Copeland Gordon: Customs and Excise (Motor Spirits) Amendment Bill — Second Reading 
Copeland Gordon: Customs and Excise (Motor Spirits) Amendment Bill — Second Reading 
[Volume:623;Page:18417] 
GORDON COPELAND (United Future) 
: 
 The previous contribution to this debate from the Hon Ken Shirley laid stress on the fact that the Labour Government has been in office for 6 years but has done nothing much about roading. I remind the House that that situation could have been a lot worse if it were not for the fact that in the confidence and supply agreement United Future negotiated with the Labour-led Government after the 2002 elections one of the four things we asked for was that the Government make a commitment to the decongesting of New Zealand’s roads and get on and start to upgrade them. So members can imagine how much worse the situation might have been had we not come into Parliament in 2002. 
Having said that I also say that this bill puts United Future into something of a dilemma. On the one hand we are committed to the upgrading of New Zealand’s land transport system and we acknowledge the need for greater investment. It is obviously needed and it is vastly overdue. I refer to the fact that members of both the National Party and the New Zealand First party criticised the bill and said they would oppose it. However none of them bothered to tell us what they had done for New Zealand roading during the period 1996 to 1999. The reason is that they did very little for roading and we are now all living with the consequences. Congestion in Auckland is costing the country a billion dollars a year and we need to fix it. Therefore the bill to the extent that it is taking a step in that direction will have our support. 
On the other hand however we believe that the overall level of taxation levied on New Zealanders is already too high. From that point of view we have very real reservations about the additional 5c per litre excise impost that will arise from this bill. Accordingly in line with submissions received on the bill from Federated Farmers we believe that the increase should be offset by a reduction in personal income tax rates. United Future has been saying for about 2 years that the present tax thresholds should be adjusted to offset the increase in the cost of living for New Zealand households since 2000. That cost of living increase will be about 13 percent by 1 April this year. Accordingly an adjustment of that sort needs to be made to the thresholds in this year’s Budget. As others have mentioned last year I brought a Supplementary Order Paper to this House asking the Government to do that but it turned it down. If again the Government fails to do so in this year’s Budget then it is clear that it is intent on perpetuating a double standard. When it comes to revenue collected by way of excise duties on tobacco alcohol and now motor spirits the Government insists on inflation-proofing by increasing the rates as a result of the annual increase in the consumer price index. However at the same time it has failed to use the movement in the consumer price index to adjust the tax brackets. It is a clear double standard and it is not good enough. 
The people of New Zealand are crying out for a reduction in income tax. The average family is indebted as never before. All we are doing and all this Government is doing is laying yet more burden on families. This bill will be the seventh occasion since Dr Michael Cullen assumed the finance and revenue portfolios that duties levies or taxes have been adjusted upwards. But we are yet to see adjustment to the income tax rates which is clearly justified and way past due. Quite frankly the United Future caucus has found it difficult to resolve this dilemma. In the end we have decided to support this bill at its second reading whilst at the same time endeavouring to keep the pressure on the Government for tax reductions in this year’s Budget. 
In the end the pressing need for additional expenditure on land transport—the issue we are debating today—has won out. Indeed the Finance and Expenditure Committee received an impassioned plea from Roading New Zealand that the 5c increase not be delayed beyond 1 April 2005. Roading New Zealand made it very clear that the group of contractors who build and maintain New Zealand’s land transport infrastructure—a group that employs around 7000 people and has a combined turnover of more than $1.5 billion per annum—has already geared up to get on with road works. In its view it would be unfortunate to say the least if that momentum was slowed down in any way. For example Roading New Zealand has already invested heavily in road-building machinery and the like and has taken on hundreds of extra staff members some of whom are in quite long-term training programmes so that it can get ahead and build the roads so desperately needed in this country without further delay. 
As a party United Future has worked very hard over the last 2 years to up the tempo in that regard and we are naturally reluctant to see it interrupted at this critical juncture. For example we extracted undertakings from the Government as part of the $1 billion Auckland funding package over the next 10 years to reduce the diversion of motor spirits excise duty to the Crown bank account by about 2c per litre commencing this year so that those funds are made available for the desperate need we have in Auckland for new roading. We look to the Government to follow through and implement those undertakings—something that has not happened yet—but we will also continue to argue strongly that the diversion should be decreased by a further 3c to 5c as a kind of dollar for dollar matching alongside the increase in excise duty proposed in this bill. In other words we are suggesting that if it is good enough for the motorist to put in an extra 5c it is good enough for the Government to make room for that as well and to leave more of the funds that are collected for excise duty from motorists dedicated to roading works. It is rather like the system that the Government used in the tsunami disaster and in last year’s February floods—a dollar for dollar subsidy. That again is something United Future had a hand in. It came forward with that suggestion and it was adopted by Government. So we are looking to the Government to at least match the contribution that is being been made by New Zealand motorists and other road users. 
I also want to signal strongly that United Future is fed up with waiting for the Minister of Transport to issue the long-awaited surface transport costs and charges study which has been promised now for around 18 months. When will that study be completed and made available to members of the public? The Government consistently claims that the diversion of excise duties to the general Crown bank account is justified when one takes into account the costs of health policing etc. that arise directly from the use of New Zealand roads—the accidents that occur on them the policing of them and all those sorts of things. 
The Government promised 18 months ago that we would have a report on a study—one with the lengthy name of Surface Transport Costs and Charges Scoping Study for New Zealand—that would indicate to this House and to the people of New Zealand exactly how that money which was diverted from the roading account into the Crown bank account is used for roading. The Government believes—and has said it is confident it is the case—that it is all used for roading. Well it is time I tell the Minister of Transport tonight that we see that report. He should be in no doubt that our patience and the patience of the Automobile Association Federated Farmers and even the National Council of Women all of which made submissions on the bill to the Finance and Expenditure Committee is beginning to wear very thin. We have been waiting for this report now for 18 months and we have not seen it. In response to repeated requests to the Government both here and during question time in the House and around the select committee table we are just told that it is being done and will be issued as soon as possible. How long does it take for a study such as this to be done? 
As well we look forward to seeing some progress being made on roading issues outside Auckland. Here in Wellington the big issue for me and for other local MPs is whether the Transmission Gully Motorway will go ahead. We are hoping that a decision can at long last also be made on that within a couple of months. Part of the 5c a litre will go into that kind of project. 
However I would like to say to the Government tonight: “Please don’t take our support on this issue for granted.” We want to see the tax brackets adjusted for inflation we want to see the 2c reduction in the excise duty to the Crown account gazetted and we want to see the surface transport costs and charges study completed and publicised as soon as possible. I hope that our good faith in that regard is not misplaced. On that basis we signal tonight our support for the second reading of the Customs and Excise (Motor Spirits) Amendment Bill.