Tanczos Nandor: Budget Debate 
Tanczos Nandor: Budget Debate 
[Volume:647;Page:16551] 
NANDOR TANCZOS (Green) 
: 
 Listening to this debate a person could be forgiven for thinking that the Labour and National Parties have only one speech each and that members are simply passing their speech notes down the line one to another. It is all very amusing but actually a bit of a waste of time particularly when even a cursory interest in the state of the planet reveals that we face having to make some very hard decisions if we do not want to completely betray our children and our grandchildren. So these proceedings have a bit of an air of unreality. I guess that that is not entirely unusual for this place but it is nevertheless embarrassing. 
Both the Labour and National Parties are procrastinating on doing something meaningful about one of the greatest challenges of our time—climate change. The Government’s proposed emissions trading scheme will now do nothing useful it seems until 2016. The National Party will do nothing useful until Australia does. If there is no action before 2012 that is too late. “What we do in the next two to three years will determine our future. This is the defining moment.” Those are the words of Dr Rajendra Pachauri the head of the Intergovernmental Panel on Climate Change warning Governments of the world to wake up. 
Climate change is only a part of it; water is under threat from over-extraction and from contamination both in this country and overseas. Food security escapes increasing numbers of people not just from the diversion of food crops to biofuels but from drought and these will increase with climate change and with the increasing global appetite for meat and dairy products—aggressively promoted by Fonterra. Twenty-nine percent of the world’s fish stocks have collapsed according to Steve Palumbi of Stanford University and the rate of decline is increasing even while the New Zealand fishing industry attacks any moves to cut quotas. Of course we are facing an oil-supply crunch in the next few years according to the International Energy Agency—a conservative forecasting body. Other organisations such as the Energy Watch Group say that world oil production has already peaked in 2006 and that we now face the inevitable decline in production at the same time as demand is rising in places like Asia. 
Where are the strategies to deal with all this? Where is the courageous leadership that this country so desperately needs to chart a way forward? Members of this House know as well as I do that that leadership is to be found only in the Green Party. There is no reason to think that we cannot build ways of living that are more meaningful—more connected and more socially emotionally and spiritually satisfying than the oil-addicted treadmill we currently find ourselves on—while meeting all of our material needs if not our greeds. But if we do not start planning and acting with some urgency we will have a very rough time. The big interest in this Parliament and in the corporate media—that of tax cuts—leaves me cold. Dr Cullen’s tax cuts or any that John Key might offer are not worth a fart in a gale force wind. 
There is one tax reform that would actually be helpful. That reform would be to tax resource throughput heavily while taxing labour and income less. New Zealand Governments have subsidised resource throughput in the past in order to stimulate growth. In fact that is what we are now proposing to do to dairy farming through the wealth transfer of the emissions trading scheme. That is what we do for Comalco with its cheap electricity rates and in the context of ecological degradation it is extremely unwise. It is time we stopped these cash subsidies and indeed it is time we started to remove implicit environmental subsidies as well. I have spoken before in this House on the use of pigovian taxes to internalise environmental externalities but they are difficult in practice. Professor Herman Daly of the University of Maryland and former senior economist with the World Bank instead recommends the blunter and simpler method of shifting our tax base away from labour and income and on to throughput. 
The present system is highly distortionary in that it signals business to shed labour and substitute more capital and resource throughput. It would actually be better to economise on throughput because of the high external costs of its depletion and pollution and at the same time to use more labour because of the high social benefits associated with reducing unemployment. In addition we must stop counting the consumption of natural capital as income. Income is by definition the maximum amount that a society can consume this year while still being able to consume the same amount next year. Natural capital is not income although we continue to treat it as a free and unlimited good. 
We have to devise a new set of national accounts: the genuine progress indicator. Green MPs have spoken about this in this House and elsewhere at length before. For poor countries GDP growth does increase welfare or is associated with an increase in welfare—at least if it is reasonably distributed. But the same is not true beyond a certain level of development—and we are well past that level in this country. The fetish that all parties except the Greens and the Maori Party have made of GDP growth is more akin to religious fundamentalism than it is to economics. Government policy should aim to maximise the productivity of natural capital in the short term and invest in increasing its supply in the long term. Due to Green pressure this Budget does contain some initiatives that increase resource efficiency. But for all of last year’s sustainability rhetoric negotiating those initiatives was like pulling teeth and although we are proud of them they are small fry compared with what is really needed in the world today. 
Finally Professor Daly recommends that we must move away from the ideology of global economic integration by free trade by free capital mobility and by export-led growth. We have to develop a different orientation; we have to promote domestic production for internal markets as the first option. International trade should only play a part where it is clearly and significantly more efficient. That does not mean that it is just cheaper because the price is subsidised through poor environmental standards or poor labour standards in developing countries; it means where it is genuinely and significantly more efficient. To paraphrase Rod Donald—and I think he got the original quote from Tim Hazledine: “Trade is the spice of life but not the basic proteins and carbs of a healthy national diet.” 
Both the Labour and National parties are committed to an entirely different direction—one where sustainability is a clip-on and where the environment will always come second. For all their pungent verbal pugilism they are really just two sides of the same coin.