Hughes Gareth: Financial Review Debate — In Committee 
Hughes Gareth: Financial Review Debate — In Committee 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Chairperson. Nga mihi nui ki a koutou. Kia ora. I rise to take a call on the Appropriation (2010/2011 Financial Review) Bill. In summary the Government has been a poor manager of the economy. In the 2011 year-end Budget what we are seeing is a deficit of over $18 billion—the largest in New Zealand’s history. That is poor economic mismanagement. In 2010-11 Crown debt rose by $13.4 billion to over $40 billion—again that is poor economic mismanagement. With economic activity that is stagnating just above the technical recession level we are again seeing poor economic mismanagement. The mismanagement of the economy is being characterised by poor decisions that have benefited the few but are paid for by the majority. 
What I want to talk about in this financial review is the narrative of this Government which as we saw led to tax cuts for the wealthy that we could not afford which led to a budget deficit and which led to cuts in spending. What we are now seeing is the third act of this narrative which is raising revenue by flogging off the State assets. When you go back to 2010 and the tax cuts what we saw was the big gains being delivered for the wealthiest New Zealanders. We saw the head of Westpac getting $5000 a week. What we had to do to respond to that was see increased borrowing for tax cuts to pay for tax cuts that were targeting the wealthiest. That is both reckless and immoral. But in addition to the inequity what we have also seen is that the tax switch which was not fiscally neutral was a fiscal blunder—another case of poor economic mismanagement. 
On the expenditure side what we have seen is this Government throwing $2 billion per year at the motorways. Meanwhile traffic is down petrol is up and public transport grows through the roof. We are seeing this Government throw $1.2 billion annually at polluters in New Zealand through its amended emissions trading scheme. We are seeing this Government sell our assets to fund $400 million worth of irrigation—again what we are seeing under this Government is it says it does not pick winners but when it comes to irrigation it is surely picking winners. When it comes to Skycity it is picking winners. When it comes to Warner Bros it is picking winners. What we are seeing is we are picking winners in the old style economy which has harmful social and harmful economic impacts on our country. 
But on the revenue side this is where the Government has failed to make up the books. To balance the books it is requiring the third act in this narrative which is to flog off the State assets. The Government turned down the Green Party’s sensible and popular proposal for a temporary earthquake levy for Christchurch. That could have raised over $1 billion per annum which would have helped with the $9 billion costs that Treasury estimates will be projected to be spent by the taxpayer. Rather than putting the cost of the earthquake on the taxpayers’ credit card we could have shared the cost more fairly across all New Zealanders and not put the burden on the many again. A comprehensive tax on capital gains would not have affected the family home. The Tax Working Group predicted that it could have brought in $4.5 billion in a year and would have helped move our economy to a more productive footing. A charge on commercial water use would have raised $500 million a year. 
But instead of taking these smart common-sense alternatives this Government—because it has got tax cuts for the rich because it has got a Budget blowout and because it is borrowing too much money—now has got to sell the assets. The problem is though when it comes to selling the assets the economics do not even stack up there. Our energy assets are getting a very good return at the moment—in fact more than repaying the debt is costing at the moment. Treasury’s Budget Policy Statement 2012 quantifies this amount. It shows that if the Government proceeds with the partial privatisation it will cost $94 million a year. Selling assets to reduce debt costs the Government money. That is the key message we have got to take to the country to stop this mindless selling of assets and the mindless arguments justifying it. 
The conclusion is that when you have got this destructive narrative affecting our economy we need to get into a good story. The good news is that there is a hero in the story. It is a smart clean economy. This is what we can deliver that is going to lift our kids out of poverty and it is going to see actual work coming to New Zealand. Take the “drill it mine it” approach this Government has got to economic development and the resource sector—there are hardly any jobs for Kiwis; hardly any royalties because we have got one of the fourth-lowest royalty rates in the world; and hardly any tax income because we have got so many tax exemptions. But what we are seeing is the profits go offshore. If we were investing in sustainable clean energy and if we were driving export growth through our international champions—these State-owned energy assets that at the moment are selling our expertise on geothermal energy around the world—we could be delivering prosperity for Kiwis and we could be growing the economy so we can lift those Kiwis out of poverty and actually give our kids a good start in the future. That is the path the Green Party will be focusing on. Thank you.