Chauvel Charles: Budget Debate 
Chauvel Charles: Budget Debate 
[Volume:663;Page:11616] 
CHARLES CHAUVEL (Labour) 
: 
 Policies that ensure a truly brighter future need to embrace economic social and environmental policy as equally important components rather than as competing considerations. Two weeks ago Bill English stood opposite and gave a 45-minute speech about tax. But switching indirect for direct tax is not an economic policy. Throwing together spending and revenue assumptions based on growth projections that will just disappear if God forbid the global financial crisis is not truly over is not an economic policy either. Cuts in real terms to research and development spending education and health spending do not make for social policy. 
Those were not the worse things about the Budget. Bill English proved last week that he and the Government in which he serves are truly anchored somewhere back in the 20th century when in his entire 45-minute speech he did not mention the environment even once. The Government’s rhetoric continues to set up the false distinction between the environment on the one hand and the economy on the other. We saw that as recently as this morning in remarks made to the EDS conference in Auckland by the Minister for the Environment. The reality is that only by starting that transition to a lower-pollution economy now can we ensure ongoing prosperity in the future. The warning signs are there for anybody who cares to see them. We had the KPMG report last month which warned that our farmers’ efficiency will be surpassed by those of developing countries like Uruguay in fewer than 5 years’ time if we do not provide farmers with the means and the encouragement to really innovate. 
Many of our leading business people have already called on the Government to promote cleantech investment but at the same time the Hamilton-based BioVittoria company can raise only $8 million on-shore of the $20 million it needs to commercialise its brilliant zero-calorie fruit-based sweetener. Those sorts of initiatives are the ones in which our future prosperity lies but they cannot get funding on shore. Our trading partners are starting to build border tariff provisions into their domestic trade and climate change legislation to deal with imports from countries and jurisdictions that do not price greenhouse gases and carbon or do not do so adequately. There is very high environmental awareness amongst inbound tourists and the purchasers of our goods in affluent off-shore markets. But 2 weeks ago Bill English turned a deaf ear to all those concerns and to all those signs. 
Research and development to promote innovation reduce primary production emissions and support the cleantech industries we all know are the path to future sustainable prosperity should have been the priority in the Budget. But the Budget resulted in an almost complete absence of new business research and development spend. Why is that? It is because businesses will get assistance to conduct research and development through vouchers and grants—Government handouts in other words. In comparison the tax credit that the Labour-led Government put in place would have more than doubled New Zealand’s business research and development spend over its first 4 years. It would have provided a heavy incentive for businesses to invest in research and development rather than just get the handouts that members opposite are so used to asking for from the Government. Predictions remain that that spending will just be static under this voucher policy put in place. 
It was a massive missed opportunity to increase our business research and development spend which is woeful when compared with other like-sized countries. National’s decision in 2008 to axe the 15 percent tax credit for research and development is one that we will live to regret at our leisure. Bill English was obsessed about the possibility of tax credits being gamed but Treasury thought it could close those loopholes. That is exactly the approach that the Australians themselves took to research and development in their Budget only a couple of weeks ago—closing the loopholes rather than cutting off the incentives through the tax system. That is why the Government should have kept the research and development tax credit system. 
There is another absence of investment in the Budget in the cleantech area. Again this contrasts poorly with the record across the Tasman last month. Australia despite its much greater mineral wealth than here recognised the importance of cleantech investment as a source of future prosperity by providing a decent amount of Government support for it. Some of our most innovative business leaders have been urging those members opposite—John Key Bill English and their colleagues—to recognise the urgent importance of future-proofing our economy by making a similar investment and what a tragedy it is that those calls have been ignored. 
The plain truth is that this Government has no sustainable vision for New Zealand’s future. Its actions show that its only strategy is to promote more intensive food production and more intensive minerals extraction by getting it out of the ground shipping it offshore to be consumed and hoping that that helps to fix the balance of payments deficit. On the way the Government wants to shift as many costs as possible on to the taxpayer and away from polluters themselves as they intensify their production or their extraction. Never mind the environmental consequences or our international reputation. Never mind whether the allocation of risk is fair between taxpayers and offshore businesses. Never mind if the profits stay in New Zealand to be invested in our future here. 
If the Government was not willing to invest in new environmental initiatives then at the very least it might have compensated for the cuts it made in last year’s Budget. The Budget documents contain no new initiatives to make up for the funds taken from Vote Environment or Vote Conservation last year. There is nothing to restore great initiatives like Enviroschools which had its funding slashed. There is nothing to make up for cutting any encouragement for Government accounting for one-third of this country’s economic activity to work in a carbon-neutral way. It is instructive that all Kate Wilkinson’s press release about the Budget could do was trumpet the building of cycleways and walkways. She failed to mention that there is no new investment here. The Department of Conservation is expected to find funding for these initiatives out of its existing budget. 
There is no new funding for conservation or for energy efficiency outside of money already announced to meet the increased demand for home insulation by the Warm Up New Zealand scheme which itself is a reworked version of Labour’s home insulation scheme. That was one of Labour’s first complementary measures to be funded from the emissions trading scheme we put in place. National has replaced that scheme with a taxpayer-funded initiative worth less than half of what Labour legislated for with no guarantee of ongoing funding after 4 years. The Government needs to ensure that everyone has access to warmer drier healthier and more energy-efficient homes but there is no initiative in the Budget to ensure that this will happen. Adequate initiatives to encourage energy efficiency across the board like truly smart meters accompanied by the availability of differential tariffs are absent from the Budget. 
I will give a final word on the evident lack of commitment in the Budget to fulfilling our country’s climate change obligations. There is no money budgeted to pay for New Zealand’s contribution to the mitigation and adaptation funds which we agreed to contribute to at the Copenhagen conference. This contrasts with the A$200 million committed for that purpose in the Australian Budget on 12 May. Assuming New Zealand will need to make a comparable contribution on a pro rata population basis and on an exchange rate of 80c to the New Zealand dollar there is just under $50 million missing from the Budget on this score. There is no provision made for the elevenfold increase in firms eligible for a free allocation of carbon credits. The Minister for Climate Change Issues has fudged the figures but people will see through this. There is over $500 million carried forward to provide for the value of credits to foresters. Misleadingly the Government described this as payments to plant trees. The new figures are said to be based on a 67 percent uptake in credits rather than a previously forecast 50 percent uptake but no explanation is given for the change in assumptions. There is no provision for the financial impact of the emissions trading scheme after 2012. The excuse is that there are no international obligations after 2012. 
Hon Tau Henare 
: Boring. 
CHARLES CHAUVEL 
: Mr Henare thinks it is boring to talk about climate change and sustainability. Does he not show the true colours of this Government? He should speak up more; the country needs to hear more of this. Let us hear his commitment to the environment. Let us hear what he really thinks about the planet. The more that member is caught out on telling the truth about this Budget and its lack of commitment the better. 
This was an irresponsible Budget. It has no vision for a brighter future for New Zealand. At the next election New Zealanders will give their verdict on it. I am very proud to support Phil Goff’s amendment to the motion to read the Appropriation (2010/11 Estimates) Bill a second time.