Norman Russel William: Taxation (Urgent Measures and Annual Rates) Bill — Third Reading 
Norman Russel William: Taxation (Urgent Measures and Annual Rates) Bill — Third Reading 
[Volume:651;Page:276] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 The Green Party is looking for a transition. We are looking for a transition to a more sustainable and a fairer society and economy. That is how we judge this tax bill. We judge this tax bill on whether it helps in the transition to a more sustainable society and economy and a fairer society. It seems to us that that is how we have to approach it. That is the bar against which we compare it. 
One way to look at the bill is to divide it into two parts. One part is the tax cuts and what is going on there and the other part is how the tax cuts are to be paid for. When we look at the tax cuts we see that we are replacing the already legislated-for tax cuts with these new tax cuts. These new tax cuts reduce what is going to low to middle-income earners and increase the tax cuts that are going to the very wealthy. That is what we are doing here. If we did nothing—if this Parliament did not pass this law—then low to middle-income earners would be better off. So if we are going to say that if this bill does not make our country a fairer place if this bill does not even make New Zealand fairer and if letting the existing tax law just run would make New Zealand fairer then in terms of fairness criteria in terms of making our society fairer how could one possibly support the bill because it does not make our country fairer? 
I think the attitude was best exemplified when Sir Roger Douglas talked about beneficiaries. He said to put them to one side because they get Government money. Somehow if people are beneficiaries and they get a benefit from the Government they can be put to one side. They do not have to be factored into making policy in this country or they do not need to be factored into our democracy. If one is a beneficiary one can just be put to one side because one does not have to be considered. I think that typifies ACT’s approach to ordinary New Zealanders. 
I would also say of course that one of the things we would have liked to see fixed up by this bill was the Working for Families discrimination against beneficiaries. One of the problems with the previous Government was actually the discrimination against beneficiaries under the Working for Families package. It would have been great had National actually moved to fix that anomaly instead of adopting a more unfair scheme. 
The other side of this bill is how we are to pay for the tax cuts. One way we will pay for them is by reducing incentives in research and development. That is not a good idea. The Green Party would like to see our research and development tax incentives targeted towards sustainability rather than just in general but none the less having tax incentives for research and development is a good idea. 
The other way this bill proposes to fund the tax cuts is through reducing incentives towards savings. For a country with a chronic current account deficit incentives to savings are critical and reducing incentives to savings does not seem to make much sense to us. We do agree with the incoming Government that using some of the superannuation fund and directing it more towards New Zealand where there are profitable ways to invest the superannuation fund money towards New Zealand does make sense. There is also I think an interesting argument to be had: there is a question mark about whether it is a very wise thing to be doing at the moment at a time of running big deficits where we are borrowing money from overseas to be channelling borrowed money from overseas into the superannuation fund. I think we need to have that debate. We also agree with having a 2 percent entry level within KiwiSaver but of course we also want to have the 4 percent. 
Then there is the question of how we should pay for the tax cuts. Aside from what is in this bill about how it proposes to pay for the tax cuts by reducing incentives to get smart and reducing incentives to save how should we pay for the tax cuts? That is where the Green Party supports ecological tax shifting. We think that as it says in the briefing note to the bill we should broaden the tax base. The briefing note to the bill states that we have to broaden the tax base and lower the rates. Well there is no broadening of the tax base in this bill. A way to broaden the tax base is to introduce resource rentals such as a water levy which would broaden the tax base and create incentives to actually use resources more efficiently and to have a polluter-pays principle when it comes to greenhouse emissions which would also broaden the tax base and create incentives to produce fewer greenhouse emissions. That would ease the pressure on the taxpayer who as the emissions trading scheme is watered down under this Government will have to pick up more of the cost of the polluter. 
The other option for broadening the tax base which is seldom discussed in New Zealand is of course using a capital gains tax excluding the primary family home. After all why should capital gains—people who make gains out of capital—not be taxed but other sources of income are taxed? The Green Party would exclude the primary family home but we think that is a way to broaden the tax base. If we are serious about broadening the tax base and I think we should be then we need to look at resource rentals polluter pays and some form of a capital gains tax. We also need to look at the question around ring-fencing losses on investment properties which has been a major problem in our tax system over the last years. 
In terms of macroeconomics this policy is designed to be a stimulus policy but it has major problems in it. It would be much better if we were to invest in sustainable infrastructure—that is public transport which would prepare us for the future of having to reduce our greenhouse gas emissions and higher oil prices. It would be much better to invest in planting hillsides. We have a major problem of erosion in New Zealand. That would be a much better way to invest in terms of a stimulus package. 
Our sewerage schemes are desperately in need of attention right around the country. I am going to Whangarei on Friday because their sewerage scheme up there is leaking into the harbour and that is not really very good for tourism in our country. To clean up our rivers and lakes would cost money. That would be a fantastic investment. It would create jobs. 
I totally agree with the Government’s focus on broadband—not necessarily the way it is doing it but I think investing in broadband clearly is critical to the future of New Zealand. Home insulation is an obvious thing to do if one wants a short-term stimulus package. I think it was Rod Oram who said on the radio that home insulation is something that can be ramped up very quickly. It employs people. One can use New Zealand products so one does not add to the trade deficit and ultimately the current account deficit. And of course there are State houses which have a high local content. By building more State houses one actually has high local content so it does not add to the current account deficit or the trade deficit.  
To focus on that kind of a stimulus package makes a lot more sense in terms of macroeconomic policy than going through this tax cut policy. In terms of the kinds of transition that the Green Party is looking for which is a transition to a more sustainable and fairer New Zealand it makes a lot of sense to actually invest in those kinds of projects. 
There are a few positive aspects about this bill: the 2 percent that I talked about and there are some other aspects on it. But overall this bill is not helping to make the transition towards a more sustainable and fairer Aotearoa New Zealand and it is for that reason that the Green Party has opposed this bill and will continue to do so. We think actually it is a missed opportunity. There has been a lot of talk in the National Party about Bluegreens and it is something the Green Party has been very interested in because our view and why we come to this place is actually to get progress on our policy. We do not care especially that we do not have seats in the Government. What really matters is to make progress on policy. Were we able to convince National to actually embrace Green ideas then that would be a good thing. We were encouraged when the Conservative Party in the United Kingdom seemed to be open to some Green ideas. We were encouraged by the talk about Bluegreens in New Zealand. But when it came down to it in this bill that we are looking at today where there was a real opportunity to do ecological tax shifting and to have a stimulus tax package that would have sustainable infrastructure in it and when this brand-new Government had an opportunity to think outside the blue box and think a bit about the green box it completely failed and we got a classic blue policy. We did not get anything green in this nothing green at all. 
So this was a missed opportunity from the point of view of the Greens for National to think a little bit outside its boundaries. I hope that over the next 3 years those in the National Government—and I know they do exist—who care about the future of our country and sustainability actually put some pressure on the leadership of National to think outside the blue box and think about how we make the Bluegreen thing real. But because this bill does not as it stands help a transition towards a more sustainable and fairer Aotearoa New Zealand we will be voting against it.