Norman Russel William: Questions for Oral Answer — Questions to Ministers 
Norman Russel William: Questions for Oral Answer — Questions to Ministers 
[Volume:672;Page:18692] 
3. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Prime Minister 
: Does he stand by his statement “… we can use this time to transform the economy to make us stronger …”; if so does this transformation involve an economy that uses fewer natural resources and produces less pollution? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I stand by my full statement which was “We don’t tell New Zealanders we can stop the global recession because we can’t. What we do tell them is we can use this time to transform the economy to make us stronger so that when the world starts growing again we can be running faster than other countries we compete with.” To the second part of the member’s question I say that this Government thinks the country should be making the most of its natural resources but obviously that needs to be balanced against environmental considerations. I note that the  
Green Budget Paper 2011 
 actually takes a similar line arguing for more efficient use of natural resources to help grow the manufacturing and agricultural sectors of the economy. 
Dr Russel Norman 
: Why is he adding around $800 million to the deficit to subsidise free allocation of units under the emissions trading scheme when a fair price on carbon would both help balance the Government’s books and create the right incentives for the economy to transform to a more sustainable footing? 
Rt Hon JOHN KEY 
: The first point I make is that this Government does have a fair price on carbon. The second point I make is that New Zealand as a country signed up to an international agreement to maintain emissions at a 1990 level. What the Government did in putting together the emissions trading scheme was to reflect the fact that those property rights of those credits that are earned by foresters should stay with foresters. The reality is that where a company exceeds its 1990 levels then it pays itself for those emissions and those credits. It can either choose to reduce its bottom line or pass that on to the consumers of New Zealand. 
Dr Russel Norman 
: Does the Prime Minister agree with the OECD which says that we should strengthen the price signals in the emissions trading scheme in order to protect our environment and the integrity of our “clean green” brand? 
Rt Hon JOHN KEY 
: I think this Government has always taken a balanced view in terms of economic growth and caring for and maintaining the environment. 
Dr Russel Norman 
: I raise a point of order Mr Speaker. I agree I was asking an opinion question but it was about a specific report by the OECD and I do not know that the Prime Minister addressed that particular issue. 
Mr SPEAKER 
: I thought the member asked whether he agreed with something and I thought the Prime Minister gave the impression that he agreed pretty much with what the member was highlighting in his question. I might be wrong on that. 
Dr Russel Norman 
: Has the Prime Minister read the latest OECD country report on New Zealand that highlights our inefficient use of natural resources like water and why will he not consider a resource charge on commercial water use to raise some revenue for the Government while giving a price signal regarding the efficient use of water? 
Rt Hon JOHN KEY 
: From memory I have read the OECD country report. The Government is taking steps towards a more efficient use of water. That was the aim of the National Policy Statement for Freshwater Management and also the work of the Land and Water Forum. The Government has signalled that there is more work to be done there and the member makes a fair point. Water is a very critical resource for New Zealand we can grow our economy if we use it wisely and we will need to think about ways to ensure there is efficient use of water while maintaining both its quality and the river flows in general. 
Dr Russel Norman 
: Why is the Government ignoring the advice of the OECD the IMF and the Savings Working Group all of which have found that New Zealand is an outlier in not having a comprehensive tax on capital gains the absence of which undermines Government revenue as well as the competitiveness of the productive sector because all the capital flows into the housing market? 
Rt Hon JOHN KEY 
: The first thing I will say is that this is probably not the week to be quoting the IMF. The second thing I will say is that if one looks at the Tax Working Group and its analysis of a capital gains tax one will see that the Tax Working Group went on to say that on balance the majority of the experts did not agree with the capital gains tax because of its inefficiency and its difficulty to apply. Once one takes the domestic family home out of a capital gains tax it becomes a more inefficient tax. 
Dr Russel Norman 
: I raise a point of order Mr Speaker. The Prime Minister may have misheard me. I said the Savings Working Group not the Tax Working Group. I acknowledge that the Tax Working Group did not come down on the side of a capital gains tax but the Savings Working Group did. 
Mr SPEAKER 
: If the member is absolutely certain that that is what he said—I thought I heard what the Prime Minister answered. If the member wants to repeat his question— 
Dr Russel Norman 
: Why is he ignoring the advice of the OECD the IMF and the Savings Working Group which have found that New Zealand is now an outlier in not having a comprehensive tax on capital gains the absence of which seriously undermines Government revenue and also directs capital into the non-productive sector the housing sector? 
Rt Hon JOHN KEY 
: I do not think this is the week to be looking closely at the IMF and I prefer the advice of the Tax Working Group to that of the Savings Working Group. 
Dr Russel Norman 
: Why is the Government risking a double-dip recession due to spending cuts and a credit downgrade due to record borrowing when raising some targeted revenue avoids both of these dire consequences and shifts the economy on to a more sustainable footing? 
Rt Hon JOHN KEY 
: The analysis from Treasury is that far from risking a double-dip recession the Government is putting the economy in a very strong position to grow both real after-tax wages and the employment levels in New Zealand to get the country back into surplus and to deliver an economic base from which New Zealanders can enjoy a brighter future. 
Dr Russel Norman 
: I seek leave to table the  
Green Budget Paper 2011 
 which lays out five costed initiatives that the Government can take to reduce Government debt and shift the economy to a more sustainable footing. 
Mr SPEAKER 
: Can I just check whether this is a press release that the Green Party has made. No this is a— 
Dr Russel Norman 
: No it is a budget paper. 
Mr SPEAKER 
: A budget paper. Leave is sought to table that document. Is there any objection? There is objection I am sorry.