Norman Russel: Budget DebateText is incorporated into the Bound VolumeNorman Russel: Budget Debate[Sitting date: 26 May 2015. Volume:705;Page:3954. Text is incorporated into the Bound Volume.]Dr RUSSEL NORMAN (Co-Leader—Green): I rise to speak on the Budget. Before I begin I would just like to say to National Party members and Labour Party members that the jokes about gender reassignment surgery are pretty disgusting. They are ugly and I think they should stop.I would like to start by acknowledging the positive dimensions of the Budget. I would like to identify four particular parts of it. The first is the benefit increases above inflation. I think that they are important. I think that they are real. There is no question that they are not enough. There is no question that they have been abated and partially taken back by the changes forcing parents to go to work when their children are only 3—that is appalling. But it is also true that the benefit increases are good. Breaking the ground and saying that benefits should increase ahead of inflation because of the terrible poverty in our countryis I think a good thing. I acknowledge the work of Child Poverty Action Group and all those who have campaigned on poverty for so many years.The second area that I would like to acknowledge is the introduction of a capital gains tax and the foreign buyers tax identity changes. The introduction of a capital gains tax I think is a very positive move. Obviously 2 years is too short as are the other limitations around it. I would particularly like to congratulate David Cunliffe and David Parker whoprovided along with the Green Party the momentum to actually get a capital gains tax introduced and over time it will be regularised and made more sensible as it should be. I think that those two initiatives—the increase in benefits and the capital gains tax—are ones that the Green Party has also campaigned on for many years and we are very pleased to see them as limited as they are.Thirdly I would like to identify the user-pays airport charges. I think that they are important. Biosecurity is an important issue for New Zealand and this is a good way to fund it.Fourthly I would like to congratulate National on abandoning the fetish around the surplus that characterised its election campaign. It was always ridiculous the way that National characterised the surplus as the defining feature of prudent economic management and I think Bill English has now acknowledged that. I wish that he had done so during the election campaign.Aside from the good elements of the Budget—and there are some—there are unfortunately many other elements of the Budget that are quite bad. Let me start with climate change. We now have about 421 billion tonnes of ice being lost each year from the Greenland and Antarctic ice sheets as a result of climate change. We are losing about 421 billion tonnes as the planet warms. The south Antarctic Peninsula ice sheet is starting to break up. This is the greatest challenge on the face of the planet facing humanity right now and unfortunately this Government is accelerating New Zealand’s emissions rather than cutting them. When we look at an economy like New Zealand’s which is dependent on a stable climate and when we look at the floods in Wellington and the drought in Canterbury—the 2013 drought which had such a big impact on New Zealand—we can see that New Zealand should be at the forefront of taking action to reduce emissions and taking action on climate change. An economy like ours is particularly susceptible to extreme weather events like floods and droughts and the changes that are coming our way as a result of our increased greenhouse gas emissions globally.When we look at what New Zealand is doing it is actually shameful. New Zealand’s gross emissions increased 20 percent from 1990 to 2013. New Zealand’s net greenhouse gas emissions increased by 42 percent from 1990 to 2013. I think it is worth dwelling on how amazingly irresponsible we have been as a country. Increasing our net emissions by 42 percent from 1990 to 2013 is an incredibly irresponsible thing to do and there is no getting away from that. The Ministry for the Environment has produced forward projections that say that New Zealand plans to increase its net emissions by a further 50 percent in the next 10 years. So not only have we increased our net emissions by 42 percent over this period but looking forward the Ministry for the Environment’s projections say that New Zealand’s net greenhouse gas emissions will increase by a further 50 percent in just one decade. That is an incredibly grossly irresponsible thing to do and future generations will curse us for it as they rightly should.The reason why these emissions are increasing is that we have policy settings designed to increase emissions. Since this Government got into office it has gutted the emissions trading scheme which was meant to put a price on greenhouse emissions in order to be an effective economic instrument to drive down greenhouse emissions. Every economic report you read tells you very clearly that the most effective way to do this is to put a price on emissions. That has an effect right across an economy and reduces emissions. Unfortunately when this Government got in it gutted the key elements of the emissions trading scheme. We now have the emissions trading scheme as a major liability for the New Zealand Government. It is projected in the Government’s papers that the cost of the emissions trading scheme to the Government because the subsidies to pollution are now so large is $684 million of taxpayer spending over 2 years. So we plan to subsidise greenhouse pollution via the emissions trading scheme—the system that is supposed to cut pollution—to the tune of $684 million in just 2 years. That is the subsidy that taxpayers are giving to climate polluters in New Zealand. The subsidy since the scheme started now totals $859 million of taxpayers’ money that has been given to polluters via the emissions trading scheme. That is not a scheme designed to cut emissions; that is a scheme designed to increase emissions.Treasury has tried to estimate what the cost of the failure to cut greenhouse gas emissionswill be to the New Zealand public. Its estimate is that our failure to cut greenhouse gas emissions means that we are going to have to buy carbon credits offshore. Depending on the cost of those carbon credits Treasury says that it could cost us up to $52 billion to buy offshorecarbon creditsto cover the big increases in emissions coming out of the New Zealand economy because all the policy settings are set up to increase emissions. We are going to have to buy carbon credits offshore. Treasury says that it could cost up to $52 billion of taxpayers’ money to buy those offshore carbon credits because we have increased our emissions so radically over this period. Do we really want to spend $52 billion buying offshore carbon credits that may be worthless—but you know they make the grade for accounting purposes—or would we rather spend that money in New Zealand to reduce our own emissions? The Government’s answer to that is very clear. It would prefer to buy offshore carbon creditsbecause its plan is to increase emissions. I think that is incredibly irresponsible and stupid. It is hard really to characterise how stupid it is for a Government to have a whole bunch of policy settings to increase emissions and then to spend $50 billion buying worthless hot air offshore. That is an amazingly short-sighted and stupid policy.The thing is it is not just the emissions trading scheme. Of course there are subsidies in many sectors in New Zealand to increase emissions. Just think of the dairy sector. If you are in the dairy sector you do not pay for your methane emissionsor nitrous oxide emissions. The taxpayer covers the cost of those for you. They are free to the dairy sector. Plus you get free fresh water. You do not have to pay any charge for the water. You get free water pollution. There is no charge when you pollute a stream. You do not have to pay anything to dispose of that polluted water. As the Government crowed about in question time today there are very largesubsidiesto expand the dairy sector—the irrigation subsidies which is $400 million ofsubsidiesgoing directly into the dairy sector in order to expand it so that its emissions will increase and water quality will decline. It is an amazingly short-sighted policy to spend that much money to increase pollution.Then of course beyond that we have the poor old forestry sector—the forestry sector sequesters our carbon and actually reduces our net emissions. Because the price of carbon emissions is so low in New Zealand now the forestry sector is cutting down a larger area of trees than it is replanting. As a result of the Government’s policies the forestry sector is now a net emitter in New Zealand.Then we have the subsidies for road freight and road transport. Literally tens of billions of dollars are given to motorways and road freight companies for free so that we can increase emissions coming out of the roading sector.Then we have the subsidiesfor fossil fuel exploration. The Government is very keen on and very proud of the high level of subsidies thatit provides to oil exploration companies in order to look for fossil fuels. So we are subsidising that as well. Is it any wonder that Fonterra is literally building coal-fired boilers right now in the 21st century when we should be cutting emissions? Fonterra which does not seem to care in the slightest about its global brand is building coal-fired boilers in New Zealand. Is it any wonder that the rail network is talking about removing electrification from the main trunk line? Could anything signify more how backward and mid - 20th century we have become at the beginning of the 21st century than the rail industry talking not about electrifying the rail network but about de-electrifying the rail network in New Zealand? We are so out of the loop about what is going on in the world in terms of the smart green economic revolution that is taking the whole of the rest of the world by storm. In New Zealand we are determined to drive back to the mid - 20th century. We are going to have coal. We are going to have motorways. We are going to subsidise oil exploration. We are going to get rid of electrification on rail because “Oh who wants that electrification stuff?”.That is the reality of where climate policy has got to in our country and it is a total total disaster. New Zealand can embrace the smart Green economic revolution we can be part of this global change we can do the right thing by our kids but we need the Government to change direction.