Baldock Larry: Injury Prevention Rehabilitation and Compensation Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Baldock Larry: Injury Prevention Rehabilitation and Compensation Amendment Bill — Second Reading 
[Sitting date: 19 June 2003. Volume:609;Page:6441. Text is incorporated into the Bound Volume.] 
LARRY BALDOCK (United Future) 
: 
 The purpose of this bill is to bring into effect announced changes in the petrol levy. Because petrol usage takes into account the amount of time the vehicle is being driven it roughly corresponds to the consequent degree of exposure to risk of injury. The Government announced in December 2002 that for the 2004-05 levy year the petrol amount will be raised from 2.3c per litre to 5.08c per litre. The reason for the increase is that the Accident Compensation Corporation motor vehicle account has recently faced a significant cost increase and the Government is legally required to collect enough levy to meet those costs. Although the number of fatalities has declined this has had the perverse effect of increasing the medical and rehabilitation costs for those who survive but sustain serious injuries. United Future supports meeting those costs for those who have suffered serious injuries and in no way wishes to deny them the best quality of life they can have. 
The other practical option for raising the necessary levy is to increase the annual vehicle licensing fee. However the Government considers that this has already reached a level whereby any further increase could have adverse social consequences. In the Government’s view the only practical and equitable solution is to increase the petrol levy. 
United Future does not fault the Government’s reasoning. We accept that the increasing costs faced by the Accident Compensation Corporation need to be met. As I have said we support giving quality care to those who suffer from accidents. We also accept that the increase in the petrol levy is the most equitable way of achieving this. However this runs counter to United Future’s view of the wider transport policy. Our view has been expressed many times by myself and my colleagues in this House. United Future cannot condone a further unnecessary increase in the tax burden already borne by New Zealand motorists. We already pay more than $1.7 billion in petrol excise duties road-user charges and motor vehicle licensing fees. Too much of this is siphoned straight back into the consolidated account. It is not spent on accident compensation and rehabilitation roads or anything else that is directly transport related. 
If one looks at the petrol excise duty alone one sees that the 18.5c per litre collected from the motorist at the pump goes straight back into the Government’s coffers with all other revenue. Currently 2.3c per litre is collected for accident compensation and is given directly to the Accident Compensation Corporation. The Government wants to increase this amount to 5.08c. That is fair enough. We like the idea that a tax is used in such a direct way for the purpose for which it was collected. 
In fact this is the point that United Future has been trying to make for some time: these taxes should be transparent and should be used for the purpose for which they were raised. Why can we not apply this same logic to the rest of the excise duty? It is supposed to be used for transport-related costs such as roads. For the purposes of this bill why can the Government not take this increase in the accident compensation levy from the 18.5c per litre that it already takes from the motorist at the petrol pump and diverts into the consolidated account? The Government should do that particularly in the light of the huge Budget surpluses it is currently running. Why not simply reduce the amount diverted into the consolidated account from 18.5c to 15.7c? 
Perhaps this could even be a precursor to our returning to the motorist in the form of transport-related benefits all the funding currently collected at the pump. That would be a policy that United Future could support. The Minister of Finance has indicated recently in answer to questions in the House that some work is being done—by Treasury I imagine—on trying to justify this money being taken from the fuel excise tax and put into the consolidated account. I have to say that United Future is open-minded about looking at the results of the research that is being done; if there is a good case for some of that money being taken and used in general expenditure by the Government we will be willing to accept that. But I do doubt seriously that it can justify the 18.5c being siphoned off into the consolidated account. 
At a time when New Zealand’s economy is said to be under pressure from external factors and from national infrastructure deficiencies is this really a good time to siphon an extra $75 million off the regions? Because that is what this bill does. Based on average levels of fuel consumption it will cost Canterbury an extra $10 million per year the Bay of Plenty $7 million Otago $4 million Wellington over $8 million the Waikato $10 million and Auckland $8 million. And all the time the Government is running Budget surpluses. Where is the sense in that? 
Jeanette Fitzsimons a co-leader of the Green Party in her first reading speech—after Peter Brown from New Zealand First and I had made this argument about money being siphoned off the regional economies—claimed that that was a very poor debate. I think that is what she said. I shall quote: “It goes back to the people who work in the treatment and rehabilitation systems in the regions and that provides economic development in the regions. Roads and motoring are not the only things that boost the economy. All the other services such as health services and care and rehabilitation also boost the economy and it is a completely shallow argument”—that is what she said—“to say that this money is being siphoned off somewhere never to appear again and never to play any useful role in the economy.” 
Well I would be the first to admit that these service industries—health services and care and rehabilitation—do play an important part in our communities and to some extent in our economies but that comment of Jeanette Fitzsimons reveals how little she understands about how the economy works and the importance of the producers in the economy and of service industries. Roads and motoring play a very very important part in the economic base of our industries of our businesses across this country. Having efficient and safe roads for them to operate on and for our freight to move around on is a key ingredient in gross domestic growth in this country. It is not the same as hospitals and health services and care and rehabilitation. If we take money away from those who are providing economic growth and give it to those who are simply providing services our economy will begin to shrink. So I do not accept her comment that it is a shallow argument; it is a very good argument to make and I believe that it is one that we need to continue to make until this Government acknowledges the desperate need we have to improve our roading infrastructure. 
Jeanette Fitzsimons mentioned in her speech in defence of the Government’s siphoning money off the excise tax that virtually every developed country in the world taxes fuel and motoring for general revenue. That may be true but I suggest that virtually every developed country already has a very well-developed roading network throughout its country. If our roads were in tip-top shape if our transport was running around without congestion problems then perhaps using some of the tax revenue from fuel excise for other purposes might be justified. But it is not justified to do so when we have such a huge transport deficit in this nation. We have been underspending on our roading network for the past 20 years and that is why we are in the current situation. 
In conclusion I shall make one further comment about Jeanette Fitzsimon’s speech. She said at the time that the Greens gave support to this bill on its first reading: “We hope that we will make some improvements at the select committee to take the bill further in some directions where it has started in a small way but not gone far enough. One simply cannot avoid a levy on fuel. People either buy fuel or they do not. So we are disappointed that we have taken only a small step in that direction.” At that point I looked forward with some confidence and some expectation that when the bill was reported back from the select committee there would be a number of changes—that there might be a reduction in the cost of registration in exchange for what is being put on at the petrol pump. But as I look at the bill today I find there are no changes like that at all. The Greens have continued to give their support for this increased tax on the motorists of New Zealand without their getting any of the changes they said they were hoping to gain. Therefore I am disappointed that the Greens are supporting a tax on the motorist—and this tax is being put on simply because of the Greens' support. United Future makes it clear that we do not support further taxes on the motorists of New Zealand until our roading network is improved.