Yesterday we heard the Prime Minister outline the Government’s plan for the year. He touched on a number of areas, one of which I would like to focus on this afternoon. He talked about the possibility of increasing the rate of GST from 12.5 percent to 15.5 percent. What did we hear from the Opposition members? One after another we heard Phil Goff, Annette King, David Cunliffe, and Shane Jones stand up and pretend to be concerned about people on low incomes.
From Phil Goff we heard about the people on the minimum wage who will pay more for their bread, their milk, their power, and their block of cheese. David Cunliffe said they are “right to be sceptical that they would be fully compensated. Mums who are trying to feed their 3 or 5 kids on a medium or a low income are frightened about the cost of bread and milk, let alone power and rent.”
Hon Trevor Mallard: This is a better speech than Rodney’s.
JOHN BOSCAWEN: I did not hear Mr Mallard’s introduction, but he was a member of the previous Government, which voted for a tax on power. He voted for a tax on power, and if the people of New Zealand had not had the good sense to vote for a change of Government 15 months ago, the cost of electricity in this country would have gone up on 1 January this year. I say to Mr Mallard that that is right: we would have had a 10 percent increase in the price of electricity from 1 January—
Hon Trevor Mallard: What’s the member been smoking over Christmas?
JOHN BOSCAWEN: The member may not like to hear that criticism, but it is exactly what would have happened. In November 2008 the people of New Zealand voted against a tax on electricity. The cost of electricity would have gone up by 10 percent on 1 January this year.
So when Mr Goff talks about the mother who has to meet the cost of bread, milk, power, and a block of cheese he is misleading all New Zealanders, because he and his colleagues voted for an emissions trading scheme tax that would have increased the price of electricity by 10 percent on 1 January this year, and the price of petrol by 5 percent. Those increases would have percolated throughout the whole economy. There would have been increases in the cost of food.
David Cunliffe talked about the cost of a block of cheese. Electricity is required to manufacture a block of cheese. Farmers have to produce milk to go into a block of cheese. The previous Labour Government was the first Government in the world to put a tax on its farmers: a tax on cows and other animals for doing what they do naturally, which is to burp and to digest food.
One after the other the Labour members stood up yesterday afternoon and talked about the price of electricity going up. They pretended to be concerned about low-income people. That is right; they pretended to be concerned about low-income people.
Hon Lianne Dalziel: Oh, John, that’s so disappointing.
JOHN BOSCAWEN: I ask Lianne Dalziel why, if Labour members were concerned about the price of electricity, they voted for an emissions trading scheme that would have increased the price of electricity by 10 percent.
Amendments were made to that scheme last year, and what do we have as a consequence? The good news is that we do not have a tax of 10 percent on electricity; it will be only 5 percent, and it will be going on 6 months later than had been intended, on 1 July this year. So we can thank the National Government for agreeing to halve the amount of the increase in the price of electricity and delay its introduction. But I ask why we are allowing the price of electricity to go up in the first place. Why do we come here and make speeches and pretend to be concerned about people on low incomes, when we know full well that we are prepared to see significant increases in the price of electricity?
The interesting thing about the increase in GST is that the Prime Minister made it very clear yesterday that people on low incomes will be compensated. He will be increasing the rate of New Zealand superannuation. He will be making sure that the people who are most affected by the increase in GST, because it takes the largest proportion of their income, are fully compensated. Was there to have been any compensation for the low-income people who were to face a 10 percent increase in the price of electricity from the Labour Government on 1 January this year? No, there was not. Sadly, I have to say the National Government too is not arranging any compensation for those low-income people who will have to pay for the increase in electricity from 1 July this year.
Mr Cunliffe talked about people being sceptical. The Prime Minister made the point very well that people will be fully compensated for the increase in the rate of GST. I ask why we have to increase the price of electricity. And if we are to increase the price of electricity, I ask, what about providing compensation for those people who have to pay for that?
I raise the issue of the emissions trading scheme tax because we were told by the Minister for Climate Change Issues last year that we had to have a tax in place before he went to the Copenhagen climate change talks. We were told that we had to keep pace with Australia, and that our emissions trading scheme tax would be consistent with the scheme that the Australian Government was going to pass. The Minister for Climate Change Issues was convinced that the Australian Government would pass the scheme before the end of November, so that the Australians could go off to Copenhagen with their tax in their bag. Well, there is no emissions trading scheme in Australia. That proposal was defeated. New Zealand is the only country outside Europe to have an emissions trading scheme. It is the only country in the world to tax its farmers. Less than 6 months ago the Minister for Climate Change Issues sat in his seat in the front row there, and he gladly and proudly told parliamentarians and the people of New Zealand that the Rio Tinto Alcan aluminium smelter, Comalco, would be the first aluminium smelter in the world to be taxed. It was to be the first aluminium smelter that would bear the cost of an emissions trading scheme. And we wonder why we have problems in creating job opportunities in New Zealand!
But the situation is worse than that. Australia tried to introduce an emissions trading scheme, but it could not pass it. In fact, I understand that it has been introduced into the Australian Parliament for the third time, but it is expected to be defeated. Over the last 3 months we have also had a total lack of credibility from the Intergovernmental Panel on Climate Change. First, we heard in November that climate data had been manipulated and hidden. Our own National Institute of Water and Atmospheric Research has also adjusted New Zealand’s climate change data and does not have records or adequate proof of the adjustments made, despite constant requests for that. The Intergovernmental Panel on Climate Change, the supposedly reputable scientific body that tells the world that we are warming, made the claim that the glaciers in the Himalayas will be melted by 2035. It said in 25 years those glaciers would be melting. But over the Christmas vacation we learnt that it had made a mistake. It was supposedly a peer-reviewed document, but we have learnt that the glaciers in the Himalayas will not have melted by 2035; it will be 2300, if that.
The ACT Party stands alone in this House. We are the only party that recognises that this is a country with two classes of citizens. We have the privileged and the underprivileged: the people who pay tax, and the people who avoid paying tax. There is the chance to introduce genuine tax reform into this country. The Prime Minister has laid out only the bare bones of it in what he has done. This country needs to go further. I was very interested to hear from John Howard, the former Prime Minister of Australia, when he visited to attend the ACT conference in November. He said he and his Liberal colleagues used to sit on the other side of the Tasman and look in awe and wonderment at New Zealand’s GST, because it was so inclusive. We have the chance to make some major tax reform, and all I ask is that the members of the Labour Opposition speak more honestly to the people of New Zealand and acknowledge that if it had not been for a change of Government, we would have had an emissions trading scheme that resulted in the price of electricity going up by 10 percent on 1 January this year. Members opposite should not stand there and give speeches that object to the price of power going up
Thank you.