Today on Newshub Nation, the Agriculture Minister admits the mycoplasma bovis outbreak is a disaster and the scale of it still isn't known. The government's tinkering with its flagship housing policies, so is KiwiBuild still going to deliver on its original promises? And as our fossil-fuel dependent regions are pushed into a carbon-free future, we look at how their economies are planning to adapt. Captions were made with the support of NZ On Air. Copyright Able 2018 Kia ora, good morning. I'm Lisa Owen. And I'm Simon Shepherd. Welcome to Newshub Nation. The mycoplasma bovis outbreak is worse than anyone first thought. It turns out farmers have been trading cows on the black market, and no one knows if they're infected or where they've ended up. The Minister of Primary Industries is halfway through a cull of 22,000 cows. It could be just the tip of the iceberg. So I asked Agriculture Minister Damien O'Connor how many farms are now affected. We have 38 farms. They are infected. They've been tested, confirmed. There are up to 70-plus farms that are likely to be infected. We've got hundreds under investigation ` up to 300 ` and then we've got up to 1700 that are of interest. So quite a large number. 1700. Do you know how many cows are on 1700 farms that could possibly be affected? No. It's a hell of a lot, and at the moment we're halfway through the process of culling 22,000, and there's up 60,000 potentially in those infected properties already identified. So the numbers are very, very big. You're talking up to 60,000 cows. You're culling 22,000. You're halfway through that. Are you still aiming for eradication? Is it actually feasible? We're still aiming for that. We are having active discussions on a daily basis as to the changing goalposts, I guess, as we do more research, more tracking, identify more properties. And clearly the balance of probability changes. So we hope that we can eradicate. It will obviously take a lot longer. We're not at the point where we're saying we can't. OK. When do you get to that point? It'll be a discussion we have with industry. We're meeting with them next week. We have all the information in front of them as well as in front of officials. We've got a technical advisory group. We're getting all the advice that we possibly can, and hopefully we can make the right decision not just for farmers now but for the farming sector into the future. So, we understand that moving day or gypsy day is coming up where share milkers move their herds around. Are you going to let that go ahead? We're very conscious of that date, and we've always been attempting to be in a position to make a clear call prior to the end of May. And some farmers and some people may have shifted stock, but any infected place, any infected farm will not be able to shift stock. Any farm with a notice of direction will not be able to shift stock, so that's a restriction on them now. In terms of the other farms, we're just hoping that farmers take a sensible approach to this and that they're not going to ignore NAIT and that they're going to adhere to the requirements of traceability. NAIT is the national animal tracking system you're talking about. It is, yes. OK, but how can you let, say, moving day go ahead if you don't know the scale of the problem, and infected cows or potentially infected cows could be going anywhere. Well, that is true, and, as I say, we've been doing more testing, more investigation, and the scope of the infection is a lot wider than the original modelling that we had. The situation's worse than we thought it was. That is unfortunate. We're having to deal with that on a day-to-day basis and to try and eliminate, but clearly the chances of rapid eradication have almost gone. Long-term eradication's still possible. We have bovine tuberculosis in this country. It's not identical but it's similar to this. We've taken on a programme of long-term eradication, and we believe that we can take the same approach to mycoplasma bovis. But those final decisions are yet to be made. Let's talk about how we got to this situation. MPs yesterday were told that there is a black market operating and that cows are being traded for various goods and services rather than going through the official channels. Do you how widespread that is? Look, it's hard to identify how widespread, but clearly it's something that has been exposed through this unfortunate mycoplasma incident. We are finding out a lot more. I think farmers are realising the importance of adhering to NAIT. This has been a wake-up call for the whole livestock sector across New Zealand, and hopefully we can learn from this and put ourselves in a better position for the future. OK. Farmers who have been trading on the black market are not going to be honest about where their cows have come from and where their cows are going. They're going to remain below the radar. So that creates a whole new area of uncertainty as to where these cows are going. I think that people purchasing stock have to be clear they know exactly where they've come from, and I think I've spoken to a number of farmers who have received stock in the past. They haven't been too clear where they've come from. They've trusted the stock agent or the person selling. I think that will change and people will have to adhere to a higher standard of proof. But given that kind of revelation, how can you possibly control this disease, let alone eradicate it? I think in the end, as we've hoped, farmers would have adhered to NAIT, would be part of a biosecurity system that understands the risks. Unfortunately they've taken it for granted and they've been too lax. So the farmers have been too lax. The farmers are at fault here? I think the signals that have gone to them from, firstly, the government when they kind of introduced NAIT and then never enforced it have been pretty kind of soft, and the importance of it hasn't been highlighted to the farmers from their leaders. OK, so, we'll talk a little bit more about that in a moment. Just on the black market, how are you going to crack down on that? Because they're just trying to avoid tax, aren't they, remain below the tax radar? It's illegal from an IRD perspective, and so unfortunately as much as we try, we can't stop some people conducting illegal activities. But we will try and clamp down on that. There's talk of actually registering stock agents to ensure that any movement of stock through their hands adheres to an ethical standard and that they need to be registered. Similar, I guess, to real estate agents. But in terms of farmers giving an animal for some payment, I guess we've just got to highlight to the farmers the risks, the biosecurity risks of doing that, let alone the risks, I guess, through IRD. So is personal greed of some small band of farmers putting the whole sort of reputation of New Zealand of risk and putting the whole industry at risk with this disease? Yes, it is. So the personal greed of some small band of farmers has caused all this? Look, we can say that 70% of farmers haven't adhered properly to the NAIT requirements in transferring animals from one farm to another` 70%? So that's a lot of farmers, and they haven't done so to try and break the law. They've just not been aware of the dangers of taking that casual approach. I think this unfortunate incident will wake them all up. So we don't know how far it's spreading, how many cows are going to be, whether you can eradicate it or whether it can be contained. This is a bit of a disaster, isn't it? Yes, it is. It's a disaster. You admit that. And this is something` probably my single biggest political challenge. Probably the biggest challenge for the livestock sector in New Zealand. We have to be honest about that, and I guess focusing on the best possible way forward is what we are focusing on now. We can't cry over spilt milk. What's been done has been done. We'll answer a few questions in hindsight. The focus now is making the right decision to try and reduce the impacts of mycoplasma bovis. OK, let's talk about the national animal tracking system that you say 70% of farmers have not been adhering to. You put the blame on the previous government and the farmers, but what are we going to do now about it? Are you going to beef it up? The fines are only between $150 and $1000 for not reporting movement of a cow. There are over 40 recommendations from the review. We will go through each and every one of them and make the changes necessary. It's from the top, at an area of governance where it's been lacking all the way through to the design of the tags. We'll be changing this, and I think farmers will appreciate that they're going to have to adhere to the standards and the requirements of the system in the future. Otherwise we're going to have another disaster like M bovis? We could do. In fact, we're under constant threat from biosecurity diseases and pests and organisms coming into the country. We need to be in a position to react. These things are coming in all the time. We run a pretty good system, but it's not perfect. But being in a position to react quickly and shut it down or eradicate is what we're aiming for. OK, let's talk about the changes that you want to make to this tracking system. Are you going to beef up farms dramatically? Are farmers going to have a lot more incurred costs because they have to be more responsible or have to adhere to a higher compliance in terms of animal tracking? They've always seen this as a cost. This is an investment. The consumers buying their products want to know exactly where they've come from and in fact how they've been produced. Blockchain and all these other systems now enable the consumer to work out how this product has been made. The farmers need to appreciate that a decent animal tracing system provides them with a marketing tool, and if they've adhered to animal welfare standards and environmental standards, labour standards, and they produce a quality product, they'll get more for it. You've estimated that it could be up to $870 million for total eradication, but the scale of the problem is changing every day, getting bigger. Do you know how much this is going to cost? Look, some of that cost estimate includes, at the best guess, around the effect on the industry over a 10-year period. I think that the cost to the industry in managing this may be greater. Farm systems will have to change. The way that farmers approach their animal movements will have to change. There'll be a cost incurred with that. It's a necessary cost. That's why, I guess, if we have a decent system; we adhere to the biosecurity standards and animal welfare; we've got to get more from the marketplace for what we produce to cover the cost of a proper animal production system. OK. So you say that our meat and our dairy and our milk might be worth more if we have such a system adhered to. But in the short term, the cost is going to be there. So it's going to be $1 billion, $2 billion? Have any forecasts been put in place? Well, that's shared. I mean, obviously, there's some upfront costs from the taxpayer that will contribute to help eradicate and minimise the impacts of this. The industry players will have to front up ` that's, effectively, the farmers. And then there's an ongoing cost. As I say, a best guesstimate on what each farmer will have to do. And, I guess, farmers are all different. They run different farm systems. If we give them good guidance on what best to do, then, hopefully, they can minimise the cost to their own operation, but they'll have to do what they have to do. Well, let's talk about what the farmers are going to have to pay in a sec, but is Cabinet going to approve more money to fight this? Is there going to be more money in the Budget? What's going to happen? There will be more money to fight this. Yes, there will be. How much? We haven't worked that out yet, and I have to take that proposal to my Cabinet colleagues. It'll be alongside industry, because it's an investment in their future as well as an investment for the taxpayer and our future. OK. So you are putting it back on the farms and saying that the industry itself will have to stump up some cash. How much is the industry going to have to pay to clean up this mess? Well, I don't know. As I say, the final cost has not been estimated. We've fronted with over $85 million, plus ongoing operational costs. The industry said that they'll front with just over $11 million. I think the cheque's still in the mail. We've got to sit down with them. There was a Government Industry Agreement concept, developed under the Labour Government, actually, after the varroa mite came in, that said we'd sit down with industry, work out who does what in the event of an incursion. And then what the last National Government did is said, 'And we'll do a cost-sharing 'arrangement on the basis of 40:60 ` 60% from the taxpayer, 40% from the industry.' So you're saying farmers, the industry, is going to have to pay 40% to clean this up? No, I'm saying that was the basis of negotiation. Now, what the National Government did, they reached an agreement` Well, they didn't reach an agreement. In fact, the two major players Dairy NZ and Beef and Lamb didn't sign any agreement. A principled agreement about cost sharing that started at 40%, then gave a 20% discount because of exacerbator contribution, and then the government, to ease the way or to try and get the people on board, said there'll be transitional discounts that said that, I think, in this year, by some of their calculations, was 12% of the total cost. Right. So, we talked to Federated Farmers, and they believe that 12.8% is the figure that they have been negotiating towards in terms of cleaning up this kind of mess. That's what they were talking about as an original transitional discount for a principled agreement that was based on 60:40. So, at the moment, we don't know, the industry doesn't know and the government doesn't know who's going to pay how much, or even the percentage terms? That's correct, and we're working through that with them. I've been right up front with them, saying that the principle from a Psa incursion was that the kiwifruit industry fronted up with 50% of the cost ` $25 million upfront. The government contributed 25. They got on, did the job, and I think the outcome's been a positive one. I said upfront to the industry players 60:40 is where we start, because the taxpayer's contributing a lot to a lot of other things ` hospitals, schools, a lot of unfunded commitments by the previous government. You know, money's not there for everything, but we are committed to assist the industry. The question for them is how much did they consider was a good investment in their future. Do you have a figure in mind? No. There are different proposals around the four different scenarios that we have. And all those figures have been shared with the industry players and are in the process of being updated on the basis of new information. It's pretty urgent, though, isn't it? As this problem is growing, they're wanting to know what they're going to have to pay for, how much they're going to have to pay, and whether that's going to make their farms viable. Absolutely. Well, look, the issue is that we can't afford not to spend this money, and we have to get on with it and do what we can to eradicate, to reduce the infection load across the country. And the farmers have to work out what level of investment is worthwhile to reduce the cost not just to them, but, actually, to future generations. All right. Should the whole industry have to pay somewhere between 12.8% and 14%? Should the whole industry have to pay that for the, sort of, probably, reckless behaviour of a few people that may have brought in infected cows and shipped them around on the black market? Yes, I think they should. Because one of the issues and the challenges we've had is that 70% of the farmers haven't adhered to a system that they should've been through the NAIT system. And so, I guess, everyone shares some of the responsibility; everyone will share some of the cost. But, so, cows are being culled now ` up to 22,000 by the end of May. If you can't eradicate it, why are we killing these cows? Well, I think that's a fair question, and we'll reach a point with the industry. The general view has been` And there's certainly anecdote from the UK where they took a softer approach that farmers are now saying, 'I wish we'd killed it all and been far more ruthless with 'our eradication attempts.' I think the question is ` to what extent should we reduce the infection load or potential infection load for the country so that we are in a position over time then to try and eradicate? OK. Let's talk about biosecurity. I mean, we've got this here now. Do we need to beef up biosecurity? And what if this had been an even more serious disease, like foot-and-mouth? Well, to some farmers, it's as serious. There are no trade implications here. Yes, we do need to beef up our system. It's been squeezed. We've had increase in trade, increase in tourism numbers. So more money for that in the Budget? You'll have to wait and see. And, clearly, what we've done is set up Biosecurity New Zealand as a separate business unit within MPI so that everyone coming into New Zealand and working around New Zealand sees an agency that is focused on biosecurity. What confidence do we have in biosecurity at the moment? I think it's pretty good. I think our systems are very good. But you've admitted that this is a disaster, so how can it be good? This is one. And all the pathways that had been assessed for mycoplasma bovis were assessed as low-risk, but that's not no-risk. So best attempts cannot guarantee something like this happening. So we have the best possible defence, but then we also have to prepare for something like this. We have to beef up the defence, in my view. We're going to have an intelligence unit working offshore to assess the changing risk. We've got climate change around the world. We've got increasing trade, increasing tourism. We have to be up with the best in the world. And how damaging is this for our international reputation? Because it doesn't look like one, we've spotted it, and secondly, have got it under control, or third, even know how big it is. No, I think it's a positive. It's a positive? How can it be a positive? Most other countries have got mycoplasma bovis. The fact that we've focused and been in a position of trying to eradicate, I think, is a positive for us. There are no issues in terms of trade or the consumption of meat. There are issues in terms of the cost of production for our internal farming system. I think people who look at this, and we've had the best international advice we can, are saying that we've done the best possible thing we could to try and eradicate this. We'll have a review, no doubt, but so far, the feedback from the Technical Advisory Group is saying that we've been doing as much as we possibly can. Damien O'Connor, Agricultural Minister, thank you for joining us. (MOUTHS) And if you've got something to say about what you see on our show, do let us know. We're on Twitter, Facebook and Instagram. Or you can email us. The address is on your screen now. Up next ` inevitable progress or economic disaster? We look at how communities that rely on the fossil fuel industry can be part of a carbon neutral future. But first ` will the government's housing policies actually make a difference to the ongoing housing crisis? This week, the government admitted it's had to tinker with its KiwiBuild policy to make it work. Three-bedroom homes in Auckland will now cost $50,000 more than Labour promised during the election campaign. And the houses might end up going to people who aren't first-home buyers. I'm joined now by housing strategist Leonie Freeman and Salvation Army social policy analyst Alan Johnson. Good morning to you both. Leonie, if I can start with you. That price jump from $600,000 to $650,000 ` how significant is that shift? I think it is quite significant, but I think what they're trying to do is to perhaps set a framework which will encourage more houses to come into that pool, because the document they released is about an invitation to participate. And what they're trying to get is development projects that are already underway that have perhaps got stalled because the developers can't get funding or presales requirements. Right, so you think the upping of the price is to make it attractive to developers? Yes, just to try and get some more into that pool. And I think it's also reflective of, perhaps, a little bit more realism about the costs and what it takes to actually build houses and get them to the market. Do you think it was unrealistic ` that $600,000 price tag for a freestanding Auckland house? Well, I think, perhaps, that what we've seen is we're still continuing to see increases in construction costs. We've got a shortage of people in the industry to build it, so there's continuing pressure on housing. But one of the key barriers at the moment has been developers getting projects to a certain point, but they can't secure funding or get the presales. So the government's trying to reduce the risk to get things moving. All right. Alan, the ministry advice has been that a household in Auckland would need to bring in around $114,000 a year to buy a one-bed KiwiBuild around the price of $500,000. So who actually is this going to help? KiwiBuild? Look, it's clear it's going to go to the middle class, and probably to the young middle class, rather than the people that we see every day and, certainly, people better off than them ` the working poor and even people who've got good, modest income jobs. A household income of that size would require two full-time incomes at the average wage. Well, most people are below that, so it is a problem. Do you think that KiwiBuild is quite elitist, then? It's for a higher market? Look, I think the government's unrealistic in its view that it can do this with very little subsidy. If we go back 30 years and 40 years to the massive home-building programmes that we had previously, there were subsidies in the families to support them to buy that house. Realistically, if we want to get modest income Kiwi families into home ownership, we're probably going to have to go back to that sort of approach. Well, Leonie, the government says it's considering now alternative purchases ` that's what it said in this document this week. So if there's not enough first-home buyers willing and able to buy, they will look at some other options. Is the scheme not even achieving what it set out to do, then? Well, I think what you have to think about is look at the housing continuum. You need policies to solve homelessness, you need policies around social housing and to provide more affordable housing. So KiwiBuild is targeted at that affordable housing space. The challenge is going to be not only in getting the supply to the market of affordable housing, but making sure we've got the demand for them. So if you've got situations where people can't afford to buy at $650,000 affordable, then we've got to be a lot smarter about how do we get them in there? Can we look at rent-to-buy schemes or shared equity? There's schemes already in place. The New Zealand Housing Foundation, for example, does a great programme where you go in with 50% equity and then, over time, you can buy it out. So we've got to look at ways to get people on the housing ladder, should they choose. Alan's nodding his head. So, a part of the coalition agreement is that Labour and the Greens ` between the Greens and Labour ` is that they have to investigate shared equity. Is that something that you want to see on the table for KiwiBuild? Oh, definitely. And it's working already in a very limited way. I think probably it needs some legislative change to make it easier to work, but it possibly can well become a model of the future, where there is a sharing of equity and easier entry at that first-home buyer market. And I think we don't have to necessarily reinvent the wheel, because there are some organisations around the country already doing this in a good way. And instead of just having to recreate everything from scratch, let's be smart and say, 'How can we scale some of what's already happening up to support this initiative?' As you mentioned, the government has called for people to express their interest in being a developer for KiwiBuild, and the government will underwrite the projects to ensure that they go ahead so that they've got guaranteed financing. What's the reaction been from the industry? Are they keen to get on this wagon? So, the thinking behind it is right. So it's a good idea. There is really mixed reaction from the industry that I've had to date. So there will be some that will give this a go, but there's actually a lot of scepticism in the development and building community, because this is another procurement process, and many of the developers and builders have been through this before. So, a few years ago, for example, MB came out with thousands of houses to build under the Crown surplus land scheme. So lots of people in the industry spent a huge amount of time, effort and money and went through the procurement process for supposed 'all these thousands of houses'. I think there was one project that came out of it. So people get really burnt. There was another one by another public sector entity a couple of years ago saying, 'Come with us with all your innovative ideas' ` very little happened with that. So I think a lot may just sit back and wait to see what happens. So you have to register your interest for this first wave by the 1st of June, which is not that far away, and the first lot of houses need to be complete by 2019. So does that suggest that these are houses that are pretty much already got their consents or planning? So is the government hijacking houses for KiwiBuild that would have already gone ahead anyway? No, I think what they're trying` Possibly they're trying to get some that might have happened anyway, but I think where they're trying to target is there are projects that have been put on hold because they can't get funding. So they might be trying to target them. But there's a whole lot of things ` it's got to be consented, it's got to fit in within that price bracket, and it's got to meet a whole lot of other criteria. Because it says that, for example, the developers and the builders have to be prepared that all their ideas and intellectual capital in whatever they put forward is going to be shared with the entire industry. And I think, again, in the community housing, non-for-profit sector, they're really open to doing that. But in the commercial sector, they don't. Right. Alan, the government has pledged to build 1000 social houses per year until demand is met. And it's committed to trying to build 2000. Is that enough? Look, we think 2000 is the minimum ` that's what we require to stop things getting worse. So just to hold our own? Yeah, just to hold our own, particularly with an aging population of people who don't own a house when they reach retirement. There's going to be massive demand from that group of people as well. That won't address the backlog that we've got. The fact that we haven't really added any social housing stock over the last five years. What we've seen in the numbers is a sort of rejigging of the way houses are funded, but we haven't actually seen a significant increase in numbers. So, that 2000 is, for us, a minimum. Name your number. Look, I think 2000 is a realistic number too, because if you come up with a ballpark of 5000, that just becomes unrealistic, and everyone gives it away. 2000's realistic ` I think it's fundable, I think it's doable in terms of building those houses, and we'll stick with that. So, two billion on KiwiBuild ` is that money well spent? Or should a portion of that be going into more social houses? Either the government or Housing New Zealand needs to stump up with some serious cash to build these houses. Social houses? Yeah, social houses` state houses. The previous government tried to do it with a mixture of approaches that never really produced the goods. There is some serious money that needs to be borrowed or found from tax revenues to fund this. And we think in the order of a billion dollars a year. And that we really have to start` For how many years? Well, we think for the next 10 years. 10 years? A billion a year for 10 years? And we think that we really need to start with the money, rather than the promises, because without the money, it won't happen. Leonie? I was just going to say, too, I think what we also need to look at is a bigger picture of this and say, 'What is the problem we're trying to solve here?' And there's a number of issues. So we come back to the housing continuum ` homelessness, social housing and affordable housing. So we've got to get much better coordinated on that so we don't just put all the energy into one bit of that housing continuum and make sure that we get the outcomes that we want, because I get concerned that sometimes it's just getting down into one initiative, without saying, 'Actually, there's a whole range of these things.' We've got to pull a lot of levers. And it comes back, again, that we've got to have much better quality data to say, 'Where are we up to, and how are we going, and what are the milestones, and are we on track?' Yeah, I'd disagree with that. I think we need to build state houses. I think the need is so bad now that` Do you think the government's got its focus wrong focusing on these so-called 'affordable houses'? No, no, I think the balance is right, but if we start to say, 'Well, let's give attention 'to the whole spectrum' when you've got people living in cars and sheds and garages and on the streets, my view is, and the view of the Salvation Army is, look after those people first. And then there'll be a trickle up thing, rather than the trickle down that we've just seen. Well, when you talk about those people, the government has already announced it's putting $37 million into creating 1500 extra housing places to help the homeless, and they want to get those places by the end of winter. Is that enough to avoid a repeat of the winter that we had last year? Things are getting better. There are more transitional housing places available. The growth and demand seems to be tapering off, although as people move into these transitional places, they're not moving out, and there's more people wanting to come in, but I think, for example, we're seeing house building in Auckland reaching a level that's probably consistent with the population growth. I think people are leaving Auckland as well, so there's some pressure going off Auckland. I'm not certain it's really impacting on the people at the bottom of the market who are struggling to find rent, but the reality is that there's a sense that the pressure's gone off. It won't necessarily be better than last winter, but it won't be worse. But it's unrealistic to think you can find 1500 more places by the end of winter. It's just not going to happen. There's just not the capacity there to do that. All right. Thank you both for joining me this morning. Still to come ` we dissect the week's political news with our panel. Plus, are fossil fuel dependent regions preparing or panicking after the government scrapped future oil and gas exploration? The prime minister will visit Taranaki next week to try to ease fears about her government's direction on climate change. A ban on new offshore oil and gas exploration permits was recently announced, but critics say the decision was rushed and made without proper consultation. So, with a target of net zero carbon emissions by 2050, how are regions supported by fossil fuel industries going to cope? John-Michael Swannix reports. By night, it looks like a small city. And by day, it helps to sustain one. More than 1000 contractors have been heading to work at Marsden Point this week. The oil refinery, which makes up 10% of Whangarei's GDP, is in the middle of a shutdown to carry out key maintenance and upgrades. It's huge. Everyone knows somebody who's involved with the shutdown. On a personal basis, my stepson is part of the maintenance crew. Even without the shutdown, the refinery employs 350 permanent staff, with a further 250 contractors on site each day. However, chief executive Sjoerd Post says they are very much aware of the changing landscape. We applaud the government in terms of wanting to tackle climate change, and we see ourselves being a partner in that process. The only caveat that we would have is that we're not only energy intensive, we're also trade exposed, so if you close us down, you know, cars will still need to drive on New Zealand roads using petrol and diesel; planes will still need to fly using jet fuel. So you're going to import that, and that may well be more carbon-intensive. Crude oil is shipped here to Marsden Point's deep water port, and from it, the refinery produces more than 85% of the country's demand for jet fuel. It also produces 70% of our diesel, more than half of our petrol and all of our marine fuel for ships. The refinery is already planning for the future. It's currently refurbishing equipment that could be used to produce carbon-neutral biofuels. So if you cast your eye forward, say, in 20 years' time, and we would be the pre-eminent biofuel manufacturer in this country making bio aviation fuels for Air New Zealand and its competitors. Air New Zealand flew one of the industry's first biofuel test flights in 2008. It saved 9 tons in carbon dioxide emissions. Marsden Point is looking to develop biofuels from the likes of bulk wood mass. Second-generation sustainable biofuels like these don't compete with food suppliers and don't take up large amounts of agricultural land or fresh water. I think biofuels will play a part in New Zealand. There's no doubt about that. We already see major corporates, like Fonterra and Z Energy, who have invested in these technologies and are looking at ways in which they can be used in their own businesses. There's a long-term future for Marsden as we go through this transition. Refining NZ is confident it can survive and thrive as the country heads to a carbon-neutral future. It's unlikely to be as affected by the government's ban on oil and gas exploration, as it gets most of its crew for refining from overseas. Here in Taranaki, the stakes are much higher. Oil and Gas employs around 4000 people here and a further 3000 are in supporting industries. 'A kick in the guts' ` that's how New Plymouth mayor Neil Holdom described the government's announcement. It came as a shock to Taranaki, and, really, the concern is that we've got this policy without any real detailed plan. New Plymouth MP Jonathan Young is also National's Energy and Resources spokesperson. He says the government has done little to reassure the region about its future. So, 4500 jobs here in Taranaki, all earning, on average, $100,000. It's really hard to replace those jobs with another industry. So, when you think about the families and the children, where they spend their money, you're looking at the devastation of a regional economy that we haven't seen in New Zealand ever. The previous National government supported oil and gas exploration, but international market changes saw the sector collapse from $300 million in 2010 to $10 million in 2015. Regional Economic Development Minister Shane Jones says National needs to get with the programme. This trend was already happening, and I just think it's short-term exploitative politics on the part of National. I didn't meet anyone in Taranaki who believes that their rohe ` their region ` is going to become some sort of kehua ` ghost town. Quite the opposite. Oil and gas currently makes up 30% of Taranaki's GDP, but the region is already planning for a more climate-friendly future. This report, published last year, recommends shifting the region away from its reliance on fossil fuel industries. It explores the potential of four futures ` energy, food production, tourism and the Maori economy. The chair of that report, Peter Tennent, says instead of banning exploration, the government should have funnelled oil and gas royalties into developing clean energy alternatives. But he's still confident about Taranaki's future. We're blessed with so much resource. We're blessed with so much opportunity. Particularly, our people. Let's develop that and bring everyone with us. So in 30 years' time, if you think Taranaki's pretty good now ` and the world does ` by gosh, things are gonna be better. Andrew Clennett is a New Plymouth-based entrepreneur exploring the potential of hydrogen energy for cars, trucks and generators. The gas is able to store electricity, much like a battery, and the only byproduct is water. We see what we can do in a region such as Taranaki, where we have the expertise to handle gas ` energy expertise; we've got engineering; we've got fabrication skills. These are all the things that are required to build this new form of infrastructure. Hydrogen-powered busses are already being used in London and the Scottish city of Aberdeen, and its energy potential is being explored by the likes of Japan and Korea. But Clennett says setting up here won't come cheap. Anything, to stick, needs to be commercial ` needs to be, ultimately, commercial. However, because of the high up-front costs, we really can see there's a role for government to help stimulate this, like it does stimulate oil and gas exploration. And the government is promising to deliver. Shane Jones recently announced nearly $20 million worth of funding for a number of major projects in Taranaki through the Provincial Growth Fund. Among the 11 allocations was $100,000 for investigating a clean energy research centre, and a further $50,000 towards a business case for hydrogen fuel adoption. Just as in earlier days people made money out of the gold rush and created Dunedin, unless you move on as these finite industries slow down, you get left behind. However, National believes it will be hard to replace the salaries and conditions of the oil and gas sector. Leader Simon Bridges has visited New Plymouth twice since the announcement and says many people feel the decision was rushed and made without any consultation. This is a new government that's having a review or an enquiry on just about every thing you can imagine. Actually, this is one where it's affecting thousands of jobs, you know, many thousands of people's lives, where they should've taken some time. But Energy minister Megan Woods says sticking to the status quo will end up doing more harm than good. If we leave it too long, then it will be a very tough transition. We've seen what happens to communities when these decisions are made overnight. Climate Change Minister James Shaw says the announcement sets a long-term direction for New Zealand. Even under existing exploration` I think that the last field is due to expire in about 2045, 2046, right? So that's on existing production. So the decisions we make now have consequences three or four decades into the future, when it comes to oil and gas exploration. And so that really drove the timing. The government is aiming to introduce its Zero Carbon Act by the end of this year. It will set a target to get the country to net zero emissions by 2050, as part of our obligations under the Paris Agreement. The scale of the transformation has still got to happen. It's more about, you know, how fast. But the same decision has to get made at some point. But the head of the oil and gas sector says banning exploration is the wrong way to go about lowering emissions. Indeed, this decision by the government could, actually, worsen New Zealand's emissions profile. Cameron Madgwick says New Zealand could help lower global emissions by exporting our natural gas to countries like China, where they still burn coal to produce electricity. Gas is around half the emissions of coal. It is expected to be a key transition fuel for major economies. Places like New Zealand, who are more likely than not to have a gas find if there's exploration, you know, can be a really important part of that global energy mix, with, of course, the benefit of reducing emissions. That claim is disputed by some economic commentators. Rod Oram says New Zealand's oil and gas is too difficult and costly to extract. They're up against very major gas exporters, such as the United States and the Middle East, which have vast quantities of gas at far cheaper prices than here. Businesses here in New Zealand pay around $38 per gigajoule to use our natural gas. That's compared to Australia, where they pay just $22 per gigajoule, or the US, where it's just $13 a gigajoule. That's the competition, and our sector here have given no evidence that they can compete in that market. On current reserves, it's estimated we have around 10 years' worth of natural gas left. So if it's not this gas that we get domestically, we either import it, or we move to imported coal, probably from Indonesia, with much higher emissions. National also sees potential in using natural gas as a transition fuel for places like the South Island. Bridges believes a find in the Barque field off the East Coast could help transition the likes of dairy plants, schools and hospitals away from burning coal. A find down there would halve the emissions of industry, if not overnight from production, look in pretty short order. But Oram says the economic case just doesn't stack up. Even if they found gas and brought it on shore at, say, Timaru, and they would have to lay pipelines around the South Island for very dispersed industrial plants to use that gas. Well, that doesn't make sense, either. Especially as the move to biomass is already underway. Biomass is where carbon-neutral products like waste wood are burned for electricity or heat in place of fossil fuels like coal or gas. Fonterra is one company investing in that field. Earlier this month, it announced the coal boiler at its Brightwater factory near Nelson would be converted to burn wood. The move is going to cut carbon emissions by around 2400 tons a year ` roughly the same as taking 530 cars off the road. Their strategic direction is tacking exactly along with the country's. They want to have cut emissions within their own plants by 30% by 2030 and get down to net zero emissions by 2050. So, that's the future, not gas. National has promised to reverse the government's oil and gas exploration ban if it gets into power. However, Shane Jones says, by then, regions like Taranaki and the rest of the world will have moved on. If you think that Simon Bridges and a future National government are ever going to... unwind what we are doing, then think again. Still to come, Green co-leader Marama Davidson's musical treat from this week's Facebook Live. But, first, we catch up with our panel ` Conor English from Agribusiness New Zealand, Tanya Sawicki-Mead from Just Speak and Hui reporter Ruwani Perera. Welcome back. I'm joined now by our panel, Conor English, Ruwani Perera and Tania Sawicki-Mead. Welcome to you all. Conor, can I start with you first? The Agriculture Minister there conceding that this Mycoplasma bovis infection ` well, it's a disaster. Do you agree? Well, it's a very significant issue. And it's a problem that needs to be solved. So, he is talking about a black market. Saying that farmers` 70% of farmers are not properly tracking their stock movements. This is an area you work in. Are you surprised by this? Well, look, the nature of the tracing system was brought in a few years ago. And a lot of farmers have seen it as a cost and as a bit of a hassle. But I think with this incident that we've got now has really highlighted to all the farmers that they should be complying with it, that they should be making 100% effort to make sure that they do, because it does have value. As the minister pointed out, it's not just a cost, it is an investment in making sure when we do have a biosecurity incursion like this, that we can actually manage it better than we've been able to in this situation. Yeah, Ruwani, he was saying there, talking about the farmers are going to have to stump up some money, yet to be decided how much, and, obviously, the taxpayer is. He says he's going back to Cabinet for some more money. What do you make of that and the flow on? Yeah, well, our biggest welfare beneficiaries keep getting propped up, don't they? Look, I think this is a problem that they need to solve on their own without the government` they're the ones who have dodged` what are they doing with all the tax that they've dodged as well ` that money, you know? You mean, trading` Trading and bartering cows, yeah. And that's why you can't even track those ones, as well, because they've done that all under the radar. And for the consumer at the end of it? Well, exactly, like, already we're paying almost $9 for a block of butter now. It's going to go up. All I can see is dairy ` milk ` meat is going to go up as a result. Whose responsibility do you think it is to mop up? Well, certainly, the revelation that there's a 70% level of non-compliance with NAIT does suggest that there's a bit of responsibility there in farmers not actually complying with the system that was set up to address these kinds of issues in the first place. So I do think that putting it on the government, on the taxpayer, is a complicated way of dealing with something that is actually really about farmers' own practices and responsibility for that. I saw Conor's eyebrow go up. (ALL LAUGH) Well, clearly, the government has to front up here as well. Sure, there's some responsibility on the industry, but the tourism industry, for example, we've got record numbers of people coming in. We don't know where this disease has come from. Are you going to stop all tourists coming in to stop any biosecurity risk? So if you want to have tourists, then you need to be able to fund solving problems like this. And the taxpayer absolutely needs to front up, to a large extent. To what extent, do you reckon? Well, that's what's being worked through` What do you think, though? Well, uh, you know, there's a range, isn't there? And the minister talked about from 12% to 40%. And we don't know what the quantum of the number is. The farmers themselves are paying. If you have your stock destroyed, that's costing you money. You're losing not only the stock, but you're losing the genetics and all the hard work that you've put in over many, many years to build up those genetics. And you've got to, sort of, start again. So it's not without cost on the farmers. And the black market comment` Isn't there compensation as well, though? Uh, well` Yeah. I mean, it raises that question` Yeah, yeah, and I'm not too sure just how that operates, but to say that it's free for the farmers is not quite right. The other issue around the black market thing ` I'm not quite sure what people mean by that. Bartering cows for feed is one of the allegations ` that they're swapping cows for feed. And as a result of that, keeping it off the books and not tracking` Well, there could be a small proportion of that, I guess. Yeah. So they're talking about, and he mentioned` the Agriculture Minister mentioned, registering stock agents. What's the industry going to think of that, Conor? Well, the system's got to operate better. And if that's one of the weak links in the chain, then they need to look at how you solve that. Yeah. Hey, Tania, this week ` kind of connected ` the Tourism Minister, Kelvin Davis, has been talking about our slogan ` '100% pure'. And it turns out that, in his words, 'it's an evolving slogan'. What do you make of that? Well, I think we're in an era where we're seeing the dangerous impacts of fake news. And we are not 100% pure, so I don't think we should be broadcasting that out into the world and waiting to be called out on it. You reckon we should ditch it altogether? Well, I just` it's not true. And I think that the more that we trade on that, it's something that we then have to defend, when we really should be putting energy into addressing the problems that are undermining the environment that we have and addressing the issues that we have. We're fighting a losing battle there, I think. It was a great campaign, you know? I remember` oh, I don't know how many years ago now, with the 'Don't Dream it's Over', I think, and it was lush and beautiful and all the fernery and everything around it, but we know it's not true. Our waterways are polluted. Let's rebrand ourselves on something else that we can stand by. But his argument is that it is not an environmental standard, it is a marketing strategy. But it's` Yeah, no, I don't buy that. But I think truthfulness in marketing is relevant as well. I don't think that anyone` I just don't think that we should be getting behind a brand that we can't really stand behind and say, 'Yeah, this is` It's like saying Ribena is packed with Vitamin C when it was packed with sugar ` it's the same thing to the consumer. Conor, what do you reckon? Well, look, we've got a fantastic country here. We actually have got a very good environment. We are clean and green. And I travel a lot, and we are an amazing country. So however you package it up, whether you want to call it '100% pure' or something else, the key story we're trying to get across to the world is that we're a great place to come to, because our environment is better than pretty much any other place. I don't have an issue with calling it '100% great'. That would be fine. Yeah, yeah, but not 'pure'. And I think we do have so many other things that we can market ourselves on and look pretty. It's just the slogan ` '100%' ` is not true. What should it be? Anyone got any ideas? Is it 74% or something? I don't know. (LAUGHS) Doesn't have the same ring to it. Isn't that the problem with a number? Yep. Mm, yeah. Cos if you're not a hundie, then what are you? Yeah, well, it's worked. And, you know, advertising does take a wee bit of license on things. If you're going to be pure about everything, you wouldn't advertise anything, would you? But it has worked, in some respects, to the detriment of the very thing that it's trying to promote. It has worked to the point that the tourism industry's not coping with the volume of the people that are coming, and the impact that that is having is effecting the very environment that we're trying to trade off. So I think it has actually, kind of, backfired in many ways. All right. We will leave it there for the moment. Do stay with us. We're back after the break. Welcome back to Newshub Nation and our panel. We were also talking about housing this morning, Tania, and KiwiBuild. So the government's confirmed that it's raising the price of its upper-end KiwiBuild houses from $600,000 to $650,000. Is this a broken promises policy now? I don't think it's a broken promises policy, but I do think that it exposes the challenge in trying to address the housing crisis purely by aiming it at middle-class buyers and purely aiming it at people who are wanting to own their own houses, rather than spreading the budget across social housing and affordable housing ` really, across the whole spectrum. I do think that the prices that they've put on them now will be out of reach for a lot of people, particularly when you take into account the growing cost of living in places where housing is already a challenge, like Auckland and Wellington. Do you think those are affordable prices? When you look at them, do you think, 'Yep, that's affordable housing.' Not really. Not when I consider what you` Also because we don't know what the actual size of the house will be yet, so I think it's hard to see how, especially if you went down to one income for a period of time, that a house for $650,000` that you don't really know where it will be either, what your commute will be like, what your other costs will be. I think there's a lot of questions about whether that's truly affordable. But having said that, that will be within reach for some people. So the question is how do you invest in other options for people along the spectrum so that we bring everyone up with us. That this` As Alan was saying, that it is not a trickle-down effect. That you address the people who are the most harmed by not having access to stable and secure housing. And that is often people who require social housing. Yeah. Ruwani, Alan Johnson from the Salvation Army was saying it will cost around, he reckons, put up a billion dollars a year for 10 years to address the social housing issue ` the bottom of the housing spectrum. Pipe dream for him for the Budget? Oh, I don't think he's` He's whistling for it really, isn't he? And he understands that as well. But, you know, I agree with what Alan was saying as well. It's not just housing, you've got to look at addiction, you've got to look at mental health services ` all of those things. Because these people don't just live on the streets, you know, just because they can't find anywhere to live. There's a myriad of other... ...social problems. ...challenges that are going on with them. He talked about` and I know you've done a few stories on this on The Hui ` he talked about the fact there's 1500 extra places that the government is trying to achieve this winter so that we don't have a winter like last year. He says that's unrealistic. They won't find those places by the end of winter. What's your experience of that? Yeah, no, where are they going to find them? I feel that the maraes are going to have to open up again and go through another winter of helping these families out. Cos where are they finding them? We abandoned the motels, and that's costing an arm and a leg as well. How do you find 1500 beds? How will that look politically, do you think, for the government if we have the same sort of winter? Red-faced. And also, I think, Phil Twyford, Minister Twyford, is finally realising that this is a really, really tricky issue, you know? It's not easily solved. It look easy from the opposition's side on the sidelines. Conor? And I think that's the key point, isn't it? Is that it's a big change when you're in government than from when you're in opposition. I mean, they're banning foreigners from buying houses, so, in theory, the house prices will drop, but one of the things that intrigues me is are they looking at just the cost of housing? I mean, $650,000 for what we think` ...a townhouse. ...a townhouse just seems to be an enormous amount of money. I mean, there's a lot of technology and a lot of innovation that's taking place in the housing market. Have we got the regulatory framework that's going to enable flat-pack houses, for example, to be brought in and smart houses or have we got blockages that stop those things happening? Now, I'm not hearing any of the politicians talk about that, because there is technology that can bring in` Prefabrication. Prefabrication, absolutely. Yeah. Yeah. New materials, new ways of doing things. We're looking at the housing stock, you know, from the 1950s family set, too, of mum, dad and four kids. Now family types are quite different, quite diverse. So part of our problem is that the property ladder doesn't come down low enough. So where is the stock that is available for a single person or a couple of people or three people? You know, we've got this view that you have to have 500m2 and a three or four-bedroom house in Auckland, and it costs a couple of million bucks,... And things have changed. Yeah, totally. ...and when you're 26, you should be able to buy it, you know? So I think we've just got to look at this whole thing quite differently than what we are looking at. Yeah, absolutely. And I think there's that perception of... there are mothers of, like, four children or six children or something like that on that on their own, solo mothers. We've got to look at the retiree people, who don't even own a home and are renting, you know. They're gonna` A different subset is coming on. A different subset, you know, we're looking at. Hey, Budget next week, looking towards that, what will you be hoping for or looking for specifically in the budget, Tanya? Well, I'll be hoping to see a massive investment in mental health and addiction services as a way to address the drivers of our massive, burgeoning prison population. If we invest in those kinds of initiatives now, then we can help to reduce it in the long-term, which will, obviously, make a massive difference to the long-term costs not only to the economy, but also to society. And we can tell that there is a massive crisis with mental health in this country. Obviously, the government is doing a lot to address that now, but I think that a really significant investment in those, across the country, in terms of in-patient beds as well as out-patient options ` all of the above. Because, yeah, we can see that if we invest in these things now, it will save us massively in the future. We're almost out of time. I want to hear from both of you very quickly. Conor, what are you eyeing up in the budget? A wee bit more on biosecurity. (CHUCKLES) Funny that. All right. (LAUGHS) And just the extent to which the government is going to spend on the promises that they had leading up to` Ruwani? I've got a wish list. Welfare reforms. We see those benefit sanctions. You know, the government have come out saying they're against them. Front up. Stump up. Teachers, nurses need to be paid more. OK. All the social services is what you're looking for. All right. We will leave it there. Green Party co-leader Marama Davidson joined us on Facebook Live this week to talk about everything from her ministerial ambitions to her spirit animal. She even shared the surprising choice of music that gets her amped up. Oh, OK, this is gonna sound the opposite, but it really is Adele. OK, come on. That is the opposite of a hype track. I know. It is. That gets you hyped for crying and, literally, nothing else. (LAUGHS) You're gonna like this, then. I like Anika Moa. My old man is the start of the` I don't know the name of it, but it starts off` I like the guitar beat in it. (SINGS) My old man... (HUMS) And so I will also have that as my hype song. OK, nice. And that is all from us for now. If you didn't catch all of the show, you can watch now on ThreePlus1. I won't be here next weekend. I'm off to London to cover the royal wedding. Don't worry. I'll be here instead with a live Budget special from 2pm on Thursday. Lucky me! Please join us then and again next weekend with our regular show. We'll see you then. Thanks for joining us. Captions by Virginia Philp, Elizabeth Welsh and Chelsea Brady. www.able.co.nz Captions were made with the support of NZ On Air. Copyright Able 2018