Norman Russel William: Financial Review Debate — In Committee 
Norman Russel William: Financial Review Debate — In Committee 
[Volume:671;Page:17460] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I thank the Minister of Finance for his intervention. He acknowledges the problem of debt that the Government has yet the Government has chosen not to use the instrument that would have resulted in a reduction in Government debt and that instrument is a temporary earthquake levy. The way in which a temporary earthquake levy would work is that if we were to strike it at 1.5 percent on incomes between $48000 and $70000 and at 3 percent on incomes above $70000 and if at the same time we were to delay the cut to the company tax rate which is due to drop shortly we could raise around a billion dollars a year in a temporary earthquake levy. For someone earning $50000 a year that would be an extra 50c a week in tax. For someone earning $70000 a year it would be an extra $6 a week in tax and for someone earning $100000 a year it would be an extra $23 a week in tax. 
An extra $6 a week in tax in order to rebuild Christchurch is a very very important way for us to do the rebuild without going into debt. An extra $6 a week for someone on $70000 is 1½ cups of coffee. Literally 1½ cups of coffee is what most New Zealanders would be willing to contribute if it meant that we could rebuild Christchurch without going into serious debt. If we go into serious debt of just under $5 billion we find that the cost of servicing that debt is $250 million a year. So Government members are saying that they want to rack up $5 billion in debt which will cost the taxpayers of New Zealand $250 million a year to service. Then on top of that as the Minister of Finance has repeatedly pointed out it will drive up interest rates right across the economy because the Government is going into further debt. So every person in New Zealand who has a home mortgage will pay a higher interest rate because Government members do not have the common sense to have a temporary earthquake levy so that we do not have to go savagely into debt in order to pay for the rebuild. 
A temporary earthquake levy is one of the options we have on the table. It is an option that the Minister of Finance and the Government have chosen not to take. I think that is a mistake because we have an opportunity to reach out to New Zealanders who are willing to contribute to the rebuild of Christchurch so that everybody right across the country kicks in a few bucks a week and over the course of a few years we pull together the money we need to pay for the rebuild. The alternative is that we go seriously into debt which adds to the interest payments of the Government which also puts upward pressure on interest rates for all mortgage-holders right across the country. 
We actually have a choice here. We will end up paying a temporary earthquake levy or we will end up paying higher mortgages on our homes so that we will pay the money to the overseas lenders or we will pay the money to ourselves and not go into debt to pay for the Christchurch rebuild. These are the genuine options that we have before us. We can have a temporary earthquake levy we can cut spending or we can increase borrowing. The Government has chosen to cut spending and increase borrowing. I think that they are poor choices and that we would do much better to have a much more fiscally responsible approach. 
The other thing I want to touch on briefly in talking about the Government’s strategy is what came up during question time in relation to the price of petrol. The Prime Minister described the increase in the price of petrol as an unexpected one. There is nothing unexpected about an increase in the price of petrol. Not only is it expected but it is predictable; not only is it predictable but the Greens predicted it. In fact I say to the Minister of Finance that the price of petrol will continue to go up and we need to factor that into the building of our infrastructure. It is completely insane in a world of rising petrol prices to throw all of our money at new motorways. That is not a sensible rational approach to increasing petrol prices. 
When petrol prices go up we should invest in the alternatives to the private motorcar and the use of petrol. Instead the Government is throwing billions of dollars at new motorway projects. There is a deep insanity and irrationality in the Government’s throwing more money at new motorways. In terms of the Puhoi to Wellsford road we can make that road safe for $300 million instead of the $2 billion new motorway project. We have done the costing to make that road safe because it is unsafe. We can improve the safety of that highway for a fraction of the cost.