Climate Change Response (Removal of Transitional Measure) Amendment Bill

I move, That the Climate Change Response (Removal of Transitional Measure) Amendment Bill be now read a first time. This bill phases out one of the temporary measures we introduced in 2009 to manage the initial impacts of the emissions trading scheme (ETS) on businesses and the wider economy. The one-for-two surrender measure means that non-forestry ETS participants have had to submit just one emissions unit for every 2 tonnes of carbon dioxide or equivalent greenhouse gas that they emit. That was extended in 2012 while New Zealand continued to recover from the global financial crisis. As I have been subtly signalling for some time—

💬 Chris Hipkins: Ha!

—yes, I know; I do not do subtle—it is now time to start removing this measure.

The Paris climate agreement marks a new era when all countries are expected to take action on climate change. New Zealand has announced an ambitious target to reduce emissions by 30 percent below 2005 levels by 2030. As a result, our ETS must send a strong signal that we need to reduce our emissions and transition to a low-carbon economy. Businesses recognise this. Three-quarters of submitters to the first phase of the ETS review supported removing the measure. However, the strongest message I received from business was that they wanted certainty from the Government about what was happening with the ETS so that they could plan and make investment decisions.

By taking this bill through all stages under urgency, we are giving the market certainty about how, and over what period, the one-for-two surrender measure will be removed. From 1 January next year the one-for-two surrender measure will start to be phased out evenly across all relevant sectors over 3 years. The current 50 percent surrender obligation will increase to 67 percent from 1 January 2017 and to 83 percent from 1 January 2018, and by 1 January 2019 all sectors in the ETS will be at 100 percent—in other words, they will be expected to pay the full surrender obligation.

The current price ceiling of $25 per unit will remain. This will ensure businesses have certainty that the price of carbon cannot be more than $25.

The free allocation of units given to emissions-intensive and trade-exposed industries will remain. These will be increased proportionately with the phase out to protect our competitiveness. For example, if a company receives 90 percent of free allocation now, it will still get 90 percent once the one-for-two surrender measure is removed. It is important for this free allocation to remain in place. To put too much financial pressure on some businesses could mean that they close their doors. Alongside the obvious loss of jobs and the hit to the economy, it would make no sense for the products they are making to simply be made in another country with no ETS. That would make them less efficient and it may actually risk contributing more to global emissions in the end, and that just would not make sense.

Why is removing the one-for-two surrender measure important? Removing the one-for-two measure sends a strong signal to businesses that they need to invest in low-emission technologies and in forestry. It encourages the planting of more forests by increasing the demand for emissions units, which will be worth more. It takes 5 to 7 years for trees to start absorbing a decent amount of carbon, so we need that tree planting to start now. It will also reduce the potential fiscal risk that the Government may have to purchase international units at unknown, and possibly higher, carbon prices over 2021 to 2030. That will happen if the ETS and our other initiatives do not deliver enough domestic emissions reductions, removals, and international units for us to meet our target. It will also ensure that there are sufficient New Zealand emissions units available so that the markets function properly.

The phased approach, I think, is fair. It strikes the right balance between moving too fast and too slowly. It incrementally increases costs across the whole economy and supports a stable market. Removing the one-for-two measure will have a broad impact directly affecting the waste, transport, energy, electricity, and industry sectors. Households may see a small increase in costs as those energy prices and petrol prices are passed to them. Modelling has shown that for low-income families it could be around $30 for a year, and for median households it could be around $40 to $45, but everyone thinks that is actually on the high side and it is likely to be less.

The fiscal impact that is in the Budget of $360 million of positive fiscal impact over the next 4 years is based on having a unit price of $12. The unit price right now—I was just looking—is $14.48, so already, actually, there will be more in the Government’s coffers than it budgeted for, which is what we locked in a couple of months ago, when that was the price it was at. So where we are looking at is—we think it is a minimal cost to households at the moment.

With the rise in benefits that this Government has done, being the first one, there is perhaps a little bit there so that sectors can actually accept that. We actually think there is enough competition in the energy market so that, hopefully, they will not pass the whole cost on. We think we are being fair to the farmers and to businesses that do emit by giving them plenty of time so that they can phase out. Farmers will have an increased cost to them, not because we are bringing agriculture into the ETS, of course, but because they are high users of electricity and transport, and, actually, Fonterra is one of the biggest emitters. So as a consequence of that we could see there being some cost to farmers. That 3-year phase-in for us was making sure that we were being fair and keeping that as low as possible at a time when they are doing it pretty hard.

So it is with pleasure that I introduce and commend this bill to the House.

I am happy to take a call on what I am sure will be one of many calls over the course of the next couple of hours on this bill. This is to signal that Labour will be supporting this legislation and that we think this is a positive, tentative baby step in the right direction. In fact, we feel quite honoured to see this Government stand up and take its first steps in front of us in terms of doing something about addressing climate change. I only wish we had a polaroid camera here so we could have captured it for posterity.

What this bill does is a positive thing, but it cannot be seen in isolation. The message we want to give to the Government is that this cannot be a cherry-picked idea from the emissions trading scheme (ETS) review that exists in isolation. What we fear is that the Government sees the ETS as a strategy and not as the tool that it is in terms of managing our emissions. The Minister for Climate Change Issues outlined the job that New Zealand has ahead of itself in terms of meeting its international emissions reduction targets. It is a large job that New Zealand has ahead of itself in order to do this. The Minister seems to realise that we simply cannot trade our way out of this in the way that the previous Minister thought we could, and that we do actually have to do something.

Getting rid of the one-for-two subsidy within the emissions trading scheme cannot exist in isolation. If we truly want to address New Zealand’s emissions, there are some other thorny issues that we must grasp. We must grasp the issue in agriculture and the fact it is still remaining outside our emissions trading scheme. When we have an emissions profile that 50 percent of our emissions come from a sector, and we fail to include it in the tool that is charged with moderating our emissions in our economy and reducing our emissions in our economy, we are not going to have an effective tool.

I also note the price cap that is remaining there at $25 a tonne means this great free-market Government is not prepared to put a price floor of where a price cannot fall below, but it is willing to put a cap of where it cannot go. I note this figure of $25 is out of kilter with what business and industry have been saying. The BusinessNZ Energy Council put together a very good report around energy consumption in our future, modelling in 2050 on a price somewhere between $60 and $115 a tonne for carbon.

We cannot have a Government that continues to put in place these kinds of ceilings on the price of carbon because, quite simply, it is this kind of thinking—this kind of 20th century thinking from this Government when it comes to climate change—that is going to fail to see us transform our economy in the way we need to. It fails to see the opportunities that a low-carbon economy puts in front of us, the kinds of opportunities it provides for jobs, if planned correctly. The failure to put together a comprehensive range of changes to the ETS illustrates this very clearly. What we see here, also, is the ceiling of $25 a tonne. I would ask the Minister to think about putting in place an amendment, when we get to the Committee stage of this bill, to also put in place a price floor.

Let us face the elephant in the room around the hot air credits this Government let in around the same time it decided to put in place this one-for-two. It let dodgy, fraudulent credits into our emissions trading scheme, which crashed the price of carbon in this country, and made it absolutely ineffective in reducing our emissions, made it absolutely ineffective in terms of doing the things it needed to do as an effective means of being a lever in our economy to make those changes. I know we are putting this legislation through under urgency, but I really do ask that the Minister think about an amendment she could put up at the Committee stage that would see that we will never return to that place. The Minister has said that it is wrong and can never happen again, but I would like to see a commitment—a legislative commitment—that that will never happen again.

This is a Government that knew exactly what it was doing when it let fraudulent hot air credits into our emissions trading scheme. It is a Government that sat back and let it happen, and crashed the very thing we could be doing to reduce our emissions trading. One of the implications of allowing those fraudulent credits into our system is that we now have a backlog and we have a lot of banked Kyoto credits within our emissions trading scheme. These have to be used before the Paris Agreement comes into force in 2020.

This is make-up on what this Government knows it has done wrong. It cannot simply enter into the post-2020 world—when the world must show a commitment and New Zealand has to lift its game with the number of banked credits it has sitting there. The Government has to remove around 250 million tonnes of carbon dioxide between 2021 and 2030 under the Paris Agreement, and will, at best, get 50 million tonnes of that removal out of new plantings. The Government knows the emissions trading scheme. The ability to trade is something it absolutely has to have in place, and it has to be in there.

One of the things, when we are talking about the price of New Zealand Units and we are talking about the $25 cap—which, of course, the Government now speaks of with great pride, saying that you cannot buy the dodgy, fraudulent hot air credits that it previously let into our system. This was not because the Government changed its mind and decided it was wrong and we should stop the trade in this kind of dodgy credit, it is simply because New Zealand did not enter into Kyoto II, the second protocol. But in a post-Paris world, what we will see happening is that New Zealand will once again start trading on the international market in terms of carbon credits.

New Zealand had a highly conditional target when it agreed in Paris what was going to happen. One of those conditions around our agreement was the transparency work that needed to be put in place to ensure that international credits both were environmentally sound and would reduce carbon within the atmosphere somewhere in the world, which is what the dodgy credits we were buying in simply did not do. For New Zealand, the Minister has gone to New York and she has signed the Paris Agreement, and she is now saying that we can ratify that treaty. But we have to be absolutely sure that transparency work is done if we are going to have a functioning and effective ETS.

For Labour, climate change and addressing climate change offer real opportunities. If we do this right and do not put in place false mechanisms, we have an opportunity to transform parts of our country, to create industries, and to create jobs. And, most importantly, if we start doing the planning now, and we do that planning right, we have the opportunity to put in place the skills training that is going to be required for a low-carbon economy. A free-market approach that just waits to see what happens, which we are seeing from this Government in regard to climate change, is going to leave ordinary people high and dry. What we are committed to is a just transition when it comes to climate change to make sure we seize the opportunities, and that not one person gets left behind.

We need to do more on climate change. New Zealand must reach its targets. This is a positive first step, but it is in no way enough. It needs to be accompanied by far more action on climate change, and I look forward to the contributions from speakers coming up to tell me what other parts of the ETS review they will be putting in place. Why not a carbon floor as well as a carbon ceiling? What are the things we are going to do around agriculture to finally address the issue that will see a real reduction in New Zealand’s greenhouse gases? These are the hard questions New Zealand must face, and these are the hard questions Labour is willing to face.

Buried in amongst that bluff and bluster and hot air from the Labour member Dr Megan Woods, who has just resumed her seat, was an endorsement of this bill. I am delighted that the Labour Opposition has seen fit to support this legislation. It is important legislation. This afternoon we have had Bill English deliver his eighth Budget. It was pragmatic, it was sensible, and it was good for New Zealand. This too, this transitional bill that we will put through the House under urgency, is a phased, pragmatic, practical approach that is so much the hallmark of this administration.

I listened very carefully to the introductory speech, the first reading speech made by the Minister, the Hon Paula Bennett and I thought that she made excellent points about how it came to be that this transitional arrangement was put into effect in the first place. It is worth just reminding the House about why it is that we are here today changing out of the situation that was put in place in 2009. Back then, of course, we were right in the very deepest, darkest phase of the global financial crisis, and it was a troublesome and very concerning period of time, not only for New Zealanders and New Zealand business people, but indeed for the whole global economy. At that stage this Government took some very pragmatic and sensible steps, many of which we have seen the rewards reaped today, in the reading of Bill English’s eighth Budget. This was one of them.

This was a measure that was taken back in 2009 to ensure that businesses that were struggling to ensure that they kept people employed, that they kept the economy ticking over, and that it kept going, were not put in an unreasonable position of being pressured so that jobs would be at risk. The time now has come when the economy is ticking along very nicely. We have heard from the Minister of Finance, Bill English, today that we have got growth at 2.8 percent and it is projected to be 3 percent for the next several years. That is a time when this transitional phase can properly and sensibly be removed.

This is a Government that takes its obligation to our environment and our obligation to world affairs, in terms of commitments that we make to climate change, very seriously. We also take very seriously our role in ensuring that we get the balance right between ensuring that our business people can create jobs and build an environment where people can prosper, grow, and thrive—so it is about being pragmatic, about being balanced, and about having an approach that is right for the times. From tourism through to agriculture and horticulture, our natural environment supports almost all of the things that we do. So protecting the environment and protecting jobs is part of what this Government sees as very important.

I want to go back, just for a minute or two, and reiterate what the primary purpose of the original creation of this situation was. The current 50 percent unit cost was established to ensure that businesses were not going to be unduly put at risk. So now, from 1 January next year, the current 50 percent unit cost will increase to 67 percent, then to 83 percent from 1 January 2018, and then all sectors in the emissions trading scheme will pay the full cost from 1 January 2019.

It is fair to note that the Government had options in terms of how it would approach this transition. Many of those options were considered before this piece of legislation was brought to the House. One of the options was just simply to go from the current situation back to a full cost situation, in one big leap. But we are, as I have said, a pragmatic, sensible Government and we think this phased approach will be good for business, good for the economy, and good for our environment.

The Minister made, I thought, a very good point in noting that currently the unit cost for units is $14.48. The expectation is that the Government’s books will benefit by about $356 million over the next 4 years. That is a figure that is based on a unit price of just $12. The expectation is that that current price of $14.48 will probably get to somewhere in the region of $16 to $18. It is at that point that there will be an absolutely terrific incentive for our foresters to start planting trees—to start creating forests and growing trees. That is really what all of this is about. It is about making sure that we get the balance right, that the pragmatic approach is right, that it is sensible, and that it is practical.

Last year the Government undertook a submissions process. A series of meetings and consultations were held around the country, and 75 percent of the submitters who were involved in that consultation process said that the one-for-two model should be ditched. Those meetings of course included iwi, business people, and the full gamut and range of New Zealand enterprises. Most of them said that the price was too low. Part of the reason that we want to change this is that the current price is too low. The Minister has made it very clear, right from the first day of her appointment to her new ministerial role, that this phase-out would occur. It was really just a question of how the phase-out would occur, what the nature of it would be, what the structure of it would be, and now, in this legislation, we have that ready to go.

This is a good piece of legislation. I am looking forward to listening to other speakers. I will be interested to see how other parties in the House decide to jump on this legislation, to see where they want to put their support, or not. I will be listening carefully to other speeches. I commend the bill, at its first reading, to the House.

This bill warrants the Government a tiny pair of flip-flops. It is a U-turn, but with a small “u”. It is a tentative first step. As my colleague Dr Megan Woods noted, it is like the first steps of a child, and it is a shame we do not have a polaroid camera here to catch the moment when that first tentative step is taken. We support the idea that a tiny pair of flip-flops for that tiny first step should be issued from this side of the House.

It is a way for the Government to signal that maybe, one day—one day maybe, but let us not rush—it may develop a plan to transition to a low-carbon economy. It may signal a tentative—a tentative—tiny, incremental signal that it wishes to increase the value of New Zealand’s economy over time by stepping into the high-value space and away from what we have always done. Hopefully—hopefully, in the future—the Government is thinking there is another way, but it is not really signalling in any strong or assertive way that it is going in that direction.

Let us not forget that the emissions trading scheme, when it was introduced, was the first “all gases, all sectors” emissions trading scheme in the whole world. New Zealand once had ambition. New Zealand once wanted to lead the transition to a high-value economy that was low carbon. We wanted to lead. But now we have a Government that has stepped away from that. It has said: “No, let’s sit with the status quo. Let’s look after the entrenched interests. Let’s not let the costs lie where they fall. Let’s subsidise polluters.”

Well, here we have a small step, saying: “We’re not going to step away from the $25 cap. We’re not actually going to have a real market. We’re not going to step away from intensive-style agriculture. We’re not going to have a real cap-and-trade scheme. We’re not going to put a cap on it, for goodness’ sake. Let’s have a cap-and-trade scheme without a track. We don’t really believe in the market, because then we wouldn’t be able to support existing interests.” This is a Government that is taking a tentative first step. It is making a tentative signal that is saying: “One day we might send some stronger signals that we really believe this stuff.”

But we will be supporting it, because it is important to support those first steps. It is important to get behind them. They may be a precursor to something more significant. We know, of course, on this side of the House that the way to get to that more significant step is to change the Government. That is the plain and simple way. These few tiny, tentative steps are certainly not a big sprint in the right direction.

This Government no longer seems to be ambitious for New Zealand. It seems to have lost touch with the aspirations of middle New Zealand. The Government seems to have focused only on the interests of the wealthiest few. We have seen that, of course, in the Panama Papers. We have seen a Budget that does very little to address the increasing gap between the cost of schooling and the money that comes in from taxpayers to support it. We have seen in this Budget a cap on the operations grant. We know that the real effect of that is that parents will be paying more “donations”—voluntary donations—to keep schools afloat. That is what this Budget means. That is what this Budget means for middle New Zealand. It means more costs for schooling.

Of course, we know that this Budget also means fewer operations. We have seen a health spend that is below the increase in health costs. Here we have, in the space of carbon emissions, again, something that really does not go the whole way. It is not even addressing the current issue in a serious fashion.

The interesting thing, if you look through the regulatory impact statement on the bill, looking at the analysis that the Government has done on this, is that it signals that the cost of this is 0.1 percent of GDP in 2020. That is the level of ambition—0.1 percent of GDP in 2020. Eight hours’ worth of GDP will be sacrificed—8 hours’ worth of GDP. That is the signal we are sending as a country. We are prepared to sacrifice 8 hours of GDP to move our country in the right direction. But, in fact, it really is not a sacrifice at all because, of course, we know that as we shift away from that old economy and into the new economy, there are some real advantages that could be taken advantage of. There are some real opportunities, I should say, that can be taken advantage of.

But this Government just does not seem to get that. It does not seem to see the opportunities. It seems much more comfortable with managing decline. Of course, in the last year we have seen what has happened to wages in New Zealand. Per person, wages in New Zealand were absolutely flat last year—absolutely flat. As costs rise, there was no wage increase for 43 percent of New Zealanders last year. Across the board, per person, we have seen absolutely no increase in wages. The only thing that is pushing our economy along right now is immigration—it is the only thing that is pushing our economy along. That is not a plan. That is simply not a plan.

Here we have from the Government little timid steps; this is not a Government that will push us in the right direction. As my colleague Grant Robertson has said, this Budget is like applying a sticking plaster to a compound fracture—that is what this Budget is. I do not think that he is understating it. In this area, it is much the same. We have got a serious issue where we need to transition New Zealand’s economy to the high-value future that is on offer. Instead, we are getting further and further and further behind our Western competitors, who are out there in front, developing the intellectual property, rewarding their innovators, and seeing the opportunity and grasping it.

They are not stuck in the past like New Zealand seems to be, under this Government. They are not protecting vested interests and they are not protecting those who are already mega-rich. They are out looking for the brighter future, looking to reward those who innovate, and looking to make sure the incentives are right for those who innovate. They are looking to take their economies forward so that they can afford the kind of health care they would want, so that they can afford the type of education they would want, and so that they can afford a secure society with a good rule of law—all of those things that taxes pay for.

But is this Government doing that? No. It seems content to manage decline, and that is out of line with the aspirations of middle New Zealand who actually want to see themselves better off. We know, for example, that of the proportion of wages that middle New Zealand received under the last Labour Government as the economy grew—which it actually did in real terms by 25 percent under the last Labour Government—more than 50 percent of the gains went to working people. Under this Government it is down to 37 percent—just 37 percent of the returns from the limited gains are going to working people. The gap between rich and poor is growing. This Government seems, in the emissions trading space, determined to protect entrenched interests. It seems completely unwilling to help shift to the new economy and to the opportunity that is out there for new technologies.

Labour will support this first step, but we cannot say that it fixes the emissions trading scheme, which the Government broke. Let us remember that as soon as it got into Government it got rid of the renewable preference for new generation because it was not comfortable with the thought that fossil fuel plants might not be added to our energy-generation mix. It got rid of the minimum obligation target for biofuels, which was not going to cost the country any more but was going to secure a future for the biofuels industry. Then, of course, it diluted the emissions trading scheme. Here we have a small step towards reinstating a small part of it.

This is a Government that is failing to invigorate the economy. We have seen also today, of course, in terms of invigorating the economy, another Byzantine grant scheme from Steven Joyce that will be about him selecting who gets what for his photo opportunities. The Government simply does not have the gumption to put in place a research and development tax credit scheme like the rest of the world recommends—like the literature recommends. It does not want real innovation; it wants to control where the money goes. Is that not the story of this Government? It wants to control where the money goes, and it certainly is not going to middle New Zealand.

Most New Zealanders will not find themselves better off as a result of this Budget. Most New Zealanders in the future will not have the opportunities that they could have if this Budget and this bill actually moved us towards an innovative new economy, if it gave the right signals about shifting away from our old dependency on carbon, and if it rewarded those in the agricultural sectors, rewarded those in the forestry sector, rewarded those in the technology sector, and rewarded anybody who wants to innovate and look toward the new world. Instead, it seems intent on preserving existing interests: the interests of the wealthiest few. That is the story of this Government.

We will, as I said, be supporting this, but on the basis that it is a tiny, tentative first step. It is 0.1 percent of GDP in 2020 that is up for grabs here. The opportunity, of course, is much bigger if we were to send a stronger signal than this Government is prepared to send. The majority of our emissions are in agriculture. This measure here is a tiny first step. Although we will be supporting it, we could be doing so much more, as a country, that would provide great opportunity for New Zealanders in the future.

I rise to take a short call on this Climate Change Response (Removal of Transitional Measure) Amendment Bill. I would like to follow on from my colleague Mr Scott Simpson, who is the chairman of the Local Government and Environment Committee, when he referred to this piece of legislation and this wonderful Budget recently delivered by the Hon Bill English as “pragmatic”. I would like to add a word to that, that word being “balanced”. I think that this is a very balanced piece of legislation. It is a balanced way to move the emissions trading scheme (ETS) forward and to meet our international obligations without shirking our duties to our own people.

What I want to say is that the members opposite seem to fail to remember that this scheme was brought into play—the one-for-two scheme—because of the global financial crisis. The reason that we brought it in was we wanted to support our people and we wanted to make sure that they had jobs during that time and could generate money for their families to support them. So this was a very pragmatic approach. It was a very balanced approach to allow businesses to move to meeting their obligations in respect of the ETS, but not to be militant in a scheme that would mean that people would lose their jobs. At the end of the day this is now a balanced way of phasing out the one-for-two scheme that allows businesses to move themselves forward to meet their obligations over that 3-year period. I think that that is a positive way forward because this is about protecting the environment, acknowledging climate change, and moving us forward in respect of our international obligations, given that we are an Island nation with a very large coastline, but we do need to remember our people.

If you look across what this Government is doing, we are being balanced. We are a Government that cares about people. We care about our people having jobs, being productive members of society, and having money to spend on their families. If you were to be militant with an ETS, jobs would just not be on the table. We would not be providing all of these jobs for our people out there in our sectors with the growth in tourism, with the growth in manufacturing, and with the growth in agriculture. We simply would not have that. Look, this is a pragmatic approach to phasing the one-for-two scheme out, but businesses have time to adjust. I think that is a balanced way forward and I support this bill.

I am always fascinated to listen to Government members speak about their balanced and sensible approach. This is the approach where they are just weighing up expanding the economy and jobs versus destroying the planet, and coming down somewhere in the middle, so that they have a sensible balance between half the jobs and burning half the planet. This somehow gets the balance right, as if those two things were somehow isolated things that were not in same biosphere.

Let me give Government members just a quick insight into how this works: jobs happen on the planet, right? So when you have an enormous drought like the one that we had in 2013—the worst drought that we have had in 60 years, which wiped $1.5 billion off our economy—jobs were lost. That is the cost of climate change. When the worst storm in 70 years happened—in the same year that that drought happened—30,000 houses in Wellington lost power and 6,000 of those houses lost power for a week and there were small businesses going under because they did not have electricity. That is jobs that are lost. There was $31 million worth of insurance claims as a result of that storm.

Last year Whanganui and Dunedin South were under water—huge floods. Every single year there are increasing numbers of droughts and storms and fires and floods. All of those come at an enormous cost to the economy and to these jobs that the Government says it is protecting, while taking this somehow balanced approach to destroying the atmosphere.

Let us just be really clear: we have an emissions trading scheme, and the purpose of an emissions trading scheme is to reduce emissions. In the time that we have had the emissions trading scheme, which coincides with the time that this Government has been in office, New Zealand’s net greenhouse gas emissions have increased 19 percent. They have increased faster than most other parts of the planet in one of the few countries that has an emissions trading scheme designed to do the precise opposite. It is a massive and total failure of public policy.

It would have been more honest, Mr Simpson, if you had come to office and simply canned the scheme completely, and said: “We don’t believe in it. It’s obviously garbage and we’d much rather jobs than a biosphere that we can continue to live on.” You hide behind this idea that you are somehow pragmatic and sensible.

Let us just get clear what this bill would do. In removing the two-for-one subsidy the New Zealand Institute of Economic Research, the Government’s own research, says that this will lead to a reduction in emissions of 0.7 percent in the year 2020. That is against a business-as-usual scenario, which the Ministry for the Environment projects will see our emissions increase by 96 percent above 1990 levels by the year 2030. Let me just restate that: our emissions—gosh the Government benches have gone very quiet—are projected to increase 96 percent above 1990 levels by the year 2030, and what this bill does is it seeks to reduce them by 0.7 percent. So this bill will make an infinitesimal difference to an extraordinary expansion in our greenhouse gas emissions, because nothing else is going to change. This bill does nothing, except remove the two-for-one deal. So it is not even a half measure; it is a 0.7 percent measure. It does not get us halfway. It is not even a half measure.

If you actually wanted to reduce emissions, here are some things that you could do. You could have not made the decision to allow the Huntly coal-fired power station—I beg your pardon, Mr Speaker; here are some things that the Government could have done if it actually wanted to reduce emissions. Since the Government made the decision to allow the Huntly coal-fired power plant to continue until after the year 2020, it has been burning coal every single day. And every day that Huntly burns coal it makes up 5 percent of our emissions profile.

So what this bill will do is that in the year 2020—4 years from now—it will reduce our emissions by 0.7 percent, at the same time as the Huntly power station adds 5 percent to our emissions on a daily basis. This is a pathetic measure. It is not even close to the scale of what needs to happen if New Zealand is actually going to reduce its greenhouse gas emissions.

The Government wants to reduce our greenhouse gas emissions by 11 percent below 1990 levels by the year 2030. The Government’s own agency says that our emissions are going to continue to increase to the point where they are 96 percent above 1990 levels by the year 2030. This bill—all it will do is reduce them a tiny, tiny amount. So it is an absolutely pathetic measure.

Last year, when we were trying to work out—the Government did its faux consultation exercise around the nationally determined target, which led to the 11 percent target of reducing our emissions below 1990 levels by the year 2030. In that exercise the Government looked at only the cost of doing something about climate change. It did not look at the benefit, at all, and it did not look at the cost of doing nothing. Those costs, which I have already outlined: $1.5 billion wiped off our economy from that drought, and millions and millions—tens of millions—of dollars’ worth of insurance claims from floods and storms. And that is just up until now. You accumulate those costs over the course of the coming decades. It is a massive risk to our economy.

Furthermore the economy carries a risk of something like $3.5 billion to $7.5 billion if we fail to meet our emissions reduction target. We will have a fiscal cost to Treasury—they are all looking down at their knees now—of $3.5 billion to $7.5 billion of risk if we fail to hit our targets.

💬 Scott Simpson: What were the numbers?

They are in the regulatory impact statement. There is a $3.5 billion to $7.5 billion economic risk if we fail to hit our targets, and—get this; I am going to say it again—a 96 percent increase in our emissions above 1990 levels. So there is a colossal risk to the New Zealand economy that is not being addressed by this bill.

If you actually wanted to reduce greenhouse gas emissions, you would close the Huntly coal-fired power station. If you actually wanted to reduce emissions, you would do something about the way that we make decisions about land use and forestry and agriculture in New Zealand. The Minister, in introducing this bill, did talk about spreading the cost across all sectors, but it, still, subsidises and excludes the single most polluting sector from the emissions trading scheme. So there is still an enormous subsidy going towards agriculture and other polluting industries, and that is putting all of the cost on to the other productive sectors of the economy. There is a huge cross-subsidisation going on, and a massive skew in investment as a result of that subsidy to that portion of the economy.

If you actually wanted to reduce emissions, you would not have a cap of $25; you would have a floor price of $25. The maximum amount should not be $25 per tonne; it should be the minimum amount. I note that France is just putting in place a NZ$50 per tonne price on carbon. So France is actually leading the way, and, once again, New Zealand is trailing around in the background, going: “Oh, isn’t it so hard. We can’t possibly do anything. We’re just so small.” It is really quite pathetic.

If you actually wanted to reduce emissions, you would have good policy. We should have an independent, non-political climate commission, as was set up in the United Kingdom, so that good public policy is decided, or guided, by the hand of good science, not by politicians who are out protecting vested interests from the sectors that they represent. And the third thing you would do is you would deliberately lead on investment, innovation, and research and development in the green economy. You would be doing, again, what other countries have done—what the United Kingdom and Australia have done—in setting up green investment banks, which have seen a huge inflow of private and public investment into the green economy, which is of massive benefit to those countries.

The Green Party will, of course, be supporting this bill. We do hope that the Government listens to some of the arguments that we have outlined, and actually does something serious about climate change in the very, very near future.

New Zealand First will also support this bill, because it is acceptable as far as it goes, and, in fact, it does not go very far. I accept what James Shaw has just said and the figures that he gave. In particular, the less than 1 percent contribution that it will make by 2020 to New Zealand’s emissions profile is very sobering. The reality is that the bill simply brings to an end a transitional provision that has come to the end of its useful life and should probably never have been there in the first place. So this is hardly the leap forward that some members opposite me here tonight have said it is.

Today’s Budget actually is overall best described, I think, as a “band-aid Budget”—a boring band-aid Budget, at that. It is a boring band-aid Budget. The protests from the other side of the House are not appropriate, because that is how the people of New Zealand will see this: a boring band-aid Budget. This bill is the smallest band-aid in the package that is put forward in this pathetic Budget. In fact, this particular measure could hardly be smaller and could hardly be more minor. New Zealand First actually has little faith altogether in the effectiveness of the emissions trading scheme (ETS) as a means of genuinely addressing New Zealand’s climate change obligation, now committed to as a result of the Paris accord. We know that as a result of that accord what we need to do now is urgent and what we need to do now must be comprehensive. That is the obligation we have, and that is what many people expect from the Government, but so far it is just this very minor, pathetic little band-aid measure.

If the ETS is to have any chance at all in making any contribution to the Paris obligations, then, of course, this bill is necessary as an extremely minor, less-than-one step forward to phase out the unfortunate, transitional, one-for-two surrender obligation measure of 2009 from the emissions trading scheme, so that realistic pricing can ultimately be achieved. That is what the original measure did; it actually put a block on that. This will help to free that situation up so that at least we will get a move towards realistic pricing.

The reason, however, why this bill is just one of the minor bandages in this band-aid Budget—a very minor step forward—is that it is actually hugely outweighed by several very large steps backwards that this Government is currently involved in. These include, first of all, a failure to act at all in any genuine way towards taking real steps to carry out our Paris obligations. The target, as the Minister said, is 30 percent below 2005 emissions by 2030. That is a fairly big bite for New Zealand to take, and I am glad that we are making that attempt, but if we are going to get there we actually have to do something about it, and all we hear from the Government is that it is planning to plan for it—planning to plan for it. That is pathetic. The Minister gave no indication of any real steps to be taken at all, while at the same time there is a failure to act to reduce dependence on fossil fuels in New Zealand, apart from a rather pathetic package announced by Simon Bridges recently to encourage the take-up of electric cars that was universally regarded as pathetic and inadequate.

In addition to that, there is no encouragement for New Zealand freight to move from clogged roads towards an underutilised and under-maintained New Zealand railway system. That is pathetic as well. In fact, all we have got in this Budget is a very minor $190 million tranche of funding for rail in the near future. That is an absolute drop in the bucket compared with the huge programme of reinvestment that is needed to reinvigorate New Zealand rail and to make it competitive with the road transport industry. So those are the steps backward. That is the neglect that this Government is guilty of at the same time as it takes this extremely minor band-aid step forward.

New Zealand First’s climate change policy seeks a much more comprehensive strategy than that. Planting trees can help, and we would certainly encourage that, but it will never be enough. We think that transport is the first major area that New Zealand needs to be taking as a step towards achieving its Paris obligations, but we are getting nothing from the Government about that—nothing other than a pathetic $190 million provision for New Zealand rail in the current Budget.

We all know—every party and every person in this country—that agriculture is the emissions area that must be addressed early and comprehensively by New Zealand if we are to have any hope at all of meeting our targets. For that, we need a strategy-based approach based on good research. People—farmers and others involved—will need to know the actions they can actually take, as a result of Government leadership and Government investment and research, so that real and effective measures can be taken as far as agricultural emissions are concerned. This is New Zealand’s most critical and urgent matter as far as the need for action on climate change is concerned, but we are getting nothing at all from this Government other than this pathetic measure.

New Zealand First wants a much more strategic approach, with clear targets backed by a comprehensive raft of regulation, so that we get a level playing field and so that we get a science-based approach that will be effective for New Zealand business and New Zealand agriculture. That has to be done in consultation with them. That has not happened either, as a result of Government inaction, and it does need to happen.

New Zealand First will support this pathetic little bill, which is necessary, but what we wanted to see and what New Zealanders want to see from the Government is much, much better leadership and real and effective actions—real and effective actions—and genuine plans, strategies, and targets towards achieving New Zealand’s Paris obligations for climate change. I hope that in the future we will see that, and I hope that we will hear from Government members opposite something better than we have heard so far in their speeches, something that will indicate some genuine commitment and some real actions, rather than just a pathetic little bill like this.

E Te Mana Whakawā Tuarua, tēnā koe. Tēnā koutou katoa e ngā mema o Te Whare. It is a pleasure to follow on from Denis O’Rourke, who has just resumed his seat. I was surprised that he brought such a level of modernity to the debate given that he generally adheres to Victorian views on most of the subjects he intervenes on in this House.

This Climate Change Response (Removal of Transitional Measure) Amendment Bill is a very good one, and I would like to congratulate my colleague the Hon Paula Bennett, the Minister for Climate Change Issues, who has introduced this piece of, I think, positive legislation.

We take the environment and our commitment to it very seriously on this side of the House. It is a blue-green approach and it represents, I think, a very sensible balancing act in that we are not immediately launching with the full force taking effect; we are, in fact, phasing in a reduction in the two-for-the-price-of-one that currently exists for carbon units in certain industries. We are phasing that in over a 3-year period at a rate of 67 percent next year, 83 percent in 2018, and 100 percent in 3 years’ time.

I would point out that agriculture is still not included in the emissions trading scheme, but there will be a few costs from this measure for those who are participating in our vital agricultural economy. For instance, although dairy farmers will not be paying for emissions from their animals, Fonterra does have some emissions related to the coal-fired drying units, for instance, the electricity consumed in its plants for producing the dairy products—which are such valuable export commodities—and also for transport and trucking. So we have some estimates here for the costs that might be imposed of around $265 a year in 2017 for sheep and beef farmers, going out to $795, and perhaps a little more for dairy farmers, with $690 in 2017. But I think this is a relatively small price to pay for something that will cement New Zealand’s clean and green reputation on the world stage and allow us to continue to be a powerhouse in tourism to attract those high-value tourists who really do value a clean and green environment, which is what we have to offer here.

I welcome the support from parties opposite who will be supporting this bill through, and I commend it fully to the House.

The next call is a split call. Dr Kennedy Graham—5 minutes.

The stated purpose of this bill is to amend the Climate Change Response Act 2002. The stated purpose of the Climate Change Response Act 2002 is to enable New Zealand to meet its international obligations under the UN Framework Convention on Climate Change. The stated purpose of the UN Framework Convention on Climate Change is to stabilise carbon concentrations in the atmosphere within a time frame that will prevent dangerous climate change. It is demonstrably clear that the logical flow of those stated purposes will not be met by this puny bill before us on climate change.

The Government members across the floor, in receipt of their notes, which were handed out just before the speech, have used the following phrases designed to capture the hearts and minds of the voting public: “get the balance right”, “pragmatic, sensible Government”, “balanced measures”, and “policies right for the times”. The balance is not right, it is not pragmatic, and it is not sensible. It is imbalanced, when it comes to climate policy, and it, surely, is not right for the times that a quarter of a century after the UN framework convention we have these baby steps, as Megan Woods put it—baby steps removing a one-for-two obligation set up “as a transitional measure”, to quote the bill, to get businesses through tough times from the global financial crisis in 2008 and 2009 and then it was continued in 2011.

If the purpose of this Government’s climate policy is to calibrate policy in a way that businesses, particularly, do not feel any obligation to move in reducing carbon, whether it is the global financial crisis or the new crisis in 2 or 3 or 4 years’ time, it will, by definition, not succeed. It is not pragmatic. Let me assure members that your policies, colleagues, will lose jobs, will hurt businesses, and will hit the families—the three objects that you state the Government’s policies are designed not to do.

The global emissions in that period of time have increased from 32 billion tonnes to 50 billion tonnes a year. New Zealand’s emissions over that time have increased from 67 million tonnes to 83 million tonnes, or so. Since this Government took over, they have increased by 19 percent. Why have they increased by 19 percent? It is because of those transitional measures taken in 2009; because of the switch from a one-for-one obligation to a one-for-two obligation in 2009; because of an insistence on continuing with free allocations subsequent to 2009, resulting in 65 million units being freely allocated; and, above all, because of the insistence, this blind devotion, against all logic—as was pointed out to Ministers through question time for 6 years—to insist on allowing the hot air coming into New Zealand by way of credits, emission reduction units, from Ukraine, Estonia, and Russia, which reduced the international price from $20 to 45c.

Yesterday—and I will finish on this, if I may—we were assured by the Minister that only 26 percent of the credits surrendered were of those and that the rest “had environmental integrity”. So we are at the moment, under the Government, only 26 percent corrupt in our policies.

As I sat there listening to the Government’s Budget speech this afternoon, all I could think was: “Is that it? Really, is that it?”. Here we are, under urgency, debating two bills, and now I am thinking: “Is that it?”. Is that all that those members can really come up with when we have a housing crisis—no, we are not debating the housing crisis. We have got critical funding shortages in health and education—no, we are not doing anything about any of those. We are here talking about increasing the price of cigarettes—which we will get to later on—and this bill, the Climate Change Response (Removal of Transitional Measures)—or “Measure”—

💬 Grant Robertson: Only one.

—Amendment Bill. That is it. It was one measure, and that is it. That is the total extent of the Government’s urgent agenda following this year’s Budget. There is nothing—nothing—about those critical issues that matter to New Zealanders. The “compilation Budget”—it is like a compilation album. That retro album, with the same old tunes you have heard time and again—that is what this Government’s Budget was. Of course, compilation albums normally come out before the band folds, because it has run out of new material, and it is about to—

💬 Grant Robertson: Out of ideas.

It is out of ideas and it is about to pack up shop. The one surprising thing about this is that the Government is doing anything about climate change at all, because, of course, we know that there is still a bunch of flat-earth believers over there who fail to accept that climate change is a reality. Of course, they are propped up by the ACT Party, which makes it its central thesis that climate change is not a reality. It has voted against most of the measures in this House that would actually do meaningful things to address the challenge of climate change. I know that personally, because the first member’s bill I introduced into the House would have stopped new electricity generation in New Zealand coming from non-renewable fossil fuels. And what did the National members do? They voted against it. A bill that would have had a meaningful impact on New Zealand’s emissions because it would have reduced the prospect of new emissions coming from electricity generation—they voted against it.

Every significant piece of legislation that has been proposed by Labour or by the Green Party or by any other party, National has opposed it. The emissions trading scheme—the first thing it did when it became the Government was to water it down. It watered down the emissions trading scheme in its very first year in office. That says everything about its commitment to dealing with the challenge of climate change. This is a Government that still fundamentally does not believe in climate change. It does not accept the realities of climate change. So although it is welcome that it is doing this one small thing, which will make a difference but not a very big one, there is still nothing in this year’s Budget that will address the really big issues around climate change.

But then National does not have anything in this year’s Budget that addresses the really big issues around just about anything else, so why should we be surprised by that? There is very little in this Budget. There are no surprises and no substance, actually, in the Budget of any great note. It is just those members continuing on, ignoring all of the major problems and major challenges facing New Zealand, burying their heads in the sand for as long as they possibly can, and hoping that someone else will fix up the problems. Well, actually, someone else will. It will be the next Labour Government, and that will happen in 2017 after the next election.

I just want to disagree with that member’s point that this Government does not believe in climate change. Of course we do—that is why we are in here today. We are taking a pragmatic, a sensible, and a responsible approach to climate change. It is a balanced view. I know that there are people in this House who do not like those four words. They do not understand that if we went out and put in a very harsh process to the phasing out of and eliminating the one-to-two obligation, then we would wipe out a lot of businesses, and it would not be very good for the economy, would it? No, it would not be.

When we start looking at the dairy farmers, if we went in and took a hard approach to them, they would be paying and paying and paying. So far, we have not heard from anyone on the Opposition benches about the value that the dairy industry adds to the economy of this country. As we start going through, if we look at the phased approach, in the first year we are looking at 67 percent by 1 January 2017, and then 83 percent by 1 January 2018, with all sectors paying full price for the emissions trading scheme by 1 January 2019.

As I say—and I am going to keep driving this home—this policy, our view to climate change response, is a pragmatic, sensible, responsible, and balanced approach, and I have no problems in commending the bill to the House.

I was expecting to debate some of the crises that we have had, and I was expecting a substantial contribution from that particular member, Joanne Hayes, and so I was surprised when there was not anything about that, and then she sat down. On this side of the House we were expecting that we would spend tonight and tomorrow debating urgency legislation that was going to fix the housing crisis and that was going to ensure that everyone who needed an operation in our hospitals would get one, and that people who were living in garages or cars would at least have some hope that they would be moved into a decent house. Instead, what we are hearing is that they are getting moved out of Auckland and instead of being homeless in Auckland they will be homeless somewhere else.

I come to this bill, and, as my colleague Dr Megan Woods has said, we are supporting it. We are supporting it on the basis that those members have finally recognised the error of their ways because—let us be straight up—this Government introduced this scheme of a one-for-two subsidy in 2009. What does that mean? It means that a business can pollute all it wants, and instead of paying the full cost it will pay half of the cost. That is what this scheme means—businesses can pollute and, instead of paying the full cost, they pay half of the cost. That does not show that this Government is serious about climate change—it certainly does not.

If this Government was serious, instead of phasing out the scheme as they are doing, it would take the issue seriously and address it right now. Instead, it is not doing anything about it today, it will not do anything about it this year, and it will do something about it next year. It does not get phased out completely until 2019. It is a signal, again—in the same way that those members have treated the housing crisis as if it was made up—that they do not recognise how serious the error of their ways is, and how serious climate change is.

I do want to acknowledge the fact that the Minister for Climate Change issues has, at least, taken this baby step. But if the Minister were to take it seriously, she would need to consider the fact that a whole suite of other activities need to take place. We have got to take seriously the reduction of our own emissions—of transitioning this workforce into a workforce of green, clean climate-changed jobs. That is what this Government has got to do.

In recognising that she has taken this baby step, I would ask the Minister to go further and work on the fact that we have also got to repair our reputation. Once upon a time, we could be proud of talking overseas about a “clean, green” New Zealand; we cannot do that anymore. At the Paris meeting last year, delegates from the Pacific said that they were disappointed that when New Zealand Government officials turned up they were not supportive of what the Pacific was advocating for. In fact, it was only because Obama and some of the other countries’ delegates dragged their feet that the New Zealand delegation then agreed to the 1.5 goal.

I say to the Minister: take this seriously. If she had heard the reports from the Parliamentary Commissioner for the Environment, she would have seen that the environment commissioner has recognised and has put up evidence to show that, already, our coastal regions are under erosion because of climate change. We cannot ignore that—that is serious stuff.

Two months ago I had the opportunity of visiting Kiribati and Tuvalu. Those islands are under serious threat. In the international arena, their representatives have spoken passionately, saying that they are the canary in the tunnel, a warning to every other country in the world, that what is happening to them is going to happen to us. The United Nations Development Programme report of 2010 identifies that among the most low-lying atolls of the Pacific—which include Tokelau, which include Tuvalu, which include Kiribati, and which include the Marshall Islands—many of those countries will be underwater by 2050.

The ASSISTANT SPEAKER (Lindsay Tisch): Come back to the bill.

I am making the point that if this Government were to take seriously the issue of climate change, then this step is not enough. It must go further. This issue is so serious that I would not even mind if those members stole Labour Party policy. I would not mind if they were to establish an independent climate commission that would establish a carbon budgeting process. I would not mind if they stole those policies because those policies are sensible and they take the issue of climate change seriously.

I heard the member who spoke before talk about business and the value of business. We certainly do value business, and, I tell you, if businesses themselves do not start planning and taking into consideration the effects of climate change on this country, they are going to have issues with where they grow their crops. They are going to have issues with transitioning the types of energy facilities that they have now into more renewable and cleaner energy sources. They need the plan, but this Government does not seem to take it seriously. It is more than just giving them the legal right to pollute; it has to be much more serious with a whole suite of other activities.

I go back to the issue I tried to raise, which I think is the key to this: the Pacific is facing this on a day-to-day basis. Here is why it is important for us. I was asked by a young person in Kiribati what New Zealand would do if Tuvalu or Kiribati were hit by Cyclone Winston, which hit Fiji. What would we do with those islands—remembering, of course, that a report was released last month showing that five islands of the Solomon Islands are now underwater? What will we do with those?

The ASSISTANT SPEAKER (Lindsay Tisch): Come back. Come back—

But this is the point, Mr Assistant Speaker.

💬 Grant Robertson: I raise a point of order, Mr Speaker. I apologise to my colleague for interrupting in the middle of his speech, but that is the second time that you have asked him to narrow his contribution down to the bill. It is a well-understood convention in this House that when a piece of legislation is dumped on the table by the Government with no notice there is some latitude, certainly in the early readings of the bill. The member is speaking about climate change—

The ASSISTANT SPEAKER (Lindsay Tisch): I thank the member for his comments. To talk about the Solomon Islands and Kiribati with water levels rising is a far stretch from talking about the emissions trading scheme (ETS) and this. I did give the member some warning earlier on. I will ask him to come back to the bill.

💬 Chris Hipkins: I raise a point of order, Mr Speaker. This is a bill that deals with climate change. The emissions trading scheme is the Government’s response to climate change.

The ASSISTANT SPEAKER (Lindsay Tisch): Exactly—thank you.

💬 Chris Hipkins: This is a—

The ASSISTANT SPEAKER (Lindsay Tisch): The member will sit. Exactly—and this is about the ETS and what is in the bill. It is all very well—and I have allowed the member to talk about the other islands; I understand those issues, just as he does—but I have asked to come back. And now I am asking him to come back to what is in the bill.

I will continue to raise that particular point because this is important and it does refer to what this Government is doing based on this legislation. It is not enough—that is the whole point—and if we do not take climate change seriously, what is happening in the Pacific will also affect this country of ours. So far this is baby stuff; this is small stuff. This issue will affect New Zealand in a significant way. I am glad that the Minister has taken this step, but I ask the Minister now to look more broadly than she is doing here and take into consideration that we need more than just what she has put in this piece of legislation.

But here is the point: we have waited with bated breath all of this time for this particular Budget, thinking—and we were all thinking—that they were going to take seriously some of the crises that this country is facing. Climate change is certainly a future crisis, but it is coming. It is coming, and it is here if you listen to the reports of the environment commissioner. Our coastal regions are being affected and local councils are trying to figure out how they pay for the roading restructuring that we need to deal with. This Government does not seem to really care about what will happen because it thinks that it will pass those costs on to somebody else.

So, again, here is the thing: giving business the right to pollute but pay only half the cost was wrong at the outset when this Government introduced it in 2009. It is wrong now to focus on this only, when it needs to take a broader approach in addressing this problem. But I tell you that the Pacific is relevant to what this country does, because if those islands are underwater I would ask those Ministers and that Government there to show me where the tent city where they are going to house 110,000 people from Kiribati should be. Show me where they want to put up the tent city where they need to house 10,000 Tuvaluans. If we approach climate change with these baby steps we are never going to get anywhere, we are not going to address the issue, and it will continue to harm not only our physical infrastructure but also our reputation.

It is an honour and a pleasure to rise in support of the Climate Change Response (Removal of Transitional Measure) Amendment Bill. Can I first just acknowledge my colleagues on this side of the House for their debate contributions so far. I think it has been a very balanced debate. I think they have taken small steps, and if I had been able to bring in a polaroid camera, I would have photographed them.

Can I just pick up on some comments from my Green Party colleagues, who said we were repeating lines to appease our voters. I think what is more important is when their colleagues, their friends over in the UK, the Green Party of England and Wales, decided that our lamb had a bigger carbon footprint than UK lamb, so it spread out its propaganda and said our lamb did not have a smaller contribution—

💬 James Shaw: I raise a point of order, Mr Speaker. I think that if one member is not allowed to refer to islands in the Pacific, another cannot refer to an island in the North Atlantic.

The ASSISTANT SPEAKER (Lindsay Tisch): I thank the member for his comments. The point I made earlier was that there was quite a long dialogue on the Pacific Islands, and I did bring the member back to that, and we have dealt with that matter. Now I am listening closely to what this member is saying, and if he goes on and spends all his time on that, I will be on my feet again. To mention a country in passing is fine. Other than that, I will move on it.

I commend this bill to the House. [Interruption]

Order! We are going to have a vote, and it will be done in silence.

Bill read a first time.

Second Reading