Norman Russel William: Debate on Budget Policy Statement 
Norman Russel William: Debate on Budget Policy Statement 
[Volume:661;Page:9551] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I start today by acknowledging the passing of Bevan Tipene-Matua who was a leader within the Green movement and within Maoridom. He will be sadly missed but well remembered. 
Today we are talking about the Budget Policy Statement. The Green Party would like to address the six pillars that the Government has put forward within the Budget Policy Statement but before we do that it is important to understand the context within which we approach the Government’s Budget. For us the objective of economic policy is to achieve prosperity for New Zealanders while at the same time cutting our use of natural resources and cutting our pollution. We need prosperity while restoring and protecting the integrity of ecosystems and that is the definition of sustainability. 
The Government has put forward six pillars the first of which is investment in infrastructure which actually means roads. The Government is saying that it wants to spend about $20 billion on motorways over the next 10 years and that it wants to borrow the money in order to do it. This is Steven Joyce’s think big project. It is a project that takes no account of the two giant issues that are currently facing the world. Those two giant issues are climate change and the end of cheap oil. This project is in total denial about the two greatest realities facing the global economy. Roads mean more greenhouse gas pollution more oil dependency more obesity and more air pollution. The Auckland state of the environment 
report was released yesterday. It showed that there was a 9 percent increase in kilometres travelled by car in the years 2004 to 2008. That is an extra billion kilometres. Health costs have been $547 million a year as a result of that road usage. 
The problem we have is that the oil import costs on New Zealand are dramatic. The last time the oil price peaked in 2008 it had a massive impact on New Zealand’s balance of payments figures because it had a big impact on our trade balance. If we do not reduce our dependency on oil then we will face exactly the same problem as oil prices go up again. We will find ourselves having to work harder and harder in order to pay for the oil that we import. Last time virtually the entire exports of the tourism industry were required to pay for our oil imports so a strategy that makes us more dependent on oil imports by investing in motorways is a pretty stupid strategy. 
Last year the executive director of the International Energy Agency the international body we all pay to predict future oil prices stated: “I can’t rule out the possibility of an oil supply constraint in 2013 and 2014.” In December 2009 the International Energy Agency which employs the international experts whom this Parliament pays in order to predict the future prices of oil stated in its oil market report that there are two demand scenarios in front of us. One is an oil demand growth of 1.4 percent for 2009-2014 which would give us an oil crunch in 2014. The agency also stated that semi-recessionary growth which would be growth of only 0.5 percent globally per annum would postpone the oil crunch to some time after 2015. The International Energy Agency is very clear that we are facing an oil price shock. 
The chief executive of the Total oil company recently stated that the oil price would rise to more than $145 per barrel on the concern that supplies may fall short as early as 2014. The spokesperson for the chief executive officer of Total stated: “We are running the risk of another oil crisis when demand outstrips supply around 2014 or 2015. There won’t be enough oil and gas by the middle of the next decade.” 
Although oil is getting more expensive and all the experts we pay to give us advice on it are telling us that the price of oil will increase dramatically over the course of the next decade we are borrowing money to invest in infrastructure that will make us more dependent on oil. Although the price of emitting greenhouse gasses will only increase as price is factored into the international market in greenhouse emissions we are building infrastructure that increases our greenhouse gas emissions. In fact we are borrowing money to build the infrastructure that will result in increased greenhouse gas emissions. Although congestion is a major cost for our urban centres we are building the infrastructure that induces greater road use and moves the congestion to another point in the road system. Only an investment in buses trains ferries cycling and walking can solve the transport problem as everyone who has ever done any study in transport knows but instead we are borrowing $20 billion over the next decade in order to invest in the one thing that we know does not work which is brand new motorway projects. National has a think big motorway building project as had Labour before it and it will end in tears like the last Think Big project did. 
The second pillar that National has talked about is regulatory reform which means leaky houses. The last time the ACT Party types did a job on cutting red tape in New Zealand they came up with a thing called the Building Act 1991 which was laissez-faire legislation saying that one could build whatever load of rubbish one liked. The cost for fixing up the leaky houses that resulted from the last attempt to cut red tape in New Zealand which we are currently facing is somewhere between $11 billion and $22 billion depending on whom we read. In terms of GDP that is a cost comparable to the devastating earthquake in Chile. 
Somewhere over 10 percent of our GDP will have to be spent on fixing up what happened the last time we let ACT Party types decide what regulations should govern the Building Act in New Zealand. It was tremendously expensive. The ACT Party types got rid of the rules that stated that a builder needed to know how to build a house that would keep out the rain. They said that was the nanny State and that they would get rid of that rule. That was in 1991 under the previous National Government and the policy was developed under the Labour Government that came before it. The ACT Party types got rid of the rules stating that the external cladding had to keep the rain out because they said that a rule like that was clearly an example of the nanny State—it is a nanny State rule that says our houses have to keep the rain out! 
The ACT Party types got rid of the rule stating that the framing needed to have a bit of boron treatment because they said that was a nanny State rule. Some of those in the National Party who promote the idea that it was the greenies who promoted that move need to know that it was decided by the New Zealand Standards Council where the timber industry had a majority vote over the researchers who opposed the change. In fact it was a result of the deregulation coming through the New Zealand Standards Council on which the timber industry had a majority. They got rid of the rules stating that buildings have to keep the rain out because they thought that it was nanny State. 
Tens of thousands of New Zealand households are today having to wear the pain as a result of the last time a National Government deregulated the building industry. So when the ACT Party types put up their ideology around regulatory reform I ask members to remember that it could again cost us $22 billion with thousands of families living with the heartache pain debt and illness that results. That is all due to the Rogernomes in National and in Labour before that. 
Let us look at another pillar that is being proposed here: tax reform. In tax reform the Government is proposing to cut the taxes paid by the top earners and to pay for that tax cut by having an increase in GST which will fall on those who have the least money. The fiscal difficulties that were created by Labour’s round of tax cuts just before it left office and by Labour’s failure to deal with the housing bubble are real; there is no question about that. But what the Government is proposing to do about them will not fix them. 
We actually need thoroughgoing tax reforms—such as a capital gains tax that excludes the family home which would make a difference because it would be highly progressive it would fall more on the wealthy than on the poor it would broaden the tax base and it would drive investment away from the housing boom. That would be an important and significant tax reform we could make not to mention putting serious prices on carbon and on water which would drive the economy to be more efficient in its production of carbon and in its use of water. 
We need to move our economy in a sustainable direction. We need to reduce our use of resources and production of pollution and unfortunately this Budget Policy Statement fails to do that. The only good thing about it is that it is not Don Brash’s policy statement so dog-eat-dog is not its central thesis but it does not have a lot of vision. 
The world is changing and that is the reality we face. It is constrained in resources and it needs to cut its pollution. That creates fantastic opportunities for new businesses in New Zealand to make a prosperous living out of New Zealand living up to its reputation for being green and for being smart. Once again I encourage the Government to start to steal our ideas rather than to steal the inheritance of future generations.