Norman Russel William: Budget Statement — Budget Debate 
Norman Russel William: Budget Statement — Budget Debate 
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Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 This Budget is a triple deficit Budget. It runs a fiscal deficit it runs an environmental deficit and it runs a social deficit. Perhaps most sadly it portrays a deficit of vision for New Zealand. This Budget takes money from overseas creditors to fund its fiscal deficit. 
Mr SPEAKER 
: I apologise to Dr Russel Norman. I ask members leaving the House to please do so quietly and I ask people in the galleries to please not talk because the noise volume just escalates here in the House and it is so hard to hear. It is totally unfair to Dr Russel Norman. I apologise for that. 
Dr RUSSEL NORMAN 
: Shall I start again? 
Mr SPEAKER 
: I think just carry on. 
Dr RUSSEL NORMAN 
: This Budget takes money from overseas creditors to fund its fiscal deficit. This Budget takes away the dreams of our young people with its social deficit. This Budget takes away the chance for our kids to love New Zealand as we do with its environmental deficit. This Budget adds to the deficit of vision that has so far marked this photo opportunity Government. 
New Zealanders believe in more than just money. New Zealanders want prosperity which is enough money to live comfortably but also warm homes; safe healthy food for their kids; a transport system that works; and an Aotearoa that they can love for ever—not mine for a quick buck. The Green Party supports this vision and therefore cannot vote for this Budget. 
Mr SPEAKER 
: I apologise to the honourable member speaking. No member in the gallery may take part in the debate in any shape or form. I make that very clear to members in the gallery. They will not interfere in the debate or they will be removed from the gallery. I apologise to the member. 
Dr RUSSEL NORMAN 
: This Budget was an opportunity to take Aotearoa down a new smarter economic path. This Budget could have provided the map and the funding to transform the New Zealand economy from one based on commodities and extractive industries towards one that rides the clean technology wave and has a reputation for high-quality sustainable commodities and for knowledge-intensive high-tech cleantech industries. 
New Zealand could be a brand of integrity. Our country can be more than just extractive industries—cow faeces in our water and national parks desecrated by mining. We can be more than a quick buck more than what we can dig up suck up and sell off. Indeed this Budget from National ACT and the Maori Party proposes to consume our capital—our financial natural and social capital. We should pass on wisdom to the next generation but we are passing on financial environmental and social debt. Most of all this Budget makes manifest the contradiction at the heart of our age. We live in a society whose central rationale is maximum economic growth at any cost yet we know that this growth threatens our well-being and even our long-term survival. 
I start by addressing the fiscal deficit. This Budget borrows to fund tax cuts more motorways and climate pollution subsidies. We are already borrowing $240 million every week for new and roll-over loans yet this Government has introduced huge tax cuts that will cost $4.6 billion in the 2011-12 financial year. We are already borrowing yet this Government is spending $9.5 billion on holiday highways and other pet motorway projects that even the Government’s figures show will cost us more than they will deliver in benefits. We are already borrowing yet this Government will spend $630 million in 2011 on subsidies to climate polluters. This is fiscally irresponsible. The impact of these measures will mean that Government debt balloons out to 26.5 percent of GDP that annual finance costs will go up to nearly $6 billion in 7 years’ time and that we will not return to pre-crisis debt levels until 2024. 
This unnecessary public debt when piled on top of the mass of private debt in our country reduces our economic sovereignty. Future generations will bear the burden of this debt and will be beholden to the international lenders who own so much of our economy. This is not freedom and this is not the sovereignty New Zealanders seek. The build-up of national debt will also provide an excuse to privatise public assets after the next election. John Bill and Gerry plan in 2012 to sell off what is left of New Zealand’s public assets. The so-called mineral stocktake which prepares the very best of our conservation estate for mining is not the only stocktake in town. Mark my words: John Key will use Government debt to justify a “For Sale” sign over our State-owned assets such as Air New Zealand Television New Zealand Solid Energy Meridian Energy Genesis New Zealand Post and the Accident Compensation Corporation. 
John Key blames tax loopholes for his decision to increase GST and cut tax rates. He could have closed the tax loopholes but he has legalised them instead. He has rewarded tax avoidance with a tax cut. That is not smart and it is not fair. 
A capital gains tax is smart and we can make it fair by excluding the family home. Sam Morgan does not think it is fair that he pays less tax than his secretary; nor do I. A capital gains tax is part of the solution to our property crisis. It can broaden our tax base and strengthen our economy. A capital gains tax is sharply progressive because income derived from capital gains is concentrated amongst the wealthiest. The United States uses a capital gains tax. It shows that those earning more than $1 million a year get around 40 percent of their income from capital gains. Meanwhile those earning less than $75000 per year get less than 2 percent of their income from capital gains. Capital gains taxes are sharply progressive because the tax falls on those who can afford it most whereas GST is regressive because the tax falls on those who can afford it the least. 
The Green Party stands for smart fair taxes and it has the courage to say what National and Labour both know—that a comprehensive capital gains tax excluding the family home would help protect New Zealanders from property speculation. It would help make the dream of homeownership a reality for more Kiwis and it would feed much-needed capital to the starved productive sector. We also know that there is a need to increase housing supply at the same time. Building more State housing can counter upward pressure on rents and boost the building sector of our economy while helping our most needy families. 
John Key may talk about taking a balanced approach but when it comes to rebalancing our economy there is little action. Our tax system remains skewed. The tax treatment of property changes to loss attributing qualifying companies and depreciation measures are a step in the right direction but it is a timid step. The time for a capital gains tax is right now—this year in this Budget—and the Government has missed the moment to strengthen our economy just as it has missed the chance to tighten foreign investment rules on property. To ignore those opportunities fails the fortitude test. 
The tax cuts in this Budget from National ACT and the Maori Party will go mostly to the well-off while raising GST hits those on low incomes disproportionately. This widens the gap between the haves and have-nots. It punishes those who already struggle to make ends meet and the punishment falls most heavily on Maori and Pacific peoples. This Budget will increase inequality the social deficit and ultimately the fiscal deficit. 
Looking after our most vulnerable children should be at the heart of any Budget because one day those kids will fill either our workforce or our prisons. The Budget from National ACT and the Maori Party increases the money for prison beds adding to the fiscal deficit and betting on which direction the social deficit is heading. New Zealand is one of the most unequal countries in the OECD and that inequality drives crime illness violence poor educational outcomes and so much more. The cost of prisons courts and the police in this Budget alone has increased to $3.7 billion from $1.7 billion just 10 years ago. 
Inequality costs everyone. Because some New Zealand families cannot afford to heat their draughty homes it costs taxpayers $54 million each year to treat respiratory illness. It costs businesses 180000 sick days and it costs $400 million in electricity that we do not need to use doing untold unnecessary environmental harm along the way. There are many more examples of how inequality hurts everybody. 
Earlier this week my colleague Metiria Turei launched a plan to reduce inequality and to help make New Zealand a place where everyone gets a fair go—a plan called Mind the Gap. It includes a tax-free threshold of $10000 which would benefit everyone but it would give the most help to the New Zealanders who need it the most: the low-income earners. Mind the Gap also suggests giving every family a reasonable amount of electricity at a fixed low rate so that they can stay warm and healthy. Under a progressive pricing plan additional power would be charged at a higher rate so it would still pay to save power. Again this measure helps all of us but it has the biggest positive impact on our poorest families. 
Those are just two of eight practical and fiscally responsible steps described in Mind the Gap. Measures such as those can address the social deficit that this Government has inherited. Instead John Key chooses to concentrate on tax cuts that help the wealthiest ahead of the neediest. John Key’s Government chooses to dishonour the Treaty of Waitangi by ensuring that Maori remain in poverty. 
The eight-point plan in our Mind the Gap package is part of what we have called a Green New Deal for New Zealand. It sits alongside two economic stimulus packages that the Green Party released last year—packages that offer practical solutions to our economic environmental and climate crises. Green New Deal solutions tackle all these pressing problems at the same time. Green New Deal solutions account for the fact that these challenges are global in nature. Green New Deal solutions see opportunity and lay out a practical path to prosperity. The most high-profile of our Green New Deal solutions is the $323 million home insulation fund which has already made 40000 New Zealand homes warmer and healthier. It is evidence that we offer practical answers to New Zealand’s problems. Indeed we have a surplus of solutions to offer to a Government in deficit. 
As well as having a vision deficit a fiscal deficit and a social deficit the Budget deepens our environmental deficit. We are currently clearing native vegetation at the fastest rate since European colonisation which is an extraordinary fact. We are in the middle of a biodiversity crisis in this country a crisis caused by us. The key reason for that loss of native vegetation is agricultural intensification according to Landcare Research. We know that a key driver of agricultural intensification is the rapid increase in rural land values. Rural developers are seeking the tax-free capital gains that come with dairy conversions and dairy corporations are pushing land harder in order to make the interest payments on the big loans. A capital gains tax would put downward pressure on rural land prices and it would take some of the pressure off our land and off our biodiversity. 
Agricultural intensification is also driving the desperate decline in water quality across our country. Drinking water for rural towns like Dunsandel is polluted by dairy corporations. Rivers are being dammed and drained for irrigation and the water is being replaced with runoff thick with faeces and fertiliser. We have health warnings now that newborns are at risk of nitrate pollution. 
Hon Maurice Williamson 
: This speech should have a health warning. 
Dr RUSSEL NORMAN 
: The Government members think it is funny that our infants are now at risk of nitrate pollution because the water has been so polluted by nitrate from dairy corporations. Well the Green Party does not think it is funny. The Government might think it is funny that they are polluting our waterways to such an extent that it is dangerous for our children and infants to drink that water. The Green Party does not think it is funny; we think that we should do something about it. The Government does not care. The Government is giving funds to irrigation companies in order to expand irrigation in New Zealand so that we can pollute our groundwater even further. Well the Green Party does not think that is funny; the Green Party thinks that is wrong. 
This Budget does nothing to address New Zealand’s environmental deficit. There is no capital gains tax there is no charge for using the public’s water for private profit and there is no charge for pollution. In fact the Government grants for irrigation schemes subsidise the destruction of our rivers and aquifers. How about that? We are now passing a Budget where taxpayers’ money will be used to subsidise the destruction of rivers and aquifers. This is environmentally tragic and it is economically stupid. Likewise the Government’s plan to subsidise greenhouse pollution to the tune of $100 billion over the next 40 years according to Treasury estimates is also environmentally tragic and economically stupid. 
The Greens have shown how we can make a 30 percent reduction in our greenhouse emissions put our economy on a competitive footing to trade in a global economy where carbon matters and do our bit to secure a safe future for our children. Instead John Key’s Government has locked New Zealanders into subsidising our biggest polluters. The more they pollute the more we pay. We teach our children that if they make a mess they should clean it up. But John Key’s lesson to industrial polluters is that there is no accountability for them. Their mess is our problem. They have little incentive to cut emissions through smarter technology. National will keep hidden how much taxpayer money subsidises each individual polluting company. National will publish the welfare details of a couple of mums on the domestic purposes benefit who upset Paula Bennett but it will not publish the details of billions of dollars worth of corporate welfare handed out to greenhouse polluters. John Key’s Government will no doubt also remain silent on the 27 percent cut to environmental research in this Budget. 
The Green Party will not vote for this Budget but we respect the Minister of Finance and acknowledge his hard work. As a Minister who takes his responsibilities very seriously he no doubt argued for a capital gains tax. We extend our sympathies that he lost out to his Cabinet’s more conservative instincts. The result is a Budget that takes our country in the wrong direction. It adds to the nation’s fiscal environmental and social deficit and has a terrible deficit of vision at its heart. It adds to the fiscal deficit and takes away the sovereignty of future generations by borrowing to pay for tax cuts that heavily favour the wealthy borrowing for Steven Joyce’s pet holiday highway projects and borrowing to subsidise polluters. It adds to the social deficit by entrenching inequality and locking our society into a further cycle of poverty crime and illness. It adds to the environmental deficit and takes away the chance to enjoy the wilderness of Aotearoa New Zealand. The Green Party will not vote for this deficit Budget.