Hughes Gareth: Budget DebateText is incorporated into the Bound VolumeHughes Gareth: Budget Debate[Sitting date: 05 June 2013. Volume:690;Page:10756. Text is incorporated into the Bound Volume.]GARETH HUGHES (Green): Kia ora. Ngā mihi nui ki a koutou. Kia ora. In this Budget debate I want to rise to talk about the economic choices facing our nation. New Zealand faces a number of economic challenges. We face growing inequality decline in economic competitiveness relative to other nations growing debt and a large number of Kiwis out of work. Over the last 60 years New Zealand has seen a steady decline in comparative economic performance and despite Kiwis working some of the longest hours for some of the lowest wages in the OECD the country is sprinting—it is running as fast as it can—just to stay where we currently are.In this Budget 2013 debate I would like to see our Parliament put aside some of the pointless point-scoring we have heard from the Government benches some of the petty partisan politics and the intellectually lazy reading of pre-prepared notes from research departments. Let us have a debate around the economic direction of our country. Let usask some of the questions like what it will take to deliver a prosperous New Zealand for our kids. What is the direction we should be taking? Where are the new jobs and the new innovation going to come from? And is New Zealand currently on the right path? These are all important questions if we want our kids and future generations of New Zealanders to grow up knowing there are good jobs to go into. The question is whether New Zealand is going to keep sliding down that OECD ranking and whether the poverty that some Kiwi families find themselves in right now is going to be exacerbated or alleviated in the coming decades.The Government has tried to make this Budget debate about just the surplus. But if you look at the numbers there is the current account deficit which is a more worrying measure of our economic performance and what we know from the Government’s books is that we are set to be the worst—the worst—in the OECD by 2017. Our national debt is set to skyrocket—$61 billion extra over the next 5 years—and our tradable sector is struggling. Without new exports or innovation we are going to have to keep selling the assets and keep resorting to borrowing offshore to maintain our lifestyles. That has been confirmed just today with the release of theOECD Economic Surveys: New Zealand 2013.When you drill down past the spin what the Budget reveals is severe structural problems facing us. They are getting worse. National’s entire economic strategy is flawed. What we are doing as a country is digging ourselves ever deeper into an economic hole. The current path National has New Zealand on is clearly not working. As the saying goes if you find yourself in a hole it is time to stop digging. But despite the worst economic performance of New Zealand in the last 50 years National is doing just that. The one answer it has to our economy is literally to dig more holes.Why would you pick fossil fuels and digging more holes and drilling more wells as your one industry to save the economy? It has got the fourth-lowest royalty plus tax rate in the world. There are pages and pages of tax exemptions and data out today shows that the Government is currently spending $46 million subsidising fossil fuel production and exploration in New Zealand. The Government literally called out the navy when iwi and protesters got in their way and it changed the laws at the behest of foreign offshore oil companies. I remember when the National Party used to talk about “one law for all”. Now what we hear from the National Party is “one law for oil”. That is what we hear. It is another egregious display just like the shameful Skycity deal—another display of making crony capitalist decisions for its mates.The question the country should be asking is why you would pick fossil fuels and digging more holes as your winner and why you would subsidise it because it is entirely a gamble. The Government cannot guarantee there is any oil there. We know that the hypothetical oil is likely to be deep at sea. The only way it is ever going to be economically feasible to extract it is if the oil price is high. If the oil price is high what we know is that every US$1 price rise in the barrel of oil wipes $40 million to $60 million off New Zealand’s GDP. Given that we still import two-thirds more oil than we export if the oil price is high we should be thinking about oil reduction plans not oil dependency plans. Unlike most other Governments militaries councils and businesses around the world this Government has got no plan to reduce our dependency on oil. It has got no plan to even start planning. The only plan it has got is a $12 billion borrowing binge for motorways and $46 million subsidies for oil drillers. It is the only plan it has got.The Government is not suggesting Kiwis are going to pay any less at the pump if we find more oil. It is not a smart sustainable area to focus on. We know it is job-poor. We know the profits are going to flow offshore; the Government’s own reports are saying 90-plus percent. We know it is unsustainable and there is still no plan for what happensonce you have used up the oil or drilled it. It is inconsistent with taking climate change seriously. Even the International Energy Agency says that we cannot even burn 70 to 80 percent of the oil we already know about without the Government going and trying to subsidise people to find some more down in the depths of the ocean. It is a last century approach to economic development and it is the same type of thinking that got us into the mess we are in right now. It is a model based on resources on commodities and on being a price-taker not a price-maker. It is about not being able to influence our country’s economic destiny. It is a gamble that someone will find something down there and they will not leave too much of a mess as they extract it and that maybe we will clip the ticket somewhat as they send the profits offshore.New Zealand is always going to lose under this strategy. If you look at the other legs of the National Party’s plan—dairy intensification and more mining—New Zealand is always going to lose out if we are trying to race Uruguay to cram more cows on a paddock. We are going to lose if we are trying to compete with China to see who can drill more holes in the ground and compromise our environment. We are always going to lose in New Zealand if we are racing to trash our environment faster towards economic growth.Another option of course is to look to the future. It is to have a plan around what is coming in the next century—the century we are in not the last century. It is to look at the markets and where international capital investment is heading. It is to focus on what Sir Paul Callaghan said was our strengths our niches. It is to focus on a smart green strategy that is going to build a richer New Zealand. Our strengths are in technology. They are in clean energy in a pure New Zealand brand that sees a premium paid when we export our products around the world. In 2011 Bloomberg reported that international capital investment in renewables outstripped fossil fuels. That is where the smart money is heading. That is where New Zealand should be looking not at making more holes in the ground.Do not get me wrong. I have got nothing against digging holes in the ground. In fact I would not mind digging a few—just some holes with a smarter rationale. I mean I would like to see the Government dig a trench to have a second internet cable to link New Zealand to our markets for resiliency for competition benefits and to support our thriving information and communications technology sector. I mean this is a $23 billion industry that you know has grown by $3 billion in the last year alone. Over the same period our oil imports have been down and just today the same OECD report that I referenced said that New Zealand’s high-cost low-speed internet is slowing us down. The Government could do more to support the sector. From greater education apprenticeships scholarships procurement removing patent software and a second internet cable there is a lot the Government could do. This is a much smarter future for New Zealand because there is virtually no limit to the amount of software or information and communications technology services we could be exporting around the world but there is a limit to the amount of cows we can cram on a paddock or holes we could dig.I would also like to see another hole dug this time in the Auckland central business district. A central business district rail link for Auckland will transform our biggest city’s public transport network. It is going to unclog it. It is going to benefit motorists primarily and it is going to help supercharge our biggest city. I think unclogging our biggest city’s transport and reducing the $8 billion fuel import bill is a smart way.Thirdly I want to see a power system that works for Kiwis for Kiwi businesses not for excessive profits. Every year hundreds of millions of dollars are taken out of Kiwis’ pockets and businesses’ bottom lines and we see excessive profits from the so-called market which is acting like a huge stealth tax on our economy. Over the last 70 yearsour electricity prices for families have risen by 70 percent in real terms while across the rest of the OECD their prices have dropped 6 percent on average. That is why we have put out the NZ Power plan—to give Kiwis a choice.What we are seeing is a real choice. Under National there will be more price rises more excuses and more assets sold. Under the Greens and Labour what you are going to see is cheaper greener power and Kiwis saving $300 a year. NZ Power is also going to deliver cheaper greener electricity in a market that is more innovative smarter and ready to take on the challenges. Growing clean-energy exports is where the smart money is. That is where international investment is going. That is where the Pure Advantage group of business people say is a $6 trillion global green energy cleantech sector that New Zealand could get a slice of. It is what PricewaterhouseCoopers says is a $22 billion economic opportunity for New Zealand. That is where we should be looking—not towards the past not towards oil drilling and drilling more holes and more fracking mining and drilling for New Zealand.In summary we have got a great number of choices facing our country a huge number of strategic economic challenges which are not being addressed by the Government with a single-minded media-friendly focus on just the deficit. What we need to do is look to the future not to the past. It is to look at where we can develop our economy. It is to look to things like the technology sector. It is to look at growing green exports and clean energy. It is about the “100% pure New Zealand” brand. Aotearoa’s future is not looking to the past; it is looking to the future. Kia ora.