Graham Kennedy: Budget DebateText is incorporated into the Bound VolumeGraham Kennedy: Budget Debate[Sitting date: 01 June 2016. Volume:714;Page:11569. Text is incorporated into the Bound Volume.]Dr KENNEDY GRAHAM (Green): I understand that Kevin Hague will address Maggie Barry’s previous statement. This Budget commits the greatest of all possible mistakes a Budget can possibly make: it misjudges the future. It rests an interrelated whole-of-Government fiscal plan on a wrong premise. Get the premise wrong and everything that follows is wrong. Let me explain how that has come about. In introducing the Budget last week the Minister of Finance said that he was presenting a healthy set of accounts with rising surpluses and falling debt.The Budget at a Glance booklet contains the 2016 highlights. What are they? There are five principal highlights and four secondary. The principal ones are growth innovation infrastructure social investment and health. The secondary ones are education housing justice and—wait for it—the environment. Within environment are three component parts: fresh water pest control and the emissions trading scheme (ETS). The ETS contains one policy measure: restoring the one-for-one surrender obligation. That constitutes the sum total of the Government’s budgetary planning on climate policy. Of what significance is this? The Ministry for the Environment calculates that it will shave 0.7 percent off our emissions in 2030. Bravo! It is within the margin of error. This relegation of climate policy to the last of 45 highlights with no perceptible effect over the longer term shows the misguided world view that I mentioned.What should the Minister have done instead? He should have placed the 2016 Budget within the context of a future carbon price. He started off optimistically: “I recall our first Budget delivered in difficult times with Treasury forecasting never-ending deficits and ever-rising debt. Today however I can present a healthy set of public accounts.” But instead of patting himself on the back from then on he should have said the following: “Although we have left those difficult times behind we must recognise that unprecedented challenges lie ahead. A continued rise in global emissions guarantees dangerous climate change for the planet including New Zealand. This Budget is therefore cast in the context of a transformational pathway to a carbon-neutral economy by 2050. Nothing less is required for us to meet our national responsibility level within the global carbon budget. If we do not move at this speed New Zealand will face a fiscal overhang in the long term of unprecedented magnitude. I note that France is setting a carbon price of NZ$50 for 2017. We must prepare for a global carbon price of this size in our fiscal planning. The 2016 Budget rests above all on that premise.” That is what he should have said and that is what is missing from page 1 of his Budget statement.Let me cite another statement the Minister made in his speech last week. He said: “Budgets are not just an accounting exercise. They are about achieving better results for New Zealanders …”. How unwittingly prescient that was. Budgets are not about accounts; they simply express in dollar terms what kind of society we are what kind of Government we have what values our country embraces and above all what level of prescience foresight purpose and resolve we are showing.This Government retains a world view that has damaged the planet and betrayed the people. Because this Budget hews to an old world view it fails the simplest most basic test. It presents an unhealthy set of accounts that appears stable and sensible and pragmatic and balanced on the surface but which in ignoring the real cost of carbon is dangerously unstable lacking in sense fails the test of pragmatism and loses all sense of intergenerational balance. In concluding his Budget speech Bill English claimed that the Government takes a long-term view of its stewardship. We commend the Minister for aspiring to take the long-term view; we condemn him for failing to do that in any way that can be seen as realistic pragmatic and sensible.