Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill

I move, That the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill be now read a second time. This bill will enable the Government to respond to the pressing need for additional investment in the land transport system programme. Excise duty on petrol applied at a national level is an efficient way of raising revenue without imposing additional compliance costs on users. Steady increases announced well in advance are a much fairer and more efficient way of increasing revenue for the National Land Transport Fund than alternative methods that the Government has considered, such as tolling existing routes or regional fuel tax. In other words, what we are saying is that you are far better off having a system that collects the money from the petrol sold and then choosing to spend it appropriately across the roading network. All the money collected from this proposal will be spent on the road network.

The three increases of 3c per litre in 2013, 2014, and 2015 will generate over $500 million within the current period—2012-15—of the National Land Transport Programme. Over this period the Government will invest a total of $9.5 billion in the land transport network, including over $3 billion in the State highway network. Once the current programme is finished, the increases will allow further investment beyond the roads of national significance. Local government’s needs for land transport are much greater than ever before, and, regardless of the particular transport solution, those needs will require further expenditure.

I would like to point out that the increases as proposed in this bill are in line with past increases. A 3c per litre increase equates to a 5.9 percent rise in the total rate of petrol excise. Previous increases have exceeded that significantly. The previous Government oversaw an 8.5 percent increase in 2002 and a 13.8 percent increase in 2005, with single-digit increases in each of the other years that it was in Government. By proposing three moderate increases of less than 6 percent, this Government is ensuring that increasing the moderate payments made by motorists will be affordable, while providing enough revenue to complete essential improvements to the national road network.

It is worth noting that motorists are already reporting that on some of the roads that have been constructed under the roads of national significance they are saving many minutes, often daily, and that is a direct benefit not only to motorists but also to the wider economy.

I commend this bill to the House.

I hope that the National Party backbenchers were listening closely to their Minister of Transport in that speech, and, indeed, he made the same comments in his first reading speech. Some of those members seemed to be labouring under the misapprehension that the money raised from these extra taxes that will be levied against low and middle income New Zealanders will be used across the transport network. That is absolutely untrue, and the Minister has made that clear. This is for roads. In fact, it is not even just for roads, or for roads broadly; it is specifically for their uneconomic roads of national significance—roads of political significance, and roads of vote-buying significance, as we found out by referencing The Hollow Men in the first reading. What is going on here is that the National Party is putting on new taxes and raising taxes on low and middle income New Zealanders.

Frankly, I am surprised that the Green Party and the Mana party are voting to increase taxes, to increase costs, for low and middle income New Zealanders. That, I think, is outrageous. Over here in the Labour Party we just will not wear that. We refuse to support an increase in taxes on low and middle income New Zealanders for transport infrastructure that simply does not stack up economically. There is a range of different—[Interruption] I raise a point of order, Mr Speaker.

💬 Mr SPEAKER: Order! I have a point of order, which will be heard in silence.

I can barely hear myself, over David Bennett. I do not mind if he wants to interject on me. He is quite fond of it. But if he could just calm down a little bit, that would be helpful.

💬 Mr SPEAKER: Order! The point is well made. The noise was coming from both sides of the House. Would the member please continue.

Thank you very much, Mr Speaker. The fact is that there are a number of different aspects to a growth-focused transport network in New Zealand. Local roads are important. Highways in some places, where appropriate, are important. Rail is important. Public transport, whether it be urban rail or buses, is important too, and so is active transport. Cycling and walking are both important as well. We need infrastructure to support all those modes of transport, but all this Government is focused on is the roads of national significance.

What we know is that when a Government builds more roads in order to relieve congestion, that is simply buying time. It is not a solution. It might last a few years, but in time all we will get is more cars on those roads and in fact we will end up exactly where we started from, with the congestion that we had before. An investment in a diverse and integrated transport network would see people moving from being single occupants in cars, travelling to work and back home again, to using public transport, if the investment was there to make sure the public transport available was reliable, regular, and fitted in with people’s lives. But this Government is not interested in investing in that type of public transport.

We would see freight taken off the road and relieving congestion, both for freight carriers and for car drivers, if we saw more freight moving on to rail and on to coastal shipping. These are appropriate methods of moving freight around the country. Sometimes freight needs to be moved on a road. Sometimes freight needs to be moved on rail. Sometimes freight needs to be moved by coastal shipping. There are different time-dependencies, and there are different types of freight. What this Government is not doing is building a transport network that responds to the different needs of different users, different types of freight, and different time-dependencies. It is investing everything into roads. Actually, what it is doing is overcapitalising in the roading network, when what would be a smarter use of capital would be to have a broader transport network so that the peak times on the roads were relieved a little bit and that we were not investing loads of capital in having empty roads most of the time.

I appreciate that congestion is appalling in Auckland, but most of the time those motorways are empty. So why spend billions of dollars on building roads that are going to be empty most of the time? There is a smarter, more sustainable, more strategic way of using transport money and investing in transport infrastructure.

💬 Simon O’Connor: What about buses and trains?

Absolutely! Buses and trains need to be used. They relieve peak congestion—they relieve peak congestion. It is a smarter use of capital. Actually, I would like to hear—[Interruption] The National Party backbenchers are quite keen to interject, but they are not at all keen to offer a substantive argument when they get their calls. I would be quite keen to hear a little bit more than just the one-liners that they have been provided with by their research team. I would like to hear them provide a more sensible, substantive argument than what they have given so far. So if they want to argue in favour of pouring all the money into uneconomic roads, they should get up and argue for that. Let us hear the case for it. But they know there is no case for it—they know there is no case for it.

What this bill actually does is it continues National’s legacy of shifting the burden of tax from those who have the most ability to pay for it, on to those who have the least ability to pay for it. It comes from a misguided belief that reducing taxes on those who can afford to pay tax somehow creates jobs. It is an absolute fallacy that reducing tax on the extremely wealthy creates jobs. How many jobs did the $5,000-a-week tax cut given to the chief executive officer of Telecom create? None—absolutely none. On the other hand—

💬 Grant Robertson: Cut 1,500 jobs.

Indeed, Telecom cut 1,500 jobs, probably to pay for the chief executive officer’s salary. On the other hand, giving tax relief to low and middle income earners is a job creation strategy, because it is the consumers who create jobs—it is the consumers who create jobs. Businesses create jobs when there is demand for their products and the demand is high enough that they need to take on additional labour to meet that demand. The demand comes from people having enough money in their back pockets to be able to go to the supermarket, to the shops, to the computer store, to wherever, and purchase products. That is where job creation comes from.

This Government is labouring again under a complete fallacy. That is why its taxation and economic policies are absolutely wrong, and that is why we are not seeing job growth. We are not seeing the 170,000 promised jobs—just another broken promise from the National Party. We are not seeing the economic growth that would get the books back into surplus without having to increase taxes and dive down the back of the couch to find every single little penny that can be found, to try to get the Government’s books back into that tiniest of tiny surpluses, 1/1000th of the overall Government books. That is well within anyone’s margin of error. The slightest little hiccup between now and next financial year and that surplus is completely gone. But the Government could be getting there if it had policy settings that encouraged job growth, like the kind of policy settings that the Labour Party has: a capital gains tax to shift investment away from speculative investment in property towards the productive sector, which creates jobs; a procurement policy that supports New Zealand businesses and New Zealand jobs; and, research and development tax credits, which, again, support the productive sector, the sector that creates jobs. Those policies and others are the kinds of things that New Zealanders need to see from this Government, not penny-pinching increases to their fuel excise tax just to make up for the fact that this Government has had unaffordable tax cuts for the wealthy, and has an unaffordable programme of road building for roads that are completely uneconomic.

I suggest that the National Party members, who reckon they represent the provinces, go and speak to some of the mayors and the councillors in those provinces and talk to them about their concerns about local roads. This Government is reviewing the way it funds local roads. I suggest that the member for Wairarapa go and talk to Roly Ellis at the Tararua District Council, who is deeply concerned that the productivity of the forestry that is about to come online in his region is not going to be as high as it could be because of the lack of investment in their local roads. The Government will not support them to upgrade their local roads, because all the money is going to the roads of national significance. That is the truth here—that is the truth. This Government does not support the regions. This Government does not actually support roads, and it does not support an integrated transport network. It supports buying votes by building uneconomic, gold-plated, silly roads that are significant to the National Party only, and not to the hard-working people of New Zealand.

I think the Labour Party needs to take stock of that member Iain Lees-Galloway. I think that an experienced member sitting beside him, like Mr Cunliffe, who had a high ranking within the Labour Party until recent times, should really talk to that member because the comments he is making around the roads of national significance will come back to bite him if he ever, ever has to do any policy.

The member cannot say that billions of dollars are being spent on empty roads. That member obviously has never been in Auckland. He is from an area outside of Auckland and is making policy and judgments around some of our busiest roads. He has no idea what he is talking about. He deliberately misled this House in talking about how this Parliament was saying that all this money was going on to the roads of national significance. That is not true. The fact is that we pay for half of the roads that are local roads.

When they are talking about relieving peak congestion, and my colleague made a very good point about trains and buses and so on, the member opposite has no idea about the way that public transport works, how much it costs, and the effectiveness of it at certain periods of time. He finished with the quote of “going to your local communities”.

In my first reading speech I made it clear to Mr Iain Lees-Galloway that we welcome his visit to Hamilton—we welcome him to Hamilton. I want to see the day that Mr Iain Lees-Galloway says the words like: “These are monster motorways that serve no real purpose.” I want to see him come to Hamilton and say that to his party’s former member Mr Gallagher, to our mayor, and to our people. I want to see Mr Iain Lees-Galloway repeat the rhetoric that he has been saying in this House, because those words will come back to haunt him.

The people of Hamilton, the Waikato, Northland, Auckland, Wellington, Christchurch, and Tauranga know that these roads are important for their communities. They make a big difference to economic growth. They make a huge difference to those communities. I want to see that member come to Hamilton and say what he has been saying outside this House, because he is going to be the biggest vote winner that National can get. He is going to be the biggest vote loser that Labour can get at the next election. So thank you, Mr Iain Lees-Galloway, and just a bit of advice: do not make such statements about roading in the future. Think about what you are saying, because it is going to hurt you in the end. Thank you.

David Bennett is very conscious of words, the importance of words that people might say, and how they will come back to haunt him. But there was one word he did not want to utter in his speech—well, two words—

💬 Iain Lees-Galloway: “Tax”.

—“tax” and “petrol tax”—because that is actually what this Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill is about.

💬 Hon Hekia Parata: That’s two words.

I said it was two. I did correct myself. Thank goodness the Minister of Education is here to keep us on track.

💬 Hon David Cunliffe: What about the contingencies?

We will come to the contingencies, but the words that Mr Bennett does not want to say are “petrol tax” and “raising petrol tax”. He did not mention that once, and that is exactly what this bill does. But I am not surprised that he did not mention that, because he would not want to get offside with his leader, John Key, who, of course, also does not want to mention that what this bill does is put up petrol taxes to ensure that the National Government can create its wafer-thin surplus.

The whole notion of what was going to happen with taxation under this Government is something that John Key does not want to talk about. In 2005 this is what he said. He was talking about taxation, and he said that what we have to avoid is the indifference to the burden that taxation heaps on middle-income families. Well, what does this do? What does this legislation do? What this legislation does is exactly that. It heaps the burden on middle-income families. These are the same families who missed out on a tax cut when the National Party came into office. These are the same families who looked on while the top 10 percent of taxpayers got 40 percent of the benefits. That is what happened. That is the squeeze that was put on the middle-income families that John Key suddenly said he felt for.

But then when National got into Government, Bill English said: “We don’t want to go down the route of raising taxes.” That is what Bill English said. What did he do? He put GST up. Who did that put the squeeze on? Low and middle income families, the people who spend more of their income on the basics. Not the National Party’s mates, who can take that money and go away on their overseas trips, but the middle and low - income families who got squeezed by a tax increase that National said it would not do. They are the same people who are being squeezed by a 20 percent increase in early childhood education costs and by an increase in prescription charges.

This Government likes to say that we are getting into surplus, wafer-thin as it may be. Well, it is off the backs of hard-working New Zealanders, who have not had a break from this Government, and it is shifting the burden. The Government is shifting the burden from its debt to New Zealanders’ bank accounts. That is what this bill does. That is why the Labour Party is strongly opposed to this bill. I am very surprised that there are parties in this House who oppose the Government’s Budget but think that they can vote for this legislation. I think it is naive to lift this bill out and say: “Oh, well, it puts petrol taxes up. We might think that’s a good idea in principle.” This bill is a hoax. It is not about the petrol taxes really, is it, Mr Brownlee? It is about the political surplus. It is about trying to make sure that a wafer-thin surplus is provided in order to meet a political commitment that this Government has made.

The reality is that this bill has to be seen in the context of the rest of the Budget. It has to be seen in the context of a Budget that delivers to National’s vested interests rather than ordinary New Zealanders’. That further creates the two-speed economy where the speculators and the vested interests benefit, and where the exporters and the manufacturers and the ordinary New Zealanders go in the slow lane. That is what this is about. This is about a Budget where there was an absolute failure to create policies for affordable housing—an absolute failure. The Government promised big and delivered very, very little. This is a Budget where there was an absolute failure to address issues of poverty. Great claims were made about food in schools, and nothing shows up on Budget day about that. Great claims were made about what would be done to get warrants of fitness for rental housing. The Government is considering a pilot—a consideration of a pilot. That is the context of this bill. That is what members in this House should be thinking about as to whether they vote for this bill.

To focus on and accept the Government’s fiddle and fudge and to say that this is about making sure that we get money for these roads of significance to National—or roads of national significance, whichever way around you want to put it—yes, that is what it wants to claim of it, but the reality is that this is a taxation bill that is part of this Government’s Budget. It is vital to its ability to drive its agenda through. Parties on this side of the House should think very carefully about whether they want to support National’s Budget, because that is what they will be doing if they vote for this legislation. They will not be voting just to increase petrol taxes—mind you, they will be doing that, which will put further pressure on middle-income families—but they will be voting for a Budget that is utterly bereft of ideas to create jobs.

The two-speed economy I mentioned earlier is relevant to this legislation. As has been discussed before, it is the people in regional New Zealand who miss out on the transport policies of this Government. It is the people in regional New Zealand whom this Government is ignoring. And my colleague Phil Twyford, when he was Labour’s transport spokesperson, and Iain Lees-Galloway now have been going around the country talking to the local authorities in the regions and talking to the businesses in the regions of New Zealand, and they are saying a consistent thing, the same thing that I have been told when going around talking to polytechs, talking to chambers of commerce, and talking to businesses about skills and training—that this Government is ignoring them. This Government is ignoring the regions. It is interested only in working with its vested interest mates. Those regions also are not benefiting from this transport policy.

As my colleague Iain Lees-Galloway has said before, a transport policy needs to be a balanced policy. Yes, there needs to be some funding for roads, but there needs to be support for public transport, and there needs to be support for walking and cycling. That is absent from this Government’s plan. It is so limited. There is no—

💬 David Bennett: That’s not true.

David Bennett says that that is not true. What is the percentage out of the transport budget that is spent on rail?

💬 Iain Lees-Galloway: Seven.

Seven percent of the transport budget is spent on rail. This is not a balanced policy. The balance that is really missing here is the balance that would give ordinary middle-income and low-income families a fair go, and give regional New Zealand a fair go. David Bennett, for all of his bluff and bluster, cannot make the case for the fact that this bill is good for his constituents. People in Hamilton and people in the Waikato are asking where this National Government is. This National Government is far more focused on deals with Skycity, selling off laws to Warner Bros, and selling off to international companies the right to protest, as we have seen in the last few days. That is the focus of the National Government. It has ignored the regions of New Zealand, and this piece of legislation is one more example of that. So I strongly urge parties in this House to oppose this legislation. This is not legislation that will deliver for New Zealanders, and it cannot be isolated out from the rest of this Government’s programme and the rest of what it is doing.

This Government has a record of broken promises when it comes to taxation. It has come to this House today with a bill that increases taxes on petrol this year, next year, and the year after. That will result in pressure on middle-income households, and there is nothing else in this Budget that New Zealanders could look at and say “OK, maybe they’re putting my petrol tax up here, but I’m going to see some delivery. I’m going to see some new jobs created. That means I can support a petrol tax going up.” But that is not there. On the jobs front this Budget is hilarious. If it were not so serious, it would be absolutely hilarious. We have discovered in the Budget figures that the National Government will pull up 60,000 jobs short of its target of 170,000 new jobs. That is bad enough, but then it has recommitted to a new target for 4 years with 170,000 jobs again. It will not do it. It does not have the policies to create jobs. It does not have the ideas and the innovation to turn this economy around, to make the changes to monetary policy, or to change procurement policy so that it focuses on New Zealand jobs. It is not prepared to tax capital through the capital gains tax. All it is prepared to do is tinker around at the edges and benefit vested interests. This bill is critical to that Budget. It should be opposed because it does not deliver to ordinary New Zealanders the kinds of benefits they should expect from a Budget like this.

There are two very different reasons for raising a tax. One might be just to raise revenue, which the Government then uses to deliver public services. But there is another way of using tax: as an economic instrument that encourages behaviour that we would like to see more of. The Green Party does support the use of economic instruments to reduce carbon emissions and to reduce pollution. That is a smart way of using tax to reflect the full external costs of what is going on, and that can raise revenue. Then we can put that revenue into smart alternatives that enable households and businesses to do more of the activities that they do with less pollution and less cost. So the Green Party can support a moderate, steady increase in petrol excise duty, because what that signals to households and businesses is that actually it would be quite a good thing if they were using less petrol, because petrol is polluting. It is also very, very good to support the economy of New Zealand in a transition to being less reliant on fossil fuels. That is really important to recognise.

Unfortunately, the Government is not taking this smart approach to raising the petrol tax. What it is doing is increasing its revenue so it can spend more money on projects that increase the vehicle dependency of New Zealand and do not provide smart alternatives so that businesses and households can get around with less petrol. It is really unfortunate that the Government is not taking this opportunity to invest the increased revenue that it is going to get from petrol tax in the types of transport that have historically been under-invested in; therefore, New Zealanders have not had the choice.

I think a lot of the time the Government confuses or conflates our high vehicle dependence with the preferences of New Zealanders. It is true that most New Zealanders have to use a car to get most places. This is not because that is what they want to do; it is the direct result of Government policy, successive Government policy, that has not given New Zealanders the choices that they would like. And, hey, that has happened all over the world in rich countries—the United States, Canada, Australia, and New Zealand. We are all in this position. But most other countries have realised that we have this opportunity right now to get better economic outcomes, better health outcomes, and better environmental outcomes, and reduce our vulnerability to spikes in the oil price by investing in smart alternatives as a priority. That means making people the priority, rather than vehicles, in our towns and cities, in our traffic engineering, planning, and funding. That means putting in a lot more money than we are currently into making it safe for kids to walk and cycle to school, and giving people the opportunity to live closer to where they work by reducing some of the barriers to intensification that currently exist in district council plans.

So there are many opportunities to reduce regulation, reduce the amount of money that the Government is spending, and get outcomes that New Zealand households and businesses would actually prefer. Of course, the National Government is entirely ideological about this. It does not have a balanced approach to transport spending. I love raising this graph. This is the new infrastructure spending in the transport budget for the next 3 years. It is not balanced. All of this purple is on a few expensive new State highways that will carry only 4 percent of daily vehicle trips. So most of the budget for new infrastructure is going on a very small percentage of vehicle trips, and freight on almost all of these routes is less than 10 percent of the vehicle trips. These roads already exist. We already have State highways. So duplicating an existing link is going to have very marginal benefits. You could improve the travel time and the safety on these routes for less than a quarter of the cost of the new roads. So it is a bit ridiculous to say that this is going to have any economic benefit at all for New Zealand as a whole.

What we have to consider is the opportunity cost. Of course people in Hamilton, people in Rodney, and people in Wellington will have the perception, if they drive on the motorway, that it is a good thing, right? Because they are not paying for it directly.

💬 David Bennett: Yes, they are.

No, all New Zealanders are paying for it, and a small number of people are using it.

💬 David Bennett: They buy petrol.

Government members do not understand the difference between direct pricing and indirect pricing, and marginal costs and average costs. What the petrol tax is is an average cost pricing, and it means that the marginal cost of building the new road is not paid for by the people directly using that road. So of course they are going to say “Oh yeah, this is a great thing”, but the truth is that if they had to pay for it directly, they would not. They would choose not to. They would say “You know what, I’d rather spend my money doing something else, and going about this another way.” That is what we have seen in Australia. That is why there has been this failure in the roading public-private partnerships in Australia, because the traffic models overestimated the demand that people would have for a new tunnel under Brisbane—the new airport link in Brisbane. The traffic model just overestimated demand. When people had to pay tolls, guess what? They were not willing to pay the tolls. So it is unfortunate that National is not taking an economically rational approach to its infrastructure investment.

What is happening is that it is spending a large amount of money on a few projects that are going to deliver very small, if any, benefits. Very little money is going to local roads and almost no money is going to new transport infrastructure, walking, and cycling. Those are the areas that have been systemically under-invested in for the better part of a century. They are very cost-effective. They are much more cost-effective. The truth is that there is nothing evil about cars, but they are a very expensive way to try to move a large number of people around urban areas. Government members would like to portray my comments as being ideologically anti-car, but they are not anti-car at all. The best thing for people using the roads—particularly for freight—is that more commuters have the opportunity to not take their car and to not clog up the roads at peak time. That is a more cost-effective use of our next dollar in transport infrastructure and investment.

So although it is fine for the member for Hamilton East to say that people in Hamilton love this road and that it is going to be good for the economy, the objective analysis does not stack up. The Government announced this project before a business case had been undertaken. I have read the business case, and it does not stack up.

💬 David Bennett: You weren’t there. You weren’t even in Parliament then.

Actually, I was a consultant and I worked for Hamilton City Council as a transport planner and policy adviser. So I was there. I was in the New Zealand Transport Agency in 2008 after the new Government was elected, working as a consultant for the agency and working on a report called Managing transport challenges when oil prices rise. The officials in the New Zealand Transport Agency were saying “What a disaster. The National Party has come in with these crazy motorways, and the business cases do not stack up, and it wants to move them right up the priority chain.” There was an opportunity cost because that was billions of dollars not going on projects that would benefit more New Zealand households and more New Zealand businesses. You do not see the opportunity cost of the money that is not spent on smarter, better projects that would have a better outcome.

The National Government is putting up the petrol tax and is spending all of the money on projects that give New Zealanders no opportunity to avoid higher oil prices. This is directly related to our current account deficit. There has been a lot of talk about the current account deficit and how the Budget that was presented this week is actually forecasting a worsening of the current account deficit. It is the current account deficit that reflects how much New Zealand is earning relative to how much it is spending on a national level. It is really that that tells us about the health of our economy. The Government Budget is only one tiny part of it. Even if the Government Budget can cobble together some optimistic surplus in a couple of years, if New Zealand is spending more money overall offshore, and is earning less by selling our goods overseas, then we are in a worse economic position, and it will be felt by New Zealand households and businesses.

Our oil bill went from about $3.5 billion at the beginning of the decade to $8 billion last year. We are importing the same amount of oil, but it is worth twice as much. So our current account deficit is worse because New Zealand households and businesses do not have the opportunity to get around in a more energy-efficient way. That is only going to get worse as time goes by, so it is right now that we critically need to be investing in those alternatives. Oil prices are not going down any time in the future. Even if we drill it here, we are still going to pay the international price of oil. Even if we drill it here, we do not use it here. It does not go in the tanks of our cars or trucks; it goes straight overseas, because it is not that type of oil that we produce here in New Zealand.

So we need to futureproof our transport system. We have the opportunity to futureproof our transport system. The National Government is not taking that opportunity, and it is going to have dire economic consequences for the country. Thank you.

Was that not a cute contribution from Julie Anne Genter, the “member for nowhere”? Outstanding. The member—[Interruption]

💬 Mr SPEAKER: Order! That level of interjection is too loud. Would the member Mike Sabin—

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. I was waiting for you to interrupt the member after his gross breach of the Standing Orders.

💬 Mr SPEAKER: Order! Would the member please resume his seat. I call Mike Sabin.

I heard the contribution from David Shearer’s speech writer, Grant Robertson, talking about how nothing in this bill, the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill, is dealing with poverty, which is rubbish, first and foremost. Secondly, this is another good example of a party that votes against everything that is actually about building the economy, that is actually about giving some of the infrastructure that provides productivity. The benefits to Northland alone from the Pūhoi to Wellsford motorway are in the vicinity of $45 million per annum. That is a province that deserves to be invested in, and this Government and this Minister of Transport are doing that.

Was that not a short call from Mike Sabin, the member from somewhere up in the far north—a very short call—and symptomatic of the amount of input that most of the Government members have had in most of the debates over the last 2 days? I want to tell a small story here about—

💬 Hon Gerry Brownlee: Nothing new in that.

No, but this is a small story about one Mr Steven Joyce, who happened to be—

💬 Hon Trevor Mallard: The member for nowhere.

—yes, he is a member for nowhere as well—one Mr Steven Joyce, who was the Minister of Transport at the time, back in about 2008-09. We on the North Shore invited him to come to see us and explain why the incoming National Government had just cancelled the regional fuel tax in Auckland. This was a regional fuel tax that was proposed in Auckland, which had taken 3 years for the local authorities in Auckland—all the local authorities, which National said could not work together—to negotiate with the former Labour Government to come up with a solution to help fund the major roading and public transport initiatives in the Greater Auckland region. And what it was going to be was that it was going to be a tax along the lines of the one in the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill, starting at 2c a litre and rising to about 9c a litre over a period of 5 years. It was going to help Aucklanders self-fund their roading and transport problems and issues over that period of time.

But the National Government got into power and immediately cancelled it—just cancelled it outright. This is after 3 years of extensive negotiations by local and central government coming up with a solution so that Aucklanders could be self-sufficient in terms of providing for their future needs in this funding area, and one Mr Steven Joyce cancelled it. He was issued three invitations, I think it was, by me when I was Mayor of North Shore to come to the North Shore and talk to us about why he did it. That same Minister of Transport, that same Minister of Transport, who lived just north of Albany, just over the border in the Rodney area, was driving through our city of North Shore half a dozen times a week, but he could not find the time to come to explain why he was cancelling the regional fuel tax, and, at the same time, why there were cutbacks to funding on things like walking school buses. On the North Shore we had over 100 walking school buses. In fact, I launched the 100th walking school bus on the North Shore when I was mayor. And yet this National Government was cutting back funding for the likes of walking school buses, which were encouraging parents to get out of their cars and get their kids to walk to school, and to stop thousands and thousands of mothers and fathers in the morning hiving all around the school gates and clogging up the streets while people were trying to get to work.

It was a great initiative, but Steven Joyce knew better—he knew better. He did not want to have any discussions on that. He did not want to come to see what we were doing in terms of public transport on the North Shore to get people on to buses, to get people on to the new Northern Busway—

Sitting suspended from 1 p.m. to 2 p.m.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. The first point of order is one that I would like to take slightly more seriously than I did earlier when I raised it. I think it is fair that you dismissed it because of the tone of my point of order, but it did go to the importance of longstanding Speakers’ rulings—since 1996, or probably 1997; post the 1996 election—as to the method of addressing list members. I think that members who are list members are to be addressed either by their names, or, in this particular case, as the Green list member. To refer to honourable members of this House as being members from nowhere or members for nowhere, as Mr Sabin did is, I think, a long-term breach of Speakers’ rulings, and I think it is important that we have it on the record that that has not become acceptable.

💬 Mr SPEAKER: I thank the member for his point. He is right: it will lead to disorder if members do refer to other members as members from nowhere. But that interjection was then being thrown around from both sides of the House.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. My second point of order is to ask you whether the rules have changed as to photography within the Chamber. I thought it was the practice that photographs were not to be take in here, including in the lunch break, unless by an accredited member of the media, and I thought they were not allowed to do it in the interval, either. It appears that at least one individual has been on the floor of the House taking photographs—

💬 Hon Ruth Dyson: Standing.

💬 Hon Trevor Mallard: —standing on the floor of the House.

💬 Hon Tau Henare: Name him!

💬 Hon Trevor Mallard: Well, if the member Mr Henare wants—

💬 Mr SPEAKER: Could the member just finish his point of order.

💬 Hon Trevor Mallard: Well, the question I am asking is whether you, Mr Speaker, have changed the rules and have given permission for photographs of members to be taken during the luncheon break.

💬 Mr SPEAKER: I have not changed any rules, at all, and if photographs were taken during the luncheon break, that is not a matter of order.

It was a very nice Saturday lunch here in Wellington, I can assure you. It is not often that we have a Saturday lunch in Wellington, but it was most pleasant. It did rob me of the chance, when I was in full flight, of telling the story of one Mr Steven Joyce, who, at the time, was a member of the Opposition, and then he became the Minister of Transport. Then—

💬 Tracey Martin: What electorate does he represent?

He represents the National Party. He has never been elected to anything himself. He has actually never ever stood in an election himself, but he does have a huge amount of influence in the National Party. And that one Mr Steven Joyce lives in the area of Rodney, just north of the North Shore, and he was the Minister of Transport at the time when he cancelled a proposed regional fuel tax in Auckland, which was going to help to provide a huge amount of self-sufficiency for Auckland in its transport woes in terms of not only its roading but also its public transport.

It is somewhat ironic that something like 4 or 5 years later, the National Government is now saying that it needs more money for roads of National Party political significance. That is what they are called now—roads of National Party political significance. It is now putting in place an excise tax on fuel, starting on 1 July, of 3c a litre, going up every 1 July—next year, another 3c a litre, and the year after that, another 3c a litre. It now sees fit to charge every single New Zealander all over this country another 9c a litre, but the Hon Steven Joyce, when he was the Minister of Transport, could not see any merit in Aucklanders having a regional fuel tax of their own to help pay for their own. It is ironic that on 18 December 2012, Gerry Brownlee, the current Minister of Transport, said the series of July increases will also ready the National Land Transport Fund for investment in upper North Island transport projects, beyond the roads of national significance programme. Basically, most of this money will be going into roads north of Hamilton. Hamilton and north is where the money is mainly going. There is a little bit in Wellington. There is a little bit down in Christchurch—a token amount in Christchurch. But the bulk of it is going north of Hamilton.

So, as I said earlier, every single person in the small population of Dipton, in Mr English’s area—down there where he has his holiday home, where he visits occasionally, and where maybe during this adjournment he might perhaps be visiting—will, as of 1 July, be paying another 3c a litre for their fuel in Dipton, to help pay for roads in Hamilton and north, and in Auckland, and north of Auckland. I am sure that the people in the electorate of Bill English, the Minister of Finance, must be thrilled with that. They must be absolutely chuffed. They must be chuffed to think that in 12 months’ time, they can look forward to another 3c a litre increase on top of that. And in 2 years’ time, they can look to another 3c a litre increase. They must be chuffed because down in Dipton they must be thinking: “Boy, we must be going to get some really good roads in Dipton out of all these extra taxes that our member of Parliament, Bill English, is going to charge us. We must be going to get some super highways in Dipton. We must be going to get some wide arterials. We must be going to get some four-lane highways in Dipton.” Not on your life, Dipton. You are not going to get a single thing out of this Minister of Finance or out of this Minister of Transport. All you are going to get, Dipton, is another 9c a litre. So when you travel and drive down to Invercargill, when you travel and go up to Queenstown, and when you go over to Dunedin, every time you take a car journey, you, the people of Dipton, should remember that you are paying more money to get there and more money to get back to Dipton, because this Minister of Finance and this Minister of Transport determined that you would help pay for the roads north of Hamilton.

But what I would encourage you to do, if you are in Dipton, is maybe take a drive up to the North Island. Drive up to the North Island, get to Hamilton, and, when you finally get to Hamilton and you get on to some of these roads of National Party political significance, make the most of it. I would probably suggest you drive between Hamilton and Auckland and around, and do it four or five or six or seven times while you are up there. It is a long way to drive from Dipton up to north of Hamilton. When you get there, make the most of it, because you might do it only once in a lifetime, when you have taken your car all the way from Dipton to go up there to pay for those roads. So, when you get there, “Diptonites”—are they called “Diptonites”?

💬 Hon Trevor Mallard: “Dipsticks”.

They are not called “dipsticks”; they are “Diptonites”. That is most appalling. There is only one “dipstick” from Dipton. So, “Diptonites”, go up to the North Island, and enjoy those roads of National Party significance. Drive up and down them. Make the most of them, and know that every time you are putting the petrol in your car at the pump, holding the handle, pressing the button, putting petrol into your car, you are paying for all those roads that the National Party wants north of Hamilton.

That is not fair on New Zealanders all over this country. It is not fair on the whole country. This is a tax and it is a hidden tax. It is a tax on the whole country, and everyone is going to be paying to help balance the National Party’s Budget. That is what it is. It is balancing the National Party’s Budget so it can, hopefully, in 2014-15 come up with a tiny little minute surplus—a tiny little minute surplus. That is what it is all about. It is trying to balance the books. New Zealand First does not go along with it. It is unfair.

I commend the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill to the House.

I rise to oppose the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill, recalling, first off, what it does to petrol prices. When the Labour-led Government left office the total petrol excise duty was 42.5c a litre. It has already gone up by one-fifth; it is 50.5c a litre. And this bill will put it up another 9c to 59.5c a litre, raking another $7 billion over 10 years out of the pockets of middle and lower-income New Zealanders.

That is not enough to fund the roads of no surplus, because it has to be done in conjunction, as we said in the first reading, with a number of other measures that are required to contrive what has been repeatedly described as a wafer-thin surplus, but which the Labour Opposition argues is actually a bogus surplus because you do not get there without having to simultaneously manipulate about $3 billion worth of revenue and spending measures. The Government is taking $200 million out of the 2014-15 operating allowance. It is refusing to give back $700 million worth of ACC levies, against the advice of officials. It is magicking $400 million of tax credit offsets in one year only—the year that it needs to hit surplus. It is contriving a $1.1 billion increase in corporate tax receipts for that year only, and a $1.1 billion increase in PAYE and employee tax as well. With all of those things, this adds up to a Budget that really is not a surplus.

I want to examine two other aspects of this today in this part of the debate, the second reading. The first is what the impact is on the economy and on the Government’s other objectives of passing this measure and the other fiscal measures that it is part of. There is a thing in the economic jargon called a “fiscal impulse”, and, for the folks listening in at home, that is what the net effect is, if you like, of all the things that the Government is doing here—all the taxes it takes out and the spending that it puts in. Is it putting your foot on the accelerator to make your car go faster, or is it putting your foot on the brake to slow it down? If you put money in, you make it go faster; if you take money out, it slows the economy down.

The highest application of the brakes, the biggest negative fiscal impulse, is in the magic year where it supposedly hits surplus, and that is because the Government is having to hold back on spending and amp up the tax it is taking and stop giving stuff like ACC levies back in order to get to the wafer-thin magic line. The net effect of that is a minus 1.2 percent fiscal impulse. That means GDP growth is about 1 percent lower than it would be if that had been neutral—all right?

So the Government is shrinking the size of the Budget, shrinking the size of the State relative to the economy, taking energy out of the economy. In so doing, what happens? Our unemployment rate is staying up at 6 percent, not the 5.2 percent it was forecast to fall to in last year’s Budget—that is, more people, by the decision of this Government, are going to be out of jobs than need to be, and, indeed, more people are going to be out of jobs than it said would be just a year ago. Those are real people, real families, who have lost hope, who have lost self-esteem, and who have lost income. Of course, for other taxpayers, that means they are having to pay for those families to live through the unemployment benefit when they do not need to be. That is the aggregate effect of a 1.2 percent slow-down in GDP growth as a result of the Government trying all these tricks to get to a surplus that does not really exist. We agree with the idea of getting to surplus. We would do it too, but we would do it in a much more genuine way, without these negative side effects on the economy.

The third thing that I want to reflect on today, given the enormous amount of money that we are watching the Government clawing out of the pockets of ordinary Kiwis through this bill—$7 billion over 10 years—is to ask that age-old question about fiscal and revenue policy: who gets what and who pays what? Because, at the end of the day, politics and the arguments around this Chamber are very much about who is getting and who is paying. What New Zealanders are now crystal clear about is that who is getting, under this Government, is the top few percent, and who is paying is everybody else.

If we needed to refresh our minds with a little bit of history back to 2010, we look at the famous tax switch, where the Government put up GST 2.5 percent for everybody and then gave the top tax rate a massive tax cut. What was the effect of that? It was to raise $14.3 billion in tax out of everybody else. Average income earners got $12 a week; someone on John Key’s salary got $243 a week—Joe Average: $12; John Key: $243. The upper income tax cuts were not neutral. The Government would not have to do all this smoke and mirrors and raise your petrol tax if it had kept the promise to make this tax neutral. In giving more to the rich and taking it off the poor, the Government was under by $1 billion over 4 years. It was $1 billion short, according to its own Treasury documents.

It does not stop there. This debate gives us an opportunity to run through the list, just to call to mind all the other sneaky little taxes that National has been up to. We caught it out twice in the last few months: the car-park tax, which it has rolled back off, and the famous iPad tax—the famous iPad tax. You know, the Government thinks it is good enough to charge ordinary workers, office workers, fringe benefit tax for the private use of their work iPad or computer. You are supposed to go through and work out how much of your use of your computer is private, and then pay the fringe benefit tax on that. What a ridiculous idea. The Government, however, did not have the courage to take on the guys who make the iPads, like Apple and the other big IT companies, and make them pay a fair share of cross-border tax. They can just shift their costs, and they pay almost no tax at all.

The Government has forced people to pay 20 percent higher early childhood education costs, a 31 percent average increase in school donations, and 22.5 percent higher tertiary and post-school fees. Student loan repayment rates have gone up, and ACC charges have gone up—get this—67 percent on the work account, 23 percent on the earners account, and 31 percent on the motor vehicle account. Workers’ ACC costs have gone up 67 percent in the life of this Government. Officials told the Government it was going to be charging $1 billion too much in 2014-15. You know what? It said: “Forget it—we’re not giving it back because we won’t hit surplus.” I call that being unfair and not straight up with New Zealanders.

What about KiwiSaver? The Government has put up the compulsory payment on KiwiSaver and reduced the tax credits. Prescriptions charges—just lots of nasty little things—have gone up from $3 to $5. Fuel excise has already gone up one-fifth, or 20 percent, under this Government, and it is going to put it up another 9c a litre through this bill. Tobacco charges have gone up. Road user charges have gone up. Local government rates have gone up. Alcohol excise has gone up. Aviation fees have gone up. Company filing fees have gone up.

The point is that this is a Government that came in and gave massive tax cuts to the top 1 or 2 percent, and then it has spent the last 5 years getting everybody else to pay for them. This is not good enough. This is not what New Zealanders want to see. This is not the New Zealand that we grew up to believe we had a right to live in. We thought we were going to grow up in a country where everybody got a fair shake of the sav—where the kid of a doctor and the kid of a driver could aspire to the same success in life; where it did not matter what the size of your parents’ wallet was, or what your skin colour was, or what your gender or your orientation was, everybody got a shot.

That is not National’s vision of New Zealand, and this bill is yet another bill, like all the other rubbish we have seen come through on this Budget, where you, New Zealanders, are paying too much, and the rich are getting away with too little. We need a vision, we need a positive future, we need everybody to have a stake in this country—to be proud of being New Zealanders again. We want a bit of positive national identity, and we are not getting it from this Government, which is disappointing, overtaxing, and dismally failing New Zealanders.

I commend this bill to the House.

It is very disappointing, and really a slap in the face for democracy and for the public, that the National Government would come to the House pushing through this obnoxious legislation and those members are not even prepared to stand up and justify it, make the case, and argue for this law. Well, on this side of the House, we are prepared to stand up and oppose it. There are two reasons that we oppose this bill, the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill. The first is that it is an illegitimate tax grab. It is a politically motivated attempt to conjure up a surplus when one really does not exist, so—

💬 Hon Trevor Mallard: It’s a lie.

It is a lie. It is a political lie for John Key to try to convince the public that he has got the books back in balance. The Government is doing it at the expense of ordinary New Zealanders and the motoring public.

We want to talk about tax and put this tax in the context of this Government’s record on taxation. So let us talk about tax. The crowning glory of the John Key Government was to distribute massive tax cuts that transferred wealth from the poorest sections of society to the top.

💬 Chris Auchinvole: Ordinary New Zealanders are motorists

We know—we know, Mr Auchinvole—that 40 percent of the benefit of those tax cuts went to the top 10 percent of New Zealand income earners. That is an outrage, and then this Government has spent the remaining few years shovelling home the cost of those tax cuts to ordinary New Zealanders.

💬 Chris Auchinvole: “Shovelling, shovelling!”

Yes, it has. It has increased GST, a flat tax that added to the burden of already stressed low-income earners. It has refused the entreaties of every economist in this country, almost without exception—every academic, the IMF, the OECD, Treasury, and everybody who says that the Government should institute a capital gains tax, that it is the missing link in our taxation system, and that not only would it be just to tax people who make their living from the earnings off assets but also it would channel investment into the productive economy. But, no, National is right and everybody else is wrong on that, apparently. And now we see this stealth tax, by pumping up the petrol excise by 9c over a period of time—3c every year for the next 3 years. That is an illegitimate tax grab.

I also want to make the point in the few minutes I have that the other reason that Labour opposes this tax grab is that the purpose of it, other than creating an illusionary surplus for the Government, is to fund Gerry Brownlee’s wasteful, economically damaging, white elephant motorway projects. These so-called roads of National Party significance are the defining feature of this National Government’s transport policy. Labour is not opposed to all of the roads of national significance. We are not opposed to all motorways, we are not opposed to all infrastructure, but let me give you a couple of examples of why we oppose this transport policy and this particular bill. The “Holiday Highway”, which National wants to build between Pūhoi and Wellsford—the Government claims it is an economic lifeline for the north. Well, let me tell you—let me tell the members who do not like it being described as the “Holiday Highway”—that there are approximately 9,000 vehicles on the road every day between Warkworth and Wellsford. Do you know how many vehicles are on the Te Atatū Road in my electorate? Four times that many—36,000 cars a day on a normal Auckland arterial road, and this Government wants to blow $1.7 billion on a gold-plated, four-lane, dual-carriage expressway on a road that carries only 9,000 vehicles a day. It beggars belief.

Mike Sabin got up in this House and said that this was the economic lifeline for Northland and that people desperately needed this road, but he will not support a policy that we have got that would spend $400 million right now on eliminating the accident black spots, eliminating the traffic bottlenecks. We would fix that road right now by spending $400 million. That member and the National Government want to blow $1.7 billion of this country’s taxes on a gold-plated “Holiday Highway”. That is completely unjustifiable.

The other example that I want to put to the House of a wasteful—

💬 Hon Tau Henare: It’ll save lives. That’s what it’ll do—save lives.

Oh, my God! The “brains trust” of Te Atatū has finally woken up. I am surprised that he is in the House. Did you not know, Mr Henare, that there is a football game on television at the moment? I am surprised that you are not in your office with your feet up on the couch watching the football, because it is on right now. Frankly, I am surprised to see the member—

Order! The member’s time has expired.

Kia ora, Mr Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to support this bill, the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill, and to offer a positive transport vision for Aotearoa New Zealand, in contrast to the National Government. We support a modest increase in the fuel excise levy, signalled well in advance. We think that 3c a year over 3 years is realistic, given that we are in the lower half of the OECD fuel excise levels.

💬 Andrew Williams: Selling out.

Selling out? What we are talking about is giving New Zealanders a clear signal, which is to invest in efficient vehicles, invest in innovation like electric vehicles and hybrid vehicles, and invest in better public transport. The problem is, of course, that the Government is not backing this up, because the Government is still stuck in the 1960s. Gerry Brownlee still has a 1960s approach to transport. Gerry Brownlee—or, as I call him, New Zealand’s “Colossus of Roads”—is spending the lion’s share of the transport budget on just seven new motorways. It is unbalanced, it is ideological, and it is fiscally reckless.

What the Government wants to do is borrow to build $12 billion worth of only seven roads. It has got poor business cases. Half of them have got negative benefit-cost ratios. There has been no Treasury analysis. What it is doing is not spending any extra money on public transport infrastructure investment. It is closing the regional rail lines, and this is the problem that has led to the situation of why we are having this bill passed under urgency now. Because fewer people are driving, we have got traffic down, petrol up, and public transport going through the roof. Fewer people are driving, and fewer people are paying the fuel taxes. So the Government has to keep on borrowing an extra $1 billion and keep putting up the fuel taxes to keep spending money on the roads, which we know Kiwis are driving on less.

So I have got this vision of Gerry Brownlee with his arm out of the window, screaming down the road to nowhere, pedal to the metal. He does not know where he is going. He is too embarrassed to ask for directions. Bill English in the back seat should speak up, because New Zealand cannot afford to be making decisions like this. Mr Brownlee, you should ask for advice and get a map to a better future. Bill English should speak up about this. The Government has made a big deal of the surplus, but what we really should be looking at is the current account deficit. It is 5 percent of GDP, and it is going to be 6.5 percent soon. We are second to only Turkey at the moment in terms of the OECD. We are on track to have the worst-performing current account deficit in the OECD by 2017. We are going to be borrowing $17 billion in deficit, which requires settling off the assets and borrowing more. We have got the second-largest current account deficit in the OECD. So if New Zealand was a household or a business, what we are doing at the moment is losing $10 billion a year. We are on track to hit a $208 billion net overseas debt by 2017.

The problem, of course, is that more motorways—especially the ones where half of them had negative benefit-cost ratios—are not going to help with these significant structural economic problems. What we should be doing is focusing on the tradable sector, focusing on innovation, and focusing on competition. You know, we should be focusing on reducing electricity prices through things like NZ Power. We should be looking at helping our businesses—supporting Kiwibank and the finance sector costs. We should be supporting the manufacturers, which are haemorrhaging jobs at the moment, yet what we know from the Government’s $12 billion spend on just seven roads is that its jobs estimate is that each job is going to cost between $500,000 and $1 million. Jobs are an important question, and roads and motorways are not the answer to that question.

We should invest in the right infrastructure, in things like a second internet cable, things like better public transport, and not these uneconomic motorways, which the Government has to borrow to build. The Government is borrowing billions to pick winners in the motorways. This is like Julius Vogel in the 1880s, borrowing millions of pounds offshore to build bullock tracks. It is looking to the 1960s. It is not what smart economies are doing at the moment. That is where the Greens are offering a positive alternative, a positive solution.

We want to give Kiwis choice—things like a central business district rail link for Auckland. Auckland is expected to grow by an extra million people—75 percent of the country’s growth will be in Auckland over the next 30 years—and what we know is that the central business district rail link is going to transform the public transport infrastructure in Auckland. It is going to unlock the potential of the central business district. It is going to massively help the development of the inner city, where we know most of the productivity gains are. This is going to unlock the city of Auckland. It is going to take 15 million kilometres of vehicle trips off the road by 2040, according to the Auckland Council. It is a great plan. It is a positive plan. This is where we should be investing—in smart infrastructure. So although we support the modest fuel excise levies increase contained in this bill, what we do not support is what the money is going to be spent on. We have got a smarter vision for this country, and I believe that New Zealanders stand behind us in it. Kia ora.

I commend this bill, the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill, to the House.