Genter Julie Anne: Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill — First ReadingText is incorporated into the Bound VolumeGenter Julie Anne: Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill — First Reading[Sitting date: 11 June 2013. Volume:691;Page:10991. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green):Tēnā koe Mr Speaker. Tēnā koutou e te Whare. Good morning. It gives me great pleasure to speak on behalf of the Green Party on the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. The Green Party will be supporting this bill going to the Finance and Expenditure Committee. It would like to congratulate the Government on taking a very small but not insignificant step to improving the fairness of our tax system by removing some of the favourable tax treatments that have existed for the mining industry which may well be worth $30 million. It is a nice change to see the Government actually moving towards fair tax treatment particularly for an industry like mining which we know is a favoured industry of this Government.However the Government does not completely level the playing field. It is still picking winners. My colleague the Hon David Parker mentioned the recent report from the OECD theOECD Economic Surveys: New Zealand 2013 . What the OECD found was that the use of environmental taxes in New Zealand is very very low by OECD standards. Their increased use would enhance the quality of future economic productivity growth. And the OECD recommended the creation of a sovereign wealth fund as Norway has to manage any mining royalties much more equitably. The OECD has found that mining royalties and access charges are still extremely low New Zealand as is the carbon price signal.The Greens have in our taxation policy a number of principles. Basically we think that taxes should come from a broad base to avoid excessive reliance on income tax and in particular that the tax base should include personal and business taxes that reward sustainable activities and enterprise. We would like consumption and expenditure taxes that discourage wasteful use of energy and finite resources targeted environmental taxes designed to reduce and eliminate behaviours that simply are not sustainable in a finite world and taxes that acknowledge the value of common property through resource rentals and that encourage long-term sustainable business practices. Of course those principles are very much in line with what is recommended internationally by organisations like the OECD.We think that investment income from different sources should be treated equally for tax purposes. I would like to congratulate the Labour Party on finally coming on board with support for the capital gains tax. I think the Hon David Parker gave an excellent explanation of why a capital gains tax is so important for rebalancing New Zealand’s economy and for ensuring that we do have high-quality economic productivity rather than just speculative investment that does not actually increase the wealth of New Zealand.Of course the lack of a capital gains tax is just one of the factors in the housing affordability problems that are being faced in Auckland. There are other factors such as an unknown quantity of foreign capital coming in because there is no restriction to New Zealand residents and citizens on the purchasing of property. We have foreign capital coming in and bidding up the price of houses the lack of a capital gains tax and quitean easy or a loose credit situation where it is quite easy to get credit that is leading to it being more favourable to purchase as opposed to rent. What we have seen in Auckland is that it is much less a supply problem that is causing the housing unaffordability and that is indicated by the gap that has opened up between house price inflation and rent inflation in Auckland.So the Green Party has as its priorities three basic areas. One is the economy. I think it is really important to look at rebalancing the economy and reducing our current account deficit and there are many easy ways that we could be implementing policy that would do that. Unfortunately the Government is doing the opposite of most of these. For example in its transport policy it is spending a lot of money on a few projects that tend to aggravate our reliance on private vehicles rather than giving New Zealanders real choices. That means that New Zealand households and businesses have to spend well over $12 billion a year on vehicles and fuel to run them while the Government spends $4 billion of our taxes on a few motorways that have extremely poor benefit-cost ratios. These will not actually reduce transport costs for New Zealand households and businesses but will mean that New Zealand households still have to rely on their cars for trips. That means they have to go fill up the tank and they are paying a lot of money for petrol. They would be paying even more if the New Zealand dollar came down to a level that would be more appropriate for it. Of course all of that contributes to our current account deficit.The other priority for the Green Party is protecting our natural environment and our natural capital. The fact is that the planet is finite. We have finite resources. If one accepts that we have finite resources it makes sense that we cannot count on extracting resources for ever and infinitely polluting the atmosphere in order to achieve a higher quality of life. It is simply not possible. On the one hand we are being told that if we want to have a high quality of life if we want wealth we have to dig up our precious minerals we have to dig up our forests like on the Denniston Plateau and we have to encroach upon these precious areas that are actually of very high value to New Zealanders in order to extract the minerals beneath them so that we can sell them.But that is not a sustainable strategy for long-term wealth creation because once that place is gone it is gone for ever. And once we have sold the minerals or the coal as the case may be what is our strategy after that? Once we have sold the coal then what do we do to earn a living in the world? The sooner we recognise that there are sustainable industries that we could be cultivating and that we should focus our attention on those the less it is going to cost us and the easier it is going to be to achieve a higher standard of living for all New Zealanders.It is also important to reduce inequality as David Parker mentioned earlier. New Zealand has one of the fastest-growing rates of inequality in the OECD. Not only is that not fair it is also not sustainable. It is not good for the economy. One of the factors in the global economic crisis was growing inequality. We are in this together. There has been a lot of research that shows that when the gap between those who have a lot and those who have very little increases then everybody is worse off. The entire country ends up paying more in terms of increased crime rates and having to put people in prison and we end up paying more because of worse health outcomes. If we have an economy that looks after our people and our environment that is going to be the best thing for all New Zealanders and that is the priority of the Green Party.So the Greens support a tax policy that can contribute to the overall quality of life of New Zealanders and one of the most obvious ways to do that is through ecological taxes. We want to see a real price on carbon. The OECD has criticised New Zealand for not having a meaningful price on greenhouse gas emissions. We know we are going to have to reduce our greenhouse gas emissions. We know we are going to have totransition to a low-carbon economy. The sooner we do that the less it will cost us. The sooner we face up and say that we are going to have to develop new ways of doing business that do not rely on activities that pollute the atmosphere the easier it is going to be for us to make that transition. The sooner we put a tax on capital gains the better it is going to be from an investment perspective. We are going to have people investing in productive industries in New Zealand hopefully and at the very least it should dampen the housing speculation that is driving up prices in Auckland.There are many other ways we can have a more direct fair and transparent tax system. We congratulate the Government on its tiny move in that direction by removing favourable tax treatment of the mining industry in this bill but we would very much like to see and we ask for a greater move towards ecological taxes.