Brown Peter: Questions for Oral Answer — Questions to Ministers 
Brown Peter: Questions for Oral Answer — Questions to Ministers 
[Volume:624;Page:19151] 
4.  
PETER BROWN (Deputy Leader—NZ First) 
 to the  
Minister of Finance 
: How much have all forms of taxes and levies gone up on each litre of petrol since the Government was elected in 1999 and does he have any concerns for the impact this is having on businesses and those on fixed incomes? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 They have increased 6.9c a litre to date excluding GST but including the increase of 2.78c a litre in the accident compensation levy. Beneficiaries and superannuitants are compensated annually for increases in the cost of living. In just over 2 weeks of course hundreds of thousands of New Zealanders will be better off as a result of the Working for Families package. 
Peter Brown 
: Is the Minister confident that an elderly single person living on a relatively low fixed income of $250 a week is compensated for what amounts to massive rises in the cost of fuel for their vehicle? 
Hon Dr MICHAEL CULLEN 
: Yes and of course the variability in prices due to international oil price movements is much larger than the variability due to taxation changes. It is worth noting however that the proportion of the price represented by taxation in New Zealand is the fourth lowest out of 29 OECD countries. 
John Key 
: Which of the following necessitates the introduction of yet another tax: the $7.4 billion operating balance excluding revaluations and accounting changes surplus; the $34 billion of additional taxes collected in the last 5 years; or the cancellation of the January bond programme just to demonstrate that the Government is so awash with cash? Which of those three would it be? 
Hon Dr MICHAEL CULLEN 
: I note from that last comment that the member has forgotten he is now a New Zealand person not an international financier. We try not to borrow money unnecessarily in New Zealand. 
Deborah Coddington 
: Why should any taxes be going up when just last week the Minister reported an operating surplus for 7 months running at $5.3 billion—that is $2 billion more than the previous year—or is this surplus like the proverbial elephant in the Minister’s living room that everybody else can see but that he says is not there? 
Hon Dr MICHAEL CULLEN 
: I think my wife can confirm that there is no elephant in our living room. 
Keith Locke 
: Does the Minister agree that the money from the extra petrol tax will greatly benefit the people on fixed incomes and the businesses that Mr Brown is so worried about by improving public transport so that both people and goods can move quickly and more cheaply around our cities? 
Hon Dr MICHAEL CULLEN 
: All of the increase in the excise duty goes into the land transport system. A good part of that will go into public transport; other parts of that will go on the roading system. Unfortunately of course the economy is moving so strongly that we are seeing strong rises in the construction cost index at the present time. On the other points a number of members have raised I wish in a sense that they were in my position at the moment of trying to make the Budget numbers add up for the long term. 
Peter Brown 
: Is the Minister telling this House that low-income people particularly people on fixed incomes are as well off now as they were a few years ago when it comes to public transport or running their cars—is that what he is telling this House? 
Hon Dr MICHAEL CULLEN 
: What I can say is that the cost of petrol has gone up and down considerably. In real terms the cost of petrol now is significantly lower than it has been on many occasions in the past. [ 
Interruption 
] Mr Power cannot remember but if he had been here in the 1970s as an adult he would remember when prices were extremely high indeed—if one could get hold of petrol at that point. 
Larry Baldock 
: Does the Minister find any contradiction in statements from a member of this House who on one day calls on the Government to action the Allen report which states: “Broadly speaking the overall conclusion from the analysis is that: the current level and pattern of investment in New Zealand’s land transport infrastructure is sub-optimal” and then complains about the Government raising funds to do exactly what the Allen report recommends; if so perhaps the Minister is left to conclude that the member wants the Government to borrow all the money spend it on roads and then not figure out how to pay for it? 
Hon Dr MICHAEL CULLEN 
: I think the member is right. Members should remind themselves that last week the Reserve Bank followed the well-trodden path that Dr Brash had been down previously by raising interest rates. The notion of feeding more demand into the economy with tax reductions at this point is about as insane as one could get in terms of economic management. 
Keith Locke 
: Does the Minister agree that in this area of the price of energy the main threat to us comes from the longer-term increase in the price of oil which even the Minister of Energy says could double and that investing now in rail bus and ferry transport is the way to secure our economic future and protect our environment? 
Hon Dr MICHAEL CULLEN 
: I think we need a balanced approach. We do need increases in public transport but we also need to recognise that we have to use road transport particularly for freight purposes. Most people will not shift their containers on buses or by bicycle in the future. 
Larry Baldock 
: Does the Minister stand by the answer given to my question to the Hon Pete Hodgson last Thursday that over $600 million is paid each year for the ongoing health and social costs of road accidents that are not covered by accident compensation and a further $400 million from health costs arising from air pollution; if so would he care to repeat the answer for the benefit of Mr Brown and other members of the House who seem to have not heard that answer last week? 
Hon Dr MICHAEL CULLEN 
: It is absolutely clear from the information now available in the public arena that the excise duty on vehicles does not cover the full economic cost of the roading system and associated costs in terms of the environment and health. 
Ron Mark 
: For the benefit of the people in Wanaka who were at the A and P show over the weekend can the Minister tell the people of Wanaka where the equity is in their paying $1.35c per litre down there in the South Island whilst people in Auckland—the privileged part of the country where the Prime Minister has a greater interest—pay 15c or 20c less per litre yet most of the money is going up into good old Auckland’s coffers? 
Hon Dr MICHAEL CULLEN 
: I do not want to offend the Prime Minister but I would certainly pay 15c per litre more to live in Wanaka rather than in Auckland.