Norman Russel: International Finance Agreements Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Norman Russel: International Finance Agreements Amendment Bill — Second Reading 
[Sitting date: 25 September 2012. Volume:684;Page:5622. Text is incorporated into the Bound Volume.] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise on behalf of the Green Party to speak on the International Finance Agreements Amendment Bill. This is a relatively small bill but it has some interesting dimensions to it particularly in relation to the International Monetary Fund. 
The Greens will not be supporting this bill for the simple reason that we do not agree with the regulation-making powers that are contained within this bill. If New Zealand as a country is to agree to changes to the voting rights at the International Monetary Fund then we believe that it should come back to the New Zealand Parliament rather than simply being a regulation enacted by the executive. We think that is a fundamental principle. 
David Bennett 
: What have you actually achieved while you’ve been in Parliament Russel? 
Dr RUSSEL NORMAN 
: I hear the heckling there from whoever it is from Hamilton who has no idea about this bill or pretty much anything else. 
What this bill does around the regulation-making powers is to make sure that the New Zealand Government does not have to come to this House to seek changes to the agreements around the IMF. We think that is wrong. But I think the bigger picture here is that there is a global shift in terms of the policy agreements and arrangements around monetary policy fiscal policy and other policy which the New Zealand Government is completely missing. There is actually a very significant shift in what is the global consensus and unfortunately the New Zealand Government is missing the boat. It feels like the New Zealand National Party can stand up against the whole world in holding on to an outdated monetary policy framework so it thinks it can take on the whole world. Even while the IMF and others are embracing alternative kinds of policies the New Zealand National Government thinks it can take on the entire world and somehow beat it when it comes to currency. But of course you cannot do that. What the IMF and others are saying is that we need to change the framework. 
I think it is important to look at the last report on New Zealand from the IMF which was released in June. I would not expect anyone in the National Party to have read it. What this says if you read it is that New Zealand has some vulnerabilities and some external liabilities risks. It says that “New Zealand’s large net liabilities present a risk.” and “the current account deficit is projected to increase over the medium term”. Of course we have seen this in the last current account deficit figures where the current account deficit is heading towards 5 percent. The report says further: “To contain this increase and limit a further buildup of foreign liabilities over the longer term the New Zealand dollar would need to be weaker than its current level.” 
That was back in June. Of course since then the New Zealand dollar has appreciated. We are now in the situation where New Zealand businesses in the tradable sector—those that are exporting or competing with imports—are screaming out for the New Zealand Government to break with its orthodox position where it thinks it can take on the whole world and to do something to bring down the value of the New Zealand dollar. The IMF of course has warned us that if we continue with a strong dollar it will have very detrimental effects on the tradable sector in New Zealand and it will have very detrimental effects on the current account deficit and our net external liabilities. 
We have actually seen that happen already since this report came out. So in this respect the IMF’s report was quite prescient. It identified one of the key problems with the New Zealand economy in terms of the level of the exchange rate and it identified that it needed to come down. Instead it has appreciated. Having just tonight been talking to some of New Zealand’s large exporters what they tell me is that they can maybe survive at the current level of the dollar but were it to increase any further large numbers of exporters—even more further exporters—would be driven out of business. Yet the Government does nothing. 
The whole world is devaluing its currencies. All of our major trading partners are adopting policies to devalue their currencies but somehow the New Zealand Government thinks that it can stand up like King Canute and hold back the ocean that somehow New Zealand can stand against the world and not do anything while all of our trading partners are devaluing their currencies and that somehow the New Zealand tradable sector can simply stand there and survive. 
Well the Government should talk to real people for a change. If it talked to real people who are actually involved in the business of exporting or competing with imports what it would find is that those real people—manufacturers and others—are having real trouble because of the current policy settings meaning that the New Zealand dollar is too high. 
So while the National Party lives in the neoclassical economic bubble where the economy is doing extremely well in theory in practice of course the New Zealand economy is doing very very poorly. 
David Bennett 
: What have you done in your time Russel here? 
Dr RUSSEL NORMAN 
: The National Party rabble whom people may hear gabbling away in the background who simply have no idea about economic policy or what is going on in the real world can yell as much as they want and try to shut down the voices that are saying that we need to take action. Of course the reality is that they can sit there and watch the economy get destroyed but the Green Party will not support that. 
The other element that I think has been interesting in terms of the development of the thinking at the IMF is around green economics. For those of you who read a publication that is put out by the IMF  
Finance and Development 
 it put out an issue a few months ago called “Going Green” which is looking very much at investment in basically mostly renewable energy. The argument it makes is that in spite of the global financial crisis there has been a huge boom in investment in renewable energy and in fact it has continued to grow even in spite of the pressure that has been on the sector. When you look at the statistics it is putting out we are seeing a dramatic increase in the amount of annual investment from about $7 billion a year back in 2002 to well over $150 billion a year now. So there is very significant growth in investment going into renewable energy. That is what the IMF is reporting. 
The reason why this is very significant for New Zealand is that one of the strategic advantages New Zealand has is in the renewable energy field because of our background particularly in hydro but also our emerging technological advances in geothermal. And this is a sector where our State-owned enterprises have some real expertise and ability to excel. Unfortunately the Government is selling them into foreign ownership—or is planning to or would like to sell them into foreign ownership—right at the moment that those State-owned enterprises can take advantage of this global boom in renewable energy investment. 
We need as a society and as an international community to have a boom in investment in clean technologies and renewable energy because it is only if we have that that we stand a chance of reducing our greenhouse emissions and surviving through this period of anthropogenic or human-caused climate change. So the IMF I think not only is playing a valuable role in challenging the if you like monetarist consensus or neoclassical consensus in economics which has dominated the economics field now for decades but also is challenging the consensus in terms of the environment around showing that green investment and green economics is one of the most rapidly growing sectors internationally. And it is saying to people like the New Zealand Government which unfortunately is deaf to it that this is one of the great opportunities as well as one of the great adaptations if you like of the economic system because it is only by having this level of investment into the renewable energy sector that we can have the kind of transition— 
David Bennett 
: Tell us about the carbon price Russel. 
Dr RUSSEL NORMAN 
: —to sustainability. Once again the National backbench members start shouting out because they have no idea about green economics or the IMF or they do not read any of the publications coming out from the IMF. That is why all they can do is sit there and shout abuse from the back of the Chamber which is pretty standard in this Parliament. We have the National MP from Hamilton David someone or other who shouts abuse pretty much in every debate in this House when anyone tries to make a rational argument and in the background you will be able to hear him shouting— 
Maggie Barry 
: Well you’re not giving a rational argument. 
Dr RUSSEL NORMAN 
: Oh Maggie Barry has joined in as well. She is also very good at shouting abuse. But of course the National Party does not want to engage in the real arguments. The real arguments are about changing the neoclassical consensus in economics and embracing the turn towards green economics and the green economic opportunities for New Zealand. That is a future focus for our country. 
If we embrace those things which you can read about in the IMF reports then that is a positive future for our country. It is a pity that the National Party wears such blinkers that it cannot see that the world is changing. 
Maggie Barry 
: Go back to Australia. 
Dr RUSSEL NORMAN 
: And Maggie Barry yells out “Go back to Australia.” because she abuses people who are migrants. That is what you get from the National Party. Maggie Barry says “Go back to Australia.” because she abuses people who are migrants. That is the level of debate from the National Party. Instead of debating the issues this is what we get day in and day out on the Finance and Expenditure Committee from the abusive National Party. They hate migrants. They hate anyone who is different. They do not like it. Well I tell you: you need to embrace the future because it is going to be diverse and it is going to be green so get used to it.