Genter Julie Anne: Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeGenter Julie Anne: Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 16 May 2013. Volume:690;Page:10327. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): There are two very different reasons for raising a tax. One might be just to raise revenue which the Government then uses to deliver public services. But there is another way of using tax: as an economic instrument that encourages behaviour that we would like to see more of. The Green Party does support the use of economic instruments to reduce carbon emissions and to reduce pollution. That is a smart way of using tax to reflect the full external costs of what is going on and that can raise revenue. Then we can put that revenue into smart alternatives that enable households and businesses to do more of the activities that they do with less pollution and less cost. So the Green Party can support a moderate steady increase in petrol excise duty because what that signals to households and businesses is that actually it would be quite a good thing if they were using less petrol because petrol is polluting. It is also very very good to support the economy of New Zealand in a transition to being less reliant on fossil fuels. That is really important to recognise.Unfortunately the Government is not taking this smart approach to raising the petrol tax. What it is doing is increasing its revenue so it can spend more money on projects that increase the vehicle dependency of New Zealand and do not provide smart alternatives so that businesses and households can get around with less petrol. It is really unfortunate that the Government is not taking this opportunity to invest the increased revenue that it is going to get from petrol tax in the types of transport that have historically been under-invested in; therefore New Zealanders have not had the choice.I think a lot of the time the Government confuses or conflates our high vehicle dependence with the preferences of New Zealanders. It is true that most New Zealanders have to use a car to get most places. This is not because that is what they want to do; it is the direct result of Government policy successive Government policy that has not given New Zealanders the choices that they would like. And hey that has happened all over the world in rich countries—the United States Canada Australia and New Zealand. We are all in this position. But most other countries have realised that we have this opportunity right now to get better economic outcomes better health outcomes and better environmental outcomes and reduce our vulnerability to spikes in the oil price by investing in smart alternatives as a priority. That means making people the priority rather than vehicles in our towns and cities in our traffic engineering planning and funding. That means putting in a lot more money than we are currently into making it safe for kids to walk and cycle to school and giving people the opportunity to live closer to where they work by reducing some of the barriers to intensification that currently exist in district council plans.So there are many opportunities to reduce regulation reduce the amount of money that the Government is spending and get outcomes that New Zealand households and businesses would actually prefer. Of course the National Government is entirely ideological about this. It does not have a balanced approach to transport spending. I love raising this graph. This is the new infrastructure spending in the transport budget for the next 3 years. It is not balanced. All of this purple is on a few expensive new State highways that will carry only 4 percent of daily vehicle trips. So most of the budget for new infrastructure is going on a very small percentage of vehicle trips and freight on almost all of these routes is less than 10 percent of the vehicle trips. These roads already exist. We already have State highways. So duplicating an existing link is going to have very marginal benefits. You could improve the travel time and the safety on these routes for less than a quarter of the cost of the new roads. So it is a bit ridiculous to say that this is going to have any economic benefit at all for New Zealand as a whole.What we have to consider is the opportunity cost. Of course people in Hamilton people in Rodney and people in Wellington will have the perception if they drive on the motorway that it is a good thing right? Because they are not paying for it directly.David Bennett: Yes they are.JULIE ANNE GENTER: No all New Zealanders are paying for it and a small number of people are using it.David Bennett: They buy petrol.JULIE ANNE GENTER: Government members do not understand the difference between direct pricing and indirect pricing and marginal costs and average costs. What the petrol tax is is an average cost pricing and it means that the marginal cost of building the new road is not paid for by the people directly using that road. So of course they are going to say “Oh yeah this is a great thing” but the truth is that if they had to pay for it directly they would not. They would choose not to. They would say “You know what I’d rather spend my money doing something else and going about this another way.” That is what we have seen in Australia. That is why there has been this failure in the roading public-private partnerships in Australia because the traffic models overestimated the demand that people would have for a new tunnel under Brisbane—the new airport link in Brisbane. The traffic model just overestimated demand. When people had to pay tolls guess what? They were not willing to pay the tolls. So it is unfortunate that National is not taking an economically rational approach to its infrastructure investment.What is happening is that it is spending a large amount of money on a few projects that are going to deliver very small if any benefits. Very little money is going to local roads and almost no money is going to new transport infrastructure walking and cycling. Those are the areas that have been systemically under-invested in for the better part of a century. They are very cost-effective. They are much more cost-effective. The truth is that there is nothing evil about cars but they are a very expensive way to try to move a large number of people around urban areas. Government members would like to portray my comments as being ideologically anti-car but they are not anti-car at all. The best thing for people using the roads—particularly for freight—is that more commuters have the opportunity to not take their car and to not clog up the roads at peak time. That is a more cost-effective use of our next dollar in transport infrastructure and investment.So although it is fine for the member for Hamilton East to say that people in Hamilton love this road and that it is going to be good for the economy the objective analysis does not stack up. The Government announced this project before a business case had been undertaken. I have read the business case and it does not stack up.David Bennett: You weren’t there. You weren’t even in Parliament then.JULIE ANNE GENTER: Actually I was a consultant and I worked for Hamilton City Council as a transport planner and policy adviser. So I was there. I was in the New Zealand Transport Agency in 2008 after the new Government was elected working as a consultant for the agency and working on a report calledManaging transport challenges when oil prices rise. The officials in the New Zealand Transport Agency were saying “What a disaster. The National Party has come in with these crazy motorways and the business cases do not stack up and it wants to move them right up the priority chain.” There was an opportunity cost because that was billions of dollars not going on projects that would benefit more New Zealand households and more New Zealand businesses. You do not see the opportunity cost of the money that is not spent on smarter better projects that would have a better outcome.The National Government is putting up the petrol tax and is spending all of the money on projects that give New Zealanders no opportunity to avoid higher oil prices. This is directly related to our current account deficit. There has been a lot of talk about the current account deficit and how the Budget that was presented this week is actually forecasting a worsening of the current account deficit. It is the current account deficit that reflects how much New Zealand is earning relative to how much it is spending on a national level. It is really that that tells us about the health of our economy. The Government Budget is only one tiny part of it. Even if the Government Budget can cobble together some optimistic surplus in a couple of years if New Zealand is spending more money overall offshore and is earning less by selling our goods overseas then we are in a worse economic position and it will be felt by New Zealand households and businesses.Our oil bill went from about $3.5 billion at the beginning of the decade to $8 billion last year. We are importing the same amount of oil but it is worth twice as much. So our current account deficit is worse because New Zealand households and businesses do not have the opportunity to get around in a more energy-efficient way. That is only going to get worse as time goes by so it is right now that we critically need to be investing in those alternatives. Oil prices are not going down any time in the future. Even if we drill it here we are still going to pay the international price of oil. Even if we drill it here we do not use it here. It does not go in the tanks of our cars or trucks; it goes straight overseas because it is not that type of oil that we produce here in New Zealand.So we need to futureproof our transport system. We have the opportunity to futureproof our transport system. The National Government is not taking that opportunity and it is going to have dire economic consequences for the country. Thank you.