Fitzsimons Jeanette: Customs and Excise (Motor Spirits) Amendment Bill — First Reading 
Fitzsimons Jeanette: Customs and Excise (Motor Spirits) Amendment Bill — First Reading 
[Volume:621;Page:16616] 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 The Greens are supporting this bill for two reasons. We are not supporting it just because there is a great lag in infrastructure funding after years of neglect but also because at the same time we have to accomplish one of the most difficult transitions that our society has ever been through—that is to a transport infrastructure that is much less reliant on oil than the present one. We have to quickly build a much better public transport infrastructure than we have a much better rail infrastructure than we have and better facilities for cycling because there is no evidence that oil will come down from US$55 a barrel to any significant degree or for any significant length of time. It will continue to fluctuate but its long-term trend is inexorably upwards. 
We know that because we have senior people in the oil industry telling us that world production cannot go much higher than it currently is yet demand is continuing to rise. When that happens New Zealand will be hit a lot worse than Europe because Europeans have adjusted to higher fuel prices for their cars and they have bought cars that are much more fuel efficient than ours are. If ordinary New Zealanders have cars that are anything like Lockwood Smith’s and they take $80 to fill the tank then they will be in deep trouble because it will cost $160 to fill the tank before too long. My advice to Lockwood Smith if he is worried about the cost of filling his tank is to get a smaller car. The Europeans have learnt how to do it. It does not cost me anything like $80 to fill my car’s tank. There are solutions to this. 
I would warn the Government though not to wait for the price to go down to what it regards as the long-term equilibrium before it brings this legislation into force. If the Government is going to wait for the price to go down to US$19 a barrel which Treasury thinks is the long-term equilibrium or even US$30 a barrel which is Treasury’s revised idea of what the equilibrium might be then this legislation will sit on the statute book and never come into force at all. It is sensible when oil prices are fluctuating to put a levy on it when it is in a bit of a dip rather than on a peak. But we cannot expect that it will be back to business as usual with cheap oil for the foreseeable future. That will simply not happen. 
The other objection I have to this is that diesel users are still not paying their fair share of excise tax. The petrol users pay for the roads and they also pay into the consolidated account. The diesel users pay absolutely nothing into the consolidated account. They pay only their share of the roading. I think that with the second big increase for diesel users who have vehicles that weigh below 6 tonnes large diesel trucks will be paying less than their share—even within the terms of the Land Transport Fund. 
The argument that some excise on fuel should go into the consolidated account is made because motor transport causes significant costs to the rest of the economy which it does not pay. The principle of economic externalities suggests that those costs ought to be paid by the people who create them. The Government has produced considerable research on this. The land transport funding study that was done back in the late 1990s was not able to be very precise about the quantity of these costs that are caused to the rest of the economy but they saw it as maybe around $1200 million. In fact if we want to have fair and transparent pricing then we need to cost those externalities like the health care costs that are not covered with the ACC levies the noise the pollution and the greenhouse gases that everybody else has to cover. They ought to be covered in the price of fuel itself. In Europe it is and fuel prices are much more expensive than ours. Europe’s economy is not suffering compared with ours and Europeans are coping. 
Peter Brown believes that we should just build large quantities of roads. I wonder whether Peter has ever looked at the outlook for oil the 20-year outlook for transport what will be running on those roads in 20 years and where we will be if we have nothing but roads. There is a terrible short-sightedness around. There is a refusal to even talk about the longer-term future the huge shift we have to make and the infrastructure that we have to build in order to be able to keep mobile after prices continue to rise and also I have to say to cope with the effects of climate change. There is a lot of lip service towards climate change and the Kyoto Protocol but quite frankly if we continue increasing our use of fuel and our road transport and neglecting rail and public transport we have no hope of addressing the climate change issue. We will all go down together in a screaming heap in a warming climate. 
I also have to take issue with Peter Brown’s suggestion that we should pay for our roads by borrowing that that would solve the problem and that future generations can pick that up. There is a rationale for all roads to be paid for by borrowing and amortised over future use. There is a rationale for paying for them on a “pay as you go” basis. But what one cannot countenance with any sense of justice is that one generation that has inherited a set of roads completely paid for by previous generations should then change to borrowing on a large scale in order to pass the costs of the extra roads they want on to future generations. It is a little bit like what was done by some members of this House who received a totally free tertiary education courtesy of the taxpayer when they were young then decided they no longer wanted to pay the sorts of tax rates that it takes to pay for an educated society. All of a sudden they decided the next generation would have to pay for its education with little in the way of student allowances and very high student fees. 
That means that one generation in the middle gets off scot-free. It inherits a really good system paid for by its parents and it does not bother to hand that on to its children. That is what we would be doing if we turned now from our “pay as you go” system to a mainly loan-funded roading system. We would simply be passing that cost along with all the other costs of oil depletion climate change and the increasing cost of fuel to the next generations. It will not work.