Norman Russel William: Questions for Oral Answer — Questions to Ministers 
Norman Russel William: Questions for Oral Answer — Questions to Ministers 
[Volume:668;Page:15158] 
5. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: Does he have a plan to enable our economy to develop in a sustainable way; if so what is it? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 It depends on one’s definition of sustainability. In our view the first call on sustainability is that new jobs and growth and incomes should be able to be maintained over time and that is what we are setting out to do with an economic programme that will contribute to sustainable economic growth. That programme consists of investment in productive infrastructure removing red tape supporting business innovation and trade lifting productivity and improving services in the public sector and strengthening the tax system where we took a significant step in Budget 2010. We believe this will make jobs and growth much more sustainable than the consumption-fed debt-financed growth over the last decade. 
Dr Russel Norman 
: Does his definition of sustainability accept the reality that the natural environment has finite resources; if so how does the fact that the natural environment has finite resources affect his plan for sustainable development? 
Hon BILL ENGLISH 
: I will use two examples that are relevant. One is the introduction of the emissions trading system. The member and his party were of course instrumental in putting that together. The current Government modified it but we have continued with that modified version. Secondly the Land and Water Forum has been working extensively to build consensus around better rules and regulation for water as one of our strategic advantages and a resource that is increasingly constrained around the world. In both of those cases I think the Government has shown an interest and an ability to recognise resource constraint and come up with what are generally accepted as effective tools for dealing with those constraints. 
Dr Russel Norman 
: Does he accept then that within such a definition of sustainability the environment has limited ability to absorb our pollution and waste and therefore weakening the emissions trading scheme has actually reduced the sustainability of his economic development plan? 
Hon BILL ENGLISH 
: I think it represents a better balance of the two definitions of sustainability that have been mentioned here. On the one hand the sustainability of the environment is recognised by the fact that we have a pretty comprehensive emissions trading scheme and others I am sure will follow. On the other hand we have introduced it in a way that ensures we are not putting at risk an economic recovery and the need for investment and jobs. I am pleased to say that the investment community is now seeing the presence of the emissions trading scheme as an advantage rather than a threat because it provides certainty for their investment decisions. 
Dr Russel Norman 
: Does he accept the former World Bank chief economist and Nobel Prize winner Professor Joseph Stiglitz is correct when he says that events such as traffic jams or oil spills increase GDP while at the same time reducing people’s quality of life; if so does he still think that maximising GDP should be the sole and central driver of Government economic policy? 
Hon BILL ENGLISH 
: No I do not believe it should be the sole driver nor is it any more than maximising personal income is the sole driver of individual New Zealanders. They have a range of motives and a range of things they want to achieve that add up to quality of life. I think the Government has shown as I said before a willingness to use tools of environmental policy that may compromise economic growth—such as an emissions trading scheme or restrictions through the Resource Management Act—as part of the trade-off that New Zealanders want for quality of life here. 
Dr Russel Norman 
: Does he agree that former World Bank chief economist and Nobel Prize winner Professor Joseph Stiglitz is correct when he states that GDP figures can hide large increases in inequality that can result in most people being worse off even as GDP is rising? 
Hon BILL ENGLISH 
: Professor Stiglitz is an eminent economist and on that matter I do agree with him. That is one reason why the Government publishes a range of reports and I think the previous Government initiated some of them. GDP figures are published regularly. There is also a social report which measures progress against dozens of indicators and we are moving into a range of environmental reports—including I think one report pretty soon on water quality—which are other measures of welfare. I think that most New Zealanders are capable of looking at that range of data and making their own assessment as to whether their quality of life is improving. 
Dr Russel Norman 
: In light of that answer when he presents his Budget next year will he consider adding indices of environmental and social sustainability alongside GDP as a measure of progress? 
Hon BILL ENGLISH 
: I think a number of those indices are readily available. It is tricky enough measuring GDP on its own without complicating that measurement; other measures are available. But I say that there is no doubt that a rise in GDP is a key to lifting environmental standards. Countries with higher GDP generally have higher environmental standards. Many people measure their progress by their economic progress. That is why it is pretty important we have policies that encourage growth. 
Dr Russel Norman 
: Does the Minister of Finance agree with world-renowned scientist David Suzuki who happens to be speaking at the Green economics conference on Friday who argues that separating economics from ecology is bad news for humans that it is not sustainable and that it is suicidal for the human race? 
Hon BILL ENGLISH 
: Well that is the kind of dramatic thing I might expect to see at a Green economics conference. But I do not disagree with the general idea. That is why—and the Green Party has been an advocate of economic tools for solving environmental problems—in that sense we are in agreement. All the work that the Green Party did on the emissions trading scheme has resulted in a tool that combines economic and environmental objectives. It does so in my view better than bureaucratic whim or random regulation. I expect as we evolve our thinking about water we will end up in pretty much the same kind of place—that is integrating our environmental and economic objectives. We have learnt a lot from the emissions trading scheme about how that might apply in a bit more relevant way to water.