Customs and Excise (Motor Spirits) Amendment Bill

I move, That the Customs and Excise (Motor Spirits) Amendment Bill be now read a third time. Today the Labour-led Government is securing investment in the land transport infrastructure for New Zealanders, in order to keep the economy moving. Over the last few days there have been headlines, following the December household labour force survey, showing how the unemployment rate is at a record low of 3.6 percent. That is the lowest in the OECD. Living standards have improved, and business is expanding. To keep that momentum going, which is what we all want, it is imperative that extra money goes into building better transport systems over the next 10 years. High productivity and the avoidance of delays are the key to keeping New Zealand moving in the 21st century, and money for that is needed now. Money will be collected in two ways.

The bill contains two amendments to the Customs and Excise Act. It brings an amendment to increase the amount of duty paid on petrol by 5c per litre, excluding GST. It also provides for excise and excise-equivalent duty allocated to the National Land Transport Fund to be indexed to inflation. That remains unchanged. Indexation will be annual and will come into effect on 1 April 2006. At expected average rates of inflation, each annual increase will be approximately 0.5c per litre of petrol. That is necessary, because the cost of land transport initiatives and the actual cost of improving our infrastructure keep going up. The Government will determine when it is appropriate to start the increase in duty, taking into account the international price of oil. The Government is not raising the duty without careful consideration of the effect the extra cost will have on households and businesses, but it has weighed up the advantages to New Zealand of doing the urgent work, and it is confident that this is the best way to get our transport system working quickly. The duty will begin sooner rather than later, at a time the Government decides, and the passing of this bill allows for that duty to begin on 1 April, should the Government decide that that date is suitable. I point out that any delay is not desirable, and that contractors and workers are ready to start work and are standing by now.

What will the money—that 5c per litre of petrol increase being introduced through this bill—be spent on? The total amount raised by this bill will go towards regional transport funding. This was first signalled last December as a means of addressing urgent infrastructure constraints, as a key element of the Government’s growth and innovation framework. This unprecedented investment package in New Zealand’s transport infrastructure is central to maintaining a healthy economy. For the first time in years it provides the certainty that contractors and the wider business community need to make investment decisions. Over the next 10 years every cent of this extra money will be spent across the regions on a per population basis. That is good for local communities, as it means the money will be there for the local projects that Transfund and Transit have planned in their areas for the next 10 years.

All regions of New Zealand will gain extra transport project work from this funding: Hawke’s Bay will gain an extra $70 million; the Canterbury region will receive $252 million; Wellington will receive 219 million; further north, Northland will receive $73 million; and Auckland will receive $716 million and another $9 million from the consolidated account. I reinforce the Minister of Transport’s view that effective land transport that meets the needs of industry helps attract investment into areas with potential growth. This extra money adds to the Government’s $227 million from the “Moving Forward” package of 2002. The increase in petrol excise and road-user charges will generate approximately $207 million annually, excluding GST. This Government is committing a massive $18 billion to land transport over the next 10 years to rebuild the country’s neglected infrastructure. I restate to this House and to members of the public that all the additional funds from this tax will be dedicated to land transport and allocated under the National Land Transport Programme. Its provision, it is promised, will improve land transport, roads, and local networks.

I say to those on the Opposition benches who are considering voting against getting New Zealand moving that they are risking the New Zealand economy and frustrating New Zealanders. National says that the money should come from slashing other areas of Government spending where money raised from fuel duty is currently spent. Two of the biggest areas funded by the Crown are health and education. Those members should try telling the public: “Oh, sorry! There’s going to be less money for nurses, less money for doctors, and less money for treatments.” Is that what the public wants? Try telling people: “There will be no more money for computers in schools and there will be a cut-back in public services and tertiary education.” That is the prescription of the National Party. Or does the National Party want to plunder the balance sheets of State-owned enterprises and the New Zealand Superannuation Fund, or the committed capital expenditure programmes for hospitals and prisons, which are a major constituent part of what is referred to as a surplus?

What New Zealander would vote for those cut-backs? New Zealanders do not want a Government that would vote to strangle public services. By failing to support this transport funding package, National is saying loudly and clearly that it will not invest in making our roads safer. It will do nothing to reduce congestion or help business to undertake its work by decongesting our roads. Ordinary Kiwis trying to get their kids to school on time in a car need decent roads to get through the traffic flows. The National Party is saying that it will do nothing to help those ordinary families in that situation.

This Government, by contrast, says “Yes” to safer, better roads and better infrastructure. However, good transport systems cost money, and this bill ensures that there is money now and in the future to make improvements to land transport. Companies complain that domestic freight is stuck in traffic, as the roads are clogged. People running businesses are sitting in traffic. This is bad for productivity, and this Government is determined to turn that round and keep New Zealand competitive.

As I conclude, I would like to quote the National Party leader, who said: “There is no doubt that our roads are under huge pressure.” He also said: “The real solution to Auckland’s traffic congestion lies in building more roads, and doing so without delay.” The failure of National and New Zealand First to support this bill is another flip-flop: flip—something needs to be done; flop—failing to commit to what needs to be done. No one wants to be sitting in traffic. It makes sense, rather than burning petrol in thin air and getting nowhere, to put some extra money into fuel, thus getting traffic flow going and safer, better roads.

The Customs and Excise (Motor Spirits) Amendment Bill is designed to provide a more secure funding base for improvements in land transport. It is only with a dedicated revenue stream indexed to inflation that we can be confident that all our land transport will receive the ongoing improvements it needs. This Labour-led Government is bold enough to make the tough decisions that will get New Zealand moving. Responsible and progressive members will vote in favour of this bill. I recommend the bill to the House.

The great tragedy about the speech from the Hon Rick Barker we just heard is that he actually believes it.

💬 Peter Brown: I don’t think he did.

I am sorry, but I say to Mr Brown that the Minister actually believes it. That is the tragedy.

I have two pieces of very pertinent advice for the Minister: firstly, he should get a new speech writer and, secondly, before he comes down to the House to give a speech he should read it first. Then he will be able to work out the bits he should delete so that he does not make a fool of himself in the House, as he just did.

National believes in fixing New Zealand’s roads. In fact, National members have been out front talking about this issue, and about its impact on the infrastructure and the growth of our economy, for months and months. So I will put a few facts on the table correctly.

The first of them is that that was a speech by a Minister whose Government brought to the House the Land Transport Management Bill. What was that legislation? Oh, that is right: it was a coalition agreement between the Green Party and the Government. It was all about cycleways, walkways, and ways to make sure that the private sector cannot be involved in building one single road in New Zealand. Lo and behold, it has been an Act for a number of years now and we have not seen a private-sector road built—and nor will we. That is how much the Government really cares.

There should not be any confusion on this issue, at all. National believes in building roads; we believe in building lots of roads. I do not think one could find a New Zealander, who has met me or who knows me, who would criticise me for saying that I do not believe in building roads.

💬 Darren Hughes: That’s true.

They will not accuse me of saying that I do not believe in building roads, I say to Mr Hughes. We believe in building roads, and in building them effectively.

But what we do not believe in is the Customs and Excise (Motor Spirits) Amendment Bill we are debating in the House today. We do not believe in it for some very, very sound reasons.

I want to run through what the bill, for a large part, will do. The first thing it will do is add a 5.6c a litre petrol tax to the current motor spirits excise that is levied on people as they fill up their cars at the service station. The amount is not 5c; it is 5.6c, because it is 5c plus GST—a tax on top of yet another tax.

This is happening at a time when the Government is running the biggest surplus in New Zealand’s history. According to Michael Cullen, the Government is out of cash and unable to do anything. On the other hand, it is running the largest surplus in New Zealand’s history. Dr Cullen has been very quick in the House to berate journalists up and down the country about the fact that they do not understand accrual accounting—that they cannot understand that a $7.4 billion surplus is not a cash surplus. I actually agree with Dr Cullen. It is not a cash surplus, and the Crown will have a borrowing requirement going forward at some stage.

But what I also know about accrual accounting is that if the Government wants to go out and spend $200 million on roads—the equivalent of what will happen through this petrol tax, if it ever comes in—it could do that by borrowing the money and making an investment in our economy. That would cost approximately $12 million a year, as a hit on the operating balance and the financing costs of those borrowings. Or it could take the $500 million that it puts into the Reserve Bank—in my view, another capital item that it does not need for an intervention programme that will never take place—and put that money into New Zealand’s roads. Or it could look at a number of other capital items it is making and put those into our roads. That is the first point.

The second point is that, lo and behold, last year the Minister told the House that he would not introduce the petrol tax right at that moment, although this bill allowed him to do that, because he was concerned about the price of oil. When I asked him what the price was in New Zealand dollars that he as the Minister was targeting—because we have to consider the actual, underlying oil price and the exchange rate—he could not give me an answer. He did not have an answer.

Well, of course he has an answer. It is not an economic answer but an election-date answer, because he knows, as I know and as the other 4 million New Zealanders know, that when a party goes to the polls having increased a petrol tax while running the biggest surplus in New Zealand’s history, that party is not very popular.

💬 Darren Hughes: It’s all cash.

I say to Mr Hughes that, no, it is not all cash, and I wish he would wake up from that sleepy little hollow that he is obviously occupying and listen to my speech. The Minister could well and truly finance roading out of capital requirements, and it would cost $12 million a year. A $200 million petrol tax would not be needed.

💬 Darren Hughes: To build all the roads the member wants?

Absolutely—it would build all that the Government will fund. I suggest that Mr Hughes should wake up from that sleepy little hollow and pull out an economics book—or go and ask the Minister of Finance, when he next sits behind the Minister, to explain accrual accounting to him. The Minister would do that in a breeze; he understands it very well, so that would work well.

We do not know when the petrol tax will be introduced. The only sort of fly in the ointment came in a story last week in the Dominion Post. It stated that contractors were very worried because they had geared up on the back of the new roads to be built.

But, of course, when the increase in the petrol tax does not come because the oil price is too high, those roads will not be built. How do we know that? How do we know that the roads will not be built? We know that because at the Finance and Expenditure Committee the very diligent National spokesperson on finance—my good self—asked the Minister whether the roads would be built if the tax were not introduced, and he said “No.” That is right. It might come as a shock to Labour members, but he said “No.”

💬 Jill Pettis: But we are putting the tax on.

That is right. Labour will impose the tax—after the election, if it wins. I know that that is a very big “if”.

In the meantime, legislation has been introduced to the House that gives any future Minister of Finance carte blanche to impose that tax any time he or she wants. And we do not actually know what rate will be targeted. Michael Cullen does not know, because a rate is not something that can be measured within 31 days of a calendar event. That is not the way one looks at oil prices.

So I think the Minister of Finance owes it to the country to be honest with us. He should tell us the truth; we are all grown-ups. He should come and tell us that he does not want to impose the tax because it is really unpopular, because he is running a whopping huge surplus, and because he knows that if he does impose it he might not get re-elected. He should say that he really cares about being elected, so that he is not going to impose it until after the election—if his party wins. That would be the honest answer. At least we could all live with it, and at least we would know we were being treated like grown-ups. I, for one, would thank the Minister of Finance for his honesty in coming to me and telling me exactly the way it is. But instead, we have to weasel our way through the information.

The second point I want to touch on is the issue of indexation. This is a very interesting Government. Not only does it not quite understand accrual accounting but, equally, it thinks it is absolutely fine to index its revenue stream. The Government has no problem at all with applying indexation to the excise on motor spirits, tobacco, and cigarettes, and no problem at all in saying that the cost of inflation is having an impact, therefore it needs to inflation-proof its income stream. But when it comes to the income of New Zealanders, when it comes to the workers out there and their earnings being inflation-proofed, this Government does not want a bar of it. We have had 5 years of the biggest surpluses and of inflation gnawing away at people’s after-tax earnings, but there is not one skerrick of movement towards inflation-proofing incomes.

Peter Costello did that for the Australian people but Michael Cullen did not do it, and when his own support partner, the United Future party, came to the House with a Supplementary Order Paper on a tax bill and said it wanted to suggest the indexation of income bands, the Minister of Finance vetoed the suggestion. So it is OK, according to the Minister of Finance, to veto inflation-proofing when it is somebody else’s money, but when it is the Government’s money coming in the Government has its hand out and is very happy to index it. That is the message from the Labour Party.

This is a Government that, frankly, I do not think has its head at all around the issue of roading. I do not think it has a plan. It does not want to see the private sector involved. For all the numbers that Government members quote, like the $18 billion, the real truth is that real spending on new roading as a percentage of GDP has been falling over the last 20 or 30 years, not rising, and that the private sector has no involvement in New Zealand roading. This is a very, very unfortunate piece of legislation that National is very proud to oppose.

I am not sure what is the most interesting part about following John Key in a debate. I am not sure whether the part when he conceded that the National Party cannot win the next election and that Labour will be returned to office, and he is concerned about our transport programme following that, was the most revealing part because we have not yet worked out what faction he is in. I am not sure whether the most revealing part was the kind of typical National Party voodoo economics that we see right throughout our electorates at the present time. The National Party keeps saying that this country is overtaxed and we need to slash tax rates to try to get more people to move to New Zealand while, at the same time, with every piece of Government expenditure they see, they want to spend more. Whatever it is, the National Party’s answer is: “Let’s spend more on it.”

I have not seen a single thing that National members do not want to spend more on. They want to spend more on education and on health. Lindsay Tisch made a very animated speech about fire trucks. They want more money for that. John Key says they want more money spent on roads. The National Party has been whingeing up-hill and down-dale about roads and about the need to improve transport. Guess what? The Labour-led Government agrees. I want to see more roads built to get to my electorate on the Kapiti Coast. I am very, very keen to see that happen because it is necessary for the economic development of our region.

But I will finish the rest of the argument, which is: how are we going to pay for it? The Government has brought to Parliament a bill that sets out very clearly and carefully how we want to fund the extra money for roading, through the National Land Transport Fund. The parties whose members stand up in the House and say: “Woe is me, we need more roads.”, also walk through the Noes lobby and say they do not want to pay for them. They cannot have it both ways. The Government has been very upfront with the people of this country, and people appreciate that kind of honesty.

Let me ask the Opposition spokesperson on finance a question. If, by some dreadful chance, National became the Government at the next election, would it repeal this petrol tax? He does not have so much to say now. Would the National Party in office repeal this petrol tax? They do not want to say a thing—there is silence. So they will oppose it today. They will walk out of this Parliament and demand more roads, but they do not want to pay for them, and they will not say what they would do if they had the chance to repeal this legislation. That says a lot about the rudderless National Party of the present. I am voting for the bill because it will bring more roads to our region, and I think that will be good for New Zealand.

This is a very sad day for New Zealanders. The Government is about to pass legislation that will add 5.6c per litre to our fuel bills. I think today is the day that the Kyoto Protocol will be ratified, and I think we can expect a carbon tax to go on our coal-fired power stations, which represents—

💬 Jeanette Fitzsimons: Hooray!

—listen to the Greens—6 or 7 percent of the power generated in this country, and, probably, from shortly thereafter, if not today, they will be paying a carbon tax. Mr Howard is coming here very shortly from Australia, where, I think, 76 percent of electricity is generated from coal. He is not going to put on a carbon tax because, basically, the Australian Government thinks of its people, first and foremost.

I heard Jeanette Fitzsimons say on the radio the other day that this Government has lost its heart. It has—it has lost its heart. It has lost its concern for the average working person, and indeed the Greens have coupled themselves alongside it. It is an absolute disgrace to put 5.6c on a litre of petrol. It is unnecessary, and I think everybody knows that. I heard the Minister say he wants to do this to keep the economy moving. I will come back to that statement.

💬 John Key: A clanger.

Yes, it is a clanger, an absolute clanger, and I will come back to it. But he made another statement. He said that this is the best way to address the issue. I ask any Government member, and United Future, what alternative they have examined. When the Government says it thinks this is the best way, that implies it had some other option. But it has not considered anything, at all. The Government is simply saying that it wants more money so it will tax the poor old motorist.

💬 Gordon Copeland: What’s the alternative, then?

I will answer that. I ask the member to sit there because he might learn something. I will tell the member another thing he should learn, and it is that I come from a party that means what it says. We do not go along with the philosophy—and this is a debating point, so the member need not raise a point of order—whereby we say we want changes to tax rates and so on, but when the Government says it wants confidence and supply, we roll over. We are not into that league, at all.

There are many ways of advancing New Zealand, and one of the most important ways is to build more roads promptly. The report that the Government should at least read—and Mr Copeland should take note of this—is the Allen report. It identifies four areas of concern in this country. There are only four areas—and I have the report here. Those areas are called the Passing Lanes package, the Auckland Western Ring Route package, the Tauranga Strategic Roading Network package, and the Wellington Regional Land Transport package. The report identifies the benefits, and I will read them for the benefit of the Government, because I know they are too tired to read this booklet on their own: “The total benefits comprise a net increase in GDP of around $1 billion, a benefit of $65.9 million attributable to the value of lives saved and permanent disability, and the benefit of $511 million from travel time savings related to non-work activities.”

It goes on to summarise those benefits: “This implies that for every dollar invested in the proposed packages, New Zealand will receive benefits worth approximately $4.75, and these are economic benefits only. For every dollar invested New Zealand will be better off by $4.75.” That varies from package to package, but it is the overall average. Further, it states: “Regardless of whether the packages are undertaken individually or in aggregate, the expected gains tower over the initial investment costs required to finance the proposed infrastructure.”

This document alone states that we should be borrowing to advance our roading if we cannot afford to do it from the current revenue stream.

Let us examine the current revenue stream, in the National Land Transport Programme for this year. Government members might like to look this up to see that I am not talking fiction. The estimate over the next 10-year period, including this tax and the indexation, is $18.7 billion. If we take out this tax, and take out the indexation, we are at around $16 billion. That is a lot of money in anybody’s language. If we look at what the Government takes from the petrol motorist over the same 10-year period, it is a further $7 billion. So over a 10-year period we are talking about the Government collecting from the motorist, through road-user charges, registration, petrol tax, and everything else, something like $23 billion. I suggest to members that if they drive down any street in this country that is occupied they will see a number of buildings, and most of those buildings are mortgaged, or have been mortgaged. They will see cars or trucks, and most of those cars and most of those trucks are either leased or paid for on hire purchase.

In other words, the average New Zealander uses the opportunity to borrow against future income for his or her house, building, business, farm, or whatever—and for his or her vehicle. Yet for the roads we stick to this antiquated “pay as you go” philosophy.

💬 Hon Richard Prebble: I hate to break it to you, but the Government has a mortgage, too.

Mr Prebble will get his time in due course. Basically, roading in this country is on a “pay as you go” system, and it is old hat.

💬 Hon Richard Prebble: What?

Mr Prebble obviously has not read the literature available to him. I suggest that he does, because this Government spends what it gets, and collects next year for the motorists. Last year it underspent by something like $230 million.

Roads have not kept pace with vehicle traffic and user demand. We know that, and we know that that is principally because past Governments have taken from the motorists and used the money here, there, and everywhere. That is absolutely wrong. National wants to correct the situation. I listened to John Key with considerable interest. National wants to correct the situation by allowing private enterprise into the system. We say that that is not necessary. We say that that is equally wrong.

There are three things we in this country should be doing. Firstly, we should be identifying the specific roading we need for long-term use and getting it absolutely correct. Secondly, we should be building those roads on an as-required basis. In other words, if we want a bridge that will accommodate 100,000 vehicles a day in 10 years’ time, we should build it in such a way as to achieve that without adding a great deal to the design and construction costs. Thirdly, we should be putting in place a continuous and sustainable funding stream. The only way to do that fairly, given what the motorist currently pays, is to use the money that is taken from the motorist at present through fuel taxes, road-user charges, etc.

If that is not enough—and I suggest that it will not be enough, because the system has been robbed blind for so many years, and we need to do so much—we will need to get into borrowing mode. I believe that sufficient income will come in to justify that. The gains outlined in the Allen report support our getting on with the job and doing it now. We must move away from the “pay as you go” regime, and towards a 21st century type of regime. There is not a person running a business of any size who would finance expansion in the way we finance the expansion of roading in this country. It is a sad day indeed when the Government is sticking to this antiquated thinking and is imposing on the motorist a further increase in fuel taxes—and, worse still, indexing the whole darn lot to inflation. New Zealand First will be opposing this bill.

I seek leave to table the 1996 coalition agreement between New Zealand First and the National Party, in which both parties gave their word that they would form a coalition Government for the 3 years through to 1999.

Document not tabled.

I thank my colleague Richard Prebble for allowing me to swap places on the speaking list so that I can get to another appointment. I appreciate it, especially as what I am about to say is probably rather different from what he is about to say.

The Greens support this bill, because it will help us move to a transport system that uses less fuel in order to get us to where we are going. There are two very important reasons why we need to do that. One is the question of climate change. We have been celebrating the coming into force today of the Kyoto Protocol, but if we are going to stop the climate change that threatens our agriculture, our economies, our health, and our way of life it is absolutely vital that we start burning less fossil fuel—and transport is one of the chief offenders. The other reason is that we are now getting quite close to the time when it will not be possible to meet the rising demand for oil simply by pumping more out of the oilfields. We are getting close to what is known as peak oil. When that happens, prices will rise quite alarmingly, and availability will steadily reduce.

This bill helps to reduce energy use in transport in two ways. Firstly, it allows more money to be raised to invest in the infrastructure we urgently need in order to adapt to rising oil prices, and by that I mean the rail systems, the public transport systems, the travel-demand management systems, and the cycling facilities, which will be funded along with some roading improvements. Secondly, the petrol levy rise signals the long-term oil price rise in time for people to start adapting to it in their own lives. As petrol starts to cost more, people will start to see the reason for making sure that the next car they buy can do a minimum of 50 miles to the gallon, the reason for making sure that the next time they move house they try to live closer to their work, and the reason for trying to make sure that they can do short trips on a bicycle or on foot.

Most people still have not caught on to the fact that the oil price rises we have seen over the last year are not temporary and are not the result of the war in Iraq. Although a number of short-term fluctuations are caused by those supply features, the long-term trend is that oil prices are going steadily up. New Zealand needs to prepare for that. We need to prepare for it with more efficient vehicles. If we had vehicle standards, we could get twice as much out of every litre of fuel as we do now. We need to prepare for it with more public transport, more rail, and by becoming less dependent on long-distance overseas trade for low-value commodities.

I am not convinced that the diesel increase that is foreshadowed in the bill, but will happen through Order in Council, should be only for vehicles under 5 tonnes. I am not convinced that the heavy vehicles are actually paying their full way in terms of paying for roads, given the very much greater damage they do because of their axle weight. We cannot afford to feather-bed the trucking industry if we want a fair, level playing field for rail, which is more energy efficient.

I am concerned that the decision of the Minister and the select committee to defer the coming into effect of this increase means that it may never happen. We are not being given any particular oil price at which the Minister feels he will be able to trigger the coming into force of this rise. The futures market tells us that the price of oil will not drop below $40 again. Treasury places a lot of faith in the futures market when it does its oil price forecasting. We are still, however, operating under a Government Budget that has an assumption that by now oil prices would be back down to $19 a barrel and will stay there indefinitely. Prices will, of course, go much higher than $40 a barrel, and if the high New Zealand dollar starts to drop, we will feel that increase as a double whammy.

I note that the new money raised in this way must still be allocated under the National Land Transport Programme and must be spent in accordance with the Land Transport Management Act. I think that this has escaped the notice of a number of regional land transport committees and local councils, many of whom have not yet got to grips with the new Act. It is not just a roading binge that will be accelerated by this extra 5c a litre, but a balanced range of transport options—road, rail, public transport, cycling, walking, and travel-demand management. If those bodies put forward proposals only for roads, they may find that the funding does not actually reach their bank accounts.

I particularly note that the proposals of the Hawke’s Bay Regional Land Transport Committee—the Minister lives in that region, and he might like to look into this—for spending the new funding are 100 percent for new roads for trucks, particularly for getting freight to the port. It makes no rail, public transport, or demand management proposals, and it makes no proposals to consult with the community. I hope the Minister will meet with his regional council staff and tell them to read the Act, or they might get a nasty surprise and find that the funding will not follow their grand plans.

Finally, I return to the question of climate change, as this is the day on which we are celebrating the Kyoto Protocol. I particularly commend the four Greenpeace activists who are on top of the Marsden B power station at the moment with a big banner that states: “Save the climate—stop coal”. This is a proposal that will massively increase our greenhouse emissions. The Marsden B power station is a very old, inefficient, dirty station that will convert coal very, very inefficiently into electricity. It will shower the people of Whangarei with sulphur dioxide, dioxins, and fine particulates that cause cancer, and it will dump mercury and other heavy toxic metals into the harbour. It will import millions of tonnes of coal from Indonesia and stockpile it near the wharf in a leaky stockpile. The local residents are appalled at this proposal, and I commend the young people who have got themselves on top of the building. The company refuses to go down and meet them, so it looks as if they might be there for quite a while. I say, good on them.

I rise to speak to the Customs and Excise (Motor Spirits) Amendment Bill. I follow the Green MP Jeanette Fitzsimons and I am appalled that she should use her time to applaud a group of people who are trespassers and who are breaking the law. The Green Party’s idea, which it promoted again today, is that it is perfectly OK for the Green Party to break the law but for no one else to do so. Those people on Marsden B power station are not activists, they are criminals. I hope that when they come down from the private property on which they are trespassing they are arrested and that the courts finally decide to get tough on people who claim that their principles enable them to break the law.

I will make another comment for the Green member about the Kyoto Protocol. One of the reasons that the ACT party has always opposed the Kyoto Protocol is, firstly, it will not solve the greenhouse problem. If we were to look 50 years into the future it will have made almost no difference. Secondly, it is fundamentally unfair to New Zealand because of the appalling way that successive Governments negotiated our position. The member should understand that the targets for each country are different. I will give one simple example. A friend of mine who owns a reasonable-sized farm did a purge on possums and was staggered to discover that he took off 8,000 possums. He had a look into this and found that 20,000 tonnes of green matter is eaten by possums every day. He asked why the Government did not just get rid of possums and thereby meet our greenhouse target easily. Getting rid of possums would meet the target, but the Government will not do it because the Green Party said that getting rid of possums should not count, and it will not. So even if we do get rid of possums it will not count. Of course, all the forests in Russia count, but New Zealand’s forests do not. That is because of the way that the Green Party, the Labour Party, and the National Party negotiated the Kyoto Protocol, which is very unfair on New Zealand.

What is proposed under this excise tax is to increase fuel tax by 5c per litre. The ACT party is opposed to this measure. Are we opposed to more roads? No, we are not. In fact, if members were to go back and look at the parliamentary record, they would see that the first party in Parliament that stood up and consistently argued that we have under-invested in roads and that we need more of them, especially in Auckland, was the ACT party. The parliamentary record shows that. Is there a shortage of money to build roads in New Zealand? Of course there is not. There is no possible argument for any Government to say that we should increase taxes when it is running a record surplus. Currently there is a tax of 18c per litre, plus GST, on fuel. Half of that money goes into the Government’s own accounts, so there is no justification for an increase in taxation.

I will raise for the House an even more serious issue, and it is a constitutional one. By indexing fuel taxes to inflation, the executive is removing the necessity for the executive to come to Parliament and ask for permission for tax rises. Those who have studied history will know that the reason we have parliamentary control over the Crown, and the little control Parliament has over the excesses of the executive, is that every Government, no matter what colour its stripes, has to come to this House and justify an increase in taxation. But this bill means that the Government does not have to come back to Parliament again to increase fuel taxes. The Government might say that there is a precedent for that move because alcohol and cigarette taxes are now inflation-adjusted. Indeed, I was part of the Government that did that. I think it is wrong. The more I think about it, the more strongly I think that it is wrong and that no real Parliament should ever agree to it.

The Westminster system means that whatever party is in Government, it must ask for approval from the House to increase taxes. But this tax is even worse, because with this bill the Government has said that it wants the ability to increase tax from 1 April, but it then wants the ability to decide whether it will. We all know how the Government will decide; it will have a look at the public opinion polls to see how it is rating. If it thinks that it is polling high enough to introduce an unpopular fuel tax, it will introduce the tax on 1 April. If it thinks that the polls are not that good, it will put it off until after the election. Then we will have the constitutional monstrosity of a tax going up under the new Parliament that is elected at the next election. That breaks the rule that states that one Parliament should not pass laws that bind the next Parliament.

We all know that that is the constitutional position. I find it appalling that our officials, such as Crown Law and the like who are supposed to advise us on these matters, did not put in a document to oppose this bill and to point out that it is a constitutional outrage to have a measure whereby this will be the last time, possibly, that we will ever debate fuel tax increases. Because, after this, the Government will say that the tax should go up according to a change in the consumer price index. Where is the evidence that the consumer price index is the right principle to use to increase a tax that the Government says is for roading? It is not very difficult for members to realise that it is quite possible for the consumer price index to have increased but for the cost of roading to have gone down. That has been the situation a number of times in my parliamentary career. The Government has only put forward this fixed formula to avoid parliamentary scrutiny, to avoid having to debate its roading programme, and to avoid having to discuss transport. They are the only reasons that this bill has been put together.

I point out to the House that when the Government inflation-proofs its revenue, and it is now doing it on petrol, alcohol, and cigarettes, it means that the Government does not care about inflation. In fact, the more inflation we have, the more money it gets. But the Government will not inflation-proof income tax. We all know that because income tax has stayed the same despite wage rises, the average New Zealand household, after tax, is no better off than it was 5 years ago. The economy may have grown, but, after tax—because income tax rates have not been inflation-proofed and because things like cigarettes, alcohol, and now fuel are going up—the average household is no better off. That is yet another reason why the ACT party says that this is a bill that no Parliament worth its name should ever allow. I am appalled to see that this bill is able to be got through because of the Green Party. It is so ideologically blind in its views about energy that it is not prepared also to realise that as parliamentarians we should never agree to a bill of this sort. It just gives the Government revenue, without any accountability.

I want to cover a few points that have been raised in the House on the Customs and Excise (Motor Spirits) Amendment Bill, particularly during the Committee stage, just to confirm United Future’s final position on the bill itself. First of all, we will be voting for this bill. We do so because, like the great majority of New Zealanders, we are appalled and alarmed that for a long time now successive Governments have consistently underspent on New Zealand’s roads, with the resultant congestion that we have on a daily basis. This is particularly so in Auckland, where this congestion is simply unacceptable, and has been for many, many years, but also in places like Tauranga, Wellington, and parts of Christchurch, and so on.

Of course, the funds raised through this excise duty of 5c a litre on petrol will go towards providing those roads, and we simply need to get on with it. We can debate here in the House for some time whether it is the right strategy, but at the end of the day the people of this country are saying: “Look, just get on and do it, please, because we are sick and tired of spending hours each day trying to get from A to B.” My colleague Paul Adams, who lives on the North Shore, would say a big “Amen!” to all of that, I am sure. He tells me that it is very, very frustrating trying to get to the airport.

However, we did make an important qualification in our minority report—one that was subsequently misquoted by ACT party leader, Rodney Hide. He either did not have the energy to read down to the third paragraph, or decided he would quote it selectively in order to score some political points in the process and, in fact, to mislead people.

However, United Future said in its minority report that the increase should be accompanied by a reduction in income taxes in New Zealand, in this year’s Budget. It is very, very clear to me, even based on his evidence before the Finance and Expenditure Committee this morning, that the Minister of Finance, Dr Michael Cullen, has really just got into the habit—no matter what happens to our accounts, essentially, no matter how much more money comes in over and above his original estimates—whereby his knee-jerk reaction is either to bank the money or to spend it. That is all that seems to come into his mind.

I want to tell the House today that over the 4 years to 2004, the Government collected $4.5 billion more than its Budget estimates. The Budget Policy Statement issued in December reworked the forecast position out to 2008, in which time it will spend—listen to this—$5.7 billion more than was projected in the Budget in May, just 6 months before.

Now that is a total of $10.1 billion more revenue than the Government’s own Budget estimates, the estimates on which it originally based its expenditure—another $10.1 billion—and it simply is not credible for the Minister of Finance to say that tax cuts are not affordable. Indeed, he admitted today that the fact that he will be reducing gross debt to 20 percent in 2008, rather than his original target of 2015—7 years earlier—basically will be putting the Crown balance sheet in better shape at the expense of the balance sheet of New Zealand households. In my view, that is completely wrong. I do hope that if he does not address these things in the Budget, New Zealanders will note those remarks and vote accordingly in the next election.

In United Future’s view, income tax cuts are definitely affordable. There is no doubt whatsoever about that. Dr Michael Cullen says they are not affordable. He says that because he seems to assume there is something divinely ordained about the decisions he makes on expenditure. In other words, what he has decided to spend has to be spent and there is no alternative. Plainly, that is completely wrong.

Let me just run through a few things that could be cut in terms of expenditure. First of all, there is enormous bureaucratic excess in the present Government. The number of civil servants being employed in this country has gone up alarmingly in the last 3 years, and it is simply unnecessary. We should get rid of that trend. Secondly, United Future would introduce public-private partnerships for health, corrections, and roading—yes, even roading. It is in the legislation, but the Government is not doing it. Just through doing those things, we could save literally billions of dollars. We would bring to an end the corporate welfare machine, on which the Government spends several hundreds of millions of dollars per year.

We would review the private training establishment funding arrangements. In the House in the last few days, the ACT party has been bringing to the attention of New Zealanders the scandal of $239 million being spent on one single private tertiary institution, which now has 34,000 students. I was interested to find out that Oxford University has 13,000 students, just to put the figure in some perspective. I really have no idea—and no one does in this country—whether that is money that has been properly spent. I suspect that it is obviously not—that it is money wasted.

We could eliminate huge waste form the health budget. A paper at the Finance and Expenditure Committee this morning from the Public Health Association reinforced this. There is a lot more that we could do in terms of preventive medical strategies through well-thought-out, well-researched initiatives, which the Government is simply not taking. So it simply does not wash with United Future that there is no room for tax cuts. There obviously is.

It seems increasingly lame to the people of New Zealand for the Minister of Finance just to repeat the same old mantra: if there is more money, we will spend more money. Today he indicated to us that there is no end in sight to that policy, even if he should remain the Minister of Finance after the next election.

I want to turn to the attacks on United Future that have been mounted by New Zealand First and the National Party, and, I think the ACT party managed to get in there—Ken Shirley did as well—about why it is that United Future does not simply pull the plug on its supply and confidence agreement with the Government, with the demand that it has to drop the 5c a litre tax reduction. I want to go through this in some detail. I have said it ad nauseam, but it needs to be said.

First of all, United Future gave its word in 2002 that it would enter into a supply and confidence agreement until the next election. That is exactly what we intend to do; I say to Mr Brown that it may be OK, morally, for some parties in this House to welsh on deals, but it is not OK for us. We feel morally and contractually bound to fulfil exactly what we said we would do. That is the first point.

The second point is that it would be a futile gesture, because the Green Party is also voting for this 5c a litre increase—OK? It seems to escape those parties, when it suits them, that the Government has alternatives to United Future. It can turn to the Greens, and if it does not want to turn to them, it can turn to New Zealand First, as it did on the foreshore and seabed legislation. I ask Mr Brown what the answer from New Zealand First members would be. I can tell the member exactly what it would be. They would say: “How soon do you want us there, guys?”, because those members jumped into the foreshore and seabed legislation overnight. They were waiting for the proposal to be made, and they said yes before the words were out of Helen Clark’s mouth. That is the reality of what happened on the foreshore and seabed legislation. It is simply not credible for you to keep coming along to the House and criticising us when we fulfil our word and you do not.

The ASSISTANT SPEAKER (H V Ross Robertson): Please do not bring the Speaker into the debate.

I am sorry, Mr Speaker. I did not mean to bring you into the debate. I was, of course, referring to the New Zealand First Party, and I think the listeners would probably have picked up on that. I apologise for the slip of the tongue.

Can I also bring to the House the comment made by the OECD just before Christmas. It was quite an interesting comment. It said that New Zealanders had had 4 good economic years, and it has. They said that one of the reasons for that was the political stability in this country. Who has provided political stability for this country in the last 3 years? No, it was not the Labour Government; it was United Future, and both the Minister of Finance and the Prime Minister have been gracious enough to say that. We are the ones who have provided stability, and we intend to go right on doing that through until this year’s election.

I listened to the speech of the list member from Tauranga, Mr Peter Brown, with great interest. It was a speech that could only have been given by somebody who had nice big wide roads and a very good bridge. Because can I say that the people of the East Coast welcome this legislation. There is only one thing worse than sitting in a traffic jam in Auckland, and that is sitting in a queue at a road accident on the East Coast, or sitting behind six logging trucks on a one-lane road and watching schoolchildren getting off the local school bus and being spattered with gravel as the trucks pass them by.

As the only member of Parliament who has an unsealed State highway in her electorate, I say there is a very good reason why we do not make a song and dance about that. It is the road around Waikaremoana and we are very concerned that if they tar-seal it, lots of people from Auckland and Tauranga will then want to drive on it. So we are leaving it as it is for now. But can I say that the people of the East Coast welcome this increase in the price of petrol so that we can have roads that look as though they come out of the same century as the rest of New Zealand. The Automobile Association report will tell members that 10 of the worst roads in New Zealand are in my electorate. I look forward to this money being invested in decent roading for the hard-working people in Gisborne and the East Coast. I think that those members who have lots of roads and big bridges should stop whingeing about it.

I would like to remind the Labour member who has just taken a call, Janet Mackey, that in the last financial year Transfund once again reported a surplus of unspent money, of $230 million. I suggest to that member that if, in all her tenure in this Parliament, she has failed to secure Transfund funding for Gisborne, it is too bad.

💬 Darren Hughes: How’s this member’s constituency going?

It is amazing that the junior Government whip always has a lot to yell while he is sitting on his backside, but does not take a call to explain matters to the public. He is just a doormat who says yes when Ministers wish him to.

The National Party is totally opposed to this bill. The bill aims to do three things. Firstly, it will put up the price of petrol by 5.625c per litre, inclusive of GST. Secondly, the increase is to come at a time at the discretion of the Labour minority Government in an election year. Thirdly, starting from 1 January 2006 there is to be indexation of petrol price increases according to changes in the consumer price index, to avoid any future Government having to explain to Parliament why the petrol tax has to be increased.

Before I expand further on some of those three aims that we object to, I must say that I found some points that were raised by various members in this debate to be quite interesting. First, the Minister and Labour members, once again, reinforced in their speeches the Labour Party’s continuing lack of any solution to problems other than its continuous motto of expanding taxation to solve them. It was almost comical to note that in the Finance and Expenditure Committee the Minister of Finance on the one hand tried to tell us on Friday that the financial statements would once again show a surplus, even a cash surplus, but on the other hand he claimed poverty and said that he would not be able to spend that surplus, because of his fiscal responsibility constraints. Yet at the same time he told the select committee that he was quite happy to spend up to $500 million to please the business community by announcing various tax incentives, such as the depreciation regime for short-term assets. Also, he announced the initiatives with regard to so-called housing ownership and the expansion of the Working for Families package, which will put more New Zealand families on welfare. So it seems to us that the minority Labour Government has a lot of money to spend, and that it can afford to spend it when it comes to buying votes in an election year. Yet when it comes to building roads and we are staring at a surplus of $230 million from Transfund, more tax increases are to be loaded on to motorists.

It is interesting to note that the Green Party, the party that is always supportive of Labour, will support the bill. The only part it is not happy about is that the bill does not go far enough. The Greens ask what is to happen with regard to diesel users, and say they should be made to pay more in tax. The Greens always believe in punishing individuals, because they believe that people get into a car simply for the luxury of driving and not because they need to, even though we had one submission from a group that provides a volunteer service for people in hospitals, and that spoke on behalf of the Meals on Wheels volunteers, as well. The group complained that its members do not get paid for their good deed to the community, and that although they will be out of pocket they will have to face those increases. So in future the Greens are trying to force the people who provide Meals on Wheels to provide “Meals on Bikes”. The only problem is that we do not know how secure those “Meals on Bikes” will be. I say that the Green Party, instead of always believing in the worst of human nature and wanting to punish New Zealanders, needs to be sympathetic to people who have to use motor transport to do some of their work.

United Future’s position is even more interesting. United Future did put in a minority report that gave people the impression that, indeed, it would be morally and contractually honest to its supporters by voting against this bill. United Future has always said that it is against high taxes and believes in rewarding hard-working New Zealanders. United Future’s minority report states that it supports the petrol tax and everything, and that the only reason it put in a minority report is that it believes that that increase should be offset by a reduction in personal income tax. Of course, this bill itself has nothing to do with personal income tax. However, when the income tax bill to confirm high tax rates came before the House last year, although United Future says that it wants to bring down income tax, it also supported that bill. So I am not sure where that minority report leads to. United Future says that it is against high income tax, but when high-income tax legislation came before the House it also supported that.

I come back to the issue of why Labour should continue to believe that every time there is a problem and every time projects have to be financed, the only solution it can think of is to introduce another tax. Interestingly, this morning the Minister of Finance shared some of his inner thoughts with the members of the Finance and Expenditure Committee. He said that the reason he has had to bring in the indexation of the petrol tax is that companies have invested in more environmentally friendly fuel—fuel that is more efficient. The Labour Government is actually collecting less revenue, and, because of that, he said it has had to bring in indexation. This measure is more about increasing the Government’s revenue than it is about really giving people the incentives to invest in measures that may produce a more environmentally friendly solution.

We all know that building roads benefits not just the current generation. After all, one likes to think that roading contractors do not aim for roads to last for just 5 or 10 years. Overseas countries, particularly Australia, should have provided this Labour Government with a lot of inspiration about the success of involving the private sector and also of extending a vision into the future. Because the investment in building more roads benefits not just the current generation but creates a long-term benefit, there is nothing wrong with borrowing in order to fund the building of roads. Also, there is nothing wrong with inviting the private sector to take an active partnership role in ensuring that the congestion in Auckland is solved. Just now the junior Labour whip yelled out the fact that this Government has been in place for 6 years. I cannot believe that any Aucklander in all those 6 years has seen road congestion be resolved even a little bit.

National is totally opposed to the passage of this bill.

That was Pansy Wong from the National Party. One does have to admire anyone from National who can speak for 10 minutes trying to explain National’s position—because, of course, it has so many positions—and say nothing. The criticism of the Government—

💬 Pansy Wong: You did not listen.

I listened very carefully to the member, and Pansy should pay me the same courtesy.

The ASSISTANT SPEAKER (H V Ross Robertson): The Minister should use the member’s full name.

The member’s critique, at best, seems to be that this Government, when it has something to say to people, has the gall to be upfront, look people in the face, and say: “There’s something to do, and it needs to be resourced. We’ve got to fund it, and here’s how we’re going to do it.” That is the criticism—as opposed to National’s strategy, which is: “We’re going to spend more on everything, but we’re going to tax less, and we’re not telling you where the money’s coming from, and anyway, we’d better be careful because the leader, Dr Brash, doesn’t say much any more.”

Don Brash has not flip-flopped in the last week and a half because he has not said anything. He has not done anything. He has sat in the House like a vegetable. I have been here only 11 years, and you, Mr Assistant Speaker, have been here a little longer—but I should not bring you into the debate, so I will not. But I have to tell my colleagues that in my 11¼ years in Parliament I cannot recall any Leader of the Opposition coming to the House, plonking himself in his chair, and saying nothing—not a question, not a word, not even an interjection.

💬 Government Member: Was he awake?

I do not know whether he was awake. I presume he was.

This bill is about fairness and security. It is about providing a more secure funding base for those things that we all know have to be done. I am pleased to support the progress of the bill.

As I heard that Labour member speak I had a new hope within me. I thought the Labour Party members were actually going to debate this bill. But as usual—they do not take all their slots, anyway—the members who got up to speak to this Customs and Excise (Motor Spirits) Amendment Bill did not take even half of their allotted time. They know that they have not contributed to the debate on this bill in a satisfactory way at all.

💬 Hon Member: That’s right.

I have another member over here saying I am right. The hard-working New Zealanders who are driving home from work in places such as Auckland—driving back from Auckland City up to the North Shore and Whangaparāoa, where I am based—will be listening to this. They will know that the Government members have not satisfactorily contributed to the debate on this bill. If they did not know that, I am reminding them now, but I am sure the public are very well aware of that as they are driving home at drive time, as I speak.

In speaking to this bill I must admit that, in relation to the commentary, as I read page 1, then page 2, and then page 3—

R Doug Woolerton: You would not have been awake after that, would you?

It was hard work, but as I was reading through it I noticed the Green Party and the United Future party minority views, on page 5. Then I started reading through the actual parts of the bill. As I read through it, I came to a conclusion.

R Doug Woolerton: What was that?

The conclusion that I came to, I say to the member who asked me what it was, was that clearly the bill has the wrong name.

R Doug Woolerton: Tell me.

I will tell the member why, because he asked. This bill has the wrong name because the actual name really does not satisfactorily represent the content. I will tell this House why. As I was reading through the commentary I noticed an excerpt that stated: “the bill provides for the indexing of the proportion of excise and excise-equivalent duty allocated to the National Land Transport Fund to inflation,”.

R Doug Woolerton: What’s that mean to the average man?

I will tell the House exactly what that means in just a few minutes. Then I read another paragraph in the commentary, which stated: “We received 16 submissions.”—obviously, this is the Finance and Expenditure Committee speaking—“Submitters generally expressed opposition to the increase in excise duty, suggesting that the funding required should be provided from the duty currently allocated as general Crown revenue,”. Then I flicked over to the heading of “Commencement date”, under which was stated: “as oil prices are at high levels, the Minister of Customs proposed that we amend the bill to allow for the excise duty increase to come into force on a later date by Order in Council, to allow the implementation of the increase to be delayed.” Then I flicked over to “Minority views”, and I saw that the Green Party and the United Future party had put minority views in, but—

R Doug Woolerton: Who was that?

The Green Party and the United Future party.

R Doug Woolerton: They are not supporting an increase in tax!

They are supporting an increase in motor vehicle tax. But not only that; I tell the member that they have put minority views in the commentary but they are supporting the bill. Quite frankly, I think that is—well, there is a word that I know of that I am not allowed to mention in this House, and it starts with “h”; I will leave it to the imagination of the members.

So as I was reading through the bill I realised that it had the wrong name. After reading all those aspects that I have just mentioned to the House, I realised that a more appropriate name for this bill would be the “Manipulation Bill.” I call it the “Manipulation Bill” because it is a direct attempt, a savage attempt, by the Government to sweep under the carpet, by indexation, the whole issue of it coming to Parliament every year to increase taxes on petrol. This Government loves taxing New Zealanders, year in, year out—and I will go into that a little bit more later on in my speech. Then I thought, no, that name, “Manipulation Bill”, does not go far enough. It actually should really be called, I believe, the “Deception Bill”.

R Doug Woolerton: That might be a bit harsh.

I think it is very appropriate.

R Doug Woolerton: Fair enough!

The member says that that is fair enough, when he thinks about it. When other members of the House think about it, they too will think it is a fair enough statement. I want to explain this to the House. As I mentioned earlier, page 2 of the commentary states: “as oil prices are at high levels, the Minister of Customs proposed that we amend the bill to allow for the excise duty increase to come into force on a later date by Order in Council, to allow the implementation of the increase to be delayed.” I have to ask the Minister—he is not here at the moment, so I might as well ask the members who support this bill, and they are the members from United Future, the Greens, and the Labour Party—whether they honestly expect the people of New Zealand, the people who, as I mentioned, are driving home from work right now, to seriously believe that rubbish, because that is what it is.

R Doug Woolerton: No!

The member over here is right. Members of the public will not believe such rubbish. I just cannot believe what I am reading. It is a bit like a couple of years ago, when I was a new member in this House, when the sherry tax bill was introduced. I could not believe what I was reading. The Government said it would bring in the sherry tax to curb youth drinking. To be honest with you, I do not know—

The ASSISTANT SPEAKER (H V Ross Robertson): Please do not bring the Speaker into the debate.

That is a very good point. I do not know of any member in this House—young or old—who honestly seriously believed that.

To get back to this bill, it is obviously a work in deception. That is my whole point. It should probably be named the “Deception Bill”. I have only one other name for this bill, because I think I have summed it up pretty well. It should be called the “Anti-Democratic Bill”. I cannot believe that during the Committee of the whole House yesterday the Minister had the audacity to say that to debate this bill was a democratic process, and that it was the first bill like this to come to Parliament, and it was being debated. I thought this will be the last time we debate this matter, as well; there will not be a lot of need to bring to the House the issue of petrol tax, because of the indexation clause within this bill.

So we get right back to what I was talking about earlier, right at the beginning of my speech: this bill is a deliberate attempt by the Government, the Greens, and United Future to sweep under the carpet the whole issue of taxation of petrol—and they know it. The average hard-working, good New Zealander knows it, as well. Since this Government came into power in 1999 it has brought in 24 new taxes. Out of those 24 new taxes, this will be the fifth tax increase on motorists. As I said, the Government wants to index this tax so that it can maybe reduce the amount of times it actually puts it up.

As I close, I want to say that this bill is a disgrace, that the people of New Zealand will see through it come election time, and that they will vote for New Zealand First, because they know that New Zealand First can fix it.

The country is recovering from a decade of neglect to infrastructure. Auckland is bogged down with a roading crisis, and this Government is doing what it can to solve that problem. My only reservation about this bill—to the extent that I have any—is that two-thirds of the money is not going to Auckland, and $1.3 billion is going to other places around the country. However, despite that, I support this bill.