Hon Gerry Brownlee - Speeches

Launch of Energy Spot Campaign

nospam@example.com (admin) — Thu, 24 Sep 2009 11:58:00 +1200

It gives me great pleasure to be here today to launch The Energy Spot campaign.

The Energy Spot is a name I expect we will become very familiar with in the next year.

It is a new and large scale campaign to help change the way we use energy in our homes and businesses.

It is mainly a prime time television campaign which will set out for New Zealanders the practical choices and options they have to use their energy wisely.

We are all familiar with the Food in the Minute campaign we see on our televisions, well this will be something similar.

A series of 60 second "Energy Spots" played across all the main television channels on what options we all have to save power and money.

This idea is something I have personally pushed for because I believe it makes sense.

With just a little bit of practical advice we can make significant power savings at home and at work, and therefore make better use of our nation's energy resources.

New Zealand households spend about $3.5 billion on energy each year, our businesses spend about $13 billion a year.

It's likely we are wasting a good margin of that energy - energy we could be saving.

And we know from EECA's research that not only are people interested in ways to manage their energy use - but many also feel they lack the knowledge on how to go about it.

64% of respondents to EECA's survey said a barrier to using energy wisely was difficulty getting the information they need.

People want information that is easy to access and easy to understand - it's why prime time television is an ideal medium.

I have championed this project because I believe many New Zealanders are hungry for good authoritative information

How will Energy Spot work?

It's a 60 second spot that's going to screen three nights a week - Sunday Monday and Tuesday.

It will screen at 6.50pm on four channels- TV One, TV2, TV3 and Maori TV.

In addition, The Energy Spot will screen 13 other times during the week, at the discretion of the broadcasters.

By screening on four major channels at the same time, plus these other screenings, it will capture 96% of adults over the course of the year.

The Energy Spot will cover a range of topics.

One week it might talk about efficient ways to heat your house, another week might be about choosing appliances that will save you money in the long term.

Many of the topics will be about household energy usage but it will also cover energy use in business, and in transport. It will also explore some of the larger issues of where our energy comes from and how we can best use it.

A key part of the Energy Spot will be demonstrating a simple low-cost or no-cost tip that viewers can do straight away.

We want to emphasise that good energy management does not have to mean big capital investments - it can just be about changing habits in a way that doesn't impact on our lifestyle but can make a big difference to our energy bills.

It's never cheap to do television. This campaign is going to cost $4 million over the coming year. But we are getting value for money from it.

As well as savings for households and businesses, there is a saving to the country as a whole.

EECA estimates that most households can easily save 10% on their electricity bills by taking a few simple steps. That works out to savings of about $200 per household, or about $320 million in savings each year across the whole country.

Even if just one in every ten households who watch the spot avoid leaving appliances on standby, the country would save over $10 million or enough electricity to run over 5,000 homes a year.

And by reducing our energy consumption, we reduce our greenhouse gas emissions too.

As an example, a 10% decrease in electricity use equates to a reduction of 760,000 tonnes of greenhouse gas emissions every year. Assuming a future carbon charge of $25 a tonne, this is worth $19 million to the economy.

Using our energy more efficiently also provides other benefits -benefits like improvements to the health and comfort of our homes, and developing more profitable businesses

In a moment we will play a few episodes of The Energy Spot as an example of what we will see.

As well as providing advice, The Energy Spot will also say where more detailed information can be found, which will be on EECA's ENERGYWISE website.

A very important factor in delivering a credible, engaging programme is the presenter, and I am very happy to say that the presenter for The Energy Spot is here today and will shortly come up and introduce himself.

Jared Turner is an Auckland-based actor who has appeared in several films and who has all the right attributes to deliver energy efficiency messages to New Zealanders.

And Jared is, of course, just one member of the large team that is making The Energy Spot happen.

I would like to thank EECA and their associated companies for their hard work in making this happen.

The Energy Spot will start on Sunday the 4th of October.

It will help us use our power more efficiently at home and at work and it will help us become a nation that makes the most of our energy resources.

It will provide New Zealanders with the advice they are seeking and practical low cost solutions to help them be more energy efficient.

And for a relatively small upfront cost we have the potential to save the home, the workplace, and the economy a great deal of money.

I hope you enjoy watching the Energy Spot now, and also for the many months ahead.

So now it is my great pleasure to show you a sneak preview of the Energy Spot.

Thank you.

Opening Address to Australasian Institute of Mining and Metallurgy 2009

nospam@example.com (admin) — Wed, 26 Aug 2009 10:36:00 +1200

Introduction

Good morning. May I begin by saying how delighted I am to be part of your annual conference and, in particular, to be invited to present this opening address.

I would first like to welcome you all, especially the international delegates and conference speakers.

It’s a pleasure to be with you and I hope that while you are here in Queenstown you will have an opportunity to enjoy the many attractions that this beautiful part of New Zealand has to offer.

Let me begin by talking briefly about the government’s approach to our natural resources, then make some comment on your industry’s achievements over the past year.

Then I want to talk about the plans the government has to enable New Zealand’s minerals industry to grow over the coming years.

Government’s approach to natural resources

The National-led Government is absolutely determined to raise our living standards.

That is going to require a big improvement to our economic growth and productivity rates.

We see our natural resources as playing a big role in contributing to those goals.

There is no doubt that New Zealand is a mineral rich country.

A recent report by Richard Barker estimated our metallic mineral potential to have a gross in-ground value in excess of $140 billion, with lignite alone at least an additional $100 billion.

Australia is often referred to as the “lucky country” because of its natural resources endowment.

The Ministers in the previous Government often used to explain away the gap in per-capita income between Australia and New Zealand as being almost entirely due to their mineral abundance.

But New Zealanders need to know that this country is also well endowed with natural resources.

A report circulated by the World Bank some years ago ranked New Zealand second in the world in terms of natural wealth per capita.

We were behind only Saudi Arabia, but well ahead of Australia.

So I am firmly of the belief that our natural resources have the potential to make a significant contribution to our prosperity and our economic development.

As a nation we have neglected the contribution that the resources sector could make to our growth rate, levels of employment, and quality of life.

Our Government wants to change that.

We are going to be far more pragmatic and supportive than the previous administration towards exploration and mining activity.

Of course we must be cognisant of our responsibility to the environment. But mining and the environment can co-exist together. I will talk more about that in a few moments.

Now for some facts and figures…

I want to commend you all on an extremely successful year.

It has been a record year for mining activity with provisional data indicating that the national coal, metals and industrial minerals production for 2008 has exceeded $2 billion in value for the first time ever.

Looking briefly at 2008 in summary:

gold production topped 520,000 ounces with a record value of $626 million, largely on the back of increased production from Newmont’s and Oceana Gold’s operations and high commodity prices;

coal production was stable at 4.9M tonnes, marginally up on the previous year, but this should increase substantially over the coming years once Pike River is running at full capacity; and

the total value of all industrial minerals and building stones produced was almost $537 million.

These figures represent total production value however from the data to hand it appears that exploration activity and expenditure for 2008 was down on recent years.

Total expenditure for prospecting and exploration was $18 million, down from $38 million in the previous year.

While the current global economic recession contributed significantly to the drop in 2008 expenditure by limiting credit and tempering exploration budgets, repeating the previous year’s bumper expenditure was always an unlikely outcome.

One bright spot however is the successful near-mine exploration of major producers to raise the resource base and extend the mine life of some of our larger mining operations.

I’m referring here of course to the efforts of Oceana Gold at Macraes and Reefton, Newmont Waihi Gold at Waihi, and Solid Energy at Stockton.

Improving access to mineral resources

So what has the government got planned to lift investors’ perceptions of New Zealand as an attractive mineral investment destination and to make things easier for you to go about doing what you do best – finding mineral deposits and developing them.

Increasing our international exposure is a fundamental way to encourage new explorers and investors into New Zealand.

Crown Minerals will continue to actively promote New Zealand’s mineral potential at appropriate international conferences and to target key investors and companies.

For my part, as Minister of Energy and Resources, I am committed to unlocking New Zealand’s mineral potential for the benefit of all New Zealanders, both present and future.

At the beginning of the year the Prime Minister asked me to specify my top priorities for each of my portfolios.

I advised him that one of my top priorities in the resources area is to improve access to mineral resources.

In my short time as Minister I have become acutely aware that one of the fundamental barriers to mineral exploration and development is access to prospective land, particularly to land administered by the Department of Conservation.

Reasonable access to the mineral estate in Crown-owned land, particularly conservation land, is a key issue.

There are obviously competing objectives here but there is scope to explore how economic development objectives could be better reconciled with other land values.

There is the potential for more flexible arrangements that do not undermine conservation and environmental objectives.

The Minister of Conservation and I have agreed that officials from Crown Minerals and DOC are to work together with a clear directive to make progress on improved access to conservation land across three fronts.

These are, first, a review of Schedule 4 of the Crown Minerals Act.

Second, improvements to DOC processes for access arrangements

And third, consultation on the reclassification of DOC administered land

I now want to briefly discuss each of these areas of work in more detail.

Starting with Schedule Four, let me put it into perspective.

I understand that DOC administered land hosts a majority of our mineral potential – an estimated 70%

About 40% of that land is listed in Schedule 4 of the Crown Minerals Act.

That means something like 30% of our most prospective land is off limits because the Minister of Conservation is not allowed to enter into any access arrangement for any area described in Schedule 4, except for certain low impact activities.

This effectively precludes all mining activities and most exploration activities on that land.

Collectively the areas currently covered by Schedule 4 make up around 13% of New Zealand’s total land area and include the highest value conservation areas.

Some of the areas within Schedule 4 are known to host significant potential for zinc, lead, copper, nickel, tin, tungsten and other metals.

The current inclusion of these highly prospective areas in Schedule 4 has potentially denied significant opportunity for economic benefit at both a national and regional level.
I have directed Crown Minerals to undertake a strategic review to determine areas possessing significant mineral potential that, with the removal of the access prohibition provided by Schedule 4, could through responsible mining techniques contribute considerably to our prosperity.

The Crown Minerals Act sets out a process for amending Schedule 4 and as part of that process the Minister of Conservation and I will need to consult with interests likely to be substantially affected by any changes before making a decision.

While most here would agree that a review of Schedule 4 land is much needed, others in the community will have the view that, given most of the land has a high conservation value, there are very few places listed on Schedule 4 where mining activity might be appropriate.

In the case of Crown land, including that administered by DOC, the Crown has distinct interests in both the land itself and the Crown owned minerals on, or under, that land.

The relative value of these two interests depends on the specific circumstances.

Accordingly, before making a final decision to recommend that certain areas are removed from Schedule 4, the Minister of Conservation and I will be required to carefully consider the land’s mineral potential and conservation values respectively.

DOC processes for access arrangements

Turning now to the Department of Conservation access arrangements, I am well aware that, although DOC access applications are generally granted, there are some particular concerns in your industry about the process.
Common concerns include the length of time to process applications, costs in time and resources, a lack of transparency, and conditions that some applicants consider unduly onerous.

There are also indications from industry that devolved decision making and the absence of generic DOC processing procedures has resulted in inconsistencies as different conservancies take different approaches.

The Minister of Conservation and I will require DOC and Crown Minerals to progress the development of mandatory nationwide DOC standard operating procedures for processing access arrangement applications under the Crown Minerals Act.

A large part of the solution, in my view, will be better communication of what the rules are, and how they will be consistently applied across all conservancies.

The new procedures will provide for:

improved clarity regarding the information that needs to be included in an application;
improved guidance on the factors that DOC needs to consider under its legislation – in other words, to explain to applicants why certain information is needed;
specified fees and consistency in setting compensation; and
clearer timeframes for each step of the process to reduce the delays and frustrations currently experienced by both the industry and DOC.

As part of the process, officials will also seek comment and further information from the minerals industry, in particular about the guidance and application forms that industry would like to have available to assist applicants in preparing access applications.

I envisage that the new standard procedures will be operational early next year.

Consultation on the reclassification of DOC administered land

I would now like to touch on the reclassification of DOC administered land.

Reclassification currently takes place under several different provisions of five different statutes.

None of these statutes require the Minister of Energy and Resources to be consulted prior to public notification and only two - national parks and national reserves - require me to be specifically notified.

Accordingly, under current law any opportunity costs associated with a reclassification can only be assessed by Crown Minerals and raised with me after proposals to reclassify areas have already been publicly notified.

This situation is clearly unsatisfactory as reclassification of DOC land can significantly raise the conservation threshold in respect of gaining access to mineral resources.

Fortunately, with the Oteake Conservation Park proposal, at a late stage I was able to meet with the Minister of Conservation to discuss the impact that the park would have on any future development of the Hawkdun lignite deposit.

The Minister of Conservation gave due consideration to the economic development potential and consequently the park boundaries were amended to exclude this important lignite deposit which constituted just 0.3% of the proposed conservation park.

To improve the present situation, the Minister of Conservation and I have directed officials to develop options to improve processes around DOC consultation with Crown Minerals on conservation land reclassification.

Personally, I favour a system where all DOC land reclassifications are referred to Crown Minerals prior to public notification so that an early review of the land’s mineral potential can be undertaken.

I am confident that the three initiatives that I have outlined today will provide a solid platform for improving and increasing access to conservation land for responsible mineral exploration and mining activity.

Environmental Responsibility

Let me pick up on that theme of responsibility for a moment.
One thing I always stress when talking about our natural resources is that good economic outcomes must not be inconsistent with good environmental practice.

As a government we know that we need to preserve the environment for future generations.

There are a number of examples that demonstrate that good mining practice can be reconciled with respect for the environment.

Take for example the Pike River coal project on the West Coast, which was presented with a certificate from DOC for the “environmental consideration it demonstrated” in the development of the coal mine.

The mine’s environmental footprint has been kept to a minimum through good design, with little damage to the ancient trees and bush.
Driving through the spectacular Paparoa ranges, you would not know there is a coal mine only a few hundred metres away.

The building of a road through the ranges to get access to the coal mine has actually opened up that area of the country for people who otherwise wouldn’t get to experience it.

There is ample scope for environmental tourism.

The Newmont Waihi Gold in Martha Hill is another example of mining co-existing with environmental responsibility.

Rehabilitation of the Martha Mine has been a major part of mine planning.

Waste rock embankments and disturbed land are being returned to productive pasture.

When the mine closes it will be turned into a safe, stable, and self-sustaining rehabilitated state.

The pit and surrounds will become a recreational lake and park, and extensive areas of pasture will be established over waste rock stockpiles and other disturbed areas.

A final example is the work of Solid Energy at the Stockton Opencast Mine.

Solid Energy has an environmental policy of reasonably minimising the adverse local environmental affects that may be an unavoidable part of operating coal mines.

As part of this, it spent 13 months between 2006 and 2007 collecting over 6,000 “Augustus” native land snails from the Mt Augustus ridgeline of Stockton Mine.

Following collection of the snails, much of the original habitat was moved 800 metres north.

By the end of 2007, approximately 4,000 snails, and over 1,000 eggs, had been released onto this and other sites.

The three examples I’ve mentioned demonstrate that mining and good environmental practice can sit side by side.

I hope to see many more examples of these in the future as the industry expands and grows.

Conclusion

In closing, let me reiterate what I said at the start of my address.

The National-led Government is absolutely determined to raise our living standards.

The development of our abundant mineral resources will play an important role in achieving that goal.

My hope for the sector in the coming years is that we see increased prospecting and exploration in New Zealand, leading to increased production and added value to the New Zealand economy.

Thank you again for the invitation to speak to you this morning and I wish you all a productive and informative conference.

Address to Private Capital Markets Forum: "Venture Capital in NZ"

nospam@example.com (admin) — Mon, 10 Aug 2009 10:39:00 +1200

Good Evening,

Thank you for the invitation to speak to the New Zealand Venture Capital Association.

I wish to start by paying tribute to efforts made by Colin McKinnon, the association's executive director

And also to Franceska Banga for her introduction and the work she undertakes on behalf of the Venture Investment Fund.

This government's overall goal is one of growing the New Zealand economy to deliver greater prosperity, security and opportunities to all New Zealanders.

We set ourselves the aspiration of raising exports from there current level of 30 per cent of GDP to 40 per cent and income parity with Australia by 2025.

To generate the higher rate of growth required we need to rapidly alter New Zealand's mix of goods and services towards those that provide higher value and higher returns - products which differentiate on the basis of quality and innovation rather than price.

As a small open economy located far from markets, we face some barriers. The global economic crisis has made our task that much harder still.

However, other small, open, advanced economies with similar characteristics, such as the Scandinavian countries, have been successful in leveraging their natural resources into higher value products.

There is no reason why New Zealand cannot enjoy the same level of success.

The National-led Government came to power with a clear agenda designed to help New Zealand businesses through the crisis but to also ensure that they are well placed to take advantage of opportunities in the long term.

As a government we want to make it clear what actions we will take to support New Zealand businesses.

This is why we are in the process of developing an economic growth agenda with a clear path forward which makes it easier for businesses, unions and the public to understand what we want to achieve and to add their support to the cause.

We envisage that this will lead to a package of measures focussed on building our competitive strengths and raising productivity.

In February this year I wrote to the Prime Minister, outlining my three priorities as Minister of Economic Development. Specifically these are to:

Improve business support programmes;
Develop areas of competitive strength; and
Bring an economic development perspective to major government decisions such as the Rugby World Cup.

One of the first steps towards improved business support programmes is a new grants scheme called the International Growth Fund which was launched on 1 July by New Zealand Trade and Enterprise.

This Fund will be focused on supporting those firms most likely to operate successfully internationally and who will deliver the greatest benefit to the New Zealand economy as a whole.

NZTE has also restructured the delivery of the new grants programme in order to better assess and meet business need.

As a result, there will be more targeted engagement with business which will enable better, more relevant solutions.

We have also been reviewing existing government business assistance programmes with a focus on improving the efficiency and effectiveness of these.

New Zealand also needs to increase its share of existing markets as well as develop new markets, products and services around areas of competitive strength - our primary products.

To ensure we have an export lead recovery we are investing in some key initiatives. They include:

Ensuring public research and science institutions are more responsive to business needs and better support business opportunities in our areas of competitive strength.

Assessing the merits of proposals to create a network of food research development and commercialisation centres. Good progress is being made in this area and I expect to be providing advice to my Cabinet colleagues on ways forward in the very near future.

We have also replaced "Fast Forward" with initiatives that more effectively link research, development and commercial activities in the primary sectors and address impediments to economic growth. I plan on working closely with the Ministers of Agriculture, Forestry and Fisheries on specific initiatives over the course of this year. Can I add aquaculture is an example an area where we can develop new food products and develop new markets.

But to achieve success requires several things, not least of which is deeper and more sophisticated capital markets.

Efficient financial markets are fundamental to economic development because they attract capital and channel it to entrepreneurs and growing businesses.

And successful financial markets are often more than the sum of their parts.

The breadth and sophistication of an economy's financial infrastructure is important.

At a minimum we need exchanges where equity can be readily traded, and people willing and able to help match investment opportunities with suitable funding. Also crucial are early-stage capital markets.

I accept it is not easy to establish a venture capital industry here and acknowledge it takes time to grow, but the growth so far has been encouraging.

This government recognises and appreciates the value of the work that both the NZVCA and NZVIF have done in catalysing the development of venture capital and early stage markets in New Zealand so far.

The New Zealand Venture Investment Fund was established in June 2002 and has now made $110 million in capital commitments to six Venture Capital Funds.

Investments of both private sector capital and VIF capital combined are $232 million into 48 companies as at June 30th this year.

The Seed Co-Investment Fund has 9 approved investment partner networks and $20.9 million combined crown and private sector capital committed to 26 companies.

This government also recognises that developing a self-sustaining early stage capital market is a long game.

We recognise that some aspects of our capital markets are underdeveloped and that the task has been made doubly difficult with the current economic downturn.

So what direction and attitude is the new government taking towards protecting and encouraging venture capital.

The first step is recognising that for venture capital to succeed the underlying business settings have to be put into place.

I am pleased to say in a short period of time we are making good progress,

And I think this first year of the new government will be judged as a foundational year for steering the economy back on track.

For example there are a number of programmes in place.

We have established a Tax Working Group which is taking a medium term look at taxation issues. This working group is chaired by Professor Bob Buckle and will report back by the end of the year.

It's been asked to give advice on how we can have a competitive tax system and means it will also be watching carefully developments in Australia with its tax review.

In recent week the government has also announced the 2025 Productivity Taskforce chaired by Dr Don Brash.

This will identify policy setting and changes to deliver productivity growth and it has a tight time frame of having to release an initial prescription by October this year.

You will be aware the Regulation Review led by Rodney Hide is well underway and will no doubt lead to a significant reduction in business red tape.

Just this week, my colleague the Immigration Minister Jonathan Coleman, and I released a new Business Migrant scheme

Developed on the back of the Job Summit and after consultation with industry leaders this new package is designed to attract high value investor migrants.

In other words it's a way to attract more equity into the country.

You may be aware the Finance Minister is leading a rewrite of the foreign investment rules to attract further balanced investment

So you can see there is no shortage of ideas on how to create the best business settings.

More specifically there is also some fresh thinking being applied to the issues of capital investment markets.

Many of you will be aware we have the Capital Markets Development Taskforce underway.

It is designed to address a range of various tax and regulatory issues on behalf of the industry.

This Taskforce is in effect an acknowledgement by the government that efficient financial markets are a key part of an environment in which the private sector can thrive.

And for those of you who have contributed and made submissions so far I would like to express the government's appreciation.

It is too early for me to say what results we will receive from the Capital Markets Development Taskforce but I can say that my colleagues and I will be keen to implement any recommendations that are beneficial for the growth of our economy.

You may also be aware my officials with the Ministry of Economic Development are conducting a review of the Venture Investment Fund.

I am not due to receive the results until September but can I signal now that I am persuaded by the work of the fund so far, and see no value in undermining or dismantling the important progress in developing venture capital funds.

In recent weeks I have met with Sir John Anderson and Fransceka Banga to discuss venture investment.

It was pleasing to hear about some of the businesses and their products assisted by venture capital investments.

Of course one step the VIF board considered necessary to help cope with the challenging economic climate is the creation of the annex fund.

It seems to me to have been a logical move to help businesses feel confident about the availability of follow-up funding at a time when the sources of capital are drying up.

I have also had the opportunity to meet with Jenny Morel from Number 8 Ventures, she is, as many of you are aware, a strong advocate for venture investment.

It was an interesting meeting. Jenny argued strongly about the ratios behind the government investment. She argues there is a greater need for the Crown to offer more one to one ratio's for venture investment.

While I am not going to rush to judgement on this, I do want to say I may have some sympathy for the argument, and simply note it as a matter worthy for further consideration.

I say this because I think it's important to signal the government still retains an open mind on developing venture capital initiatives.

So can I start to conclude by saying good progress is being made toward fixing the underlying business fundamentals in the New Zealand economy.

Get that right and the prospects for venture capital gets better.

And can I leave you with this thought. The economic climate is beginning to change. Just this week the share market was back up to the 3 thousand points marks.

The language of the economic commentators is beginning to subtly change - less talk about the bottom falling out of the economy and more talk about how long it will take to recover.

So I think its time to embrace a more positive tone.

Less worry about how we can protect ourselves - and more thinking about what opportunity exists .

And the government will continue with its clear and consistent goal to get our economy back on the road to recovery.

I wish you the very best of luck for the New Zealand Venture Capital Association's annual general meeting....and look forward to meeting and talking to some of you later in the evening.

Opening Address to the 2009 EDANZ Conference

nospam@example.com (admin) — Mon, 10 Aug 2009 10:37:00 +1200

Priorities for New Zealand in the current economic environment

Introduction: Weathering the downturn

The Government understands that times are currently tough for businesses and local communities and that Economic Development Agencies are working hard to respond to these challenges.

You are "on the ground" delivering the solutions and knowledge that we need to emerge strongly from this recession.

I encourage you to continue in your efforts to deliver regional economic development activities which will help strengthen the national economy

As you know, what began as a crisis in the American and European financial markets rapidly developed into a concerted worldwide recession.

Many governments are still working to stabilise troubled banks and cope with rapidly rising unemployment.

New Zealand has avoided the worst effects of the crisis due to our sound banking sector, an export base that gives us a comparative advantage in hard times, swift and measured responses by our Government and the Reserve Bank - and of course the resilience that ordinary Kiwis and businesses have displayed across the country.

Our banks remain stable and are now, along with Australia's and Canada's, among the most stable in the world. The retail deposit and wholesale funding guarantees that we have maintained are working.

Our export base gives us a comparative advantage in hard times. While consumers are putting off buying new cars or flatscreen televisions, they still need our dairy products, meat, wine and fruit.

The Reserve Bank's OCR cuts have lowered borrowing costs for individuals and firms.

We have aimed to protect the hardest-hit New Zealanders from the worst effects of the recession. We are focused on helping businesses protect jobs and giving New Zealanders who lose their jobs the best chance of finding a new one.

As a result, we have committed to a fiscal stimulus that will amount to about 5% of GDP over this year and the next - high by world standards.

While our path has been smoothed by these actions, we have not escaped the global downturn - firms are facing challenges including tighter credit and falling domestic and overseas demand.

Ultimately, we must use this recession as the occasion to shift our country onto a higher growth path. To truly "recover", we must improve the way we do business, and make hard work and innovation more rewarding.

We have a real chance to emerge from the recession in a stronger position than most other countries - with higher levels of productivity growth and improved export competitiveness.

Today, I'd like to talk with you about the opportunities that I see amidst the current turmoil.

First, I want to introduce some important themes from the Government's new Economic Growth Agenda, and some steps we have already taken towards lifting productivity and creating a better environment for growth.

Second, I want to talk about the areas in which local economic development organisations can support and strengthen our work.

Seizing the opportunities will take some hard work - and a lot of the creativity that our country is known for - but I believe that we are up to the task.

A New Focus

My colleagues and I spent our first 100 days in office focusing on quickly implementing our campaign promises to make it easier for employers, workers, and households to weather the downturn.

In that time, we accomplished a lot in the way of loosening restrictions on business flexibility and pumping a significant amount of money into the economy to support jobs - from the $1 billion in income tax cuts that have been putting more money in average workers' pockets since April to the nearly $500 million worth of roading, housing, and school projects that we accelerated.

Now, while we're still concerned with helping ordinary Kiwis and businesses ride through the recession, we also have to think about the future for New Zealand - how we will emerge from the downturn in a stronger competitive position.

To address this, my colleagues and I are developing a new Economic Growth Agenda. One thing that won't change is our commitment to putting common-sense ideas into practice - this plan will be about actions, not words.

I expect economic development agencies to have a strong role in delivering and supporting our Agenda in a number of key areas.

Key Message: Emerging stronger

The Economic Growth Agenda announced by the Prime Minister on 15 July isn't just about surviving - it's about maximising our opportunities and emerging from this downturn in a stronger position relative to the countries we compete with internationally.

We are seeking to raise New Zealanders' incomes and narrow the income gap that has opened with Australia and our other trading partners.

We aspire to raise exports from their current level of 30 percent of GDP to 40 percent, and achieve income parity with Australia by 2025.

To do so, we'll need to play to our strengths - our expertise in food production, our beautiful landscape, unique culture and clean environment, and our Kiwi ingenuity - and take good opportunities to create and market higher-value goods and services.

This will mean improving our economic fundamentals and making smart investments in six key areas:

We will invest in productive infrastructure, including new road, school and hospital projects and an ultra-fast broadband network that will help our firms overcome the "tyranny of distance" to reach new customers abroad.

We will create a world-class tax system that rewards hard work and innovativeness.

We will reform regulatory road-blocks such as the unwieldy Resource Management Act.

We will put discipline into government spending and provide front-line services at a lower cost.

We will invest in lifting the literacy and numeracy skills of our young people.

We will implement responsive and targeted business assistance and align our innovation system with industry needs.

As Minister for Economic Development, I am leading work in the sixth area, and working with my colleagues on several others. In particular, I would like to talk to you about three of my key priorities under the Economic Growth Agenda:

Overhauling business support programmes to improve the benefits gained from investment in firms with high international growth potential;
Building on our areas of competitive strength and our science and innovation system; and

Ensuring lasting economic benefits to New Zealand from major initiatives such as the Rugby World Cup.

Clearly, much of the Economic Growth Agenda is relevant to economic development agencies, as you are often the "front line" of support for growing and established businesses.

I understand that your priorities, including digital development, the Rugby World Cup Legacy Project, building management capability in firms, local infrastructure investment, and acting as a conduit between firms and Government growth and research funds, often relate to our goals, and I welcome your input and engagement.

Economic Growth Agenda

Although my colleagues and I are still developing further the details of the Economic Growth Agenda, we have already taken some initial steps. For example, we have:

Launched New Zealand Trade and Enterprise's new International Growth Fund, which is focused on supporting the firms that are most likely to succeed internationally and bring the greatest benefit to the New Zealand economy as a whole. This, along with our wider Review of Business Assistance, will change the way we deliver growth funding to firms.

Created the Primary Growth Partnership, which will provide up to $70 million in matching funds for primary sector research. The Ministry of Agriculture and Forestry will be delivering funds by the end of the year.

Invested $1.5 billion over ten years to roll out ultra-fast broadband to businesses, schools, hospitals, and 75% of NZ homes.

Started reviewing clunky regulation including the Resource Management Act and aquaculture related legislation.

Set up the NZ Insulation Fund to improve health and energy efficiency by helping home owners and occupants fit homes with insulation and clean heating devices.

Furthermore, we've got several important priorities coming up that promise to be quite relevant to your work as local economic development agencies:

I am working with Jonathan Coleman, the Minister of Immigration, on a new Business Migration Package, which we announced on the 28th of July.

We aim to ensure that new investor and entrepreneur migrant rules bring the most benefit to New Zealand by conducting targeted marketing campaigns overseas and linking new migrants into domestic business and investment communities. I expect EDAs to play a key role in doing so.

I am currently considering options for creating a network of food research development and commercialisation centres. This would establish a number of industry hubs across the country, allowing small and medium sized companies access to the facilities they need to develop new products and enter new markets.

I am working with Murray McCully, the Minister for the Rugby World Cup, to ensure that we are taking the actions needed to ensure that the event brings lasting benefits to New Zealand.

While the Rugby World Cup is a fantastic opportunity for us as a nation, its success hinges on getting things right at the regional level, with stadium development and local tourism and business initiatives. We expect to work with EDANZ and economic development organisations to link our "big picture" with regional activities.

I welcome your input to and participation in the Economic Growth Agenda that we are putting forward. Much of the important work of "making it happen" will take place at a local and regional level.

You are already involved in some of my key priorities, such as the Rugby World Cup and business migration, and I hope that you will continue to engage with us as work continues on issues such as business assistance grants, research and development initiatives, broadband roll-out and digital literacy, and infrastructure investments.

Conclusion.

While New Zealand is still facing significant challenges as a result of the world financial crisis, rapid action, good policies, and a dash of Kiwi resilience have brought us through the most dangerous times. However, we must now face up to the longer-term threats.

Over the past decades, our incomes have not kept up with those of our competitors, and our trade balance has slipped into negative territory.

Our Government seeks to reverse these trends by making innovativeness and hard work more rewarding.

As a result, we are laying out an ambitious Economic Growth Agenda that will commit to common-sense actions rather than just more words.

I've laid out a few of our actions, and expect to have a lot more to announce in good time.

Thank you for your time, and I look forward to working with you.

Speech to the Centre for Advanced Engineering Distinguished Fellows’ Forum

nospam@example.com (admin) — Fri, 24 Jul 2009 10:43:00 +1200

Unlocking New Zealand’s Frontier Resources

Introduction

Thank you for the invitation to be here today.

Can I say at the outset that I’ve long admired the work undertaken by the Centre for Advanced Engineering, particularly in relation to energy and resources.

I think you play a valuable role in increasing our overall knowledge base in relation to new technologies, and explaining how they might contribute to future economic growth and social progress.

The CAE is a key linkage between universities, research institutes and the private and public sectors.

So I’m delighted to be here today to address you on the topic of unlocking New Zealand’s frontier resources.

I’d first like to talk our resources potential, about the Government’s attitude to our natural resources, what we’ve done already since coming to office, and the work streams that have commenced within Crown Minerals.

I’ll then turn to frontier resources and talk about methane hydrates and lignite in particular.

I think the most valuable part of today will be the conversation I hope we’ll have after my short address about what the future looks like for New Zealand’s frontier resources.

I’m particularly keen to hear your views about what the role of government should be in this area, and how we might best assist the development of those resources.

Our resources potential

So let me start by talking about our resources potential and how this government views that potential.

I think it’s well understood that New Zealand has excellent renewable resources.

Almost all New Zealanders would know for example that much of New Zealand’s electricity supply comes from hydro generation.

And thanks to the vagaries of the weather in the last few years, we are intimately acquainted with what happens when we run out of water each winter!

Geothermal energy is also well known, and there is an increasing knowledge that we have potential for quite a lot of energy to be generated from wind – although that’s not popular with everyone.

On the other hand, very few New Zealanders I suspect are aware of the vast endowment of fossil fuel resources that New Zealand possesses, and the potential they have to contribute to our economic growth and prosperity.

I suspect if you told most people that more than 1.2 million square kilometres of our exclusive economic zone are likely to be underlain by sedimentary basins thick enough to generate petroleum, they would think you were nuts.

Likewise if you told them that New Zealand’s offshore petroleum basins, even with conservative assumptions, could be worth in the order of $4 trillion New Zealand dollars.

But both those statements about our resources potential are accurate.

I think most reasonable people when hearing those numbers would regard the government as having a duty to investigate how this potential could be translated into higher standards of living for New Zealanders.

The previous government used to talk a lot about “economic transformation”, as if saying it often enough would somehow make it happen.

There is no doubt in my mind that New Zealand’s natural resources have the potential to deliver a transformation of our economy.

As a government, we want to explore how that can occur, and what role we need to play.

Australia is often called the “lucky country” because of its natural resources endowment and rode an economic boom for the first part of this century on the back of it.

New Zealanders need to know that this country is similarly endowed.

I see it as part of my job as Minister of Energy and Resources to increase public awareness of our resources potential.

This Government is excited by the quantum gains in economic development, growth and prosperity that our natural resources offer us.

For too long now we have not made the most of the wealth hidden in our hills, under the ground, and in our oceans.

As a government we are determined to unlock our natural resources potential.

The resources sector’s contribution

Let me talk briefly about the contribution that natural resources already make to our economy.

Most New Zealanders would know that we are an agricultural nation; that a considerable amount of our prosperity is built on overseas consumers buying our dairy products and our lamb.

New Zealanders would also know that tourism is a major contributor to economic growth as well.

What most people wouldn’t know is that the minerals, oil, gas and coal being produced in New Zealand have a value of about $4.5 billion per year, and contribute more than $2 billion to exports.

The oil & gas sector by itself contributes $1.6 billion to the NZ economy annually, more than 8600 jobs, and has paid $1 billion in royalties to the Crown over the past 8 years.

Those are great figures already, but they have the potential to be so much larger.

Our natural resources endowment presents New Zealand with the potential to spread our economic reliance beyond the agricultural sector.

World demand and the role of India and China

It’s been widely acknowledged that New Zealand, as an agricultural exporting nation, is in a prime position for the coming years as the growth rates of China and India mean their citizens will increasingly demand our farm based products.

It’s also true that those economies are extremely hungry not just for food, but also resources.

They want coal for power stations, silica for microchips, iron sands for steel, hydrocarbons for automotive fuels and feedstock for petrochemicals.

Demand for these resources will only increase, and prices will only increase.

Between 2000 and 2006, world demand for coal grew at nearly 5% per year. Coal consumption is expected to grow by 61% between 2006 and 2030.

Global demand for natural gas is expected to increase by 52% between 2006 and 2030.

New Zealand is in the fortunate position of being able to meet some of this demand.

Ten years ago with mineral prices at record lows, the prevailing wisdom was that the “old economy” of natural resources was on the way out, with the “new economy” of technology and services on the way in.

That has all changed. In 2000 the market value of Cisco Systems, the world’s leading internet company, was greater than that of the world’s 12 largest mining companies combined.

In 2008 Cisco is still a large and successful company but its value is significantly less than that of BHP Billiton, the largest mining company.

What we’ve done already

We’ve done a number of things already to indicate the government’s changed attitude and to start the process of developing our natural resources.

First, we repealed the ban on new base load thermal electricity generation, which was a massive disincentive to oil and gas explorers.

Second, we’re spending $20 million over the next three years on seismic data acquisition, on top of the $3.75 million spent over the last summer.

A blocks offer based on the data already collected is scheduled for opening in late 2009

Third, we opened bidding for new petroleum exploration permits across two large offshore areas in the Raukumara and Northland basins, with a combined total area of over 66,000 square kilometres.

These blocks offers have already attracted considerable interest from a large number of international and local exploration companies.

Fourth, we’ve ensured the Hawkdun lignite deposits in Southland have stayed outside the boundary of the Oteake Conservation Park.

The lignite deposits are a significant resource of recoverable energy which could yield liquid fuels equivalent to New Zealand's transport requirements for 15 to 20 years. I’ll talk more about lignite in a moment.

And fifth, we have announced that we will revise the New Zealand Energy Strategy, so that it better recognises our goals for economic growth and prosperity, balanced by environmental responsibility. Natural resources will be an important part of the new strategy.

More work to be done

It’s clear that there is much more to do. Let me mention some of what is underway already.

I’ve asked Crown Minerals to review existing domestic and international petroleum policy, licensing and fiscal regimes to ensure they are fit for purpose.

The work will include identification of petroleum, industrial, environmental and economic policies that work well in other jurisdictions and the reasons for their success.

The aim of the review will be to recommend measures that ensure NZ continues to have a petroleum regime that is attractive to explorers and extractors, but also sensitive to environmental best practice.

Crown Minerals also has a “big oil” project, looking at how New Zealand might manage a large oil and gas find in the future to ensure we maximise value from the development of our resources.

Access to the Crown conservation estate for the exploration and mining of minerals is also a critical area of work because of the amount and prospectivity of that land.

Crown Minerals is working with the Department of Conservation with an aim to improve the access provisions through a review of the land currently held under Schedule 4 of the Crown Minerals Act, and the implementation of DOC standard operating procedures to provide transparency and clear information requirements for access applicants.

We are also considering a number of amendments to the Crown Minerals Act and the Continental Shelf Act 1964 to enhance the regulatory environment and reduce costs.

Frontier Resources

Now that I’ve mapped out the potential of our “conventional” natural resources, let me turn to what are often called “frontier resources.”

In this area I’m advised that New Zealand has considerable potential.

The recent extension of the country’s continental margins makes New Zealand the fourth largest maritime nation in the world.

Interest in seafloor minerals occurrences such as phosphates, iron sands and zones of metallic mineralisation associated with the Kermadec arc have increased significantly in recent years

But there’s a huge amount we don’t know. For example, very little is known about the extent and value of our maritime mineral resources.

However, technology is now enabling areas of deeper water to be targeted for exploration and commercialisation of oil and gas, so that knowledge gap should begin to close.

Methane hydrates

One very interesting resource is methane hydrates.

We know that there are methane hydrate deposits off the East Coast of the North Island from Gisborne to Marlborough, and also offshore from Fiordland.

We also know that they could provide up to six times the volume of gas produced from the Maui Field.

The resource located offshore on the East Coast of the North Island is characterised by a number of “sweet spots”.

These form one of the largest known offshore deposits in the world and are unique in that they are closer to shore - within 20 km - and in more accessible water depths than others.

These features make our “sweet spots” comparatively attractive to research and development options.

Estimates of the energy potential of gas hydrates from around the world have prompted major economies to advance the development of discovered methane hydrate resources.

The US Geological Survey has conservatively estimated that the worldwide amount of carbon held in methane hydrates is twice the amount found in all known fossil fuels on earth.

I understand that MED recently commissioned from the Centre an “Options analysis for the commercial and economic development of offshore methane hydrates as a future energy option for New Zealand”.

I’m yet to read the report but I understand the report confirms methane hydrates are a resource of strategic economic advantage to New Zealand.

I’m advised that the key findings are that:

Methane hydrates offer a real opportunity to make a significant contribution to New Zealand’s economic requirements.

Accelerating their development offers the potential for significant increased economic benefit.

Contingent on the development of commercial production technology, methane hydrates could underpin New Zealand’s future energy supply system and also form the basis for new export industries.

There are some immediate and practicable steps that could be taken that could significantly enhance our chances to successfully develop and maximise economic benefits from methane hydrates.

Advances in technology suggest commercial production of methane hydrates could be around 2020 and some international groups are planning for as early as 2016.

This timeframe probably means immediate consideration is required to determine an appropriate allocation regime and overall structure to manage the procurement and development of this resource.

I’d be very interested in your thoughts in this area.

Lignite

I’d also like to make some comments about our lignite resource.

South Island lignite is a strategic energy resource that has enormous national and regional economic implications.

Development of the lignite resource could not only give New Zealand assured supply of transport fuels, but have other economic benefits including improved balance of payments and tremendous economic boost to the southern South Island.

In contrast to other potential hydrocarbon resources, New Zealand’s lignite resources are well understood.

At least 6.3 billion tonnes of lignite is technically and economically recoverable. Their energy content is about 75,000 petajoules, equivalent to about 20 Maui gas fields.

Development based on a world scale facility could transform New Zealand from a net consumer to a net supplier of energy commodities and give New Zealand a significant economic advantage.

The key to unlocking this opportunity will be the application of environmentally-focused gasification technology.

In 2005 an independent study was carried out on behalf of MED to determine the contemporary economics of a development scenario for the Hawkdun and Home Hills lignite deposits. This study highlighted the following:

New Zealand’s lignite is amongst the most competitively priced energy resources in the world.

The resource is suitable for extraction and conversion to high value energy products.

The total energy content of recoverable lignite is about 75,000 Petajoules, which would provide 71 million tonnes of transport fuel, enough to supply New Zealand’s total transport fuel requirements for 15-20 years or,

Provide all of New Zealand’s nitrogenous fertiliser requirements for 127 years together with additional exports of 1.9 million tonnes per year, providing an annual income of $540 million or,

Supply New Zealand’s domestic requirements for methanol and provide an annual income of $1 billion or,

Supply all of the South Island’s electricity demand for about 60 years.

The development option that appears to have the most going for it is conversion to automotive diesel fuel.

My own view at the moment is that use of the lignite resource is probably not feasible without greater advances in carbon capture and storage technology, so that carbon emissions are kept to a minimum.

I’d be interested in your thoughts about the future of our lignite resource.

Conclusion
The only thing I want to say in closing is that we have a very bright energy future.

We have world class renewable energy sources and we have superb natural resources.

We just need to get the policy settings right so New Zealand’s energy sector can really fly, and contribute to the economy in the way we all know it can.

I look forward to working with you to make that happen and would welcome any comments that you have.

Address to Inaugural Coal Seam Gas Industry Briefing

nospam@example.com (admin) — Tue, 30 Jun 2009 10:46:00 +1200

Introduction

It’s great to be here today for what I hope will be the first of many conferences in New Zealand dedicated to coal seam gas.

Coal seam gas has the potential to make a sizeable contribution to New Zealand’s energy security, our economic growth rate, and our prosperity.

In my speech today I’ve been asked to address the outlook for New Zealand's energy industry, with an emphasis on the opportunities for coal seam gas.

I’ll start by talking briefly about the government’s general approach to our natural resources, before turning to coal seam gas developments in New Zealand, its treatment under New Zealand’s petroleum regime, the potential benefits for New Zealand from coal seam gas, and some work we’ve got planned which we hope will allow the industry to grow over the next few years.

Government’s approach to natural resources

Let me start by talking briefly about how this government views our natural resources.

The Government believes that our natural resources have the potential to make a significant contribution to our prosperity and our economic development.

The contribution that the resources sector could make to our growth rate, levels of employment, and quality of life, has been neglected in the last few years.

Other resource-rich countries, like Australia, have worked hard to maximise the return from their resource endowment and have reaped the rewards.

Australia is often called the “lucky country” because of its natural resources endowment.

Indeed, in a recent newspaper interview, the former Finance Minister, the Hon Michael Cullen explained that one of the reasons Australia is more prosperous than New Zealand is because of their endowment of natural resources.

New Zealanders need to know that this country is similarly endowed. We just haven’t made the most of the resources we do have.

It’s clear from the economic contribution the resources sector already makes that it can play a more significant role in lifting our living standards.

We’re currently revising the New Zealand Energy Strategy so that it better reflects the priority this government places on the development of our energy resources. The new strategy will be released toward the end of this year.

Coal Seam Gas – international context

So with those remarks in mind, let me turn to coal seam gas.

The last few decades have seen an explosion in interest in coal seam gas around the world.

In Australia, the home of coal seam gas sector is Queensland, primarily in the Surat and Bowen basins.

Coal Seam gas currently accounts for around 15% of gas production in the eastern states of Australia and over 70% of production in Queensland. Production is growing rapidly, as are proven and probable reserves.

The US produced around 1700 petajoules in 2007 (which represents around 7% of domestic dry gas production) and it is also an important fuel source in Canada.

Coal Seam Gas in New Zealand

Looking at New Zealand, it’s fair to say that in comparison with the rest of the world, our coal seam gas industry is in its infancy.

Exploration for Coal Seam Gas actually began in New Zealand in the early eighties when RC Macdonald Ltd initiated the Southgas project in the Ohai coalfield and subsequently the Westgas project in the Greymouth Coalfield, although these projects did not yield any commercial quantities of CSG.

There are currently 17 petroleum permits granted which include the exploration of coal seam gas, with one permit granted solely for commercial mining of coal seam gas.

In 2008 only Solid Energy produced any meaningful quantities of CSG – which even then was only enough to power a 1 MW turbine, and this production was part of an exploration permit.

However, there is little doubt that the potential for coal seam gas production in New Zealand is definitely there.

It’s estimated that New Zealand has over 15 billion tonnes of
in-ground coal resource, and although not all of this will be conducive to coal seam gas production, a lot of it will be.

That is a considerable resource by any measure.

The limited current coal seam gas activity is more a reflection of the under-explored nature of New Zealand’s petroleum and mineral basins rather than a perceived lack of resource.

For many years, thanks to Maui, there was little incentive to explore for new gas sources in New Zealand.

With Maui running down and the price of gas subsequently rising, coal seam gas now looks more attractive.

Coal Seam Gas Developments

I would like to acknowledge some exciting and interesting developments occurring around the country:

In Southland, L&M Petroleum has confirmed the presence of gas in the first well of its 2009 coal seam gas exploration drilling campaign.

Their initial analysis indicates their permits may hold collectively up to 300 PJ of CSG potential resources.

In the Waikato, a pilot coal seam gas field has been developed through a joint venture between Solid Energy and US oil and gas company, Resource Development Technologies.

Initial work has indicated a methane resource in the North Huntly Coalfield could contain gas between 25 and 200 petajoules of energy.

Solid Energy recently launched a 1MW power station at Huntly, fired by coal seam gas from the pilot field.

On the West Coast, Chartwell Energy has two core wells scheduled for the third quarter of this year in their West Coast license.

The wells are to be drilled in advance of a planned pilot programme kicking off in the first quarter of 2010.

Also on the West Coast, Pike River Coal is carrying out exploration work on the coal seam gas potential at its West Coast mine, and has indicated it could potentially look at establishing small-scale on-site electricity generation.

Following on from these developments, I expect the number of permit applications for coal seam gas exploration and activity to grow in the coming years.

Regulatory regime

In New Zealand, CSG falls within the definition of petroleum for the purposes of the Crown Minerals Act and as such royalty regimes for natural gas apply.

The royalty regime for any coal seam gas discovery made between 30 June 2004 and 31 December 2009 comprises an ad valorem royalty component of 1 percent on natural gas; and an accounting profits royalty component of 15 percent on the first $250 million of cumulative gross sales for an onshore discovery and a 20 percent accounting profits royalty on additional production.

For all other production, including any production from a discovery made after 31 December 2009, the royalty regime comprises a 5 percent ad valorem royalty component, and a 20 percent accounting profits royalty component.

Because coal seam gas in New Zealand falls under the petroleum regime, you’ll be interested to know that the Government is currently reviewing that regime to ensure it is “fit for purpose”.

The work will include identification of petroleum, industrial, environmental and economic policies that work well in other jurisdictions and the reasons for their success.

The aim of the review will be to recommend measures that ensure NZ continues to have a “fit for purpose” petroleum regime which is attractive to explorers and extractors.

Gas in New Zealand

Gas has been an extremely important fuel in New Zealand since the development of the Maui field from 1979 on.

Our offshore natural gas resources in Taranaki have provided the fuel for gas-fired power stations at New Plymouth, Stratford and Otahuhu, as well as reticulated gas for residential consumers in the North Island.

Gas-fired electricity generation ensures New Zealand has a secure supply of electricity, playing a vital “firming” role in dry years when the lakes run low.

Last winter our gas-fired plants ran around the clock keeping the lights on.

As a government we’re very conscious of the importance of gas to our economy, and we certainly see coal seam gas as part of our energy mix in the future.

CSG is virtually indistinguishable from natural gas and therefore can be used in many of the same applications as natural gas, which mean there are a number of potential uses for it in New Zealand:

CSG could be injected into natural gas pipelines by direct reticulation to large-scale industrial sites or for supply to cities for domestic gas networks.
It could be used as a gas feedstock for other energy or chemical feedstock uses.
It may have a potential for use in onsite electricity generation.
It could possibly be compressed to CNG for use in local markets including for use as a transport fuel.
There is also the potential for electricity generation from coal seam gas, if a large enough commercial discovery is made.

Gas from the Huntly wells contains only 1% CO2 and has 98% energy-rich methane.

That means it has a lower carbon footprint than conventionally-produced natural gas, which until now has been New Zealand’s cleanest thermal fuel.

Furthermore, electricity generation from coal seam gas produces around 50 per cent lower greenhouse gas emissions than conventional coal-fired electricity.

The development of CSG would diversify our energy inputs, and therefore have a positive impact on security of supply.

Government policy changes

As I indicated at the start of my speech, the government is keen to encourage the exploration and development of our natural resources, including coal seam gas.

We’ve already made some moves in that direction by repealing the ban on new thermal electricity generation.

We’re also developing better access protocols to Crown-owned land. There is significant mineral potential within Crown-owned land, but access to the minerals estate is often difficult.

There is definitely scope to explore how economic development objectives could be better reconciled with other land values.

Crown Minerals and the Department of Conservation are therefore working on the the implementation of DOC standard operating procedures to provide transparency and clear information requirements for access applicants.

Environmental Responsibility

One thing I always stress when talking about our natural resources is that good economic outcomes must not be inconsistent with good environmental practice.

As a government we know that we need to preserve the environment for future generations.

The Pike River coal project on the West Coast demonstrates how mining can be reconciled with high environmental standards, and can have positive environmental effects.

At Pike River, the mine’s environmental footprint has been kept to a minimum through good design, with little damage to the ancient trees and bush.

Driving through the spectacular Paparoa ranges, you would not know there is a coal mine only a few hundred metres away.

The building of a road through the ranges to get access to the coal mine has actually opened up that area of the country for people who otherwise wouldn’t get to experience it.

There is ample scope for environmental tourism.

The Department of Conservation recently presented Pike River Coal with a certificate recognising the “environmental consideration it demonstrated” in the development of the coal mine.

The Newmont Waihi Gold in Martha Hill is another example of mining co-existing with environmental responsibility.

Rehabilitation of the Martha Mine has been a major part of mine planning and the operation is an acclaimed example of modern mine site progressive rehabilitation.

Currently waste rock embankments and disturbed land are being returned to productive pasture.

When the mine closes it will be turned into a safe, stable, and self-sustaining rehabilitated state.

The pit and surrounds will become a recreational lake and park, and extensive areas of pasture will be established over waste rock stockpiles and other disturbed areas.

A final example is the work of Solid Energy at the Stockton Opencast Mine.

Solid Energy has an environmental policy of reasonably minimising the adverse local environmental affects that may be an unavoidable part of operating coal mines.

As part of this, it spent 13 months between 2006 and 2007 collecting over 6,000 “Augustus” native land snails from the Mt Augustus ridgeline of Stockton Mine.

Following collection of the snails, much of the original habitat was moved 800 metres north.

By the end of 2007, approximately 4,000 snails, and over 1,000 eggs, had been released onto this and other sites.

It’s very important as our coal seam gas resource is explored and developed in New Zealand, that the impact on the environment is minimised, as in the case of these three examples that I’ve mentioned.

Conclusion

I’ll finish by saying that the future for coal seam gas in New Zealand is a bright one.

We have a considerable in-ground coal resource with some interesting developments occurring already.

I’m sure they’ll grow as the years go by and as we learn more about the exact size and nature of the resource in New Zealand.

There would be numerous benefits to New Zealand from the environmentally responsible development of coal seam gas, and so as a government we will watch and support it with interest.

I wish you all the best for the conference today, and I look forward to coming to many more in the future.

Address to the Electricity Engineers’ Association Annual Conference

nospam@example.com (admin) — Fri, 19 Jun 2009 10:49:00 +1200

Thank you for the invitation to be here today. I’m told the theme of your conference is “Delivering Sustainable Infrastructure.”

That’s a particularly relevant theme given the importance this Government is placing on the delivery of important infrastructure.

The various elements of our energy infrastructure – everything from the national grid, electricity lines, and generation plants – are essential for a prosperous society.

Today I’d like to talk about some of the current challenges facing the electricity industry, and what the Government is doing about meeting those challenges.

I’ll talk about transmission, the Ministerial Review of the Electricity Industry, investment in generation, and a very exciting new initiative we announced yesterday: the Warm up New Zealand: Heat Smart home insulation scheme.

I’m very happy to take questions at the end of my address.

Transmission

Let me start with transmission, an area I know many of you will be interested in.

A secure supply of electricity is one of the foundations for a growing economy. When businesses shut down because of power failures, we all lose out.

The Government is very concerned by the

under-investment in the national grid over the last few years.

The result of that under-investment has been power outages like we saw earlier this year in Auckland, and rising retail prices because of an inability for generators to send electricity freely around the country.

The retirement of Pole 1 at the end of 2007 has placed considerable pressure on the system, and all around the grid there are constraints which indicate upgrades are well overdue.

It's important that these problems are fixed as quickly as possible.

Transpower has a $3.8 billion programme of investment planned for the next ten years, and the Government is keen to see that work progressed.

Earlier in the year we issued a new Government Policy Statement which raised the threshold above which national grid investment had to be approved by the Electricity Commission.

Previously, individual grid upgrade projects costing more than $1.5 million had to each be approved by the Electricity Commission.

The process often involved a lengthy duplication of engineering and systems planning, resulting in costly delays.

Furthermore, in the five years the Commission has operated, the cost difference between projects proposed and projects approved has only been $120 million.

I say only because that represents just 5.9% of the total cost of all approved projects.

And that doesn't take any account of the time and expense in the process.

For many projects there has been little or no variation between the application and approval cost figures.

The new Government Policy Statement raises the threshold for which Electricity Commission approval is required to $20 million.

We’re confident this will help assist Transpower in getting on with the job.

The figure of $20 million is well below what some in the industry recommended, such as $50 or even $100 million.

I think it strikes the right balance between timeliness of investment decision making, and making sure investments are prudent and reasonable.

Ministerial Review

In April this year I established a Technical Advisory Group to assist with a Ministerial Review of the Electricity Industry.

The Review is essentially looking at two areas where we think there is significant scope for improvement in the electricity sector in New Zealand.

First is the issue of electricity governance and regulation.

The Government considers the overlapping roles and duplication between the Electricity Commission, the Commerce Commission, and Transpower, should be disentangled.

Our 2008 election policy promised a regulatory and governance review, to reduce duplication, minimise the costs of regulation, and improve the investment environment.

The Ministerial Review gives effect to that policy.

There is broad consensus in the industry, I believe, that the current arrangements are not working. Change is required.

The critical question is: change to what?

The LECG report commissioned by Business NZ written by Kieran Murray, Graham Scott, and Toby Stevenson made a good start in answering that question.

The report says that there is currently a clear mismatch between an allocation of roles and responsibilities for effective problem solving, and the current allocation of regulatory functions in the electricity industry.

I agree with that analysis, and have referred this report with others to the Technical Advisory Group working with MED on the Ministerial Review.

The TAG group, as it’s become known, is chaired by Brent Layton, and its members are Toby Stevenson, Lew Evans, Stephen Franks, Miriam Dean QC and David Russell.

The Ministerial Review team will publish a discussion document in late July with some recommended reforms to the governance and regulation of the industry.

Your association will have a chance to submit on those recommendations and I encourage you take up that opportunity.

The government does not have any fixed ideas about what we want the electricity sector to look like, so all ideas will be considered.

But we do know that we need to improve on the arrangements we have presently.

The second issue the Ministerial Review will be examining is the structure, design and performance of the electricity market.

The timeframe for this work is a bit longer than that relating to governance, because its so complicated, and so important to get right.

The Review is taking a careful look at the Commerce Commission investigation into market power in the electricity sector, better known as the Wolak Report.

I suspect the reaction of most people to the news that electricity companies had “market power” was, “so tell us something we don’t know.”

The $4.3 billion of alleged overcharging of consumers by power companies in particular has attracted much public attention.

The precise methodology utilised by Professor Wolak is now coming under fairly sustained criticism from some in the industry.

Some of that criticism is fair.

However, I do agree with Professor Wolak’s basic conclusion - that there are serious systemic issues arising out of the current market structure, market design and market rules, which provide the generators with the ability and incentive to exercise market power at various times.

The Government is very concerned at the ever increasing price of electricity.

Retail electricity prices have risen by 72% over the last nine years.

We cannot continue along the path of electricity price increases at double the rate of inflation each year.

We anticipated that the Wolak Report would raise some issues that would need to be considered by experts, and so I’ve referred the Wolak Report to the Review team to consider carefully.

The team will also be considering other recent reports into the electricity market, such as the Electricity Commission’s market design review.

It’s important that we don’t respond to the Wolak report in an

ad-hoc way and make policy on the hoof.

The review team has been told to take its time to explore all of the issues arising from the report.

I’ve asked them to think creatively about solutions to the current problems in the electricity market.

Nothing is off the table. I am not pre-disposed to particular outcomes.

This is not a review that has been set-up with an outcome already in mind.

The Government wants electricity prices to be as competitive as possible, we want to spur innovation and better service, and for prices to flatten and fall more in line with the rate of inflation each year.

It’s abundantly evident that we don’t have that at the moment.

The discussion document published in July will outline the history of the market and its design, comment on current issues and work already done, and suggest some proposed changes.

You’ll be able to submit your own thoughts on those proposed changes.

Generation

A critical element for security of supply is new generation coming online to meet rising demand.

Although our power consumption fell by 5% last quarter, when the economy picks up again, so will demand for electricity.

There is little doubt in my mind that the convolutions of the RMA have in no small part deterred greater levels of investment in generation.

The RMA has slowed down new projects, made sure some never got off the drawing board, and even made it hard to keep existing power stations running.

The worst effect of the RMA has been the costs it has imposed on new projects - costs that just get passed on to consumers

I'm very pleased by the initial changes to the RMA that are currently before a select committee of Parliament.

That Bill will soon came back out of committee, and we’ll be progressing it quickly through the House

Insulation and Clean Heating

The final thing I’d like to talk about is the government’s home insulation and clean heating scheme which we launched yesterday.

In the Budget we allocated $323 million over four years for the Warm Up New Zealand: Heat Smart programme.

That is a lot of money, at a time when we know there is not a lot about.

Households of all income levels with homes built before 2000 will be able to access up to $1800 for insulation and a clean heating device such as a heat pump or a wood burner.

The Government is providing such a large amount of funding because we have such a large amount of inadequately insulated homes: around 900,000.

Our aim is to get 180,000 houses insulated by the end of year four of the programme.

There are three particular benefits from the programme I want to highlight:

First are the big health benefits from warm homes. When a house is not insulated properly, it is more difficult and costly to heat.

New Zealand homes are much colder than homes in other developed countries.

The World Health Organisation recommends a minimum indoor temperature of 18 degrees for healthy people and 20 degrees for sick people, the very young, or very old.

New Zealand’s average living room temperature is less than 16 degrees.

Cold houses mean more doctors’ visits, more admissions to hospitals, more days off school and work, and more of a burden for employers and families.

If 180,000 houses are insulated under the scheme, then Otago University health researchers estimate the programme will result in 33 percent fewer respiratory illnesses for people with pre-existing conditions.

The second benefit is in terms of job creation.

Over four years we expect to see 33 square kilometres of insulation laid under the floor and in the ceilings of New Zealand houses.

That’s about the size of 4000 rugby fields.

Fitting that much insulation is a massive undertaking, and will create jobs for hundreds of New Zealanders.

The third benefit is in terms of energy efficiency.

Insulation means households can use the same amount of electricity as they normally would to heat their home, but get much more benefit from it, because the heat is not escaping quickly.

And if they use a clean wood burner as well, the benefits are even greater.

Energy efficiency saves households money on their power bills, and helps the country as well, by reducing the demand for electricity and thus expensive new power stations.

So Warm Up New Zealand: Heat Smart is a win-win-win for everyone, and that’s why I’ve been proud to develop it over the last few months.

Conclusion

Let me just finish by saying that these are exciting times for the electricity sector in New Zealand.

I’m looking forward to the next couple of years as we make changes that improve the investment environment and competition, improve the affordability of electricity, and roll out a scheme that will see thousands of New Zealanders enjoy healthier, warmer homes.

Speech to the Aotearoa Wave and Tidal Energy Annual Conference

nospam@example.com (admin) — Tue, 19 May 2009 10:50:00 +1200

Introduction

It gives me great pleasure to open the Aotearoa Wave and Tidal Energy Association's third annual conference today, with the theme ‘Making Waves'.

It is great to see a strong turn out today, in an industry which is still in its infancy, but has enthusiastic and hard-working proponents.

Gatherings like this are a great opportunity to make contacts and share knowledge, and I'm sure you will make the most of the sessions today.

I would like to use my time today to outline the government's thoughts on renewable energy and marine energy in particular.

And I am pleased to be able to announce the recipient of the second round of the government's Marine Energy Deployment Fund.

But as the day's first speaker, I felt it would be useful for me to start by briefly summarising the progress made by marine energy in New Zealand and internationally - how far we've come, and where we are headed.

Marine energy overseas

Some of you may have seen comments by UK marine energy expert Henry Jeffrey when he was in New Zealand as part of the panel for the Marine Energy Deployment Fund.

He noted that for a long time, even international presentations on marine energy had to rely on concept drawings.

Now, however, we are seeing photos of actual projects, off the drawing board, into the water, and producing electricity.

I think that sums up well the progress marine energy is making.

In fact, more than 200 companies worldwide are developing wave and tidal energy solutions.

One of the European initiatives is Seagen, the world's first commercial-scale grid-connected tidal stream turbine, which has the capacity to produce 1.2 megawatts.

This was deployed in Northern Ireland in April last year, and has been feeding electricity onto the grid since July.

Irish company OpenHydro installed a 250kW open-centre tidal turbine at the European Marine Energy Centre off Orkney in Scotland and successfully connected it to the UK electricity grid in May last year.

It paves the way for a significant tidal power development in the Channel Islands sometime this year.

I'm pleased to see that once again, those at the forefront of marine energy development are attending the AWATEA conference.

Voith Hydro from Germany, and Wavegen from the UK, are both presenting later today.

Their business partnership represents real and significant progress in the commercialisation of the marine energy industry.

Their technical developments are supported by their relationship with RWE Innogy, one of Europe's largest energy companies.

Together they have a joint venture to develop and test a 110 kilowatt seabed-mounted turbine off the Korean coast, which if successful, will lead to a 600MW project.

New Zealand's marine resource

New Zealand has world-class renewable energy resources.

We already generate an impressive 65 percent of our electricity from the renewable sources: hydro, geothermal and wind.

I'm sure marine energy will be added to our portfolio of renewable generators in the future.

An initial assessment of our marine energy resource indicates potential for around 8000 megawatts of generation capacity.

Obviously more work needs to be done on the nature and size of this resource, but given our present total electricity generation capacity is around 9000 megawatts, it's clear that marine energy has the potential to significantly contribute to New Zealand's long term energy needs.

A focus of this government is security of electricity supply. One component of that is diversity of electricity generation sources. Marine energy could have an important role to play in making sure our lights stay on throughout the coming century.

Marine energy projects in New Zealand

Perhaps in recognition of the resources we have available in New Zealand, there is a high level of activity in the marine space.

I understand there are around 26 domestic marine energy projects that have been proposed in the last four years, ranging from conceptual ideas, to university research projects, to deployment projects.

Around 20 of those are devices, and they are evenly balanced between local developments, and imported technologies.

One of these projects is led by Crest Energy, which was the recipient of last year's round of the Marine Energy Deployment Fund.

Crest Energy's proposal is to deploy tidal stream generators at the entrance to the Kaipara Harbour, north of Auckland.

That application is before the Environment Court now.

It's encouraging to see this much activity in this industry. Obviously there will be trial and error both here and overseas as technologies and methods are tested and proven.

But the more activity, the faster we can establish what works, and move forward with confidence.

Government support for marine energy

The government, through the Energy Efficiency and Conservation Authority, is helping develop marine energy potential.

One important thing we do is support the marine energy industry association, AWATEA, which enables conferences like this to occur.

We have supported research. EECA, along with the Electricity Commission and the Greater Wellington Regional Council, have helped fund a substantial report on marine activity in New Zealand, and its potential.

And of course there is the Marine Energy Deployment Fund, which offers $8 million dollars over four years to support the deployment of marine energy devices in New Zealand.

There may be other ways New Zealand can ‘ride the wave' of marine energy development, and provide value to the international market place for this maturing technology.

Grow Wellington clean energy centre of excellence

For example, as part of their Sustainable Energy Strategy, the Wellington regional economic development agency, Grow Wellington, is proposing to establish a marine energy centre of excellence on Wellington's south coast.

As the project's proponents point out, the location has many advantages.

It is close to leading research institutes and universities focused on the technology.

A deep water port in very close proximity to a world class tidal current resource is in the Cook Strait

And energy companies and support businesses accustomed to renewable energy generation, delivery and support, are nearby.

Such a venture could include a marine energy testing venue.

Globally there are already a small but growing number of marine energy testing centres.

The first and most comprehensive is the European Marine Energy Centre in northern Scotland, led by Neil Kermode who is visiting Wellington at this time.

However, none are in the southern hemisphere and only one is currently planned for the Pacific area on the west coast of the USA.

I know Grow Wellington is keen to form a partnership with the European Marine Energy Centre, to develop a facility that would allow New Zealand to position itself as a leading southern hemisphere player in this emerging marine tidal energy industry.

Government policy

This leads nicely into what I'd like to say about our government's energy policies.

As you may know, we are currently reviewing the New Zealand Energy Strategy.

The National-led Government believes a refocusing of the Energy Strategy is required.

The new strategy will focus on security of supply, affordability, and environmental responsibility, with the overriding goal of maximising economic growth.

The strategy will encourage investors to develop more electricity generation, particularly from renewable sources, and marine energy fits into this picture.

The update of the Energy Strategy is underway and I expect to be able to release it later this year.

Supporting renewable energy in New Zealand

One of the things this government is doing to support renewable energy in New Zealand is by providing grants for biodiesel production.

I am announcing today that this year's Budget will allocate $36 million over three years to domestic biodiesel producers.

Greenhouse gas emissions from transport make up almost half of our energy emissions.

By supporting biodiesel production in New Zealand, we can help get a new industry up and running, which can provide jobs for New Zealanders, at the same time as helping to reduce their greenhouse gas emissions.

Round two of the MEDF

It is now my pleasure to announce the recipient of the second round of funding from the Marine Energy Deployment Fund.

The recipient was selected by an expert panel. I would like to thank them for their involvement in the selection process. The panel members are:

Gerry Te Kapa Coates
Melanie Nadeau
Dr Edward Hudson
Henry Jeffrey, and
Dr David Hume

In awarding the funding, the Panel was asked to look for projects that had commercial potential and community support, and that provided us with useful information on the costs and benefits, including environmental and socio-economic impacts.

We received four applications for funding this round.

The successful candidate intends to build on their New Zealand-designed and engineered prototype that was launched off Wellington's coast last year.

The project is to construct and deploy a pre-commercial half-scale device.

I am pleased to announce that as part of this year's funding round, $760,000 will go to WET-NZ, a project run by Power Projects Ltd, and Industrial Research Limited.

Our judges commented that the WET-NZ project has a logical, staged development approach to their technology, as well as an experienced project team.

In addition to the technical merits of this project, the Intellectual Property generated will reside in New Zealand.

And WET-NZ will primarily be designing and manufactured in New Zealand.

I congratulate WET-NZ for their successful application and wish them well in now going ahead and developing their proposal.

Applications for round three of approximately $2.4m will open on Friday 31 July 2009 and will close on Monday 23 November 2009.

Conclusion

New Zealand is an island nation surrounded by wave and tidal patterns that indicate, marine energy has a bright future in this country.

I would like to thank you for your commitment to making it happen.

I hope you enjoy your conference and come away feeling excited and inspired by the presentations you see today.

Speech: Film NZ Networking Function

nospam@example.com (admin) — Thu, 07 May 2009 10:53:00 +1200

Firstly can I thank Film NZ for the invitation to speak here this evening.

Can I start by acknowledging the presence of so many influential figures within our screen production industry.

And can I quickly acknowledge a few others:

- my cabinet colleaque, the Minister for Arts, Culture, and Heritage, Chris Finlayson. - the recently appointed Chief Executive of the Film Commission, Graeme Mason.... welcome aboard. - and also Lewis Holden, he has been working as a Deputy Secretary within the Ministry of Economic Development but has now been appointed as the CEO of the Ministry of Culture and Heritage. Congratulations Lewis.

As Economic Development Minister, I have a strong interest in the continued success of the screen industry because it makes a real contribution to both the culture of New Zealand, and the New Zealand economy.

Look at the most recent statistics released last Friday:

- you mentioned the screen production sector increased gross revenues by 18% to $1,266 million in 2007/2008 - if you break that down....the gross revenue from screen production from foreign productions rose 79 percent to $542 million.

- and many different regions displayed increases in economic benefit from film production....that was especially so in Wellington and also Auckland.

As a nation we are now on the global map for screen production and post-production.

Some of the people in this room are behind the leading technology that is impressive on a global level.

We're not just known for Lord of the Rings anymore. If you look to any large-budget production you'll probably find there's a New Zealander behind the scenes.

We're known for world-class work on some of the largest productions - such as the new Wolverine film with its stunning views of Central Otago, and the groundbreaking technology being used in James Cameron's Avatar.

But we're also making a name for ourselves on the small screen.

From exporting TV series for global audiences, to video games by companies like Sidhe [pronounced ‘Shee'] Interactive.

We often say that New Zealand punches above its weight punch above its weight . And the screen industry is one of the best examples of this.

We have a precious pool of talent in New Zealand.

Talent which shows through at every level of the industry.

Its talent you can all be proud of, and a talent the Government recognises and wishes to encourage.

As good as the industry is in New Zealand...this doesn't mean that we shouldn't seek further improvement.

Our competitors continue to work to attract productions to their countries. So while we don't want to engage in a ‘race to the bottom' within higher and higher incentives the next step is to cultivate a regulatory environment that makes it easy for filmmakers to come to New Zealand, and film in our locations, use our facilities, and hire our workers, and engage our talent pool.

I understand there are some areas we can improve on, and the government is open to fresh change that facilitates further growth in the industry For example, the approach to gaining filming permits in public estates differs between conservancies.

Park management plans often restrict access to the very locations that draw filmmakers to New Zealand.

While environmental regulations are important to protect our national parks, we need to be sure that we balance economic growth with environmental concerns.

I think a more co-ordinated approach on this issue sounds sensible.

I am asking my officials at the Ministry of Economic Development to work with DOC to develop protocols that can apply nationwide, and balance conservation values with ease of access to film crews. And that's not just about drawing foreign filmmakers to New Zealand. It's also about helping some of our filmmaker's right here.

The Government wants to support and develop the domestic screen production industry.

We recognise the need to foster an environment where strong skills can be retained and developed. It is early days, and I know my colleague, the Minister for Arts, Culture and Heritage has some work to develop.

But can I say from the outset.....there are certain areas as Minister for Economic Development that I favour.

I believe the Large Budget Screen Production Grant and the Screen Production Incentive Fund have both played important roles....they should continue in their present form... to continue the good work they produce.

There is plenty of work and fresh approaches to develop.

I look forward to talking with you tonight.

To meet and hear further ideas you have to develop one of our most innovative and well-known industries.

And finally I know the Cannes Film Festival is just about to start....we are lucky to actually have so many of you in the same place...

I know some of you face a very busy, exhausting schedule over the next month...I wish you good luck...and hope you get some great deals signed-up.

Thank you.

Opening Address to the 2009 EECA: Biofuels in New Zealand - Where to from here?

nospam@example.com (admin) — Tue, 24 Mar 2009 10:53:00 +1300

Introduction

I am very pleased to be here today to open the EECA Biofuels and Electric Vehicles conference.

I welcome you all here today, and I especially welcome our overseas visitors and keynote speakers.

It's impressive to have speakers of such a high calibre here in Wellington.

Around the world governments and companies are grappling with the challenges of increasing energy security.

It's important that we share our knowledge where we can, so that we all can benefit and make progress on this critical challenge.

Some of you may be surprised to see that I've turned up today, given the government repealed the biofuel sales obligation before Christmas.

Lost amongst much of the commentary on that decision were the high hopes and optimism I expressed about the future of the biofuel industry in New Zealand.

There's no doubt that New Zealand has great potential to develop a thriving biofuels industry, and that's what I'd like to talk about today. I'll also touch on electric vehicles.

Repeal of the Biofuel Sales Obligation

The government moved swiftly to repeal the biofuel sales obligation for three reasons.

First, we were very worried that the obligation would have led to oil companies importing biofuel from overseas, which could have been produced from unsustainable sources.

There was not enough biofuel being produced in New Zealand for oil companies to meet the obligation from domestic sources, and nothing compelling them to do so.

The Parliamentary Commissioner for the Environment had noted that importing biofuel without environmental standards for production could contribute to the hugely damaging environmental and social impacts occurring in countries like Indonesia and Malaysia.

In the absence of workable and practical sustainability standards, the government was not prepared to have New Zealand contribute to deforestation and the destruction of arable land, for questionable greenhouse gas reductions.

The second reason we repealed the obligation was our concern about the uncertain costs that would have been placed onto consumers.

The evidence from oil companies was that meeting the obligation would add anywhere from two to eight cents a litre to the cost of fuel.

In these tough economic times the Government does not regard that as a desirable outcome, especially when the environmental benefits of doing so were so unclear.

The Government believes that biofuels should be introduced gradually and when they offer cost advantages rather than cost increases to the price of transport fuel.

That will only happen through a market-based approach rather than a mandatory approach.

The third reason is that this government generally prefers choice not compulsion, and in voluntary action over mandatory action.

It's very appropriate therefore that this conference is titled "Driving Choices".

We think that biofuels should be introduced through companies responding to commercial, environmental and marketing considerations, not because the Government tells them they have to.

That doesn't prevent us looking to some incentives to make biofuels more competitive. I'll talk more about that shortly.

But first let me turn to the biofuel developments taking place around the country.

Biofuel Developments

Biofuels have not disappeared from the New Zealand economy as a result of the repeal of the sales obligation, contrary to some of the hysteria expressed at the time.

There are a number of exciting biofuel developments taking place around New Zealand.

In February I visited the EcoDiesel factory in south Auckland, which will soon start producing high quality biodiesel from tallow.

I hope to visit some other projects around the country as the year progresses.

These projects have the potential to provide jobs for New Zealanders and economic growth in the regions, as well as achieve environmental goals.

Gull and Mobil are currently selling biofuels, and I commend them for doing so.

They demonstrate that we should not need a law to make retailers offer a product, if there is a genuine demand for it, driven by interest from consumers.

I'd also note the successful trial Air New Zealand recently carried out of a jatropha-based aviation biofuel.

The government did not tell Air New Zealand to find a renewable alternative to conventional jet fuel but there is clearly a commercial advantage for an airline that can promote a cleaner, green voyage, to and from a clean green country.

Air New Zealand is responding to the market - a market concerned about reducing greenhouse gas emissions.

The Future

New Zealand has a great opportunity to make sustainable biofuels from land based energy resources that do not adversely compete with food production.

These include tallow and used cooking oil which are immediately available for biodiesel, as well as exciting developments in the use of oil seed crops.

In the longer term, we have the potential to capitalise on New Zealand's strengths in forestry primary production, biotechnology and biological process engineering to produce biofuels.

Scion, our forestry Crown Research Institute, has recently investigated bioenergy options for New Zealand.

Their research shows how New Zealand could be self sufficient in transport fuels made from purpose grown forestry on marginal land - that's land currently used for low intensity, low return, sheep grazing.

While the technology to turn trees into transport fuels is proven in the lab, it is not yet commercial.

But it is likely to be at some point and the use of trees for energy would add to the range of products from our current and future forests.

But trees do not grow overnight. What we need to understand right now is how to encourage the development of forests for energy, including biofuels, so that we have the ongoing resource available when the technology is commercial.

From New Zealand's point of view, this looks like a low risk investment.

Forests have multiple potential uses. They act as carbon sinks.

They provide land management benefits, and they offer a feedstock resource for lumber, pulp and paper, engineered wood products, like laminated veneer lumber, and biomaterials, such as biochar for carbon capture and bio-sequestration.

Sustainability

Not all biofuels are created equal.

Some biofuels do have the potential for significant benefits, but the wrong biofuels can result in environmental and social harms.

These concerns have led to scepticism on the part of the consumer.

Research by EECA shows that while half of New Zealanders support biofuels, a huge 38 percent are unsure or don't know. Sales figures anecdotally presented back this assertion.

The main reason those New Zealanders say they can't make up their minds is due to questions about the sustainability of biofuels.

We need to give confidence to New Zealand consumers that they can identify and choose biofuels that do provide an environmental benefit.

EECA is now working on voluntary sustainability reporting for biofuels, based on what the UK currently does in practice, as Nick Goodall from the UK's Renewable Fuels Agency will be explaining to you later.

This reporting will mean that people can get the information they need to ensure that when they choose to use biofuels they are choosing biofuels with environmental benefits.

We know that consumers are increasingly seeking out products that help the environment.

I am confident that New Zealanders will make the right choices, armed with good, reliable information.

A consistent tax incentive for biofuels

As I've signalled on a number of occasions, the Government is concerned at the imbalance in the tax treatment between bioethanol and biodiesel.

Bioethanol sales do not incur associated excise tax like the petrol it substitutes, whereas biodiesel incurs the same road user charges as mineral diesel.

Bioethanol and biodiesel should be treated equally.

I am particularly concerned that this imbalance disadvantages New Zealand biofuel producers whose current focus is biodiesel, in favour of imported ethanol

As we enter a time where investors are considering where to put their money, it is important to provide certainty that all technologies are encouraged equally, and are not penalised by distortions in government charges.

The National Party went into the election promising to provide consistent tax incentives for sustainable biofuels and officials are currently working on how that promise will be delivered.

It is proving more difficult than expected but I'm confident we can devise a mechanism to give effect to our policy. I hope to make further announcements soon.

Electric Vehicles

Due to Mitsubishi and Hyundai, we have had the opportunity to see modern electric vehicles in action in New Zealand.

The combustion engine has powered our transport for many decades now, but now electric vehicles are beginning to present viable alternatives.

Electric cars have a number of advantages. Their motors convert energy to power more efficiently than a combustion engine.

They are quiet, and do not contribute to air quality problems.

If we run them on New Zealand's largely renewable electricity, they reduce our transport greenhouse gas emissions.

Later today you will hear from a number of speakers working closely with electric vehicles, including car company Holden, from across the Tasman, which plans to have electric vehicles in Australasia from 2012.

Holden is just one of a number of the world's big car makers that are planning to produce electric models commercially.

Electric cars are no longer some kind of science fiction fantasy. They have moved from the drawing board to reality.

As desirable as electric cars may be for New Zealand and many New Zealanders, they will start off being expensive.

The Government believes it is appropriate to provide an incentive for electric vehicles through an exemption to road user charges.

My colleagues, the Minister of Transport and the Minister for Climate Change Issues and I, believe that those who invest in an electric vehicle should be rewarded.

The Minister of Transport is currently discussing the details of the exemption with officials.

While I look forward to seeing more electric vehicles on our roads, it won't happen overnight.

Conclusion

There is no doubt the world faces significant economic and environmental challenges in the coming years.

New Zealand is well placed to weather those changes.

We have good resources of renewable energy, including the capacity to produce our own biofuels.

We have clever scientists and entrepreneurial business people who are keen to explore these new options.

And we have the will and the ability to change and adapt to meet these oncoming challenges.

This conference gives you the opportunity to share your knowledge and learn from others.

I hope you enjoy the opportunity, and profit from it.

Unlocking New Zealand's Energy and Resources Potential

nospam@example.com (admin) — Tue, 24 Feb 2009 10:56:00 +1300

INTRODUCTION

It's great to be here today for my first major speech since becoming the Minister of Energy and Resources late last year.

I was delighted when Prime Minister John Key asked me to take on the energy and resources portfolio after the election.

New Zealand has an extremely bright energy future ahead of it.

We have world-class renewable energy sources like wind and geothermal, and the potential for large gains in economic development through our gas, oil and mineral resources.

As Minister, I am committed to unlocking New Zealand's energy potential for the benefit of all New Zealanders, both present and future.

In the first part of my comments today I'll talk about the policy and regulatory challenges facing New Zealand in electricity.

I'll talk about our plans for increasing transmission investment, improving security of supply, upholding our environmental responsibilities, the New Zealand energy strategy, and energy efficiency.

I'll then talk about New Zealand's natural resources and our ideas to bolster this much neglected area of economic activity.

TRANSMISSION INVESTMENT

The National Party went into the 2008 election with an electricity policy focused on ensuring security of supply.

A vital part of security of supply is effective and efficient transmission.
There has been underinvestment in the electricity grid over the past decade.

The result has been power outages like we saw early this month in Auckland and rising retail prices because of an inability for generators to send electricity freely around the country.

In particular, the retirement of Pole 1 at the end of 2007 has placed considerable pressure on the electricity system. All around the grid vital upgrades are well overdue.

It's important is that these problems are fixed as quickly as possible.

It's encouraging to see that Transpower has a $3.8 billion programme of investment planned for the next ten years.

The Government is keen to see that work progressed.

To that end, the government believes that disentangling the regulatory overlap between Transpower, the Electricity Commission and the Commerce Commission is desirable.

We know that getting it right will take some time.

However the Government is taking some interim steps to ensure transmission investment can happen more quickly.

Government Policy Statement

As a first step, Cabinet is considering a new draft Government Policy Statement on Electricity Governance.

At the moment, individual grid upgrade projects costing more than $1.5 million must be approved by the Electricity Commission.

The process can involve a lengthy duplication of engineering and systems planning.

And that doesn't take any account of the time and expense in the process. Moreover for many projects there has been little or no variation between the application and approval cost figures.

The Electricity Act requires a new GPS go through a period of consultation. Once issued, I expect that to be brief. In these tough economic times it's advisable the bureaucracy stops going around in circles.

Regulatory and Governance Arrangements

In the longer term, as I said before, the Government regards it as vital that the overlapping roles and duplication between the Electricity Commission, the Commerce Commission, and Transpower, are disentangled.

Our 2008 election policy promised a regulatory and governance review, to reduce duplication, minimise the costs of regulation, and improve the investment environment.

Reviews take time and so it's with great interest that I have received a report commissioned by Business NZ that examines exactly those issues. I am very impressed by the report.

It is highly credible, written by Kieran Murray, Graham Scott, and Toby Stevenson - all very familiar with the industry.

The report makes a number of interesting observations and makes some recommendations that would find favour with critics of the current arrangements.

However, some of the report's recommendations require more thought.

For example, the report says that industry participants would be more effective at designing efficient wholesale and retail market trading rules.

I think the wild-west days of 1998 to 2003 demonstrate the perils of complete industry self-governance reliant on voluntary action.

After reading the Business NZ report, I was immediately struck by the absurdity of calling for a review of duplication of activity in the electricity sector - when any further review would in fact duplicate the Business NZ report.

I am therefore considering a Ministerial Working Party to take the Business NZ report as a working document that may form the basis for recommendations on future regulatory and governance arrangements.

The working party would also be asked to consider the issue of affordability and consider how we can get off the escalator of price hikes that has typified the last five years.

While a decision to proceed down this line has yet to be made, any working party would be expected to report in the latter half of the year.

As I'm sure you're aware, the Commerce Commission is currently nearing completion of an investigation into alleged breaches of market power by electricity generators.

That investigation involves a detailed assessment of whether electricity market participants have substantial market power, and whether they have used such power for an anti-competitive purpose.

That report will be extremely interesting to receive and my understanding is that it will be released shortly.

I want to say very clearly that the Government will not hesitate to act if the report finds significant shortcomings in the operation of the market.

Electricity affordability is too important to New Zealanders for us not to.

SECURITY OF SUPPLY

Transmission is not the only aspect of security of supply.

A critical element of security of supply is new generation coming online to meet rising demand.

Only around 1100 MW of net new capacity has been built since 2001 - around 135 MW per year.

New Zealand needs around 175 to 200 MW of new capacity each year.

The lack of new generation build has reduced security of supply.

I know this is simplistic analysis, but if supply is short then price will always be under upward pressure.

RMA Reform

There is little doubt in my mind that the convolutions of the RMA have in no small part deterred greater levels of investment.

Earlier this month, the Minister for the Environment announced extensive plans for long overdue reform of the Resource Management Act.

The RMA has slowed down new projects, made sure some never got off the drawing board, and even made it hard to keep existing power stations running.

The worst effect of the RMA has been the costs it has imposed on new projects - costs that just get passed on to consumers.

I'm very pleased by the initial RMA changes introduced to the House by Hon Dr Nick Smith last Thursday.

I don't have the time to give you a detailed outline of the major changes here today, but I think they'll be very useful for the industry.

The Resource Management (Streamlining and Simplifying) Amendment Bill is currently before the Local Government and Environment Select Committee and I encourage you to make submissions on it.

The intention is to have the reformed RMA in force by 1 July this year.

Thermal Ban

One of the first things the new Government did was to remove the ban on new thermal baseload electricity generation.

The ban was a piece of political symbolism that endangered security of supply.

The Government wants investment in new electricity generation to occur on the basis of sound economics, rather than through ruling out particular options on the basis of ideology.

Gas will be a big part of New Zealand's energy mix in the future.

Gas already plays a vital "firming" role with hydro generation, and this will only increase in the future with intermittent generation such as wind coming into the system.

New Zealand's electrical energy future will rely on more wind, hydro and geothermal. Gas will bridge us to that future.

ENVIRONMENTAL RESPONSIBILITY

The Government knows that New Zealand must balance its energy needs with its environmental responsibilities.

We are very conscious that energy contributes to greenhouse gas emissions and our Kyoto liability.

Emissions Trading Scheme

I know that many of you are concerned about the Government's plans for the Emissions Trading Scheme.

The ETS designed by the previous government is being reviewed by a special select committee of Parliament, and it would be premature to comment before their work is completed.

National went into the 2008 election committed to a well-considered, carefully balanced Emissions Trading Scheme for New Zealand.

The Government is very focused on the international negotiations around the successor to the Kyoto Treaty.

The efforts of Trade Minister Hon Tim Groser in negotiating our position are aimed at allowing New Zealand to participate in the post-Kyoto world.

I am hopeful that the special select committee process will recommend an ETS scheme that will let us do that.

Biofuels

As you'll know the Government moved swiftly before Christmas last year to repeal the biofuel sales obligation.

Despite that, the Government is supportive of the use of biofuels in New Zealand. There are a number of exciting biofuel developments taking place around the country.

I've signaled in the past that the government is concerned at the imbalance in the tax treatment between bioethanol and biodiesel.

Bioethanol sales do not incur associated excise tax like the petrol it substitutes, whereas biodiesel and mineral diesel incur road user charges equally.

There is no meaningful public policy justification for this distortion.

I am particularly concerned that it disadvantages New Zealand biofuel producers whose current focus is biodiesel, in favour of imported ethanol.

The Government is undertaking further work in this area, and will look at applying a consistent tax incentive for sustainable biofuels, whether bioethanol or biodiesel.

You can expect to hear more from me on this when I open the EECA Biofuels and Electric Cars conference in March.

REVIEWING THE ENERGY STRATEGY

The Government agrees with the idea of an energy strategy that everyone in the industry can get behind, and a strategy that sets out key priorities for the medium to long-term.

However, the Government believes that the current New Zealand Energy Strategy, released in late 2007, is deficient in a number of ways.

The current Energy Strategy represents the high point of the total subsuming of energy policy into climate change policy.

The whole Strategy is an idealistic vision document for carbon neutrality.

You need only read the foreword of the NZES to get a sense of this.

"Sustainability" and "sustainable" are mentioned thirteen times, "greenhouse gas" is mentioned four times, and "climate change" is mentioned three times.

That is all very good, but security of supply rates only one mention. Affordability is not touched on at all. Nor is economic growth.

The National-led Government believes a refocusing of the Energy Strategy is required.

The new strategy will focus on security of supply, affordability, and environmental responsibility, with the overriding goal of maximising economic growth.

The Government is currently considering the best way of carrying out the update of the Energy Strategy and I will make further announcements about this in the coming weeks.

ENERGY EFFICIENCY

I'm keen to encourage energy efficiency gains in New Zealand.

Improved energy efficiency saves consumers money, reduces demand for electricity, with consequent positive effect on our energy emissions profile.

One of the things the government is focusing on at the moment is household insulation.

Around 860,000 houses in New Zealand have no insulation, or are under insulated. 235,000 of these homes are occupied by people on low incomes.

Research from the Wellington School of Medicine shows that for every dollar spent on insulating cold houses, there is a two dollar return in energy and health savings.

One night in hospital costs the same as insulating a whole house.

I have tasked the Ministry of Economic Development and EECA with designing a plan to significantly boost the number of home insulation retrofits occurring in private homes.

Investing in home insulation doesn't just make sense from a health and productivity point of view, it's also the right type of infrastructure boost our economy needs just to keep jobs through the downturn.

I'll be making announcements about the government's intentions for more home insulations later.

RESOURCES

I'd now like to talk about New Zealand's natural resources.

One of my first opportunities as a Minister was to visit the opening of the Pike River Coal mine on the West Coast.

In my speech there I signaled that New Zealand's natural resources such as minerals, oil, and gas have a significant role to play in contributing to our economic prosperity.

The total annual production value of petroleum, coal and minerals is about $4.2 billion, which should increase significantly in coming years with production from the Tui, Pohokura, Kupe and Maari oil and gas fields.

The Crown currently collects around $137 million in royalties and energy resource levies, which are projected to rise to around $700 million by 2010/11.

I believe the contribution that the resources sector could make to our growth rate, levels of employment, and quality of life, has been neglected in the last few years.

Other resource-rich countries, such as Australia, have worked hard to maximise the return from its resource endowment and have reaped the rewards.

Australia is called the "lucky country" because of its natural resources endowment. New Zealanders need to know that this country is similarly endowed.

For example, there is great interest in New Zealand's offshore hydrocarbon opportunities.

GNS calculate that more than 1.2 million square kilometres of New Zealand's economic zone could have hydrocarbons underneath it.

Our total petroleum potential could be as much as 24 billion barrels of oil equivalent.

New Zealand is a mineral rich country.

A recent report by geologist Richard Barker estimated that the metallic mineral potential of New Zealand has a gross in-situ value of more than $140 billion, with lignite alone at least an additional $100 billion.

In Northland there is the potential for $28 billion of non-metallic and $5.2 billion of metallic mineral deposits.

This Government is excited by the gains in economic development that natural resources can help produce.

It's for that reason that Prime Minister John Key added the responsibility of "Resources" to the Energy portfolio. It's a clear signal that New Zealand's quite considerable resource endowment is of great interest to us.

Petroleum

The Government is interested in acquiring new seismic data to stimulate further exploration for oil and gas.

The last round of seismic collection between 2004 and 2007, before the programme was abolished, led to considerable new exploration in New Zealand waters.

Before Christmas I asked my Ministry to free up $3.75 million for some seismic work over this summer.

In the year ahead the Government will also be reviewing existing domestic and international petroleum policy, licensing and fiscal regimes. This was signaled in our 2008 election manifesto.

The work will include identification of petroleum, industrial, environmental and economic policies that work well in other jurisdictions and the reasons for their success.

The aim of the review will be to recommend measures that ensure NZ continues to have a "fit for purpose" petroleum regime, attractive to explorers and extractors, but also sensitive to environmental best practice.

Minerals

Work will also begin this year on a review of the mineral regime to ensure it captures appropriate value for New Zealand.

In exploiting the potential of NZ mineral deposits, it's worth noting that economically beneficial outcomes are not always inconsistent with good environmental practice.

The Pike River project demonstrates exactly that. The mine's environmental footprint has been kept to a minimum through good design, with little damage to the ancient trees and bush.

The Department of Conservation recently presented Pike River Coal with a certificate recognising the "environmental consideration it demonstrated" in the development of the coal mine.

The Government's RMA Amendment Bill establishes an Environmental Protection Agency.

Initially this will be a statutory office inside the Ministry for the Environment, and it will evolve into a body that takes a wider view of environmental issues.

Crown Minerals will be co-operating with its development to ensure the success of Pike River can be replicated by other operators.

Carbon Sequestration

The Government is also interested in the possibilities of Carbon Capture and Storage, or carbon sequestration technology.

If commercially viable CCS technology can be developed then it will be enormously beneficial to New Zealand.

Our total in ground coal resource is approximately 15.5 billion tonnes. Of this there are at least 6 billion tonnes of economically recoverable lignite.

This equates to 74,000 petajoules or the energy content of 20 Maui gas fields.

Last year I visited the Otway project in Victoria in which some government entities have had some involvement.

I'll be interested to see how the government can be involved in supporting this exciting technology in the future.

CONCLUSION

In conclusion, let me repeat that New Zealand is an energy rich country.

We have extraordinary renewable energy resources, such as wind, hydro, and geothermal power.

We have fantastic natural resources which could make a significant contribution to our prosperity.

I'm sure it is the goal of all of us here to unlock the potential of New Zealand's energy resources for the benefit of all New Zealanders, and I look forward to working with the industry to achieve that.

John Key - 2008: A Fresh Start forNew Zealand

nospam@example.com (Staff) — Tue, 29 Jan 2008 13:28:00 +1300

2008: A Fresh Start forNew Zealand
A State of the Nation Speech

This time a week ago we were saying goodbye to our country's favourite son.

Sir Edmund Hillary will be remembered through the ages as a rock-solid reminder of the heights to which we Kiwis can aspire and the feats we can accomplish.

When Sir Ed climbed Mt Everest back in 1953, he wasn't the only New Zealander on top of the world. We all were. We were among the five wealthiest countries on earth. Not any more.

Fifty-five years on, we are no longer an Everest nation. We are among the foothill nations at the base of the OECD wealth mountain. Number 22 for income per person, and falling.

But what does a wealth ranking matter, you might ask? Why does it matter if we're number 22 or number four?

It matters because at number 22 your income is lower, you have to work harder, and you can save less. You face more uncertainty when things go wrong, when you or your family get sick or lose a job. No New Zealand sports team would be happy to be number 22. Why is the Government?

This is a great country. But it could be so much greater. It has been so much greater.

So the question I'm asking Kiwi voters is this: Do you really believe this is as good as it gets for New Zealand? Or are you prepared to back yourselves and this country to be greater still? National certainly is.

Under Helen Clark and Labour, our country has become a story of lost opportunities.

Despite inheriting the tail wind of a strong global economy, Helen Clark has failed to use that momentum to make significant improvement in areas of real importance to New Zealanders. She has squandered your economic inheritance by failing to build stronger foundations for the future.

Tomorrow, Helen Clark will tell us what she thinks about the state of our nation. In all likelihood, she'll remind us how good she thinks we've got it, how grateful she thinks we should be to Labour, and why we need her for another three years.

Well, I've got a challenge for the Prime Minister. Before she asks for another three years, why doesn't she answer the questions Kiwis are really asking, like:

Why, after eight years of Labour, are we paying the second-highest interest rates in the developed world?
Why, under Labour, is the gap between our wages, and wages in Australia and other parts of the world, getting bigger and bigger?
Why, under Labour, do we only get a tax cut in election year, when we really needed it years ago?
Why are grocery and petrol prices going through the roof?
Why can't our hardworking kids afford to buy their own house?
Why is one in five Kiwi kids leaving school with grossly inadequate literacy and numeracy skills?
Why, when Labour claim they aspire to be carbon-neutral, do our greenhouse gas emissions continue to rise at an alarming rate?
Why hasn't the health system improved when billions of extra dollars have been poured into it?
Why is violent crime against innocent New Zealanders continuing to soar and why is Labour unable to do anything about it?

Those are the questions on which this election will be fought.

Helen Clark thinks she can hoodwink Kiwi voters into giving her another three years to answer these questions. Well, I say she's had nine years, she's had her chance and she's wasted it. The truth is that as time has gone on, Labour has concentrated more and more on its own survival and less and less on the issues that matter to the people who put them there.

This year, signs are emerging that the winds of global growth have not only stopped but are turning into a head wind.

New Zealand cannot and will not be immune from the impacts of a slowing global economy. It's too early to say how severe the impact on our economy will be. However, we are already beginning to see the cracks appear in Labour's legacy.

Right now, we are sandwiched between low growth and high inflation. Finance companies are falling over and taking the savings of thousands with them. Mortgage rates are rocketing upwards. Retirement savings are being slashed by the falling value of shares. Inflation is eating away at spending power and living standards.

When the going gets this tough, is it any wonder that Kiwis look longingly at our Aussie cousins? Our Aussie cousins, who get paid a third more than us for doing the same job. Our Aussie cousins, who have been given a tax cut in every Budget for the past five years and who will continue to have their taxes cut for Budgets to come.

Too many Kiwis are looking at those stats and choosing to join their cousins across the ditch. We have to give them better reasons to stay.

So today, let me say this – unlike Labour, National is not in denial about the state that many New Zealand households find themselves in.

We know Kiwis are suffocating under the burden of rising mortgage payments and interest rates. We know you cringe at the thought of filling up the car, paying for the groceries, or trying to pay off your credit card.

We know you think wistfully about how it would feel to be Michael Cullen, smugly sitting on a wad of your cash and thinking about how he can buy some more votes with it. Not all Kiwis have a surplus to fall back on Dr Cullen. They paid their surplus in tax.

My message to Kiwis is that under National you will come first – not the fanciful whims of big-spending Ministers who have long since stopped worrying about how to make ends meet.

The National Party has an economic plan that will build the foundations for a better future.

We will focus on lifting medium-term economic performance and managing taxpayers' money effectively.
We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.
We will cut taxes, not just in election year, but in a regular programme of ongoing tax cuts.
We will invest in the infrastructure this country needs for productivity growth.
We will be more careful with how we spend the cash in the public purse, monitoring not just the quantity but also the quality of government spending.
We will concentrate on equipping young New Zealanders with the education they need for a 21st century global economy.
We will reduce the burden of compliance and bureaucracy, and we will say goodbye to the blind ideology that locks the private sector out of too many parts of our economy.
And we will do all of this while improving the public services that Kiwis have a right to expect.

Because the hard truth is that Labour's economic underperformance hasn't delivered the social dividend they promised us.

So, make no mistake: this election won't be fought only on Labour's economic legacy. National will be asking Labour to front up on their social legacy, too. Many of the social problems the Government said it would solve have only got worse.

This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn't exist. They said there was no underclass in New Zealand.

But who now could deny it? 2007 showed us its bitter fruits. The dramatic drive-by shooting of two-year-old Jhia Te Tua, caught in a battle between two gangs in Wanganui. The incidence of typhoid, a Third World disease, reaching a 20-year high. The horrific torture and eventual death of three-year-old Nia Glassie. The staggering discovery of a lost tribe of 6,000 children who are not enrolled at any school.

The list goes on and on. The fact is, that under Labour, there has been no let-up in the drift to social and economic separatism.

We don't need more of their hand-wringing, their strategies, and their interdepartmental working groups. What's needed is the courage to make the tough calls to fix these problems.

Today, I'm going to announce a new set of policies which will leave you in no doubt that National has that courage.

Youth Plan

These policies are about delivering for our young people.

Young people are a group I'm passionate about. For they, more than anyone, will determine the future shape and prosperity of New Zealand. The energy and enthusiasm of the vast majority of our young people make me hugely optimistic for our country.

But the sad fact is that a growing number are failing to deliver on their potential.

This wasted potential is there for us all to see: teenage parents with no plans for their or their children's future; illiterate and innumerate school leavers; youth gangs prowling our neighbourhoods and sporadically dishing out beatings.

More than 25,000 Kiwis aged 15-19 are not in any form of education, training or work – that's despite Labour's promise to get that number down to zero. Those young people are disengaged from education and are at a loose end.

More than one in five kids leave school with no qualifications. Almost half of all kids – four out of every ten – leave school without a qualification that provides them with the foundation skills needed for work or further study. More than 13,000 teenagers are collecting a welfare cheque and many others are filling their days with nothing but Playstation and TV soaps.

Violent youth crime is at an all-time high. Robbery is up. Grievous assaults are up. Aggravated robbery is up. Young criminals are graduating from petty crime to more serious crime; unexploded time-bombs on a fast-track to Paremoremo.

The victims are people like you and me. Innocent Kiwis randomly beaten by teens on the North Shore. A Wellington Uni student beaten to a pulp on his walk home. A dairy worker stabbed to death in South Auckland last week. A 14-year-old arrested at the weekend for a fatal stabbing in Tokoroa. The list goes on and on.

Rather than being the hope for our future, these young people represent our future fears.

The habit of the Clark Government is always to shy away from these problems. They prefer to poke their noses into the lives of good parents while ignoring the ticking time bombs right in front of them. That's not my approach.

Today, I'm going to outline some new policy that forms part of National's plan for giving young people the future they deserve. This Youth Plan will have two major aspects to it.

One part is about education. The other part is about rolling up our sleeves to prevent New Zealand's youth crime problem from becoming tomorrow's crisis.

This plan is about giving all young people the opportunity and responsibility to better themselves, no matter what their circumstances, abilities, or track record. That's the Kiwi Way.

Youth Guarantee

Firstly, let me turn to education.

In an ever more competitive and highly-educated world, we must do better at engaging our young people in education. Far too many teenagers leave school at 16 without even a basic qualification. That might have worked 30 years ago, but it won't cut it in the future I'm aiming for.

Today, I'm going to announce a new education entitlement – National's Youth Guarantee. It's based on National's expectation that all young people under the age of 18 should be in work, education, or training.

To make this possible, a National-led Government will provide a universal educational entitlement for all 16- and 17-year-olds. The Youth Guarantee will allow them to access, free of charge, a programme of educational study towards school-level qualifications. This new entitlement will be on top of, not instead of, the education entitlements they have now.

The Youth Guarantee will be wholly different from the education entitlements of the past – because a National Government won't presume that in the 21st century, school will always be the best place for every young adult to be educated.

We don't think that simply raising the school leaving age is good enough. We know there are plenty of 16- and 17-year-olds who have jobs and are learning from them. We also think there are some kids who might be more motivated and who might achieve more if they could learn in a non-school setting.

They might get more out of their education at, for example, a polytechnic, a wananga, a private training establishment, or a combination of these options. Many will still do better at school. That's fine. But it's time we provided for the minority who don't.

There are many reasons why an alternative provider might suit a young person better than their local high school.

A disengaged teenager might need more intensive reading and writing help than a typical Year 12 class is geared up to give. A young person might not be interested in the conventional subjects offered at their local high school, but could be interested in doing a basic skills course to prepare them for trade training. A pregnant teen or teen parent might not be able to access a place in a teen parent unit, but could stand to gain a lot from a specialised parenting course.

Under National's future-looking scheme, those choices won't come with a cost penalty.

Because we don't think it's fair that a 16- or 17-year-old can get a free education at their local high school, but is asked to front up with as much as $4,000 in fees for a work-skills course at their local polytechnic.

We also think this new approach will encourage tertiary education providers to develop new courses that cater to the specific needs of unqualified and lowly qualified school leavers. It will help this large and potentially productive group of people make a smoother transition from school into further education.

Rest assured, no one will be playing twilight golf or doing sing-along classes. Providers offering courses under the Youth Guarantee will have to meet quality criteria to ensure they are effectively engaging their students.

What is more, the Youth Guarantee comes with obligations. As a society, it's time to stand up and say to our young people that we will support them, but only if they are supporting themselves by developing the skills and knowledge they need to succeed.

Under National, young people who aren't working and who fail to take up their educational entitlement will not be eligible to receive a benefit.

In saying that, the policy will take account of the special circumstances that young people and their families may face. For example, some 16- or 17-year-olds may genuinely be too sick to work or participate in education. And a short stand-down period will be necessary so those who are genuinely looking for work have a reasonable window of time in which to do so.

Teenage parents will be specifically catered for. Programmes incorporating childcare, parenting advice, and tailored education will be developed to meet their particular needs.

National will be conscious that people's circumstances are many and varied. But the bottom line is this – the days of 16- and 17-year-olds being able to leave school and drift along aimlessly while being financially supported by the Government are at an end.

Youth Justice

The second part of National's Youth Plan is for dealing with the kids who already pose a serious threat to the security of our communities.

We think it's time to provide the youth justice system with a modern set of tools for getting young people out of the crime cycle.

First, we are going to extend the jurisdiction of the Youth Court so it has the power to deal with 12- and 13-year-olds accused of serious offences.

At the moment, 12- and 13-year-olds accused of high-order crimes, such as aggravated robbery and home invasion, can only be dealt with by the Family Court. National thinks the Youth Court, with its wider range of powers, could play a much stronger role in getting these young offenders back on track.

Secondly, we're going to give the Youth Court new powers for following up on proven young offenders once they walk out the courtroom doors. This will involve a new range of Youth Court orders.

Thirdly, we're going to create a tough new range of sentencing options for dealing with the hardcore group of young criminals.

Before I say anything more about these new initiatives, let me state for the record that our youth justice system does an excellent job of dealing with most young people who get into trouble.

The vast majority of youth offenders are dealt with by the Police and don't end up in court. There are lots of teenagers who make mistakes and do dumb things, but who learn their lessons and become law-abiding adults.

The problem I am talking about today is the group of serious persistent offenders. In the view of Principal Youth Court Judge Andrew Becroft, this is a group of about 1,000 young people. We don't need a pre-school check to work out who they are. We already know their names. Too often, these kids are simply sifted through the youth justice system and into adult courts in what can become a shoddy game of pass-the-parcel.

I don't think it's good enough to simply throw up our hands and allow these troublesome teens to become life-long criminals. Good, law-abiding Kiwis end up paying the price. We must act now to defuse these unexploded human time-bombs.

New powers for the Youth Court

The first set of powers I'm proposing today are aimed at the young offenders who the Youth Court thinks are at risk of becoming part of the hardcore offending group. They are not the worst kids, but they are in danger of heading down that track.

The Youth Court currently has limited tools for properly dealing with these known offenders. National will give the Youth Court three new powers for pushing them back onto the right track. We will back those powers up with increased funding to the services involved.

First, the power to issue parenting orders.

These orders will require parents of youth offenders to attend parenting courses that address problems at home that may be contributing to their child's offending. The young person will also be required to co-operate with the requirements of these programmes. Non-compliance will result in community work or fines for parents and child.

Secondly, the power to refer young offenders to mentoring programmes.

Programmes like Project K and Big Brother have been highly successful at turning around the lives of hundreds of struggling teenagers.

A mentor may, for example, give the extra push that encourages a young person to join their local rugby team and start turning up for practice. They may help a young person recognise the value of school or get them to honestly examine some of the negative things they're doing in their life.

At the moment, access to effective mentoring programmes is limited by funding shortfalls and uncertainty. National will fund these programmes properly to ensure the Youth Court can refer young offenders to them, regardless of where they live, for a period of up to 12 months.

Thirdly, the power to refer young offenders to compulsory drug or alcohol rehabilitation programmes.

As many as four out of five young offenders before the Youth Court have a drug or alcohol problem. Despite this it can be difficult for the Youth Court to ensure young offenders get the treatment they need.

A kid with a P addiction will reoffend; it's that simple. So we have to do something about getting them off the drug. National will ensure that proven drug and alcohol rehabilitation providers are funded to get these kids sober.

I'm confident these three new tools – parenting orders, mentoring programmes and targeted drug and alcohol rehabilitation – will go a long way to flushing more young people out of the crime cycle.

In all these areas, National will fund providers with proven results. We'll ensure there's a range of programmes available that cater to the individual needs of the offenders and their whanau. This would include iwi-based services and other services aimed specifically at Maori or other cultural groups.

Tougher sentences

But the fact is, those new tools by themselves won't be enough – because some young people have committed crimes so serious and so chilling that we must take far more drastic action.

Currently, the Youth Court has the power to refer the worst of these offenders – the Bailey Junior Kurarikis of this world, the rapists, the murderers, the aggravated robbers – to the adult courts. That should continue to be the case.

All offenders over the age of 16 are also referred to the adult courts. This, too, should continue to be the case. Labour thinks 17-year-olds who commit adult crimes should get youth sentences. National thinks they should pay with adult sentences. For the next group down – those who are currently sentenced by the Youth Court – there needs to be a range of tougher sentencing options. I propose three new measures:

The first is longer residential sentences.

The Youth Court currently has the power to place young offenders in youth justice residential facilities for a period of up to three months. Many are released after just two.

Last year, long-overdue legislation was tabled to allow these sentences to extend to six months. National supports this extension and in Government we will, as a matter of priority, pass the legislation to make it happen.

In addition, National will fund a new type of programme for teenagers who aren't bad enough to be put in a youth justice facility but who need a serious dose of intervention.

The 'supervision with activity' sentence is already available for these kids. It's hardly ever used, however, because though there are some very good programmes that work, there are far too few of them. Youth justice experts have been making this point for years. National has been listening, and we will act.

National will fund a new range of revolutionary 'Fresh Start Programmes'.

They will be designed to give young offenders what they need to make a fresh start – structure, routine, clear boundaries, intensive support and a sense of self-discipline and personal responsibility.

The programmes will last up to one year and will include up to three months of residential training at, for example, army facilities. Young people sentenced to Fresh Start Programmes will be intensively supervised by high-quality staff dedicated to getting them back on track.

Fresh Start Programmes will be designed to address the problems underlying a young person's offending and may include, for example, drug and alcohol rehab, outdoor and physical fitness training, literacy and numeracy teaching and work towards NCEA credits, teamwork exercises, and reinforcement of community values.

In all cases where a Fresh Start sentence is imposed, participation will be compulsory.

Graduates from Fresh Start Programmes will be expected to comply with Fresh Start contracts outlining the changes they have pledged to make in their lives. They will work with mentors and social workers to ensure the changes are permanent.

These programmes will be run by specialist providers with a proven track record of getting troubled young people back on the straight and narrow. The Army may work with others to provide these programmes. After all, they have a long and successful history of instilling values and discipline into young men and women.

Take, for example, the Limited Service Volunteers scheme (LSV) run at Burnham Army Base and aimed at long-term unemployed young people aged 17-25. It works. Seventy per cent of participants go on to full-time employment and demonstrate an improved respect for the laws and norms of society. Despite this, Labour has hacked away at LSV, ideologically reducing the number of participants year after year.

In 2002, a Ministerial Taskforce on Youth Offending recommended that the Army could run programmes for young offenders at army bases. That recommendation was ignored by Labour. National won't be so blind.

I want to make one thing clear, however. Fresh Start Programmes are not going to be some sort of short-term camp run by a tyrannical sergeant-major, which attempts to scare kids straight. What I'm talking about is a much more modern approach that tackles the underlying causes of criminal offending. I want to take the effective elements of army-type training and combine them with the most advanced expertise in youth offending and rehabilitation that New Zealand has to offer.

Providers like Graeme Dingle's Foundation for Youth Development have the expertise to develop these programmes. National will back them and others like them to get to work on dismantling some of New Zealand's ticking time-bombs.

Finally, we think the Youth Court needs better teeth for following up serious youth offenders when they are released back into the community.

I'm sick of hearing about serious young offenders who receive community-based sentences but who fail to comply with the requirements of those sentences.

I'm thinking, for example, of the case last year of a 16-year-old member of an Auckland youth gang who was sentenced to supervision and community work on nine charges, including burglary and wilful damage. While supposedly being 'supervised' in the community, he carried out seven more crimes, including assault with a weapon and threatening to kill.

That's unacceptable. Teens who don't comply with supervisory sentences should face serious consequences.

National will introduce a new "Spotlight Sentence" that can be issued by the Youth Court.

Young people sentenced to a Spotlight Sentence will be ordered to comply with a court-ordered contract. The contract will set out the court's expectations of the offender including, for example, curfews, an end to gang involvement, compliance with drug treatment programmes, or regular school attendance.

To ensure compliance, the court will wield a big stick to be used in the event of a contract breach. That stick will be intensive supervision and surveillance, including electronic monitoring of the young person using an ankle bracelet.

All these tough new youth justice measures will carry a considerable financial cost. It will be money well spent. It will save lives. It will save young people from a life of crime.

Without doubt, the financial cost of getting serious about youth justice is far less than the social and economic cost borne by the community when young offenders are allowed to go on offending without sanction.

Under my leadership, a tough approach will always be accompanied by the provision of opportunity and a second chance.

I believe in the ability of every individual to take their life in their own hands and change it for the better. That's why I want to see a new Youth Guarantee to provide under-18-year-olds with a universal educational entitlement. That's why I want to see better and more extensive provision of parenting courses, mentoring programmes, and drug and alcohol treatment programmes.

I want every young Kiwi to be able to find a way onto the path to success. I believe the only limit on our nation's ambition is the limit which our young put on their individual ambition.

We owe it to our children and to our country to have great expectations for what they can achieve. Their prospects are New Zealand's prospects. We must raise their sights.

Conclusion

The approaches to education and youth justice I've outlined today demonstrate the positive and pragmatic approach National will take in all our policies.

We will not sweep problems under the carpet. We will not meet the country's challenges by quietly lowering our expectations.

We will focus on the real issues facing New Zealand. We won't fixate on the tired old political debates from 20 or 30 years ago.

National knows New Zealand has a great future if we embrace good ideas and put them into action. And my sense is that in 2008, New Zealand is ready for those new ideas – ready for a fresh start.

At this election, the National Party has the chance to harness the growing mood for change and march New Zealand towards a better tomorrow.

We know this isn't as good as it gets. We know Kiwis deserve better than they are getting. We are focused on the issues that matter and we have the ideas and the ability to bring this country forward.

National is ambitious for New Zealand and we want New Zealanders to be ambitious for themselves.

Election 2008 is your chance to act on that ambition. Let's make it count.

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Continue reading "John Key - 2008: A Fresh Start forNew Zealand"

Opening Address to the New Zealand Drillers Association AGM

nospam@example.com (admin) — Sat, 18 Aug 2007 15:01:00 +1200

Mr Chairman, thank you for your kind invitation to be present at your Annual General Meeting this morning.

I say at the outset that I can't help recognising that the Drillers Association has a considerable amount in common with the current government. Both of you, it would appear, take great joy in digging holes for yourselves.

When we periodically get invitations to come along to occasions like this, it's interesting to do a little bit of research to find out what the participants at such an occasion are involved in.

In the case of your group, while it may seem that drilling is somewhat singular in purpose, the reality is that you cover quite a range of activities across our economy.

You are significant employers and the value added from the work you do is considerable.

So, no doubt, like the rest of the business community in New Zealand you will be taking a close look at the ups and downs of the New Zealand dollar and asking yourselves what the effect of that long term may be on the economy.

Well, all I can say is that most of the political interests around the economy are doing the same sort of watching. One of the problems you get when the dollar rises against the US or other strong currencies is a lowering of your overall export receipts.

But equally, the input to your economy from the product or service that's imported becomes more expensive. It will be interesting over the next short while to see just what the inflationary effect of the devaluing dollar is on our economy and how much room there is for Dr Bollard to start looking at a lower interest rate.

The last time the New Zealand dollar was around 69 cents against the US dollar, our official cash rate was around 7 to 7.5%, so there is perhaps some good news for the domestic economy when it comes to interest rates, but for an industry like yours, the effect of the dollar fall on your fuel supplies could be quite marked.

That's not to say that the outlook for the New Zealand economy isn't good. The National Party has a strong view that our economy, although some say is at capacity, does need to grow a great deal in the future. We think New Zealanders' incomes need to rise, and a consequence of that is that businesses like yours do need the opportunity to prosper and to profit. That will be part of the challenge that we present to New Zealanders at the time of next year's election.

That election is probably about 15 months off and we have opponents who, in our view, have not capitalised on the extraordinary opportunities they've had over the past eight years to seriously grow the wealth of this country. And although they are at the moment, somewhat unpopular, they will not leave office willingly.

In fact, we are very concerned that they are currently putting before Parliament an Electoral Reform Bill, supposedly because the nation has been outraged by third party spending in General Elections. But at the same time, they failed to mention their rather considerable dipping into the taxpayer's purse for their pledge card and for the numerous programmes that ran in support of government policy prior to the last election.

You may ask me why I am mentioning these things at the start of your conference. Well largely because you're a big captive audience and therefore I take the opportunity, but also because we do live in a democracy.

We live in a very safe democracy and one where we have extraordinary opportunities to build a life for ourselves that is better than in many other parts of the world.

Part of protecting democracy is allowing anybody to say what they want about a government of the day. New Zealanders aren't stupid, they will always make their judgments based on the experiences they have, and I for one, am prepared to be judged in a political sense in the regard.

So when we see the government putting forward legislation that wants to limit the amount that anyone can spend in questioning their programme, then we think it's time to start ringing the alarm bells.

Some people say it would be good for you guys if you were in government. But that is not how we think, and I hope that the next National Government is very much judged by what it achieves, because under John Key, we are setting ourselves some pretty strong targets.

The most relevant to your industry and the sort of work that you're in involved in is our commitment to improving New Zealand's infrastructure.

While we often think of infrastructure as physical items like roads, cables, pipes, the truth is that fundamentally, infrastructure is about connection.

Infrastructure is what enables the movement of people, goods, energy, water and information around our country and around the world. Infrastructure, as you will know, does not just happen.

It is complex, it's expensive, it needs to be planned, and it should be designed well, constructed to the highest standards and then properly maintained.

Ideally, infrastructure should be developed before it's needed on the basis of an established national vision. All too often however, it's a rushed response begun only after the need has already become desperate.

Our estimate is that we've reached that point in New Zealand at the moment. When we look out to the horizon we can see the need for some $60 billion dollars of infrastructure spending over the next ten years.

That infrastructure plays such a pivotal role in the success of any nation. For New Zealand to be a First World country, we simply have to have that sort of investment in our infrastructure.

We want to unleash the skills and the talents of our people, to minimise waste in our economy and to ensure that we have the highest levels of motivation and production. For this reason, it's an investment we simply have to make.

In recent years, New Zealand as a country has under invested in infrastructure. Much more so than our nearest neighbours. Central government has lacked clear vision for infrastructure and much of the burden has fallen on individual local councils.

This has meant that much of that spending has been fragmented and somewhat ineffective. Valuable time and money has been wasted on endless regulation and red tape as people have been somewhat timid to make the sort or progress and investment that we need.

Critical decisions are often delayed while multiple reports are prepared on every aspect.

The eventual decision often appears to be based on a desire to avoid liability rather than consideration of what is in New Zealand's best interest.

The current infrastructure situation is unsustainable. Developing a new framework to sort out the issues around the planning, regulation, governance and finance of infrastructure will make a significant contribution towards moving New Zealand to a more productive economy.

We believe that improved investment in infrastructure can be developed in such a way as to protect our unique environment and support our Kiwi way of life.

Our Blue Green Discussion document has shown that policies can address both economic and environmental concerns.

We want to develop an infrastructure framework based on six key principals to help build a functional and aesthetic infrastructure network that will be part of a heritage for New Zealand.

Just as the work of Vogel was towards the end of the 1800's.

Drawing on work from the New Zealand Council of Infrastructure Development, we intend designing a framework for development based on government leadership and commitment to national development,

A long term integrated plan, a streamlined planning and approval process - particularly for projects or national of regional importance,

Integrated planning, regulation and governance,

A wide range of procurement and financing options and legislative change.

We want a policy that will recognise infrastructure and under-pins that quality of life and the future prosperity of New Zealand. So the next National government will not take the short term expedient route in the development of infrastructure but rather look at it as being part of our nation's future heritage.

Last year we released a document that set out to meld our economic and environmental direction and we remain committed to that.

However, we are equally committed to substantial reforms of the Resource Management Act. These reforms are critical to addressing New Zealand's infrastructure demands.

They are also important in attracting investment in industries, reducing compliance costs for farmers, for small business and for home owners.

Our objective is to reduce delays and uncertainties of the act while maintaining high environmental standards.

We support the Act's commitment to sustainability; the integrated approach to environmental management, and the focus on environmental effects.

But the Act has become too complex and cumbersome. Its public consultation provisions are open to abuse from minority groups which can impose huge costs and delays on our communities.

Insufficient weight is given to the rights of property owners about how their land is used.

There's too much confusion, with virtually every council having a different set of rules or alternatively, they're put in a position of having to reinvent the wheel.

It is our belief that policies and plans under the Act need far more clarity and consistency to reduce uncertainties and disputes - and ultimately litigation.
If we're successful in 2008, early in our term you can expect us to:

• Introduce legislation limiting the definition of environment to natural and physical resources and amenity.

• Remove vague Treaty references.

• Establish national environmental objectives and milestones.

• Establish an environmental protection authority with expertise to write effective national standards and policies.

• Introduce incentive mechanisms to enhance flexibility and give greater impetus to conflict resolution.

This may include transferable water permits, cap and trade systems for discharges like nitrogen, a net conservation benefit decision framework, greater use of infrastructure levies and negotiated solutions, reducing consent processing times by applying a late consent as a deemed consent principal, enabling the direct referral of complex cases to the environment court, and removing ministerial veto from coastal consents.

We want to reduce the so called 'nimby' syndrome.

We want to review compensation entitlements for property compulsorily taken for infrastructure works, providing leadership and incentives for resolving those conflicts through negotiation.

We want to re-focus legal aid for community groups towards mediation, scientific advice and by limiting it otherwise to large complex cases which will be subject to direct referral to the environment court.

And we want to increase accountability for local government through national objectives and milestones with regular reporting on progress.

It is our strong belief that those initiatives will restore the intent of the original Resource Management Act. That was 'if you want to do something in this country, you could, so long as you mitigate against the worse environmental effects'.

Unfortunately, interpretations of any act eventually leave it somewhat cumbersome and hidebound.

It is high time this country was able to see the changes we intend to make.

It is difficult to talk about infrastructure and large scale development without reference to climate change.

Climate change is one of those issues that have gripped the world in recent years. Every significant political leader in the world has grabbed hold of climate change and has a lot to say about it.

I think the days of arguing the science of climate change are long passed. The reality is that the world is starting to deal with the concept. And the way the world deals with it will have consequences for New Zealand.

Once marketers get hold of an idea like this, then it very quickly takes hold. As of 2009, the vast majority of New Zealand's fresh meat sold into foreign markets will need to carry carbon footprint statements. As a major trader this country simply cannot get left behind.

We want to ensure that climate change does not impact on our plans to further enhance the infrastructure of this country, so we have put in place a policy which has a target of reducing our 1990 net emissions by 50% by 2050.

Our belief is that technology will help to some extent, and so will the changes that inevitably society will demand of us anyway.

In the next few months, I think we can expect a number of moves that may see a different approach to that adopted with Kyoto.

So, at this time I simply signal that National is very aware of the impact that climate change could have on our domestic economy, very aware of the impact that climate change could have on our export economy.

And very aware that whatever way it goes, there are some things that we simply need to do to ensure that we are seen as good international citizens.

But that won't stop us having a look at the opportunities. We have to develop further the mineral wealth of this country.

In 2005/2006, a total of $2.5 billion dollars worth of petroleum, coal and industrial mineral and metals were extracted in New Zealand. Excluding petroleum, the extraction was worth about $1.4 billion, up 17.9% on 2004 values.

The strong growth in production has been buoyed by increases in commodity prices and corresponding increases in investment expenditure.

The geological wealth of New Zealand is estimated at over $200 billion. A first of its kind study, just released by GNS Science, shows $33 billion worth of mineral deposits are potentially present in Northland alone.

Some 80% of known mineral deposits currently lie under the Conservation Estate. Much of this cannot be even prospected at the moment let alone mined due to perceived conservation values.

These values are not always well defined, while DOC's conservation estate keeps growing faster than their ability to maintain conservation values, let alone define them.

In 2004, NZIER estimated mining contributes 1% of GDP. That's 4000 direct jobs or 8000 indirect jobs. Future potential is estimated at 4% of GDP. That's a total of some 40,000 jobs.

So mineral exploration and mineral extraction have a big part to play in New Zealand's future. We're aware that the current government's seismic survey fund is almost depleted. It is our hope that the fund will be topped up or a similar fund established.

The potential royalties to come out of the work achieved by that survey are quite extraordinary.

And any National government will want to continue seeing that sort of work done. The concept of being able to protect your conservation estate, but still do what you reasonably can to extract minerals from beneath it is one that we want to explore further.

In the longer term, conservation values are what New Zealanders will most appreciate the government for, but an effort to try to find a way to satisfy the need for our economy to grow off the value of our mineral deposits, is something we wish to explore.

Mr Chairman, can I conclude by saying that it is our firm belief that the greatest natural resource in this country is water. As a primarily agrarian economy, water is the life blood. National will most certainly want to encourage the infrastructural development of irrigation schemes.

But we'd also encourage the conservation of water in-ground where possible, alongside the most efficient and the most effective ways of extracting and distributing water.

Sir, this is an industry that I think has a very interesting future ahead.

I've been surprised to learn just as I said at the start, just how far your organisation is involved across the economy. So, I wish you all the best for your meeting and take the greatest pleasure in officially declaring your meeting open.

Thank you.