On The Nation: Lisa Owen interviews James Shaw
Headlines:
Labour and the Green Party have launched a joint set of ‘Budget Responsibility Rules’. But despite Labour promising no tax increases, Greens co-leader James Shaw says his party hasn’t settled on a tax policy yet.
Labour has dropped its Capital Gains Tax policy, but James Shaw says the Greens still want it ”We think it’s an important part of rebalancing the economy and taking some of the speculative heat out of, in particular, the Auckland market.”
James Shaw admits the Green Party may have to accept being part of the Five Eyes alliance as part of a Government with Labour: “I accept that we will not get everything that we want, and neither will the Labour Party.”

Now, Labour and the Greens have taken another big step – a really big step, actually, in my opinion – in their campaign to change the government. They have developed a set of rules to reassure voters that they can manage the country’s finances.
Grant Robertson: If we are in a position to form a government, there will be discussions between partner parties on details. But what we can say with confidence is that both the rules themselves and the process that we have used to develop them show the strength of our working relationship, and this relationship will stand us in good stead in any negotiations.
OK, so let’s drill down into that relationship in some more detail now. The Green Party co-leader, James Shaw, is with Lisa.
Lisa Owen: Thanks for joining me this morning. You’ve unveiled your budget responsibility rules. What is new in those rules?
James Shaw: Well, the fact that the rules exist is new. I don’t think there has been a situation in New Zealand where political parties have released a set of budget responsibility rules or principles for how we’re going to propose a budget in advance of an election. And, certainly, it’s the first time that two parties have come together around a shared framework for that.
But the thing is, if you look at the detail, a lot of it is already going on. So, Bill English is aiming to get debt under 20% of GDP as well. He wants to run services, and they have targets – social targets, better public service targets – too, which is what you’ve got now.
Well, these do put some distance between us and the English Government. So, for example, we have said here that we don’t want to generate surpluses at the expense of core public services. We have said that we want to invest in the long-term issues in New Zealand, and we think that, actually, the National Government has not done that. They’ve avoided doing that. So, for example, we’ve said that we want to resume payments to the Superannuation Fund as fast as possible, whereas Bill English would rather have tax cuts and kick that into the future.
Did you need this to counter the perception – whether it was right or wrong – the perception that you’re financially irresponsible?
Well, I think—What we’ve got at the moment is a government which is dominated by one very large party with a few minnows around the edges. The next government is going to be a bit more balanced. So, Labour and the Greens are sort of slightly more balanced parties, and a lot of the questions we get are how is that going to work? And so this is a way of saying, well, yes, we are two different parties. We will have slightly different policies and priorities, but we’ve got a set of shared principles for how we intend to— at least in relation to the Budget, how we intend to think about those things.
That is a reasonable point, how will it work, and let’s explore part of that. In this Budget responsibility rules, you’re committed to an independent tax review, in essence. Labour has already committed to no new personal taxes. so I’m wondering how that fits in with a couple of things that you’re previously committed to. So, capital gains tax. Do you still want it?
Yeah, I mean, the Green Party has been advocating a capital gains tax since we entered parliament in 1999. We think it’s an important part of rebalancing the economy and taking some of the speculative heat out of, in particular, the Auckland market. So, we’ve got a sense of urgency about that, but—
But Labour doesn’t have that same sense of urgency about that. I think it doesn’t want a bar of it.
No, I think what Labour have actually said is they want to do a review of the entire tax system in the first term, and then any significant changes to the tax system they want to take into the subsequent election. And I actually think, by the way, that doing a review of the whole system is probably a really good idea. It’s been about ten years since the last tax working group. There are huge imbalances in the economy. It’s a pretty good idea to take a look at the whole thing.
So are you saying that while they don’t want some of these things in the first term, do you have a level of confidence that you might get them in a second term?
Well, one of the reasons I’m suggesting that people vote for the Green Party is because if they believe in the set of solutions that we are putting forward, that the larger we are in the next government, the more we’ll be able to advocate for those, and that’s just a function of how coalition governments operate under MMP.
But have you had any discussions about that? So, no capital gains this term, but maybe next time around, and what about your 40 cents on the dollar over 140k. Are you going to keep that?
Well, at the last election—we went into the last election saying that 97% of New Zealanders would actually get an income tax cut under a Green government, and that would be funded by charges on pollution that causes climate change.
But are you still committed to that tax bracket?
What we’re planning to do is a tax package later on this year. I’m still doing the numbers on that, and so—I mean, I have to say, it’ll be broad—
So it’s safe to say you’re not ruling it out?
I’m not ruling it out. I’m not ruling anything out. It’ll be broadly in line with what we’ve said in the past, but it won’t be exactly the same.
Okay, so one of your other top priorities was $1 billion to end child poverty, and that money was coming from raising taxes. So if Labour doesn’t want to raise taxes, which it’s clearly stated, how are you going to pay for that?
Actually, at the last election—one of the exercises that we did when we were putting together these Budget responsibility rules is that we looked at the costed policies that we had at the last election and said would they fit within this set of rules? And, actually, they came in well under, so we’re actually pretty confident that we will be able to make the investments that New Zealanders want and need and stay within the set framework.
But in combination? Because Labour have said it’s costed what it wants to do, and that it’s possible to achieve those things within current revenue. Are you telling us that their costings include some of your policies?
We haven’t done that work. And, in fact, any coalition government—
So no it doesn’t, then. It doesn’t include policies that you might want. That’s a problem, isn’t it?
Well, any coalition government, you’ve got to put together a Budget that includes some level of policies across all of the parties. You’ve got to remember that Greens and Labour may not be the only two parties within a coalition. So you’re going to have to—And what we’ve committed to is a balanced budget that takes into account all of those priorities, and it’s a function of negotiations between parties. I mean, this is how government operated.
Yes, but have you had any commitment—
This is how it’s been for the last 20 years.
Have you had any commitment to some of these policies, that are core policies to you, that would get introduced if you had, say, a second term together? Have you got a commitment for any of them?
We have not talked about our second term yet. We’re still busy working out the first one.
All right, well, you have signalled this week that you would like to redistribute transport spending in Auckland. So what roading projects would you can? What ones aren’t worth it?
We’re doing a release on our transport policy closer to the election, so we’ll get into specifics then.
Yeah, but the election’s only six months away, and voters want to know. So what ones are you eyeing up?
Well, that’s why we have an election campaign, and we’ll be releasing our transport policy closer to the election.
So, Penlink – this is a road, 7km, I think it is, from Whangaparaoa Peninsula, joining up with a main highway. Do you think that road is value for money? I think it’s, what, how much does that road cost? I think $350 million for 7 km?
We will be releasing our transport policy closer to the election.
Is that road value for money?
We will be releasing our transport policy closer to the election.
I’m not asking you about your transport policy. I’m asking if you think that 7km road is value for money at that price.
Well, look, most of the roads of national significance that National has invested in have had extremely poor business cost ratios. I mean, what was the news we had about two weeks ago that the Puhoi to Wellsford cost has blown from $495 million to $2 billion. And even when that was only under $500 million, it only had a business-cost ratio of 0.25%. So you do have to take a more economically responsible and rational way of looking at these projects, and do they stack up on a business-cost ratio? And, actually, many of those projects do not.
Okay, so, Penlink, it doesn’t stack up?
I don’t know what the business-cost ratio is of Penlink.
For every dollar they spend, they reckon they’re going to get three bucks back in increased productivity. So, Warkworth to Wellsford – is that one that you’re eying up?
So, Lisa, we will be doing our transport policy closer to the election.
All right, well, at the last election—Oh, the other thing, actually, before we move on – the other thing that you said you’d be trimming is Defence. So, what specifically would you lose from that $20 billion that’s been earmarked?
Well, I’m not going into the specifics of that, because we haven’t done that work. But what we have said is $20 billion is a significant amount of money at a time when you’ve got people sleeping in cars and garages, and do we have the balance of investment right there? I’m not convinced that we did. I looked at the Defence whitepaper when it was released. There were a lot of very hazy details that—
So you haven’t identified anything you could cut out of there yet?
No, we haven’t done that work yet.
But you’re saying there is some trimming to be done. Because you’ve got a 52-year-old Hercules, a 51-year-old Orion – that’s older than anyone in this room, you know.
Well, I think we’ve got to remember the Orion and the Hercules don’t add up to $20 billion.
No.
So, I mean, $20 billion is quite a lot of money, Lisa, so I’d say if there is an area where you want to do a review of that kind of spending commitment whilst maintaining the need to make sure that we’ve got the right kind of equipment for our people to do the work that they do in the Pacific around the rest of the world, I think that there may be opportunities there.
Another area where you differ from Labour is Five Eyes. You want out. So if you’re in a government, and you’re, say, Deputy Prime Minister for the purpose of this exercise, are you just going to have to suck that up that you’re in Five Eyes?
Well, Lisa, any coalition government is a compromise between the policies that every party takes in, right? We’re not going to get—
Do you accept that that is something you will just have to tolerate?
I accept that we will not get everything that we want, and neither will the Labour Party.
And is Five Eyes on of the things that you’re not going to get?
I don’t know. I haven’t formed a government with them yet. Let’s find out.
Okay, so let’s run the scenario – where does that leave you, morally, if you’re in a government, and Five Eyes is one of the things that you have to tolerate? You’re in a meeting, Five Eyes intelligence comes up – what do you do? Do you walk out?
No, we’re not going to bring the government down over that. And, in fact, one of the reasons why we did these Budget responsibility rules is we think it’s really important that people know that there is a stable, alternative, credible government that is willing to go the extra mile.
I’m not talking about—
I did a speech a few weeks ago with the Green Party Conference—
I’m not talking about walking out of Parl—Sorry to interrupt you, but I’m not talking about walking out of Parliament. I’m talking about if you’re in a meeting, the government is relying on information that is coming from Five Eyes – do you remove yourself from that information? Do you just not want to know what comes from Five Eyes? How would you handle it?
Well, actually, we’ve said that we want to be on the committee that has oversight over our intelligence and security operations and agencies, and, in fact, we’re really pleased that we were able to convince the government to change the legislation on that, so we will actually have proportional representation on the oversight committee in the future. And that is because we think it is important for all parties to be represented, and to ensure if there are—You know, you’ve got to have some sceptics in the room when you’re looking at that kind of thing. And if you think about the creeping invasion of privacy that we’re seeing under the changes in intelligence and security legislation over the course of this government, we think it is very important for a party that has a sceptical view of that to be represented in the room around the table when we’ve got oversight over intelligence services.
We’re running out of time, but I do want to get through a couple more things. Talking about the military – SAS. Should we have Special Forces that go off and fight in wars?
I think if we’re talking about the case that’s been highlighted through Nicky Hagar and Jon Stephenson’s book; I think it is really important that we have an inquiry into that, because, you know, the allegations are—
But should we have an SAS at all?
Well, Lisa, I don’t have a view on whether there should be a particular branch of the military, right, and I don’t advocate that we close down the military services. There are times when we need to intervene for humanitarian purposes. Our people do extremely good work in the Pacific, especially when it comes to disaster relief. We have a very important role in peacekeeping in different locations around the world, and so I think it’s important that those kinds of humanitarian missions are able to be staffed.
Almost out of time. I would like an answer to this one. New Zealand troops in Iraq – they’re there until 2018 as part of a Donald Trump-led coalition. If you were in the government, would you pull this pin on that, get them out?
Well, we didn’t think that they should be over there in the first place. We thought that was an American military adventure that was essentially doomed to failure, and—
So if you’re in government, they’re out?
Well, it’s not—
Is that what you want?
Lisa, it’s not going to be up to us only, all right? It’s a coalition government, and coalition governments, you know, you’ve got to work through all those issues with your coalition partners. That’s just how it operates. It’s been operating that way for 20 years, and long may it continue.
All right, we need to leave it there. Thanks for joining us this morning.
OK.

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