Energy Resources Levy Amendment Bill

I present a legislative statement on the Energy Resources Levy Amendment Bill.

SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon Dr MEGAN WOODS: I move, That the Energy Resources Levy Amendment Bill be now read a first time.

This bill clarifies the rules around royalties and will ensure that the Crown receives a fair financial return from fossil gas. The bill progresses a discrete change to the energy resources levy—that is an Act of 1976—to clarify who is exempt from the levy.

In a few moments, I’ll say more about the bill and how the amendment will support the collection of revenue from the Crown’s mineral estate, but first I’d like to explain to the House the background to the Government’s intention to introduce this bill and for it to pass through all stages under urgency. This context is important to understand why the Government is taking decisive steps, and I want to be transparent about this. All petroleum legislation, including the Petroleum Act 1937, and the Crown Minerals Act 1991 which superseded it, grant rights to mine Crown-owned minerals in exchange for a fair financial return to the Crown. The rights to extract fossil gas in certain areas are granted through licences and, more recently, permits. These are issued following the discovery of a deposit, and the licence or permit grants rights to an area that is deemed large enough to contain the reservoir intended to be mined.

There have been inconsistent approaches over time to achieving a fair financial return on the Crown’s fossil gas resources, with royalty rates dependent on when licences or permits were granted for gas discoveries. This is not uncommon and reflects the historical practice at the time those licences were granted. Licences granted under the old Petroleum Act 1937, resulting from a discovery before 1 January 1986, are subject to a royalty rate of either 5 or 10 percent. In comparison, post-1986 licences and modern permits granted under the Crown Minerals Act 1991 pay either 12.5 or 20 percent royalty rates. These rates are some of the lowest in the world.

To ensure the Crown receives a fair financial return from the pre-1986 licences with low royalty rates, the Energy Resources Levy Act 1976 imposes a levy on gas production. Discoveries made before 1 January 1986 are exempt from paying this levy. However, the use of the word “discovery” in the exemption clause could potentially lead to some confusion about whether fossil gas production from newly producing deposits within pre-1986 licence areas could be considered new gas discoveries for the purposes of the exemption. This could undermine the broader intent of the petroleum legislation to achieve a fair financial return to the Crown.

The Government recognises this is a problem and one that needs to be fixed. If this is ignored, the Crown could lose millions in revenue. I see this as a significant amount of money that the Crown is entitled to collect for the benefit of the New Zealand public. The bill will clarify that the levy exemption does not apply to gas produced from any land to which a licence relates if the licence was granted in relation to a discovery of gas that was made before 1 January 1986. This would clarify that the pre-1986 licence holders who operate on a low royalty rate must pay the top-up levy. The amendment will only apply prospectively, so it will not impact on previous payments or non-payments. This is fair, and this is reasonable.

The bill also validates past levy payments so that the public can have confidence that all past levy payments were proper and that the money received has always been lawfully collected and applied. So, to move forward, we are drawing a line under any possible confusion and are moving to ensure the regime is clear and the Crown receives a fair financial return on its fossil gas. I commend this bill to the House.

Thank you, Mr Speaker. Well, it is not a pleasure, actually, to speak on this Energy Resources Levy Amendment Bill. It’s still unclear exactly what we’re doing here. It seems a retrospective changing of the rules and, actually, natural gas—which we are really reliant on to keep the lights on in New Zealand, we’re reliant on to keep our businesses and manufacturing actually up and running. And those industries and anyone who’s investing in that area has already got very little confidence because of the sovereign risk in New Zealand when the former Prime Minister decided she wanted a good press moment overseas and decided to ban oil and gas exploration offshore in New Zealand, where we have huge resources, potentially, and large amounts of potential royalties that New Zealand could benefit from. But, in fact, I know from a personal contact—who was dealing with a banker overseas for a large project, nothing to do with oil and gas—who told me that the bank would not support that project because New Zealand used to be a low sovereign risk country. Since the oil and gas ban, it is now seen as a huge fiscal and sovereign risk because the rug could be pulled out from those businesses at any moment, because the Government will make a decision on a whim—on a whim—without any consultation. And we’ve just seen this bill, right now, and we heard a woolly speech from a Minister who should know what she’s talking about but appeared not to, telling us an explanation that doesn’t make any sense to me at this moment.

If they wanted to really do this and thought it was essential, you’d think there’d be a little bit of a take-aside, out the back in the Ayes or Noes lobby, with a bit of an explanation: “This is what we’re doing. We’ve got a problem here. We really need to do it.” But no, no; nothing from this Government on that. I mean, the lack of energy in the Prime Minister’s speech earlier on is a great sign of the symptoms and the problems going on. I think Napoleon’s sharpening his sword up, quite frankly, as we speak.

Hon Dr Duncan Webb: That’ll be Nicola Willis.

STUART SMITH: It’s ironic that they’re grasping at straws over here. The reality is that this is a very narrow bill which is attempting to change the rules retrospectively and disingenuously, and it will put another shock through the oil and gas sector, who are not actually keen to invest now anyway. It means, for every New Zealander, that the royalties that go into the consolidated accounts that help pay for all of our other services that we have will now be put at risk. Not only is it that; the Huntly coal-fired power station, which runs mostly a lot on gas as well, is burning so much coal because of that Government. That Government’s ban on oil and gas exploration has sent a shock through the system. We don’t have the exploration going on that we should have, so we don’t have the gas. We should have been burning more gas at Huntly than we are burning coal, but they won’t allow us to. That’s just outrageous.

Hon Gerry Brownlee: I’m looking at the actual bill.

STUART SMITH: Well, the actual bill’s got to—

Hon Gerry Brownlee: I’m just trying to make sense of it.

STUART SMITH: Well, yeah, I’d love to make sense of it as well. I haven’t had an opportunity to actually read it yet. But it shows how desperate they are. They don’t even show us the bill before it comes up.

Chris Penk: What a bullshit ambush.

STUART SMITH: It is a bullshit ambush, and let the record show that. I find it really strange. I just wonder why they would actually do this at this moment. I don’t know. We’ve got two very experienced former Ministers who actually knew what they were doing in the energy portfolio, the Hon Gerry Brownlee and here, on my right, the Hon Judith Collins. Both of those would know twice as much as the Minister across the way, who doesn’t seem to understand the sector, how it works, and how the people in that industry will actually see this bill. They will not like it, and quite rightly so.

I don’t know what the Minister thinks she is doing trying to increase the levy across different sectors when they had an agreement in the beginning. New discoveries are a different kettle of fish, but we’re not talking about that; we’re talking about pre-1986, and there’s going to be a top-up levy, which the Minister is putting out there. All the other providers—hopefully my colleagues are able to get through the very short bill while I am speaking to find something of substance, but I am seeing by the look on the Hon Gerry Brownlee’s face that—it’s a bit like the Minister—the bill’s got very little substance. What about you, Judith? No.

Hon Gerry Brownlee: They’re not even statute amendments.

STUART SMITH: They’re not even statute—

Hon Gerry Brownlee: It’s just the Government waving a flag, saying, “How clever we are.”

STUART SMITH: Yeah. Oh well, they are poor; they’ve spent all the money, as we’ve seen today. It is outrageous. It is such a worrying time for us in New Zealand. We have a Government that is addicted to spending—we know that—but they’ve left the books in such a state that, when we get the opportunity to sit on that side of the House in October we will find a lot of landmines in the books, I’m sure. We will wonder how we’ve got through to this stage actually keeping our head above water. I see a real risk now for us in New Zealand—already, before this bill came up—that we would suffer a credit downgrade. Now I think this sort of action is adding to that risk quite significantly.

So we oppose this bill. I take no great pleasure. I think, if there was something that would be useful to New Zealand, useful to the taxpayer, I would have been very pleased to stand up here and actually support the bill. I don’t want to be partisan for partisanship’s sake, but I’m left with little choice, having not been given the courtesy of any sort of a heads-up on this bill telling us why they are in trouble. Actually, it makes me really suspicious. Perhaps things are far worse—far worse—than we imagined. I’m not sure how we’re going to find out just how bad this is in the coming days, but I think that the Minister’s woolly speech actually gives us a—

Matt Doocey: No select committee.

STUART SMITH: Yeah, no select committee, and this is a time when a select committee—we could have accommodated a select committee overnight if it was a desperate measure to get some feedback from the industry. But no; no opportunity for that. Why? Are they afraid of something? Afraid of too much information getting out? I think that’s probably what it is. That’s why we wouldn’t get a heads-up. Why give us a chance to actually see what the real reason is behind this bill! I don’t know what it is. Neither do any of my colleagues. I’m not sure what we’re going to do with the—

Chris Penk: The ink’s drying on it for goodness’ sake.

STUART SMITH: Well, yes, the Minister’s got her head down. I’m quite sure she’d be worried about it. So we oppose this bill. We hope to get some more information from the speeches that come after this. It’s unlikely, but we will live in hope. And with that, I do not support this bill.

Thank you, Mr Speaker. It really astounds me, the speed reading abilities of the other party. It’s a very, very short bill, and it’s actually a very, very clear, precise, and tight bill that we’re offering. Fairness is the word of this bill. It is to make sure that all of the licences that we’ve granted pre-1986—1986; am I allowed to say that was before I was born? So, before 1986, those licences paid the same amount as those of the gas exploration and discovery afterwards, and so it’s making sure that the levy gets added—that we actually have fairness in the way that we as the Crown receive our revenue from fossil gas.

Lots of the questions raised by the other side obviously are just coming from the fact that they haven’t read the bill. But some of the things I do want to address, in terms of making sure that the supply of gas—this is gas. So I heard a lot of details about petroleum, but this bill is actually about our gas exploration and our gas discoveries, and making sure that we actually clarify that confusion in the word “exemption”, whether it means discoveries or not. So it is discoveries after that 1986 date, and it actually clarifies that that is not an exemption, so that we actually have the levy, to make sure that we charge everyone for the same thing no matter when you explored and discovered gas in New Zealand shores.

There are hardly any impacts, actually, in terms of our gas supply in the country. The majority of them are actually the licensees. Those are sold under long term—so they’re fixed-price contracts—so making sure that New Zealand still has the supply that we need in our gas, and to make sure that there is actually fairness. I come back to the word “fairness”; no matter how long or how short you’ve been in this game, you’re not being advantaged just because you discovered gas on New Zealand shores earlier. So that’s why I commend this bill to the House.

What a truly stupid comment from the Government side. They turn up here with some retrospective legislation, asking—asking—Parliament to rubber-stamp their attempt to change the rules on people who have had licences since 1986, or whatever; retrospective because it’s changing the rules for them. And that member, Naisi Chen, who’s resumed her seat, who’s been in this place five minutes and is going to be here for less than that, all she wants to do is say that we haven’t read the bill. The bill’s only just been tabled, and it was not sent to other parties. A draft was not sent to other parties. Not once did that Minister—whoever it is now; apparently it’s someone else, not Megan Woods—even bother to pick up the phone to the spokespeople in the National Party, or any other party that we’re aware of, and say there’s some issue that we want to solve.

It’s actually not an issue. I haven’t heard this Government talk about the wonderful funds and levies that they get off natural gas before, not since Jacinda Ardern, in her lack of wisdom, went and decided to ban offshore oil and gas—

Angela Roberts: We did not ban offshore—she’s got to get her facts straight.

Hon JUDITH COLLINS: —exploration for natural gas. And as for the cackling coming over from that side, might I remind them that this is an industry—oil and gas—that was once our largest export market to Australia. Oil was our largest export, and these people over there, cackling away with their knitting—oh, they actually don’t have their knitting, but if only they could do their knitting!

Hon Gerry Brownlee: That requires coordination.

Hon JUDITH COLLINS: The Hon Gerry Brownlee has very cruelly, but rightly, pointed out that it requires co-ordination. What they’ve done is they’ve turned up here and said, “Look, the rules that these people signed up to do this exploration, made in 1980-something—we want to change those now.”

When they made those decisions to actually try and get oil and gas out of, say, New Zealand waters, they made financial decisions based on things that they knew at that time. They knew what they were doing. And now, what they’ve done, over this side, is they’re going to make it less viable for people to bother to keep doing it. Like Stuart Smith rightly pointed out, businesses overseas, who can actually pick and choose which countries they go and work in and explore in, are looking at New Zealand now like a fruit-loop country that can’t make decisions and then stick to them. Instead, we’ve got flip-flopping around. This is their grab—grab—on natural gas and the explorers, who, by the way, have been helping to keep the lights on. And I see that member over there—I can’t be bothered learning her name, because I know she’s not going to be around long—carrying on as though she knew anything about this.

This is an enormously important industry for New Zealand. It should not be treated in a cavalier manner like this. And I know it is a cavalier manner because the Minister couldn’t even be bothered to pick up the phone to the other parties in Parliament. They sit over there, saying that we should support them. Well, why would we? We have a raft of legislation now, which they have put on the Table finally in Parliament, where they’re asking for all these different rules around energy levies and everything else. This is crucial. At a time when people are finding it really difficult to pay their power bills, we’ve got a Government that wants to increase a levy on natural gas. It is already expensive compared to what it was a few years ago. It is already expensive because the people who were looking, searching for natural gas, are wondering, “Well, if there’s another Labour Government—oh no, please don’t let that happen ever again in my lifetime.”

Then, what’s going to happen to their industry again? They’ll be treated like they have been under the Ardern-led Government. And now we’ve got a Hipkins-led Government, who are showing exactly the same disregard for business, disregard for the flow-on effects of people just saying, “You’re changing the rules on me. That’s not what we signed up to.”, because that’s what they have to look at—sovereign risk, as Stuart Smith said—and New Zealand has now become a sovereign risk for businesses—

Hon Dr Duncan Webb: Talking us down again.

Hon JUDITH COLLINS: —wanting to invest in New Zealand. And that person over there—that person, I can’t remember his name; no, no, Duncan Webb, I know that’s Duncan Webb—he says that we’re talking New Zealand down. No, actually, he said, “Talking us down.” Yeah, I’m going to talk Labour down. They’re the most useless Government I can remember in 21 years in Parliament—the most useless Government that can’t do anything except stick up taxes and waste money—

Hon Gerry Brownlee: What have they ever finished?

Hon JUDITH COLLINS: “What have they ever finished?” says Gerry Brownlee. Well, what about that cycle bridge over the Waitematā Harbour? Well, did that ever get finished, Gerry?

Hon Gerry Brownlee: No, no.

Hon JUDITH COLLINS: No, it did not. What about that Dunedin hospital that they campaigned on? Now, how’s that going? Six years on the job; what’s happened? Weren’t they saying that they were going to redo Hawke’s Bay Hospital, or was that just a pipedream?

Chris Penk: A broken promise is what it is.

Hon JUDITH COLLINS: It is just another broken promise. But, look, to be true, Chris Penk, who has interjected brilliantly with “another broken promise”, I point out: is it a broken promise if they really, really would like to have it happen but they just have no idea how to do it? Do you think that would be a broken—I think it probably is; it gets to that stage. What was the other thing that they were going to do? I know, light rail—light rail—

DEPUTY SPEAKER: Ms Collins, it’s not a general debate speech. Can we, at some stage, make some passing reference to the bill, please?

Hon JUDITH COLLINS: Oh, well, thank you, Mr Speaker. So, when I look at this bill, I see that there is nothing in here that tells me that this Government is prepared to address the cost of natural gas, except to put it up. This is going to increase the cost of natural gas. I want the listeners, the people of New Zealand, to realise that. As this Government over here talks fairness, you should think “unfairness”. As this Government talks about increasing levy payments to the Crown, people should think “taking more people’s money”, being paid for, ultimately, by the consumer, and then changing the rules on businesses so that the cost goes up, because they have to take that into account when they are looking at this Government. Thankfully, they won’t have to look at it much longer.

But it is really important that we consider in this bill why the Government refused or didn’t even bother to alert other parties in Parliament, suddenly tabled it, didn’t want to let us know what they were doing, didn’t let us have the opportunity to even speak to the sector, didn’t even let the sector have an opportunity to speak to Parliament, isn’t putting this through a select committee process, but is, in what’s going to be the dead of night soon, rushing through yet another tax. Well, I think we remember that they said they weren’t going to have new taxes this term. Oh, but, apparently, this bill, which is called the Energy Resources Levy Amendment Bill—a levy apparently isn’t a tax. Well, it is a tax—it is a tax. It’s a tax on the consumer, because the consumer will end up paying.

When we have to bring in more Indonesian coal—dirty, filthy coal coming in—when we’ve got lovely, beautiful New Zealand coal in this country, which we can’t use at the moment, and we can’t use lovely, gorgeous natural gas—instead it is again another tax on the consumer. And so this levy, this Energy Resources Levy Amendment Bill, is going to have the exact opposite effect than those people over there are screaming and shouting out at, and, actually, I have to say, looking pretty miserable about it, too.

They should be looking miserable, because this is another broken promise. It’s not even a broken promise to the people of New Zealand, it’s a broken promise to the industry and those that have stuck with New Zealand despite a flip-flopping Government that doesn’t seem to know that money that’s earned is not their money; it’s the people’s money. And what we’re seeing with this is yet another consumer cost going to be added, because, if it’s not going to be added, who else is going to pay for it? And that’s exactly what’s going to happen.

This bill should have been through a proper process, it should be going through a select committee process, and it should have been discussed across Parliament—it’s not being. Today, this Government wants it pushed through, and they want the people of New Zealand not to realise that this Government’s going to be at fault when the cost of natural gas goes up.

The question is that the motion be agreed to.

Kia ora, Mr Speaker, and thank you for allowing me the call this afternoon. A lot of negativity, as always, coming from the other side of the House, and, I guess, to run down this Labour Government by the previous speaker, the Hon Judith Collins, is a bit rich because she was leader of the National Party at the time that we were able to get the majority in this House. And so we have been cracking on and ensuring that we are making good legislation for the sake and the benefit of all New Zealanders. So thank you for your contribution this afternoon.

It’s important for us to look at fossil gas and how the levies are charged. As the Minister said earlier, we have some of the lowest rates in the world when it comes to levies for fossil gases. And I just want to pause and reflect on our Minister of Energy and Resources, the Hon Megan Woods. I want to thank her for the work that she does in this space, and I know she spends a lot of time in my electorate, in New Plymouth, coming to engage with the sector, to engage with iwi, to engage with our communities around our way forward, as we look forwards to 2050, to our low-carbon economy, as we look forward to what the possibility of offshore wind is, the possibility of green hydrogen, the possibility of what is to come for the future of Aotearoa New Zealand.

This legislation, the Energy Resources Levy Amendment Bill, is around fairness, as has been said already this afternoon. When you look at 12.5 percent, to other percentages, others paying 20 percent, depending on what year you’re involved, it’s important for us to get it right and to lock it down, to make sure it’s happening. So this legislation is simple. It moves things forward. I support our Minister in this, in terms of making sure we get it right. And I’m glad to see what we have, and what our horizons and future hold when it comes to a clean, green future. But fossil gases are part of that, and we will continue to move forward. I commend this bill to the House.

The ACT Party will be opposing this legislation. Despite what the bill says—that it’s not retrospective—either that’s a typo or it is retrospective. This Government has introduced a bill, under urgency, which applies costs to businesses, which will affect their rate of return on investments made in the genuine understanding about what levies they would have to pay in the future—if, for example, you’ve invested in a gasfield or oil field in Taranaki that might have been permitted pre-1986 and you’ve continued to invest in production equipment, in personnel, in training, in safety, in environmental protection, on the basis of a future revenue stream, and then it turns out that this Government introduces a bill to the House under urgency which undermines that revenue stream by applying, essentially, a gas tax on your business.

This is a very interesting proposition, though, because this is the Government that claimed there was a climate emergency, there was no future for hydrocarbons, and there was no future for natural gas and oil. In fact, this very Minister—the Hon Megan Woods—has claimed that New Zealand will achieve 100 percent renewable electricity by some arbitrary date. I think it was “2030” when she uttered it. I bet she’s hoping that everybody forgets it—[Interruption]—in the same way they’ll forget the names of those Labour backbenchers, who will be gone on 15 October.

If we want to consider just what it means to introduce retrospective legislation—the Energy Resources Levy Amendment Bill—what it means to people and to businesses that might consider investing in New Zealand over the next few years or decades, well, they’ll be afraid of the word “Labour”, because they know it means that any investment they might make could be undermined in future, without consultation and without any opportunity for natural justice. This bill will be introduced and pass all stages without the opportunity to hear from stakeholders, which means that it’s up to the MPs in the Chamber here tonight to tease out from the Minister and from officials what they think the reason for this bill is, what the costs and benefits are, who pays the costs, and who gets the benefits.

The Minister is going to have a lot of explaining to do when we get to the committee of the whole House, but I just want to raise some of the issues that are bound to come out: firstly, the Government changing the rules without notification or consultation; retrospective law changes that apply costs to businesses that affect their return on investment; the knock in confidence at a time when New Zealand is already hungry for foreign direct investment, when we’re short of capital to build infrastructure, and yet this Government takes another action to sterilise, to chill, to ward off that very foreign direct investment that New Zealand so desperately needs.

In fact, a few months ago, I attended a conference with investors who were part of an organisation that raised $172 billion in capital to invest in infrastructure in 2022 alone. I asked them: “How much of that are you bringing to New Zealand?” And they said, “None—none. We’re not bringing any to New Zealand, because we can’t trust the Government.” I said, “What would you invest in if you wanted to?” They said, “Wind farms—offshore wind farms for renewable energy.” But this Government—in fact, this Minister, as Minister of Energy and Resources—has not been able to bring any legislation or regulation to the House, or to any committee of Parliament, which even sets out how you might apply to establish an offshore wind farm.

So here’s a Government that complains that we’re all going to die because of climate change—there’s a climate emergency. Our children have no future!

Hon Gerry Brownlee: 15 years.

SIMON COURT: Is it 15 years now, Mr Brownlee?

Hon Gerry Brownlee: It was 12.

SIMON COURT: It was 12. The Minister extended it by a couple of years, and, yet, they can’t even bring legislation or a regulatory framework for someone to apply for an offshore wind farm. Of course, if I wanted to set up a new drilling rig for oil and gas in Taranaki, I could still do that, but I can’t apply—there’s no paperwork I can fill out to apply—for an offshore wind farm.

This Government’s got its priorities all wrong. It talks a big game on climate change; talks about cost of living. What does it do? It introduces legislation that’s going to add tax and cost to the gas sector, increase the cost of living for gas users, for New Zealand domestic gas users, because, if the Government’s taking money that the business can’t recover out of its bottom line, it’s going to pass that on to consumers. For members of the Labour Party who didn’t do fourth-form economics—even though they might have got a degree in something else, they have no practical experience in business—this might come as a shock to them: when the Government puts cost on businesses that they can’t find efficiencies in their business to deal with, they pass it on to the consumer, and that consumer is me.

I have an interest in this. I have gas hot water at home. It’s the best energy source you can get. Do you know why? Because I’ve got three teenage boys, and when they want a 20-minute shower each, do you think I’d get a hot shower? I tell you what, if we were living on electricity, if we had an electric hot water cylinder, it’d be empty after the first shower, there’d be a riot by the time the third boy got into the bathroom, and Dad would have to have a cold shower.

So there’s a reason why gas is part of our future. I just want to touch on that: clearly, the Minister and this Government also believe that natural gas is a big part of our future, because they’ve realised there is a significant resource available to New Zealand, and that we will continue to need it, and we will get it whether this Government likes it or not, whether they want to ban gas barbecues or not, whether they want to ban new gas connections in new homes or not. New Zealanders will continue to extract and use this natural gas, and, obviously, that’s come as a bit of a revelation to this Government and this Minister—“Crikey, there’s quite a bit of gas out there. Kiwis are going to keep using it even though we’ve said that they’re bad and naughty and we’ve tried to ban the stuff. Crikey, we’d better get our hooks into that, because that could be an earner for Government.”

It turns out this Government’s got an insatiable appetite for other people’s money for revenue. It hasn’t been able to find any ways to actually cut costs in this Budget that was announced today. So now they’re scratching around, looking for a bit more revenue, and, of course, like everything this Government does that’s a revenue hunt, it ends up costing consumers and costing taxpayers, sometimes both.

Now, I also want to reflect on some comments that the Minister made at a conference I attended recently. It was the Downstream energy conference in Lower Hutt, where the Minister made claims about 100 percent renewable electricity: that the Onslow dam project was going to help reduce the dry-year risk, there’s going to be a big battery to store up all the renewable energy, and it is going to recycle energy in a big dam that’s going to cost something like $16 billion, at the bottom of the South Island, drowning what are no doubt threatened species, and hundreds if not thousands of kilometres away from where people actually use the most energy and electricity in New Zealand, which is the top half of the North Island. The Minister is very proud of that project.

The Minister’s officials at the Ministry of Business, Innovation and Employment said this project is on track—you know, a business case is coming; great things are going to happen. There was no sense at the time that the Minister was considering applying fees, charges, or levies to the natural gas producers—those producers of valuable hydrocarbons that don’t just get used to run my hot water but that are also used to manufacture all kinds of very valuable chemicals that are incorporated in everything from waterproof raincoats and backpacks to paints and cosmetics, which are made from New Zealand hydrocarbons.

The Minister did not give the industry or any downstream users of gas the benefit of signalling at the downstream conference that policies which produced this legislation were coming. The Minister stood there cold as ice—and we know butter wouldn’t melt in her mouth—and claimed that 100 percent renewable electricity was the future: “Everything’s on track. Nothing to see here. Smile and wave, boys, and off we go.” Yet, what we see here today is another example of a callous Government, having identified an industry that is absolutely vital, that can’t pick up its business and go anywhere else, because their business is in delivering energy from New Zealand to Kiwis, that has decided to put a charge on them that’s going to end up hitting consumers in the pocket.

Order! Order! The member’s time is up.

Tēnā koe, Madam Speaker. Tēnā koutou e te Whare. Look, the Green Party is supporting this bill, the Energy Resources Levy Amendment Bill. Obviously, we’ve had some very alarming news overnight globally about the difficulty the world is facing in achieving our goals on keeping global warming to less than 1.5 degrees, and it’s very telling to hear the ACT Party leader and MPs moaning, because they clearly do not accept the science or the physics that we have to change how we live and how we use resources if we want to have a sustainable future. We’re already seeing the consequences of global warming here in New Zealand, and I hear David Seymour talking about how terrible it is in the aftermath of Cyclone Gabrielle and the flooding in Auckland, but there is a clear cognitive dissonance in the denial about what is needed to prevent those severe storms in the future.

The International Energy Agency and many, many scientists and experts in this subject have said that gas can’t be a transition fuel—that, if we’re going to meet our goals globally, we have to rapidly transition away from fossil fuel use—so the transition means not looking for more, which is why it makes sense to stop exploration for new gas, because we know we can’t afford to use all the fossil fuels we already have. And, at the very least, we can try to close this loophole, where, at the moment, we have very low royalties globally.

I thought it was really telling as well when the previous member, Simon Court, mentioned that people who are in the business of “producing gas” can’t just up and leave New Zealand. Why would that be? Because they don’t produce gas. The gas exists. They extract the gas. This is something that rightfully belongs to all New Zealanders, all people. All people who are born on to this earth should have a rightful share to natural resources. And that’s why it’s so outrageous that they are quite happy for some people—who at the right time in history acquired those resources or access to them—to not pay their fair share to use it. And that is the reality of what the ACT Party stands for: protecting the wealth and privilege of a few—mostly due to things that were decisions that were made in the past.

But, actually, all New Zealanders have the right to benefit from this gas, and it’s fair enough to close the loophole that means that, when new gas supplies are discovered in areas, or extracted and produced from areas where there was already a permit, we should have the ability to levy the same royalty rate that we do for modern permits. Of course, the Green Party will be supporting this. I think it absolutely is fair. But, of course, we need to go much faster and much further in terms of having a plan to phase out fossil fuel use here in Aotearoa.

As members on this side of the House have said, this bill is really a clarification. But what concerns me today, and what I’ve heard, is the climate denial coming from the other side of the House. We heard the ACT Party describe climate change as a topic which is around being “bad” and “naughty”—absolute denial of the up to $14 billion worth of damage done to New Zealand recently through the cyclones and weather events. This legislation is really about creating some fairness, because at the moment it’s complex. There’s between—

Hon Judith Collins: Point of order, Madam Speaker. Nobody on this side of the House has said what that member just said we said. None of us have said that. So is that acceptable that that member can stand up and say something entirely wrong against us?

INGRID LEARY: Speaking to the point of order, Madam Speaker. I inferred, from what I heard in the House, a level of climate denial. I think I am able to make that inference.

Hon Gerry Brownlee: There is a provision in the Standing Orders, which I’m sure you can get advice on, which does make it clear that, if an accusation is made against a member, they may stop the proceedings of the House and respond to that accusation. No one in here has said anything about the climate change situation that would suggest that they are in denial of it. If a member makes their own analysis of someone’s speeches to suit their own narrative, then, in fact, that would become a debating matter. But, without attributing it and saying, “I have heard”, that is an accusation against members on this side of the House that is unacceptable.

Hon Kieran McAnulty: Speaking to the point of order. Thank you, Madam Speaker. These aren’t points of orders. These are debating points. No single member was singled out. This is a delaying tactic, which shouldn’t be tolerated.

ASSISTANT SPEAKER (Hon Jenny Salesa): This was actually the point that I was about to make as the Speaker that’s sitting here in the House. It was actually a debating point, and I did not hear the member refer to any particular member. Can I just ask the member, though, in the rest of her speech, to make sure that she doesn’t carry on in a similar vein.

INGRID LEARY: Thank you, Madam Speaker. I just turn now to the principle of retrospectivity. I absolutely take the point that legislation shouldn’t be retrospective usually. There are some exceptions, and that is where there is inherent unfairness. Currently, if people are paying a levy of 5 percent versus up to 20 percent simply by virtue of when they obtained their licence, that is inherent unfairness. And, in my view, that justifies being able to pass law to make it fairer.

I do worry when I hear the enthusiasm for the extractive industries from the other side of the House around needing more extracting of fossil fuels. I reference that with the announcement recently by the ACT Party that they would reverse the zero carbon Act if they were in Government. I just remind viewers of that.

When I look at who benefits from this levy, it is not the Government; it is the taxpayers of New Zealand who benefit from targeted support and from the public good that this Government delivers. Today, we’ve heard about that being for people in my electorate, some hard-working parents being able to save up to $133 a week so that they can get their two-year-olds into childcare, return back to work. That’s going to be a huge help to mothers. This is the point about [Interruption]

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! I know that there are members on one side of this House that are not really in agreement with this member or the bill, but I actually would like to hear what this member is saying, and other members of this House will also have an opportunity to debate this by giving a speech.

INGRID LEARY: Thank you, Madam Speaker. I’m flattered that the Opposition are listening so carefully to what I have to say! This simple, technical bill has elicited a huge emotional response, which is really interesting. I go back to what my colleague Naisi Chen said: this is a clarification. It’s about making the system fairer for those in the business, so that one set of business people are not paying a levy that is different to others. It’s also about clarifying that discoveries cannot happen before 1986, which is perfectly rational. It’s a good bill; I commend it to the House.

Thank you, Madam Speaker. What an outrageous piece of legislation this is. How many people make a deal 37 years ago, and next thing the Government comes back and starts trying to claw something back off them?

You’ve just got to look around Taranaki. This industry and the dairy industry have built Taranaki, and they’re not big. As someone said before, “Oh well, it’s all right because they’re big multinationals.” Well, they are big multinationals—some of them—but, actually, they’ll just stop coming. Then we’ll have nothing, because, if it wasn’t bad enough, in 2018 this Government sent a very clear message to this industry that they weren’t welcome, and now it’s sending another message to the industry that they’re still not welcome here. It seems all fine with this Government that they can bring in heaps and heaps of unprecedented amounts of Indonesian coal to replace what they have taken away from this industry, and I don’t know how any Taranaki MP can actually sit in the House and debate for this bill.

What I can tell you about this bill is that it’s a Government that looks like: “Oh, here’s a way to get some cash, because we want to try and balance future Budgets because of our wasteful spending.” Well, hopefully, there will be no more future Budgets.

This bill was done on a whim, and I’ll tell you why. It’s because the regulatory impact statement said, “Are there any publicly available inquiry, review or evaluation reports that have informed, or are relevant to, the policy to be given effect by this Bill? No. Does this Bill seek to give effect to New Zealand action in relation to an international treaty? No. Were any regulatory impact statements provided to inform the policy decisions that led to this Bill? No. Has further impact analysis become available for any aspects of the policy to be given effect by this Bill? No.”

So there is also no analysis on the size of the potential costs or the benefits of this bill, or for the potential of any group or persons to suffer a substantial or unavoidable loss of income or of wealth. So, to go back to 1986 and start scrounging around through pieces of legislation to see where this Government can get some money on Budget day, to actually balance up the books because they’ve made a terrible job of overspending—and worse still, they’ve actually made a terrible job of overspending and they’re just trying to find some cash to make it all work.

Now, the other thing is that I’ve heard in this House today comments coming from the other side about a just transition. We don’t see any just transition. Is a just transition disabling the gas industry so we can bring shiploads of coal in from Indonesia? That is not a just transition. A just transition would be if all those magical answers that the Government has that are going to replace gas were developed and they were there, and then we could transition from gas to the new thing. But what this Government has done is a very unjust transition by going from a much cleaner energy—gas—back to Indonesian coal.

Now, someone’s got to tell the National Party how that’s going to benefit climate change, because we sat in the House this afternoon and we got all sorts of attacks from the other side about how we’re climate change deniers. We’re just concerned about why we would be cutting off gas and replacing it with Indonesian coal. That makes no sense at all—no sense at all. So a just transition is not even a thing, but to scrape the barrel to balance the Budget—and not only to go back 37 years to an industry that they have disabled but to turn round then and kick this industry after they’ve disabled it for their own benefit, in order to look good and to balance the Budget in the interests of climate change—does not fly with the National Party.

We, over this side of the House, are absolutely outraged that this bill has come up today, and we have no intention of supporting it. It hasn’t gone to a select committee. I think that’s because the Government like to shut their ears on these sorts of things. They don’t want submitters to come in. They don’t want to actually hear the real facts and processes around this industry. So, this afternoon, it is with great pleasure that I stand against this bill, and I do not intend—and neither does my team—to commend it to the House. Thank you, Madam Speaker.

The next call is a five-minute call.

Thank you, Madam Speaker. I rise to take a call—and, yeah, inevitably there’s a bit of an economics lesson or a history lesson involved; I suppose I do revert to type—but I just need to just query whether or not anyone on the other side of the House can actually pat their head and rub their tummy at the same time, because it is possible to hold two thoughts in your head at the same time. In Taranaki, we have been leading on energy—first in the Commonwealth to discover oil—since 1865, and it is possible to continue to pay attention to oil and gas and, at the same time, pay attention to a just transition in the broader energy context as we decarbonise. It is possible to do both.

So it’s really interesting to hear that the member opposite, Barbara Kuriger, says that we’ll have nothing. She obviously hasn’t been hanging around Taranaki much recently, with the significant conversations around offshore wind and the ability to, I don’t know, maybe have a windmill that helps to make urea. So, you know, it’s really—

Steph Lewis: Green hydrogen.

ANGELA ROBERTS: —interesting. Oh, green hydrogen; yeah, there’s another one. So it’s really interesting that there is this inability to be incredibly ambitious for this country, and incredibly resourceful and collaborative about building a great future in energy, and at the same time pay attention to what is currently happening.

We haven’t remained stagnant; we’ve been passing legislation around energy since 1937. We have been ambitious. We dug our first oil wells on that beach at Ngamotu in 1865. We discovered oil and gas offshore in, oh, I don’t know—Māui was discovered in 1969; a really good year for some reason other than Māui gas discovery; 1984, the methanol plant, and we’ve had a really progressive oil and gas industry.

The conversation we have now isn’t about oil and gas; it is about energy. I talk to the engineering companies in New Plymouth. We talk to all of the other amazing, progressive energy players in the sector, and we can do that at the same time as we can pay attention to oil and gas. It is absolutely appropriate that the clarity that will be put into this with this bill, that helps to ensure a fair return for New Zealanders—we should be able to benefit fully from the extraction of oil and gas. And, because of that, I commend this bill to the House.

Thank you, Madam Speaker. It’s a pleasure to take a call on the Energy Resources Levy Amendment Bill. This is a very straightforward bill, despite some of the wailing and gnashing across the House this afternoon. It’s a very straightforward bill. The Government is putting it forward because there have been inconsistent approaches to achieving a fair financial return on the Crown’s natural gas resources. We’ve had inconsistency in the royalty rates between earlier permits and later ones, and that’s unfair on the sector. It also denies New Zealanders revenue that should, rightfully, be coming into the Crown accounts to help fund the services that we deliver across New Zealand. So it’s a very straightforward bill. I don’t quite understand why the other side are causing a big fuss about it, because it’s about fairness, it’s about consistency, it’s an excellent bill, and I commend it to the House.

I call on the Hon Gerry Brownlee—it’s your time.

Thank you, Madam Speaker. What an irony it is that, on the day the Government has been crowing about what they call a “Wellbeing Budget”, where the Prime Minister and the finance Minister speak about how much they’re doing to address the cost of living for New Zealanders, the very first bill they bring into the House under urgency related to the Budget is going to push costs up for New Zealanders. One of the things that’s most staggering is, quite apart from the fact that this is about a hundred-word bill in substance—about a hundred words; not much more—it simply increases the levy that’s allowed to be taken on some gases.

It’s interesting to note the departmental disclosure statement from the ministry of—what are they called?—innovation, business, etc., who has energy inside it—MBIE; they don’t like being called MBIE, but I’ll call them that. This disclosure is to tell the public of New Zealand what work is being done to prepare the bill. Well, there are multiple points all the way through here—and I’ll talk to some of them—where the answer is, no, they haven’t done it. There is one here, though, that is most concerning, which is a no, which asks that question about: is this a policy that, if enacted into an Act of Parliament, will cause extra costs for New Zealanders? The answer to that is—sorry; the analysis was: can you quantify the size of what the potential costs might be to New Zealanders? The answer is, no, they can’t.

Now, that would leave it for me to say, quite comfortably and uncontestably, that this will put power bills up by 30 to 40 percent. All those people across the North Island tonight who are relying on gas for their cooking, for their heating, for their showers—as my colleague from the North Shore was talking about before—their energy bills will go up as a consequence of this. There’s no way that it can be looked at any other way. The members over there can shake their heads; they haven’t been able to control a single other price related to cost of living in the whole five years they’ve been in Government.

Hon Dr Duncan Webb: Price controls now—price controls—“Muldoonism”.

Hon GERRY BROWNLEE: Here it is in black and white from the ministry—and I can see I’m being heckled by the “Minister of Weights and Measures” over there; it might have been good if he’d actually got on to here and done a bit of analysis. It’s quite clear: is there any work done to find out what the costs might be on New Zealanders? The answer: no.

Then, of course, diving a little bit deeper into the same document—the departmental disclosure statement—it’s no wonder there’s no departmental officials here; deeply embarrassed by a bill like this, I’m quite sure. It says: “Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?” The answer is: “Yes”. One of only two yeses in about 20-odd questions that they have answered on this particular bill. So there’s no doubt about it: it’s a tax and it is raising costs for New Zealanders.

One of the things that’s been interesting in the last few minutes is the previous speaker, Angela Roberts, talking about the so-called just transition. I feel for her because quite clearly that member is a victim of the sloganeering that comes out of the Minister of Energy and Resources when it comes to all of these matters.

The Minister said, some years ago, when the offshore exploration was cut—an industry, by the way, that was a worth about a billion dollars a year to New Zealand; a billion dollars of hard cash coming in that might have made a difference to the lives of some New Zealanders, but that was closed off, all gone—“Well, there’s plenty of gas onshore and that gas can be extracted and that will fill up the gap for the just transition.” Well, the question is: why is Huntly short of gas; so short of gas that it’s now got the coal pots burning flat tack? Not coal that’s extracted from a short distance away, the Huntly coal line, but coal that’s extracted from some very, very questionable operation—by way of climate change, I mean; it’s probably a good company, I don’t know—from Indonesia. And so traveling all the way across the Tasman, to New Zealand, and apparently this is part of the just transition of energy.

Look, I’m attending, in a short while, in about a few days’ time, a conference that is looking at hydrogen as a future fuel for New Zealand. I think that’s great. I think that’s absolutely wonderful. But if anyone thinks that fossil fuel is suddenly going to be off the agenda on a particular day, they are seriously deluded. It’s just like anything else. There is a slow transition that can occur, but it’s not helped by this sort of dopey legislation that retrospectively puts unreasonable costs, potentially, because there’s also, in that disclosure statement, no indication of what levy will be applied. All we get is that, at the moment, they’re paying between 5 and 10 percent as a levy or a royalty, and, in the future, they’re going to be paying a levy on top of that—very explicit in the bill. So their costs for that part of it, of their expense in their business, are going to go right up.

So I’m saying that you can’t expect to have that transition if the fuel source for that very transition is cut off. No one argues that we should use less coal. But, if we are using coal, it should be from a source that does not see our emissions profile artificially lowered while we increase someone else’s. That’s no contribution to the world whatsoever. It is a complete head-in-the-sand, ostrich approach to the idea that you’re going to transition energy over a period of time.

Some of these other things in here I think are quite worrying. The question is: “Are there any publicly available inquiry, review or evaluation reports that have informed, or are relevant to, the policy to be given effect by this Bill?” Now, what that means is it’s a question: is there some expertise out there that has suggested this is a good idea? Is there some sort of compelling economic reason for going down this track? Are there any documents that can support the reason for this, other than the whim of the Minister and the will of the Government to take more cash off New Zealanders so that they can spend it, because they apparently know better than New Zealanders? The answer is: no, there’s not—no, there’s not.

So I say again that I’m not surprised there are no officials here. They’ve probably done a reasonable job of writing the bill, but do they support it? Clearly not in the documents that they have provided to go alongside the bill.

Look, I think the real problem here is that there are no specifics within the legislation—no specifics in the departmental statement. There is no New Zealand Bill of Rights Act report, because the Ministry of Justice, who looked at it, clearly thought, “Well, actually, it’s not even worth writing anything about this; it’s so patently clear that there are injustices in it.”

That is why, during the question period that comes with the committee stage, there will be a lot of questions for the Minister. I hope, over the coming dinner break, that the Minister is able to get some of those more quantifiable numbers that might make us think some of the aspects of this bill are reasonable; at the moment, none of them are.

The other thing that is slightly chilling about any legislation that is retrospective is that anybody who has made an investment on the basis of a contract will now feel a little bit uncomfortable about the prospect of the Labour Government simply coming into the House, using their majority under urgency, and changing the basis of that contractual arrangement. I think that is a chilling aspect that is, perhaps, not well-enough understood by people across the country.

In the meantime, can I just say to those people who are preparing their evening meal, who probably have the heating on in the colder weather, looking forward to a warm shower later tonight or first thing in the morning, wanting to keep the kids—you know, the kids who we’re all worried about—in nice, safe, warm conditions: don’t feel too threatened by this ridiculous bill, because there is change coming, because we do need to get New Zealand back on track; we do need to get New Zealand thinking about the welfare of people in a much broader fashion than the narrow “We’ll take the money in and spend it on your behalf” approach of the current Government.

This is not a bill that we can support, but we do look forward to the Minister attempting to answer some of the very reasonable questions that will come in the committee stage.

Thank you, Madam Speaker. I want to begin my contribution, which I hope will be a relatively short one, by just pointing out a couple of very odd statements that have been made from the other side of the House.

Gerry Brownlee, who’s just taken a seat, spent the greater part of 10 minutes railing—railing—against the fact that there was not a regulatory impact statement provided to inform the policy decisions that led to this bill. He’s read 2.3 in the departmental disclosure statement, and he—it says next to it, “No”—“No.” He spent 10 minutes railing on that topic. What he failed to do was read the paragraph that follows—the paragraph that follows. I will read it out for the benefit of the House. “The Treasury’s Regulatory Impact Analysis team determined that the proposed amendment to clarify obligations relating to the fossil gas levy exemption in the Energy Resources Levy Act 1976 is exempt from the requirement to provide a Regulatory Impact Statement on the grounds”—wait for it—“that it has no or only minor impacts on businesses, individuals, and not-for-profit entities.” Yet Mr Brownlee spent 10 minutes trying to tell the House that the sky was going to fall in, the sky is falling in, and it’s going to cost, cost, cost, cost, cost.

Well, this is actually a very simple bill that fixes a small loophole that has been identified in the legislation that we’re looking at. Business—industry—has asked for clarification, and the Government is providing clarification; a simple tidy-up. Our tax system in this country is based on being low rate - broad based. That’s how our tax system works, and occasionally we tidy up the odd loophole, or the odd thing that’s been identified that might be inconsistent, or that business or industry asks for clarification on. We say, “We’ll help you out; we’ll clarify things. We’ll tidy it up so there’s no ambiguity.”

That’s what we’re doing here today. It’s a very, very simple bill that tidies up what could be a potential loophole in the legislation. The query was made; we’re tidying it up. So the Chicken Littles on the other side of the House, worried that the sky will fall in with this legislation, need to kind of read the papers that have been provided—that will explain clearly that it’s just a simple loophole that we are tidying up.

I’ll leave my other points because they pale in comparison to just drawing attention to that idiosyncratic speech and the fact that it’s really identifying a problem that does not exist.

This bill is set down for second reading immediately.

Second Reading