to travel in petrol-powered or diesel-powered vehicles will be paying a little bit more and not a whole lot more. It is also good to see that as New Zealand is too small to mitigate the international oil supply disruptions on its own, we have a collective arrangement under the International Energy Agency to help meet our risk. So, instead of doing as you would in the 1950s, when, of course, you built every State home you would need, for every person who would need it, in the place that you think they would need it—just like “Pleasantville Phil” suggested we should—and we would stockpile 90 days of oil barrels on our own shores, we instead have bought tickets—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am a little unsure, but if the member was making a reference to a member of the House, he will withdraw.

I withdraw and apologise, Mr Assistant Speaker. So, instead of taking an approach of risk mitigation that we might take back in the 1950s, we have bought contract tickets on the international market, which mitigate our risk and which allow us to buy oil at a prevailing market price in the event of a declared emergency. This means that New Zealand does not have to stockpile many, many thousands of barrels of oil on our shores. This is a pragmatic and sound approach to making sure that we meet our obligations and can ensure some oil energy supply to New Zealanders in the case of emergency. I commend the bill to the House.

Kia ora, Mr Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. It is great to take a last call on the last day of this Parliament this year. I would like to acknowledge members and wish them a merry Christmas and a happy and safe summer break. I rise to support this bill that we have in front of the House. I would like to acknowledge the Commerce Committee, the chair, and the submitters. I think it is fair to say we had a small number but high quality of submissions in the select committee. This bill is a very simple mechanism. You have to wonder why it is the most pressing item of business on the Government’s agenda on the last day of Parliament, but it is a still a bill that the Green Party will be supporting no matter how small it is. Basically, what the Government is doing in this legislation is taking the cost for New Zealand’s offshore oil reserves, which are currently held on a ticket system—most of it is currently in Japan; it comes out of general Crown expenditure—and through the fuel excise levy and the road-user charges place a per litre price on oil and oil products so those costs of having those oil stocks are seen transparently.

Why is the Government doing it? First of all, it is important that New Zealand does have an oil reserve. I would argue that it would be better to have it onshore in New Zealand but there is an oil reserve, which is part of our International Energy Agency obligations to deal with oil shocks, which, as we have seen, have recurred throughout the decades. The Government has decided to do this move in part because of the rising costs of having those oil reserves. Government official advice looks to be about a $5 million per annum cost increasing to $10 million in the financial year 2016-17. But also the officials note in the small print that we are seeing domestic oil production declining in the medium term. Traditionally, some of the New Zealand oil reserves were counted as part of the oil stocks for International Energy Agency reasons. However, with the declining reserves of oil in New Zealand, in fact, we are having to increase the offshore stocks. I would like to reiterate the importance of having those stocks, but when the officials looked at the guidance, the cost of having it onshore, which is what I understand that Air New Zealand was arguing in favour of, it was only $24.3 million, so an affordable cost in the context of $8 billion of annual fuel import bills.

The real question that I think this Parliament should be asking is whether the tinkering we are seeing in the House tonight, on the last day of the Government’s 50th Parliament, while we are spending this money on storing—

💬 Tim Macindoe: 51st.

—the 51st Parliament, Mr Macindoe, thank you very much.

💬 Simon O’Connor: Time flies.

Time does fly. Why should we be spending this money on storing oil stocks offshore? Surely we could be spending this money domestically in New Zealand, reducing the very cause of the problem it is trying to address, which is our high dependence on oil and the clear economic impacts this can have. So we support the bill. We think costs should lie where they fall. We think there is a greater argument for transparency. It is going to add an economic signal, which is that when people do fill up at the pump, obviously someone has to pay for those fuel stocks being held in reserve for those recurring fuel crises we have seen again and again. It is pretty minor; it is only less than 0.5c per litre, but it is an economic signal all the same.

One big concern that we tried to address in the select committee, which, unfortunately, the Government members did not want to act on, was that biofuels, including domestically created biofuels, come under this. I agree with Z Energy, one of our largest petroleum retailers, that it is pretty absurd that biofuels, which are more sustainable, which decrease our dependence on oil, and which increase our resiliency, are going to be charged at exactly the same rate as oil. It sends the wrong economic signal to biofuel investors and biofuel consumers, and it does nothing to increase our resiliency in New Zealand. There is also an equity argument. I agree with Z Energy that it is unfair that other petroleum products such as liquid petroleum gas, jet fuel, and bitumen are not going to face this very small charge, yet biofuels are. So it seems that the Government does not quite understand the role of markets and how we could be using market and price signals to incentivise good behaviour, and in this case we are actually disincentivising sustainable biofuels, which are good for New Zealand, good for the economy, and good for consumers.

That wider elephant in the room—which is not being addressed by this tinkering bill on the last day of the Government’s Parliament this year—is that 6 years since the last oil shock, there is still no plan to reduce our dependence on oil. There is no plan to even start planning under National. When you look across the country there are councils like the Dunedin City Council, when you look across the economy there are businesses, and when you look across the world there are countries—and even militaries like the Pentagon, the world’s single largest petroleum user—that are actively planning and taking steps to reduce their dependency on oil. New Zealand is the only country in the world that seems to be hell-bent on simply creating more oil. The Government has got an oil production strategy, but no oil reduction or resiliency strategy, and this is the big strategic economic issue facing our country. When you look at the host of issues facing us, it is one of the big ones.

In New Zealand we spend about $8 billion—billion with a “b”—importing oil from offshore. That is about the equivalent of our entire tourism industry. So we have got tens of thousands of people doing great work in our tourism sector across the country, bringing foreigners down to enjoy our hospitality in New Zealand, but the fact is that our entire tourism industry is basically only paying for the oil import bill. That is madness. We should be increasing our economic resiliency and diversifying our economy, not just having one of our major economic sectors simply paying for the petrol bill. When you look at the impact on New Zealand’s economy, we are incredibly vulnerable to high and rising oil prices. We are one of the most dependent economies in the world. I know that when I looked at our vehicle fleet a few years ago, our average vehicle age in New Zealand is about 11.7 years, which is one of the oldest vehicle fleets in the world. We drive some of the shortest trips in terms of kilometres in the Western World and we drive with the fewest passengers. So we are incredibly oil-reliant.

My office did some analysis a few years back and we found that for every US$1 increase in the price of a barrel of oil, it shaved $40 million to $60 million off New Zealand’s GDP. We have seen oil being a major driver of recessions through the last six-odd decades, and when you look at the last great oil shock in 2008—which, in part, played a significant role in the global financial crisis—what Kiwis found was that they wanted to be able to keep doing things and undertaking economic activity. In the face of high oil prices, they had no options. So in Wellington, commuters flocked to the public transport system because they wanted to avoid paying higher oil prices, but they were out of luck because there was such a limited capacity. In fact, in Wellington we literally went to the museum to get rail units out of the museum and put them on the tracks to cater for the increase in commuters.

In my hometown of Gisborne, exporters wanted to put their products on the local rail line to get them to market, rather than face high and rising oil prices, but what they found was that the rail line had closed thanks to National’s inactivity, and now it has closed for good. Across the country people wanted to get to work or school on their bikes to get fit and to save money, but what they found was that there was no safe cycling infrastructure out there and they did not feel it was safe. So people felt trapped because the Government was not giving them options to escape high and rising oil prices, and this slight marginal increase in the price of a litre of oil to pay for our offshore oil stocks is not going to make a shred of difference.

This bill also does not take into account climate change. This is the greatest global environmental threat. The International Energy Agency—an agency that we subscribe to; that the Government actually contributes money towards—is advising us that we cannot afford to burn 70 percent of the oil reserves we have already discovered let alone go looking for more deep in our oceans, as we invited Chevron Oil to do yesterday. We cannot afford to burn 70 percent of the stuff we have already found if we want a safe and stable climate for our kids.

So instead of this tinkering, what the Green Party has been advocating is real solutions for Kiwis and better ideas for the New Zealand economy. We would like to see greater action on electric cars. For a country with close to 100 percent renewables, we could be helping to save consumers money. The equivalent to filling a tank of petrol in an electric vehicle is about 30 bucks—30 bucks versus, say, 150 bucks. We should be giving Kiwis better options for public transport, such as the central business district rail link for Auckland; better buses, cleaner buses, and cheaper buses for Wellington; and clean energy. Imagine what kind of country we would have. It would be a more resilient country, and a nicer country in terms of nicer places to live—healthier places to walk and cycle without the smoke, pollution, and particulates that are killing hundreds of us every year. We would see more jobs and more development. In short, the Greens’ smart solution to deal with one of the biggest issues of our age will lead to a richer New Zealand in all of the terms that encompasses. Merry Christmas to you, Mr Assistant Speaker, and merry Christmas to all the members of Parliament and the public.

It is quite similar to yesterday. There are lots of conversations on this side of the House about disagreeing with what the Government is trying to do, and yet it seems, at this stage anyway, that only one party will stand up to oppose how it intends to fix this small problem. I stand on behalf of New Zealand First to attempt to add some small controversy to today’s proceedings.

The Energy (Fuels, Levies, and References) Amendment Bill amends the purpose and the amount of the petroleum or engine fuel monitoring levy that is currently provided for under the Energy (Fuels, Levies, and References) Act 1989, section 24. New Zealand First does agree with the obligation to meet international energy agreements. It does agree that having 90 days’ worth of oil stocks is absolutely essential. We as a country must meet our obligations to our international commitments, and these stocks must be held with our—as suggested—domestic oil supply. It is a $20 million commitment over the next 3 years. It is not large, but, as was well spoken to by previous members, there are reasons why this bill should not go ahead as it is written.

What is important to note as well is that it is not just physical stocks, and, actually, it is not stocks in New Zealand. What we are talking about is the rights to tickets, or stocks, held in other countries that will count towards our total stock obligation. We are buying these overseas commitments and we are actually leaving those reserves in those other countries. We have been told the costs of these tickets are going up. These increased costs are due to the decrease in domestic production of oil, an increase in the ticket contract price, and an increase in the volume we need to hold. We acknowledge that these are real issues. The Ministry of Business, Innovation and Employment forecasts a further increase in prices of these tickets. Again, we acknowledge that it is a problem now. We must meet our obligations, and these commitments will get larger over time.

We do not dispute any of these facts. We know that we are highly dependent on these stocks, and to run out of fuel would be devastating for our local economy. To suggest that we should not comply with our international obligations would be, and is, inappropriate. But this is where our take on the actions necessary differs from that of the Government. We are told that the Vote Energy budget is now insufficient, but the Government’s solution is simply to add another tax, to New Zealand road users especially. The Automobile Association points out that New Zealanders are currently paying 67.129c per litre of petrol just on tax—67c on the price of petrol is currently being collected by the Government as fuel excise, and that is before motorists pay GST, which is on top. Just to clarify: New Zealand First has always opposed tax on a tax, which this situation now is a prime example of. As the Legislation Advisory Committee correctly points out, this new levy can be categorised as being a charge in the nature of a tax.

New Zealand First acknowledges that asking the fuel companies to build infrastructure large enough to meet our physical stock obligations, as was discussed in the Commerce Committee, would simply put prices up even more, and this is what we in New Zealand First are trying to avoid. We were told by the Minister of Energy and Resources that oil is our fourth-biggest export, and right now we are searching for more. Why could we not simply use existing levies to offset this increased cost to ensure we comply with our international obligations? Apparently, we are looking to increase our domestic capacity so our stocks will increase. New Zealand First applauds this, but would suggest to the Minister of Revenue that he look to ensure that we as a country benefit more than the large oil conglomerates do when they come and start taking oil out of our land. New Zealand First has campaigned strongly on regional development, for example, and looks to these recent announcements as an opportunity for the Government to share its largesse with the regions. Recent OECD reports showed very clearly that this Government needs to take another approach to building wealth in this country. The report gives clear suggestions that this might take the form of economic policy where all New Zealanders can share in this wealth and income-generating activity.

Although we believe that the Government will pass this legislation despite our protests, further burdening road users with another levy in perpetuity for a problem that can be resolved in the short term, we offer some suggestions for the Minister’s consideration. One of the discussions I have had with those affected by this bill revolved around using the GST component to purchase the required tickets or stock, or even using the levies we already have to address this problem. Let us not create another one. We have already been told in the House today by other members, who in principle seemed to oppose this, that the levy is tiny, and we should absorb it. The Legislation Advisory Committee has stated that the original purpose of this bill was too broad. It was originally supposed to address the emergency reserves commitment, but there was a lack of clarity around the purpose for which this bill can be applied and how the levy rate will be set. If the Government insists on passing this bill, then its intent must match its original purpose. If this Government insists on taxing the New Zealand public even more, then its purpose must be very specific.

The bill did not originally contain any specific criteria for setting the levy or for determining which fuels were subject to it. I would like to concur with the previous speaker, Gareth Hughes, that the selection—and the lack of reasoning for the selection—of the types of fuels seems to be nonsensical. We would, in fact, support the removal of the levy on biofuels, for example, to encourage that industry. There is now reference in the bill to a calculation that must be applied, but can I add further that the absence of a cap suggests that this levy will, in fact, be just another revenue device, with no mention of stopping the levy when our obligations are met. New Zealand First would argue that, despite the intent of the bill, the Government will use it simply as another way of burdening Kiwi motorists in perpetuity. We need to be very clear to the public about what the levy sum will be. This legislation needs to guide and inform so that the New Zealand public is not surprised or even misinformed. Further clarification is needed, as we cannot be sure even what fuels are being taxed. There is a clear lack of specificity—for example, we do know aviation fuel is exempt because it is subject to a different international convention. Oil in its raw form is apparently also exempt at this stage.

What the Government is proposing to do with regard to prescribing rates gives too much power yet again to a Minister in charge of a portfolio. It is seeking to remove parliamentary process in the setting of this levy. Once again, the Minister must consult only with those considered by him to be people affected. Once again, there will a loss of opportunity for wider consultation and submission. How about the Minister makes a list of who he thinks those important parties are? Let us be transparent and upfront. Whom will he be talking to? We agree that we are an international player and must meet our obligations. New Zealand must do its part to ensure worldwide stability and, of course, to ensure that any international or even domestic incidents that could interfere with the smooth and continuous supply of oil are mitigated.

The intent of this bill is important, but on behalf of the travelling public of New Zealand we oppose another increase on petrol levies. This tax will further aggravate the erroneous and inappropriate tax on a tax situation, which New Zealand First so proudly campaigned against in the last election. There are alternatives that have not been explored, which would not cost the people of New Zealand yet more of their hard-earned money. There are issues with the wording of this bill. It lacks details. It is another example of a Government Minister taking power away from a good democratic process. We oppose this bill. We do not need yet another tax.

Whilst I have this opportunity, may I end by wishing my parliamentary colleagues a very merry Christmas and a happy and peaceful New Year. Thank you.

What a delight to be able to speak on this bill. I have to say it is so nice to follow a member, Fletcher Tabuteau, who has been speaking about why Ministers should not take responsibility, and yet I have heard today in the House members on the other side constantly berating my colleagues because they were, in fact, allowing their ministries to take proper responsibility and not overriding them. But I just thought that was quite stunning.

This bill is all about putting the cost of our stockholding treaty obligations for oil on to the people who are using the oil. That actually seems to me to be a pretty sensible thing. Many people have no idea that our biggest export to Australia in terms of value, by the way, is oil. The second biggest is gold. So for those on the other side who do not know about these things, we have long been an exporting nation of these rich mineral lands.

Having said that, we also import our oil that we use in New Zealand because that is the standard of oil that our refinery is able to take. The sort of oil that we take out of Taranaki, for instance, that goes off overseas is a different quality of oil. Apparently it is very, very high-quality oil and it is too high for our oil refinery. So when we listen to people talk about how we should boycott oil, and we should stop doing this with oil, the fact is that it is a huge part of our economy now. What this bill very sensibly does is give the Minister the power to put the costs where they should be, where they should lie.

💬 Chris Hipkins: What about Whale Oil?

One of the things that some of us are old enough to remember is carless days. I know that Mr Hipkins—he is very vocal; he has been allowed out to play—does not remember that because he was not born then. But I am not jealous of the fact he was not born then. I know he was probably a twinkle in someone’s eye. But I remember that. I am sure that the Assistant Speaker remembers carless days. I am sure many people can remember those days. That is what happened when we became victims of the—

💬 Chris Hipkins: Before the car?

Mr Hipkins wonders whether or not there were cars then. There were then, yes. I think one of the things that we need to do is to always be aware that even though we are major exporter of oil in terms of our economy, we are also a big importer of oil. It is really impossible for us to ignore the fact that as a small nation we need to be able to have access to oil. We know what happened last time, in the 1970s, when we went through these problems. The fact is that this is a sensible bill that enables the costs to lie where they should.

Can I also, just in conclusion—because it is such a fabulous bill that we want to get this through its second reading; such a fabulous bill—

💬 Chris Hipkins: Once more with a straight face.

Such a fabulous bill, Mr Hipkins—he is actually a lovely young man and he will make someone a lovely son one day. I would like to wish everyone a merry Christmas. And might I say, I confess that I am going to have a glass or two of something on New Year’s Eve, because, frankly, I have had enough of this year and I am looking forward to a fabulous 2015. I wish everyone well, please drive safely, and all come back again. Thank you.

I was not sure who was going to take the next call. I certainly think that the previous speaker, the Hon Judith Collins, who was a very welcome addition to the Commerce Committee, is vying tonight for the award for “the twinkle in Parliament’s eye” or to be the “parliamentary Christmas fairy”.

💬 Hon Judith Collins: No fairies on this side.

On that note, I would like to wish everyone a merry Christmas—and you, Mr Assistant Speaker—and do hope that we all have a good break. I think we all need it. It has been a long year. Thank you to the messengers and all of the people who work at Parliament and make Parliament work for us in the background. Thank you so much for your good humour and your steadfast support of us all.

I do not want to relitigate what has been said in this scintillating debate on this extremely important piece of legislation, which is the last piece of legislation going through in 2014, other than to say that, as one of only two members who were actually on the select committee who have spoken in the debate tonight, it was not a hugely controversial bill. There were four submissions. I think it was reasonably straightforward in terms of the small changes that were made during the select committee process and recommended back to the House.

I would like to make a couple of comments, though, because what preceded that select committee process, with the submissions, was actually another process. It was a discussion document that was put out by the Ministry of Business, Innovation and Employment, in which there were a number of other submissions given—15, I think. There was much more in-depth discussion that resulted from that.

Through that, I think the general point that was made, and which is why we have got this bill before the House, is that the actual cost of the contract requirement, requiring this amendment to come before us, is actually increasing to a point, if the House can see it on this graph, where it is going right up. The current appropriation of $3 million to cover that cost is just simply not enough. We are currently at around this point on the graph and it is going up to around $10 million to $12 million. So we have got to be able to find a way, if we are going to meet our international treaty obligations, to actually do that.

Whether there should be a storage facility built so that we could actually keep that fuel onshore was thought about, which I think a couple of my colleagues in the Greens and New Zealand First were arguing for. That was determined to be too expensive, and that is why we are looking at this expanded levy arrangement, which does result in a cost to taxpayers. I think we all need to acknowledge that. But the regulatory impact statement, actually, puts that cost as being at 0.113c per litre. I do not know about the other costs that have been mentioned tonight. I think in the Committee stage, when we do get to the Committee stage, it would be good to have the Minister clarify those. That equates to around 4.5c per 40 litres for a tank of fuel—4.5c.

I guess we have got to put that into context, and I think the New Zealand First representative who spoke, who was not on the select committee—it would be worth thinking about that and thinking about what the impact of that actually is on the consumer. I think we do need to get some assurance from the Minister, in the Committee stage, that there will be close monitoring of that cost and that there are not going to be further costs passed on to consumers, because I think that is pretty important.

I also think that there has been a huge opportunity missed through this bill, as usual, by this Government, which is more obsessed with presiding over the dirtiest, filthiest, grubbiest, vilest operations we have ever seen in New Zealand politics. Instead, it could have actually come up with a strategy for sustainability and looking at where we are going in terms of fuel use, and moving beyond oil in terms of sustainable fuel and looking at biofuels and what we can be doing in that space.

Where is the economic development strategy that sits behind this bill? There simply is none. As usual, it is a piecemeal, small piece of legislation that does not fit into a wider strategy. Labour supports the bill because it is sensible, it fits our obligations for an international treaty, and it is not a huge impost on consumers. But it is small-minded, it does not fit into a bigger picture, there is no economic development, and no ongoing strategy around sustainable fuel and around how New Zealand could actually be using this as an opportunity for economic development. I think that is a great pity. It is a missed opportunity. I look forward to the Committee stage and questioning the Minister on some of those issues. I just reiterate: best wishes to everyone for Christmas. Make sure you have a good break and have a safe break, and we will come back fighting in 2015.

This bill was considered by the Commerce Committee and minor amendments were recommended. This bill is part of New Zealand’s commitment to its treaty obligation as a signatory to the international energy programme. As a signatory to this agreement New Zealand is required to hold oil stocks equivalent to 90 days of net imports. Stockholding costs have previously been funded through general taxation. The bill allows for the costs to instead be met through the existing petroleum or engine fuel monitoring levy. It is very important for us to hold the stock. This bill enhances New Zealand’s ability to cope with international oil supply disruptions.

The previous speaker Clare Curran just mentioned that this bill is short-sighted, but I do not agree with her. The Government has got a Business Growth Agenda and we have been performing very well in the past 6 years.

Before I conclude, I would like to wish all members a merry Christmas and a happy New Year. To you in particular, Mr Assistant Speaker Mallard, I am still waiting for the day when some member will test your patience and you will throw that member out of this Chamber. I look forward to that day, and I would love to be the first one to be kicked out by you.

In standing for what seems like the final call, I am not taking up the challenge of my colleague Kanwaljit Singh Bakshi to test your patience, Mr Speaker, and be tossed out. In fact, I am here in some ways to deliver the good oil on this bill. I am hoping to not leak anything here or slip up. I have noted, though, that—[Interruption] I am sorry, I apologise to the nation. [Interruption] So I should, my colleague from Coromandel notes. Look—

💬 Chris Hipkins: Tell us about South Park.

Actually South Park is a fantastic—thank you for allowing me that little segue there—programme.

This is a relatively simple bill, as many colleagues in the House have spoken about. We have an international agreement, like many nations in the world, to make sure there are 90 days of fuel stocks or oil stocks available. Up until this bill, basically all New Zealanders, via the general tax bill—

💬 Andrew Little: Just enough to get you through your trial period of employment.

I have to stop here. I have not had the chance, Mr Little, to actually congratulate you on your role.

💬 Andrew Little: Waiting for your text message.

You have not given me your number yet. We will have to see whether there is any divine intervention. We will have to have that discussion.

💬 Chris Hipkins: He doesn’t change it all the time like John Key.

That is right. Divine intervention is what we are on to. Anyway, we keep going off on these segues at the moment.

The bill is really, importantly, about moving the tax burden or the obligations away from the general taxpayer to those using vehicles. This is a piece of legislation that enables that to happen. But I think this Energy (Fuels, Levies, and References) Amendment Bill, here in its second reading, is in the yuletide spirit. I have noted over this week and in weeks past there has been dissension in the ranks. We have had Opposition parties opposing what we do, which we have come to expect from Labour. We have the likes of the Greens—of course, they oppose everything we do. New Zealand First members normally speak in support of things and then switch their minds.

But we thought it was probably important, I assume—I cannot speak for the Leader of the House. But the Government thought: “What bill can we put here that will bring unanimity to this House, in this final piece of legislation that moves forward?”. It has been really good to hear from those speaking, from all the various parties in the previous calls, that this bill will have widespread support.

💬 Dr David Clark: Find some levity to finish—some levity.

Again, it is quite festive, as is the jacket of the member opposite.

💬 Grant Robertson: I see—now you’re in his good books.

That is right. It is ecumenical, you see. We are reaching out.

Anyway, back to the bill at hand. Here is what is the final bill, drawing people together. So, as this final call comes to a close, I want to echo what many members of the House have been doing, which is to wish everyone a merry Christmas and a prosperous New Year. It has been quite a busy and formidable year for all of us, regardless of the politics. [Interruption] It has been prosperous—I think I have got that in about four times so far.

💬 Tim Macindoe: You’re prospecting for oil.

Oh, prospecting—yes, I did not realise the etymology of that. I think, actually, for all of us it has been an immensely intense year, and a big part of that is ultimately in relation to it having been an election year. I think there is something in it too that here we are, in this final speaking slot on a simple bill, taking up a good few minutes on it—burning the oil, if you wish.

💬 Grant Robertson: You’ve lost them, Simon. You’ve lost them.

💬 Dr Megan Woods: Sit down.

I know; I know. It is shocking. I feel my majority in Tāmaki shrinking, and I am getting very, very worried.

💬 Joanne Hayes: Don’t worry.

I do not worry. It is in this spirit of thanks. Also, if I am going red, it is not related to anything else other than the season.

💬 Tim Macindoe: You can stop gushing.

All right. With thanks to the House for what has been a very good and successful year, a busy year with the election, can I add my thanks to all those who make Parliament tick over and work as well as it does. There may be 120 of us here as MPs, but there are hundreds and hundreds of people who make this place work—from the cleaners to the messengers, to the security staff, to the library, and to the Parliamentary Service. In closing on this 5 or so minutes’ dictated oration, may I wish the House and you, Mr Speaker, a merry Christmas and a happy New Year.