May 16, 2011
Govt can address debt and economic transformation this Budget
The National Government can rapidly reduce record levels of debt while beginning the process of transforming the
economy, Green Party Co-leader Dr Russel Norman said today.
Dr Norman launched the Green Budget initiatives today — a package of Budget measures focused on revenue raising while
moving the economy onto a more sustainable footing.
“The Government has the opportunity to use this Budget to begin the economic transition to a more sustainable,
prosperous, and fair economy,” said Dr Norman.
“Our long-term prosperity depends on our own natural resource heritage, which must be safeguarded. No environment, no
“Market mechanisms, like a price on water, would help shift the economy in a smart green direction and help the
Government balance their books at the same time.
“Likewise, cutting a billion dollars in subsidies to greenhouse gas polluters would be good for the Government’s bottom
line and begin the transition to a low carbon economy.”
Dr Norman was highlighting two of five alternative measures he has laid out to help the Government reign in record debt
levels while incentivising a switch to a more sustainable economy.
“It’s likely, however, this Government will use the record deficit — a deficit they have to take some responsibility for
creating — as a reason to cut and sell, leaving the economy no different from the place we were in when things went
wrong,” Dr Norman said.
“A smart government would balance their books by considering some revenue options, like a temporary earthquake levy,
while revisiting some of the ways its spending money poorly, like the $7 billion it's pouring into motorways when oil
prices are high.
“A clear majority of New Zealanders indicated that they are prepared to pay a small temporary levy on their income to
pay for the rebuilding of Christchurch. So why are we adding $5 billion more to a record deficit instead?
The final part of the Green Budget package revisits the need for a comprehensive tax on capital gains (excluding the
family home). The case for a capital gains tax was given renewed emphasis recently in the latest OECD Country Report on
New Zealand which highlighted this basic distortion in our tax system.
“If the National Government are serious about rebalancing the economy towards greater investment in the productive
sector rather than more housing speculation, they’d be following the advice of the OECD, the IMF, and their own Savings
Working Group and introduce a comprehensive tax on capital gains except for the family home,” said Dr Norman.
“New taxes on capital gains and water would raise substantial additional revenue, broadening the tax base and enabling
the Government to lower debt and live within its means once again.”
Link to the Green Budget document (7 pages):
Link to the 2011 OECD Country Report on New Zealand (16 page summary):