Donald Rod: Taxation (Base Maintenance and MiscellaneousProvisions) Bill — First Reading 
Donald Rod: Taxation (Base Maintenance and MiscellaneousProvisions) Bill — First Reading 
[Volume:622;Page:18060] 
ROD DONALD (Co-Leader—Green) 
: 
 I thank the Hon Richard Prebble for again deferring to me his place in the speaking order. In fact in honour of Richard Prebble I decided today to wear my Fraser Institute tie from Canada. I was privileged to speak to the Fraser Institute last year on taxation and other matters and particularly on MMP. I paid homage to Richard Prebble and Roger Douglas because both of their portraits were on the wall of honour of august gentlemen at that institute. 
Mr SPEAKER 
: Now could we come to the point? 
ROD DONALD 
: I am just about to narrow the debate but this is a valedictory to Richard Prebble. I ask you Mr Speaker to allow me one more sentence. I paid honour to Richard Prebble and Roger Douglas because I said that without them New Zealand would not have MMP and without MMP I would not have been there to speak to the institute about the excellent policies that the Greens promote in Parliament. 
In speaking of excellent policies I would like to say that the Green Party will be supporting the Taxation (Base Maintenance and Miscellaneous Provisions) Bill because there are some very good features in it. We do have some disappointments with it but I will come to those in a moment. The very good features are of course the ones around the thin capitalisation rules for foreign-owned banks because for too long those banks have got away with not paying their fair share of tax in New Zealand. I am all in favour of Dr Cullen having a bigger money bag with which to invest in sustainable infrastructure and to be able to invest more in human capital particularly in our young people through taxpayer-funded tertiary education. So if Dr Cullen is able to rake in I think $360 million from foreign-owned banks that they have not but should have been paying that is a very good thing and something that we look forward to supporting as this bill progresses. 
It is also worth noting when talking about banks that I am pleased to see that the Reserve Bank has finally told Westpac that it needs to set up a proper bank in New Zealand instead of running its New Zealand operation like some sort of branch operation out of Australia. Too many of New Zealand’s business enterprises are run like branches out of Australia and we have to reverse that trend. In the same way we have to make sure that our Government does not become the equivalent of an Australian state operation as happens under Food Standards Australia New Zealand and some of the other bodies set up in recent times. 
The other particularly good measure in this bill relates to business environmental expenditure. The Greens are very pleased to see that the Government will be addressing concerns raised with regard to the tax deductions available for that expenditure. Anything that is done to remedy or mitigate the detrimental effects of the discharge of contaminants is something that should be encouraged and that is a step forward with regard to this bill. 
Our concern focuses on the Government’s “drill and hope” strategy. Yet again the Government is trying to encourage more drilling—in this case by offering tax exemptions for a period of 6 years. 
Gordon Copeland 
: What’s wrong with that? 
ROD DONALD 
: What is wrong with that is the opportunity cost. We would much prefer any tax incentives for energy generation to be focused on renewable energy so that we can do more to encourage wind generation. I know that the Minister has already done his bit to enable Mr Hodgson to spend a considerable sum of money via carbon credits on encouraging the development of wind energy in New Zealand and that is a good thing. We can see the result of the Government’s excellent commitment to the Kyoto Protocol come through in terms of all the new wind farms that are being announced. There seems to be one new wind farm a week at the moment which just shows that the Government does have a commitment to renewable energy. But that is not enough. We would like more effort to be put into renewables. 
So instead of the Government offering tax incentives for a “drill and hope” strategy to try to find more oil and gas it should be putting more in the way of tax incentives and direct investment into solar energy and into energy efficiency and conservation. The gains are guaranteed in those areas. We know that we could save between 20 percent and 30 percent of our electricity generation through conservation and efficiency measures. That is not a case of hoping we will discover some oil or gas; it is a case of knowing there is energy that can be saved if only we make the capital investment. That is something that the Government could do directly as well as encouraging the private sector through tax incentives to invest capital in the efficiency measures that will have pay-offs not just for those companies but for the country as a whole. That is an area that we will debate strongly at the select committee. 
However overall as I said at the beginning of my speech this bill is a positive one. It does not go as far as we would like it to go. We think this is the sort of bill that should have been called the “Taxation (Carbon Tax Base Maintenance and Miscellaneous Provisions) Bill”. This bill would have been the opportunity for the Government to bring forward the carbon tax that it says it will introduce in 2007. Why should we wait until 2007? Let us have a carbon tax in 2005 and let us move towards a more sustainable infrastructure. Let us bring in a tax that is vitally necessary to send the right signals to the marketplace about the need to move away from a fossil fuel economy and towards a sustainable economy particularly in relation to transport infrastructure. If the carbon tax had been introduced in this bill it would have given the Government more revenue which it could have then used to implement other Green polices such as reducing the taxation on work and enterprise. We are very keen to see that because we want the taxation base to shift towards encouraging good behaviour and discouraging bad behaviour. I look forward to hearing submissions on this bill at the select committee.