Energy Resources Levy Amendment Bill

I move, That the Energy Resources Levy Amendment Bill be now read a third time.

The bill will ensure the Crown receives a fair financial return on its fossil gas. To ensure the Crown receives that fair financial return from our pre-1986 licences with low royalty rates, the Energy Resources Levy Act of 1976 imposes a levy on gas production.

The bill progresses a discrete change to the Energy Resources Levy Act to clarify who is exempt from this levy. This would clarify that production from deposits within pre-1986 licences operating on low royalty rates cannot be exempt and must pay the top-up levy on all gas that is produced. This will avoid any risk of confusion that licence holders could operate on a low royalty rate and not pay up the top-up level by claiming a discovery. The amendments will only apply prospectively, so will not impact on previous payments or non-payments. It also validates those past levy payments.

This bill ensures the Crown—and New Zealanders—continue to receive the levies it is entitled to collect. This is for the benefit of all New Zealanders. I commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Mr Speaker. It is a pleasure to take a call on this bill, and this has been an illuminating session.

Hon Member: Well, not really.

STUART SMITH: Well, it has because we found out how little we do know, because the Minister doesn’t know much either about it. It’s quite surprising, actually. And I can see future court cases coming up here. We have a Minister that has no idea, absolutely no idea, what will actually qualify for the exemption or not. What we’ve heard was it was new discoveries; no, then it’s new deposits. We don’t know what a deposit is because there is no definition. I mean, you could take one definition of a new deposit as the gas being new, but all those deposits are millions of years old, so how would you define that? In a field that we know if it’s drilled from the same place but it’s a new deposit, then it applies. If it’s not, it doesn’t. But if we don’t have a definition of what a new deposit is, then the whole bill has been a waste of time.

So the estimate of $50 million might be five, could be less, might be nothing. And the potential, to use the Minister’s words, of lost revenue could be, you know, $50 million or more because the bill is simply ineffective. So we don’t know why this bill was brought to the House. It doesn’t make any sense at all. We’ve had several explanations about what the genesis of this bill was. Initially, it was that the Minister had had representations from the industry, but it doesn’t say anything about that in the documentation provided. In fact, it says here “are there any publicly available inquiry, review or evaluation reports that have informed or are relevant to the policy to be given effect to by this bill?” Answer: no.

So, was there a secret meeting? Maybe. Is there a discovery that is potentially about to be exploited that has a significant revenue stream? Maybe; I would say highly likely. I would say there’s been meetings about this sort of stuff in the Minister’s office. They’ve had a run around and they’ve got a bit of a panic going there. I think it’s almost certainly the case, and this will come out in the fullness of time—probably, by the time it comes out, the Minister will no longer be in Parliament—in November or somewhere. But it is really very disappointing that we could come through, when we didn’t have the benefit of a select committee process where these things could have been explored so we could see what was at stake here.

This is really fast and loose with the legislation process. We could have heard from the oil and gas companies; it would be really good to hear from them in the select committee. They would no doubt have submitted; I’m sure they would have. We could have heard from the oil and gas users, and we are all—

Simon Court: You could have got Glen to ask them some questions.

Well, that’s right. It would have been fascinating.STUART SMITH Well, oil and gas users are really important in this process because, actually, what I’ve heard from sources throughout the course of the afternoon, since this bill actually landed on the table, is the chilling effect that it is already having on the industry. The thing that people forget about with natural gas is that, if they stop exploring, if they stop drilling new wells, actually, it almost immediately—the access to that gas starts to decline. It is not like a water well that you drill a hole into an aquifer and the water just keeps replenishing from water coming from rainfall percolating through into the aquifer. This is quite different; the natural gas deposits were laid down millions of years ago. They’re sitting there waiting, under pressure, and we can exploit them to use them, and natural gas is a much cleaner alternative. As I said in one of the earlier debates on this bill, in the UK, they lowered their carbon dioxide emissions by 45 percent by switching from coal to natural gas.

In New Zealand, we have gone from natural gas to coal and we’ve done that because of a very unwise decision to give a former Prime Minister an opportunity to star in the media, in front of some schoolchildren in France—in Paris, actually—to give an outrageous decision that has to ban oil and gas exploration offshore, which has had a chilling effect, a significant effect, on our sovereign risk profile. And the members on the other side might not think that’s important. Perhaps they’ve never been in a business transaction dealing with international financiers. Perhaps they’ve never been in a trade negotiation. These things are very, very important. They are taken very seriously in international fields.

I think it’s an absolute disgrace that this bill has had such little scrutiny, and it was appalling. If it was so important, and so important for New Zealanders, in a fiscal sense, and was a technicality that could have been dealt with, the way to deal with that would have been for the Minister to approach the Opposition and the Opposition parties, and inform them of the issue, and work with us. We may not have supported it anyway—in fact, we wouldn’t because of what we know now—but if it was a legitimate case or the case that the Minister has tried to make, unsuccessfully—I mean, we’ve got two former energy Ministers, very experienced people in this field on this side of the House, who should know if this was a good bill; they would know. And they don’t. They do not follow the logic behind it.

I know that, on the other side, they are following speaking notes that were given to them. They haven’t had the benefit of any more information than we have. In fact, I suspect that the only person with information is the Minister, and quite clearly she doesn’t understand it all. She doesn’t understand what a deposit is. She doesn’t understand the technicalities of, actually, how these fields are maintained, how the flows are kept going at a rate that is economic. They don’t understand that natural gas is far more important than just generating electricity, although that’s incredibly important.

I think people underestimate the importance of methanol. It is almost in everything. I think, even though I’ve got a wool suit, I’m pretty sure that the dye in this suit will have a component of methanol in the manufacture of that dye. It’s almost in everything, or that industry here in New Zealand is dependent on the continual investment, and the oil and gas sector to maintain those fields. And yet this bill is sending a chilling effect to those investors, and those companies are not just sitting there with a pile of cash, wondering what to do with it. They have to go out and approach people on international money markets and say, “I’ve got this proposal; I want to develop this well further, extend its life.”

As we’ve heard, Māui has been extended by a significant amount. It should have closed down many years ago and has continued to develop and produce income for New Zealand, actually, and royalties for New Zealand. But that has all been put at risk by a shoddy process. This will likely fail, I would think. I think that any company that wants to get around this, it’s going to be pretty easy because there is no definition of what is one—

Simon Court: Unless they ask for it.

STUART SMITH: Well, did they ask for it? We have no evidence that they asked for it whatsoever, but we won’t go there as to what that implication would be for the Minister. But the reality is we’re here tonight. This is a poor bill—it’s poorly thought-out, not understood by the person who’s promoting it, and I think it is a really shonky process, and we oppose this bill vigorously.

Thank you, Mr Speaker. This bill is actually a really, really simple bill. Like I said at the very beginning, in the first reading—and this hasn’t changed—it is a matter of fairness.

When we put people who’ve been in the field since 1976, so we’re talking about the 1976 Act, and those in who had licences pre-1986—they should not be paying a lower levy than those who are post-1986.

It is a matter of actually making sure that all of the people within the same industry are paying at the same rate to make sure that there’s fairness, in terms of the Government’s levy, from all companies. No matter how long you’ve been in the industry, you should not be paying any less just because you’re here earlier. That’s why I commend this bill to the House.

Thank you, Mr Speaker. It’s such a delight to follow that woman-splaining from Naisi Chen, the list MP for the Labour Party, telling us that we don’t understand these things. Well, I’ve got to say, I felt this evening that the Minister, the Hon Megan Woods, has been somewhat struggling, too, and perhaps she might have benefited from coming to the select committee which didn’t eventuate.

Hon Member: Oh, come on!

Hon JUDITH COLLINS: Why I say that—and I hear some shouting coming over from the Labour Party, but I must say they’re not looking that good in their red. They wonder why I would say that. Well, that’s because, when I was asking the Minister, when she was in the chair in the committee stage, where these new deposits were that she had started talking about, she couldn’t come up with them. My colleague Stuart Smith rightly asked, “Well, what are these? What is a ‘deposit’? Where’s the definition?” It’s not in the bill. We went back to the primary legislation—as you would expect me to do—and we could not find it there either. We have wondered whether or not there was any legally defined “deposit”, and perhaps there is, but the Minister seemed unable or incapable of actually finding that for us or telling us. The only part that I could see it referred to was in the explanatory note, which, as we know, is actually not the legislation; it’s an explanatory note. Perhaps it’s because the Minister has rushed this through without the proper process of a select committee.

I understand, from the Minister, that this could amount to around $50 million—did she really say that?—for the Crown. And that was a wonderful thing. The issue is, of course, that that $50 million is apparently, according to the Minister, being demanded to be paid, or collected, from the very industry that’s going to be the one paying it. That I find just staggering. I’ve heard of all sorts of virtue-signalling, and I think we’ve all seen some examples of that, even relatively recently, of people who demand to pay more money for things. Well, I just don’t know, from my experience as the former Minister of Energy and Resources, that that many businesses and people who are in the business of extracting natural gas, very clean-burning natural gas—and using them in our barbecues, by the way, and all those other things that we use them for—would be offering and demanding, demanding, demanding that the law change so they could pay another $50 million. That just doesn’t ring true.

When I asked the Minister, quite genuinely, “Who were these people demanding? And where?”, she said they’d apparently been demanding this of the officials. Well, again, I’m finding this one really hard, because, when we got this bill this afternoon, after the Budget, we decided, on reading it, that this was not the sort of piece of legislation that we would want to rush through during urgency—that we would want to consult with the industry; we would want to hear advice from the officials. And we decided that we would not support this bill. We thought it was very strange that the Minister, on a bill which she says is just correcting a misunderstanding or misinterpretation, wouldn’t have reached out across Parliament to say, “This is what this is. Can you please support it?” But no, she didn’t, and I just thought that was very strange, too. She couldn’t come up with any of these people who had demanded—the names of any of these companies that had demanded—to pay more money. When she said that they had been demanding it—you know, the officials—she just couldn’t say anything about what they’d actually demanded, other than they really wanted to pay more.

Look, I don’t want to be cynical about this one, but I’m not too sure that that really rings quite true with the nature of what this is: a $50 million extra payment to the taxpayer—well, the Government. How does that work?

Hon Member: People like paying their fair share.

Hon JUDITH COLLINS: And I hear from someone—Ms Lorck? She’s desperate for me to name her, because she won’t be named here anymore after 14 October. She’s desperate for me to name her; so I’ll just do it so she can get in the Hansard—poor person. She’s asking, “Well, these people just want to pay their fair share.” But that’s not what we’re hearing from the Minister.

Marja Lubeck: They’re desperate.

Hon JUDITH COLLINS: Thank you. That’s not what we’re hearing from the Minister. What we’re hearing from her is that they demanded it of her. Then, when we asked her, “When? Where?”—whatever—apparently they demanded it of the officials. Which officials? When? And who was doing the demanding? It just doesn’t ring true.

Then, if we have a quick look on what was actually happening around that time, New Zealand Petroleum and Minerals (NZPM), which is the official arm within the Ministry of Business, Innovation and Employment that actually deals with permits, had been very successfully sued and had had a really good telling-off in the court, on a judicial review by Greymouth Petroleum to get, in fact, a permit on oil and gas in seams in the Taranaki area—and I’m not sure which basin it was in. The Minister wasn’t too clear on that one, either. But she said, “Nothing to do with it.” I just think it’s amazing that it had nothing to do with it, when, in December last year, when apparently this was being demanded by somebody unnamed, somebody in the industry—it just happened. And then, at that time, given that the court was handing, I would say, or letting no doubt New Zealand Petroleum and Minerals know—it was pretty clear, I would have thought—an indication at that stage just how badly their case was going, that you just have to wonder: is there no connection at all? And the Minister has assured us tonight that there’s none. But I think there’s going to have to be some Official Information Act requests going in. I feel that our colleague Stuart Smith is going to be prosecuting this one, because it just is a little bit cute.

Then we have to ask ourselves: and why is this so urgent today? The Minister has explained: because the Government needs this money. Well, didn’t they need it 42 years ago? Didn’t they need it six months ago? Why couldn’t they have said before, in December, when they apparently were being demanded that they clarify this issue? Why didn’t they then put the matter to other parties in Parliament or even bring it here? We’ve had urgency, haven’t we, between then and now? It’s a very teeny-weeny little bill. I mean, it’s just a teeny-weeny little thing. And, yet, apparently it’s taken them six months to do it, and it all has to be without the industry actually being consulted at all—absolutely no consultation. Because we have heard this afternoon from people in the industry, people who actually represent the industry, not just those who might know somebody in the Minister’s office, who’ve said that they are delighted we are opposing this bill, because, no, they did not ask for it. So I am going to be really interested to find out what, who exactly, and when, and to whom.

And I know that some people might find that really strange—that a Minister would do that—but that’s six months, $50 million. Why wasn’t it done beforehand? And the answer is: because I don’t think it is anything more than an attempt to perhaps set a complete destruction of the oil and gas industry. We look at the way that the Minister, who is the Minister of Energy and Resources, refers to natural gas. She refers to it as “fossil gas”. Well, I hope she enjoys her fossil gas barbecues! I hope she’s thinking like that when she’s, you know, starting up the barbie! I really do think that having a Minister of Energy and Resources who has such contempt for the industry, such contempt for a sector that has been a major exporter for us—and when we were in Government, and the Hon Gerry Brownlee will certainly remember from his time as the Minister, crude oil was our No. 1 export to Australia, and No. 2 was gold. This Government, using NZPM—that used to have some really good people; I’m sure that they still are there, hiding—must be really worried about the fact they’ve got a Minister who has no respect for the sector, no respect for the industry, and they hear the rubbish I’ve heard today about how somehow this has got something to do with climate change.

It’s got nothing to do with it. Nothing in here will make any scrap of difference to our climate change obligations. In fact, it’s quite the opposite. What it’s going to do is actually have less natural gas being looked for and more coal being imported from Indonesia and more coal being burnt and our emissions continuing to rise because this Government went and did some virtue signalling.

Hon Julie Anne Genter: You’ve got no idea what you’re talking about.

Hon JUDITH COLLINS: And I wish that person would just be quiet when I’m speaking. It’s not her time. Why doesn’t she just take her turn?

The member’s time is completed.

Thank you, Mr Speaker. The Energy Resources Levy Amendment Bill is about clarity. And the only ones that seem confused are those in the National Party, which we saw from the previous speaker, Judith Collins, as she did nothing but twist and turn everything to show once again the negative, negative National Party that we have on the other side of the House.

This is about levelling the playing field to get a fair deal—a return for New Zealanders on the Crown’s fossil gas. The Minister has said there could be $50 million to be returned in levies, and that could be spent on housing, education, and backing places like Hawke’s Bay. I commend this bill to the House.

What a performance tonight from the Labour Government, introducing another bill under urgency, again violating normal democratic principles. Discarding principles like the rule of law which, essentially, if I was to summarise it for Labour members over there who aren’t familiar with this concept, is that everybody should know what the law is, how it applies to them when they take an action in advance so they can make sensible, logical actions. If a Government’s going to change the law that affects people who’ve made investments or have this thing called skin in the game—in other words, they actually produce things and make things for New Zealand—then it should go and consult with them, because I think the Minister made a good point, which was that the New Zealand Government, the Crown, has the right to royalties from New Zealand’s petroleum and mineral resources. They belong to the Crown, and if the Minister and officials wanted to make the case that the royalty regime was out of date and needed to be updated because we’re going to be using gas for a lot longer and we’re going to be getting all of our gas out of the ground, we’re going to find more and more gas, and we’re going to keep using it, maybe for another 50 or 100 or 200 years—

Simeon Brown: More barbecues.

SIMON COURT: Not just for barbecues, Mr Brown, but, potentially, hot showers and, potentially, to manufacture things like methanol, like ammonia urea fertiliser at Kapuni. Gas is not just for energy; gas is also a vital chemical in manufacturing products that New Zealand uses here domestically and exports to the world. So if the Government wanted to change the royalty regime, they could have consulted with the industry, consulted with the New Zealand public, asked for advice from economists, from geologists, from all kinds of experts, and they could have proposed and then passed a new regime for royalties, but they didn’t do that.

They’ve come to the House and made the most obtuse, vague series of explanations as to why this bill needs to be passed tonight. That is why the ACT Party says this is not in accordance with the principles around the rule of law and it is not fit for a democracy like New Zealand’s to pass laws in this way.

I also want to address the issue that the Minister raised, having finally admitted there was a potential benefit of $50 million to the Crown, which is no insignificant amount of money. I mean, it’s about as much as they blew on consultants for a bike bridge that never got built, so they’ve got to keep finding these $50 millions down the back of everyone’s couch, otherwise they won’t be able to employ any more consultants to design things that won’t get built, like Let’s Get Wellington Moving or Auckland light rail. So we understand they need the money, but when I asked the Minister about the costs: what are the costs that business and consumers have to pay? Will this $50 million that the Government gets become a lot bigger number in terms of the costs to the industry, to the gas producers, and to those who manufacture and consume gas, and eventually to the consumer—to the Kiwis who rely on affordable energy, on affordable products? Whether they be paints or resins or waterproof raincoats, which is what methanol is used to manufacture, or kids’ waterproof backpacks so that their books don’t get wet when they go to school—assuming that this Labour Government cares whether kids go to school or not—all of those products are extracts from natural gas made in New Zealand. It’s natural gas produced in New Zealand for the benefit of all New Zealanders.

So when I asked the Minister about what the costs of this policy are, the Minister did not address that at all in the committee stage. She continued to describe the benefits but refused to venture anywhere near the costs, because all of the costs will flow through to the consumer in one way or another, or if these costs flow into the manufacturing sector, then the manufactured goods like methanol—of which New Zealand produces 3 percent of the world’s methanol—those costs will be added on to the cost of our manufactured products.

They will be less competitive in the international market, which means New Zealand will receive less money from our international customers, which means that our balance of payments deficit—which is the difference between what New Zealand sells to the world and earns and what we spend, what we import from the rest of the world, have to pay for—will get worse because our manufacturers won’t be selling as much if the price goes up and they have to compete with cheaper manufacturers. Just to give you an example: cheaper manufacturers of methanol are based, for example, in China, where they make methanol not from clean natural gas but from gasifying coal in a coal gasification process that New Zealand abandoned in the 1970s because it created so much toxic waste in the form of polycyclic aromatic hydrocarbons, coal tars, and all kinds of other carcinogenic chemicals.

So what this Government’s really saying is, “We want to put costs on our clean natural-gas industry so they become less competitive with the rest of the world, and we don’t really care.”, and that makes us less competitive with the dirtiest, most polluting manufacturers in the world. None of this makes any sense if you really care about the environment, if you really care about climate change, and if you really care about the socio-economic fabric of New Zealand society and of great places to live and work, like Taranaki, which have the highest incomes in any regional economy in New Zealand.

So what the ACT Party would be saying to the Minister is that you’re happy to talk about the benefits to the Crown and why this Government needs another $50 million—no doubt to waste on projects that will never be delivered, by the by—but we didn’t hear anything about the costs and the opportunity cost, because the signal this sends is that New Zealand’s not a safe place to send your money to start a business. If you’re a foreign organisation, you’re a forestry company, you’re a manufacturer, or you’re a distributor of products, and you want to come and set up in New Zealand, this bill raises the risk profile for international investors. It’s another way that this Government has iced, has sterilised, and has frosted up the windscreen on the New Zealand economy.

So it’s less likely that foreign investors will come and send us their money, because we are short of capital. We know that, because we have an infrastructure deficit of hundreds of billions of dollars, and this Government has no solution for that. International foreign direct investment could help with our infrastructure deficit. All of this rushed legislation, violating the principles of the rule of law without consultation, and failing to account for the costs and the benefits undermines New Zealanders’ and our trusted international partners’ confidence in New Zealand as a place to invest, a place to work, and a place to live.

Of course, we hear a lot from this Government about disinformation, about a loss of trust in the democratic process, and yet here this Government is, this Labour Government, introducing a bill under urgency, having claimed that they’ve been begged to apply a new levy regime by those who wish to pay the levy. This almost fantastical notion that there’s a queue of people outside the Beehive who have big businesses or big profits and want to pay more money to the Government because they’re so confident it will be spent wisely—I mean, this sounds like a bedtime story you’d read to young socialists, but I tell you what: it’s not true, and Kiwis don’t believe it. People who’d like to bring their money and invest in New Zealand because they like Kiwis don’t believe it, either. That’s why the ACT Party says it’s not credible, Minister.

Then we think about our high-value resources. New Zealand is resource rich. We’re resource-rich in our people and our skills but also the minerals: the petroleum, the gold, all of those rare earth minerals that we find in all kinds of places Kiwis might not have thought to look—whether it’s lithium deposits around the Taupō volcanic zone, whether it’s some of the purest gold, deep, deep, deep underground underneath the Coromandel ranges, where a company called OceanaGold has undertaken to drill a 10-kilometre tunnel underground to get the gold out without disturbing the surface of a national park. That’s how good Kiwis are at caring for our environment, getting our minerals and resources out of the ground, and actually making us wealthy as a nation.

ACT can’t support this bill, because it makes New Zealand poorer. But we’ll be working very hard when we have an opportunity as part of a future Government, a centre-right Government, to make sure New Zealand becomes a wealthier place and that our environment and our people are wealthier too.

Tēnā koe, Mr Speaker. I’m only going to take a short call on this third reading. As we’ve already traversed, it does make sense to close the loophole which means that some people who are extracting natural gas, who have found ways to extend fields that originally had licences or permits in the early 1980s, will pay the same royalties as anyone else. It seems fair.

The Green Party has long said that our royalties on oil and gas are too low, by international standards. At the same time, it’s fair to charge an appropriate royalty because, ultimately, it is a collective natural resource that everyone in New Zealand deserves to benefit from. That’s why it makes sense for the Government to charge higher royalties which can then go to pay for infrastructure and public services that will help us transition away from fossil fuels.

The climate science is that we have to rapidly phase-out the use of fossil fuels if we want to have a habitable climate. You would think that people in this House would realise that we have a climate crisis because we’re getting hit by extreme weather events at a much faster rate—exactly as the Green Party said 20 and 30 years ago, when we were talking about how we needed to act on climate change and to transition away from fossil fuel use.

It’s hard not to feel compelled to stand up and just say that I think most New Zealanders know that it doesn’t make us rich to sell our non-renewable natural resources at a very low rate to overseas interests. When they talk about foreign direct investment somehow making us richer, I don’t think it’s the case that there’s a lot of people who are going to come here and build infrastructure for free; they’re going to expect a return on that.

The reality is that we can live good lives and work together to address climate change. We do that by addressing inequality. We don’t do that by selling off our natural assets and helping small private interests make huge profits off trashing the planet, off taking our non-renewable resources. We do it by investing wisely in sustainable infrastructure, sustainable energy.

And I do have to mention that, earlier, the Hon Judith Collins was talking about Indonesian coal. I think her talking points from Mike Hosking and the right wing are a little out of date, because it is not the case that there is huge amounts of coal being used to generate electricity right now. But if, as the Green Party campaigned on in the early 2000s, the Government had actually invested in a plan to transition off Huntly, as Jeanette Fitzsimons called for when that member was Minister of Energy and Resources and did nothing of the sort to prepare us for climate change, we wouldn’t be in the situation where, in a dry year, we had to rely on burning coal.

New Zealanders know this. They’re starting to realise climate change is a real issue, and they will very quickly realise that that side of the House has nothing to offer, no vision, no imagination, no belief in our ability to tackle our environmental challenges and to address inequality in this country. They just want to bring back $5 charges for drugs at the drug store. So good luck to you—good luck to you. I commend this bill to the House.

Well, the National Party have really shown their true colours tonight. They’ve shown that they’re in the pocket of oil companies who owe money to New Zealanders.

Hon Gerry Brownlee: Point of order, Mr Speaker. You know that that was a massive breach of Standing Orders. There should be a withdrawal and apology for making that statement.

DEPUTY SPEAKER: Could you be more specific, Mr Brownlee? I didn’t hear anything that actually—

Hon Gerry Brownlee: I’m not going to repeat what she said, and you should be listening, but when one member accuses others in this House of being in the pocket of someone else, that is unacceptable. It is a breach of Standing Orders.

DEPUTY SPEAKER: I’ve taken some advice on this and it’s very much a marginal call about whether we’ve actually been influenced or corrupted. I will tell the member just to steer clear of that for the rest of her speech.

INGRID LEARY: Thank you, Mr Speaker. What is really clear to me is the love of the extractive industries of the Opposition, and the fact that they are willing to back oil companies rather than go into bat for taxpayers who rightfully can take this money because this is what is owed to them and this is what this law is making clear. It is unfair on taxpayers to have different levies when actually what they need is the fair amount of tax that is payable to them. That is what this law does. It’s a very, very simple matter and I commend this bill to the House.

It never fails to amaze me how the connection between putting higher costs on gas extraction, or not, actually extrapolates its way up to the customer. Today all we hear about is the bread and butter and the higher cost of living and what the Government’s doing about it, and the National Party cannot see any connection between what’s going on here and keeping the costs down for members of the New Zealand public—because there is no connection. We’ve been really disappointed tonight, in that we have not received the answers that we needed to receive in the interests of making good legislation.

I remember back to 2018, and I often refer to the former member of Parliament for Taranaki, Jonathan Young, who was our energy spokesperson, who predicted everything that would happen after that 2018 legislation—I often refer to it as Jonathan Young’s crystal ball. The Hon Megan Woods at that time said to Jonathan Young, “Well, don’t worry, the sky is not falling in.” Well, I can tell you that we’ve gone to 20 percent of the available reserves now than we had back then, and now the reserves that we have got we are failing to get clear answers from the Minister about in the detail around this bill. It’s a very thin bill. It hasn’t got a lot on it. It obviously needs a little bit more. We’ve been looking for the definition of a deposit.

Now, in 2018, as we know, there were no more permits to be issued offshore. So if this is in fact a new deposit, it can’t come from a new offshore field. So we are actually grappling, over here, to understand—we know that technology improves all the time and we know that these industry groups are spending millions of dollars on new technology that can actually extract more from the same field. So we don’t actually know—it’s not clear to us, and the Minister has not been able to explain to us tonight—exactly what this new deposit is.

We’re also very unclear about the lack of consultation. Back in 2018, the select committee refused to come to Taranaki to talk to something that would affect Taranaki greatly, and now, tonight, we’re even refused the possibility of having a select committee. So when asked, “Has there been any consultation?”, no, there’s been no external consultation. But then someone approached the officials in December—that is six months ago. Why are we standing in the House in urgency, not being told why, or what were the reasons, or has there been another field found? It seems like there may not have been, or there may have been. Nothing seems to be very clear tonight, but it’s taken six months from that event, when somebody in the industry approached the officials, and now we’re sitting here six months later doing something in urgency, getting no explanations, and not understanding what this extra royalty is going to apply to.

Now, if it was something new, we could understand that, but we’re not convinced that that fits under this bill. And when you go back to someone—sorry, not you, Mr Speaker. But when the Government goes back to someone, after 37 years, to change the rules, I think it’s fair for this Parliament to understand a lot more detail than what we’ve been able to get hold of tonight. We were first told that there was no regulatory impact statement, on the grounds that it had no or only minor impacts on businesses, individuals, and not-for-profit entities. And then, in the Minister of Energy and Resources’ speech, she talked about millions, and then, when we had the committee stage, the Minister actually said $50 million.

So the whole story, as we’ve been going tonight, feels like all of this has been made up on the fly. Whether it was written overnight, last night, we’re not sure, but it just seems to be a very bad way to do legislation. If you give people the same information when they’re making a decision—I know in Parliament we often have different views, but you’ve got more chance of getting people on the same page if all of the information is available. Even though the lights are on here, in urgency in Parliament tonight, we feel very much in the dark around what has happened. For that reason, we are unable to support this bill. Thank you, Mr Speaker.

Meka Whaitiri.

The Hon Meka Whaitiri, thank you, Mr Speaker.

DEPUTY SPEAKER: The Hon Meka Whaitiri.

Hon MEKA WHAITIRI: Listen, I want to just add again, from the contributions I’ve made on this bill, that I fail to see the urgency. I fail to see the urgency in why this bill is coming to the House. I do want to acknowledge the Minister’s answer to my question around the preservation of the Tiriti partners’ rights. She did underscore that this is permit holders. She further underscored that there will be no further breaches for those iwi who currently have claims to Crown minerals around the country, and I think that’s important that that underscoring goes on the record for those iwi.

The reason why I’m opposing it is because it’s not been given due consideration, particularly around going to select committee and hearing from those impacted iwi who have years and years of case law and, I guess, case claims to the fact that they have interests and rights in Crown minerals. Like I said, the Minister did answer the question around why there’s distinction around this bill to what I’ve raised earlier, which is that this is just for permit holders. But, again, we haven’t allowed our Treaty partners to have a say in how this is going to impact, and so it is unclear to me what the urgency is.

I have listened to why there is urgency; I can’t find it. There are members of the Government that just say that it’s a simple bill, but those are the ones that often alienate the Treaty partners in this country—it’s those simple bills. But, again, we’ve got a democracy in this country. We test it, and it goes off to the select committee, but in this case we’ve bypassed that. Members on that side feel that that’s OK, and yet members on that side, who represent a particular region, who have for years and years put claims around their rights and interests to what we’re talking about here tonight—I think that speaks for itself.

So I stand again, as I did in the second reading and through the committee stage, to oppose this bill, because it has not been given due consideration. It has not allowed the Tiriti partner to put down what they think. Even though they may not be permit holders, they do have rights and interests and want to test that their rights going forward aren’t further breached. We just heard tonight from the Minister that she felt the advice that she got was that it would not be further breached, but, again, we haven’t heard from the other side of the coin. That was my whole point in asking the questions I did to the Minister.

So people will now hear—it is on record in this House—that this passage of this bill does not impact iwi rights and interests, that it’s limited to those with permit holders, and that future considerations will be not impacted. But, again, that’s purely from the Government’s side. It would have been balanced if we allowed it to go to select committee to hear, like I said, from the Treaty partners. So it’s sad, because we do have the Wai 796 Petroleum Report that has been tabled. It did declare iwi rights and interests to petroleum and minerals on their land, which this bill does have an impact on. But, again, we don’t need to hear from them because it doesn’t impact on them and it doesn’t impact on their future claims. Therefore, we are hearing tonight from the Government that there are no further future breaches of Te Tiriti.

So we’ll leave that there, because, again, there are contemporary claims. But for those that currently have claims, it is now on record that the Government feels that there is no future breach and it doesn’t impact on them, and I’m sure that that will go some way in furthering their claims when we talk about this Energy Resources Levy Amendment Bill. So with those few words, we will oppose this bill.

Thank you, Mr Speaker. Delightful to take a split call on the Energy Resources Levy Amendment Bill.

As we have heard, it’s a bill to ensure the Crown receives a fair return from its fossil gas. We have heard tonight, extensively, about the need for the introduction of this bill. The main argument from the National Party seems to be that they don’t understand the bill and that’s why we shouldn’t be doing anything about it and keep it status quo. Which is no surprise, because the National Party is the party of the status quo and kicking the can down the road.

It’s really clear, from what we’ve heard, that due to historical practices over time, there could be some risk of confusion to achieve a fair financial return on the Crown’s fossil gas resources and there could be some problems—and that needs to be resolved. So, as the Minister has said very clearly, it is time that we draw a line under any possible confusion and, therefore, I commend it to the House. Thank you.

Well, far from clarifying anything and getting over any confusion, this bill is written in a way that doesn’t appear to deliver what the Minister of Energy and Resources and what subsequent Labour Party speakers have had to say. If one looks at the amendment to section 6—clause 5 of this bill—about exemption from the levy, what that’s saying is that under the principal Act any exemption that might have existed no longer exists, but then it qualifies it by saying that, actually, anything that’s been taken out under the exemption and paid under the exemption is perfectly lawful and quite reasonable.

So the question that sort of comes into my head is: why wasn’t there a bill that simply said this is the new regime for the Crown’s interests in levies and royalties on gas? It would’ve been a very simple bill—so simple that it raises the question of why it wasn’t dealt with in simple statute amendment, which would’ve meant that the Minister would’ve had to go through the arduous process, I suppose, of talking to other parties in the House, making the reasonable case that she claims she has made and getting agreement for it to go through in a statutes bill. That would’ve been, I think, something that could’ve been achieved in the last five months—after all, speaker after speaker after speaker from the other side of the House, all victims of the sloganeering of the current Government, has said that the changes were minor, that the changes were fixing an anomaly, that the changes were closing a loophole, and that it was simply a matter of clarification. All of those are circumstances that are required for a statutes amendment, but, no, we’ve got a bill. After the Minister was first notified of the potential for this in December of 2022, we go through five months—no consultation with the industry, no discussion with other parties in the House, and suddenly, on the day that the Government has brought down a Budget that they claim is about the cost of living, a bill is brought into the House that’s going to put extra costs on to New Zealanders. It doesn’t make sense. So from a political strategy point of view, this has got to be an absolute loser.

When it comes to bills like this, we have had very legitimate questions that’ve been put to the Minister. One of those was how it will apply that pre-1986 and post-1986 arrangement that appears to be in place, although the bill actually says anything before 1986 is now gone, except that the main bill—this is the confusion—still leaves discretion for that with the Minister. So it’s an all over the place sort of bill, and the claims on the other side that it’s all very simple are actually an indication that there has not been great consultation even inside the Labour caucus, which is most alarming, in my opinion.

We heard that there is to be, in the Crown minerals department inside the Ministry of Business, Innovation and Employment, a new determination for what a gasfield is. So what we understand—what’s always been understood—is that a gasfield is a geological structure that exists somewhere in the Earth’s crust, and that it can be defined by an area and therefore lines on a map. That is what the licence is issued for, for the extraction of gas in that gasfield. What we’ve heard tonight from the Minister is that there are only two fields that are affected here—one is Māui and the other is McKee—and that if there are to be new wellheads put on those existing fields, then that is considered to be new deposits or new discovery and therefore caught by the new legislation. That seems to be fundamentally mixed up. It goes back to my point: if it is just to change the royalty structure, to bring it all into line, to simplify it, to overcome an anomaly, to make a minor change to bring it all into a clarified situation that avoids a loophole, why have that extra construction put on it?

Why were the advisers coming up to the Minister and giving her advice that this would constitute a new deposit? There’s no such thing as a new deposit inside an identified gasfield. It is either a gasfield or it’s not. That is the reason why, across those two big fields—or certainly across Māui, I should say, there are only two platforms, but there are multiple wellheads, multiple extractions from in that reserve.

We heard also that if we don’t do this, then the Crown could be missing out on $50 million in revenue. That number appears to have been plucked out of the air. Why wasn’t it in the explanatory notes? Why wasn’t it in some sort of discussion that was had with parties around the House? No one’s going to say, “Oh, that’s a bit silly. We won’t take that.” Instead, we got this ludicrous argument that there were hoards of the oil industry banging down the Minister’s door begging to pay more tax. That’s complete rubbish. Be upfront about what’s going on. If it’s just the change to the royalty structure, the levy structure, then have a bill that says that, not this convoluted arrangement that we’ve got here in front of us tonight.

When we look at oil and gas in New Zealand, particularly gas, it is a massive transition fuel—no question about that. I don’t have any doubt in my mind that, over the next few decades, the energy picture for New Zealand will change. We should be looking to that future. But it’s not here now; it won’t be here in five years’ time. It might be a little closer in 10 years’ time, but gas is going to be a transition fuel in the New Zealand economy for a long time.

So what we would question is why there isn’t a more upfront approach about what’s happening here? Because it also seems to me that if you look at just Māui alone, it was supposed to be extinct 20 years ago. It’s had two revisions of its potential, and the latest revision says, “Well, it’s got another 10 years with about 500 petajoules of energy likely available for extraction during that time.” I suspect that that’s about to be recalculated. I suspected that there is a new—they call it the “P” reserve figure that’s likely to go up. I think that’s probably one of the motivations here.

I can’t help thinking that the Government is slightly embarrassed, having gone on for so long about an energy transition, an economy that is going to be run on these new fuels which are not in sight—absolutely not in sight—knowing that for the next few decades we’re going to be relying on that big resource, and so they want their extra royalty out of it.

In principle, we don’t oppose royalties. But we do oppose the fact that this has been done very, very quickly; it’s been done without consultation with the industry; and it’s been done in a way that makes everything look just a little bit shifty. I heard some ridiculous comments from the Green member before about the balance of payments. I mean, you would swear that you could grow money on trees with the way those people talk. It’s just not possible. You would swear that there is some kind of alchemy that would make gold available at the swizzle of a stick inside a glass somewhere. It’s just not possible.

Looking at what Māui and McKee and Pohokura and any other gasfield that you like to mention has contributed to the economy of New Zealand over those last 50 years, it’s just extraordinary. Imagine what our balance of payments would be if we were as reliant on gas as we have deliberately made ourselves reliant on coal. It would be an absolute disaster—a greater disaster than we’re already seeing with the burning of coal at Huntly.

So any suggestion that this bill has got even an inkling of purpose in reducing carbon emissions in New Zealand is just out to lunch. We know that the burning of gas is a cleaner option than burning coal; everyone knows that. We know that doing that efficiently is even better. We know that, beyond that, when there is another fuel that can replace that, and it’s clean, that will be even better again. But in the meantime, we need to have a less-confused energy policy and a policy that does not make new definitions for the industry.

Thank you, Mr Speaker, for the opportunity to take a brief call on the Energy Resources Levy Amendment Bill, third reading. Just to use one of the words that the Opposition members have used, this bill has seen an illuminating debate.

I want to thank the Minister Megan Woods for bringing this to the House and also for answering some of those questions during the committee of the whole House stage. I note that there have been some other questions still firing in the last few contributions; they ran out of steam during the committee stage where they could have asked and clarified a bit more. So I thank the Minister for providing those clarifications for us.

So we know what this bill does. It amends the Energy Resources Levy Act 1976. What it does is it provides that fair play and fair financial return on the Crown’s fossil gas resources. It is what we need. That’s why I commend this bill to the House.