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Economic Policy Summary – Thinking Beyond Tomorrow

Russel Norman MP
Russel Norman MP
russel [dot] norman [at] parliament [dot] govt [dot] nz (Email)

The Green Party has a plan to create a smart economy that will deliver real prosperity for everyone and help the environment.

We will live within our means, sustaining our natural capital through measures like a commercial levy on the use of water.

We will create a fairer, more equal society through a strongly progressive tax system, raising the minimum wage, and by building more state houses.

We will create a more productive economy through measures like a capital gains tax (excluding the family home).

We'll create jobs that are good for the environment and good for people through business incentives and direct government investment.

Read the full Economic Policy

Purpose

A Green economy will improve the quality of life of all New Zealanders by growing our reputation as a producer of high value, clean green products which sustain our natural resources and environment. It will grow the knowledge, basic science and technological research on which a sustainable economy can be based, and shrink waste, pollution and the overuse of scarce resources. It will be known for smart business, good education and meaningful work offering well paid jobs. It will take more control over our own economic destiny, while trading fairly with the rest of the world.

Measuring Success Differently

Growth in GDP is not an adequate measure of the success of our economy. It counts as a positive growth in "bads" like crime, pollution and waste, but does not measure at all the depletion of our resources, or the sustainability of our economy. We will draw on various international models, such as the Genuine Progress Index, to measure our economic success better. The Greens will develop:

  • a modified set of national accounts, to measure real national achievement and wellbeing by including positive activities such as voluntary work and unpaid childcare; and deducting negatives such as smoking and drinking related health costs, car accidents and pollution clean ups.
  • a set of natural resource accounts that will measure the degradation or restoration of resources such as forests, clean water and energy reserves. We will use these to ensure that economic management achieves a decrease in the overall rate at which resources are turned into waste.
  • An expanded set of social indicators to be reported and considered alongside the national accounts. They will build on what Government has done with the MSD Social Report.
  • Better resourcing for Statistics New Zealand to collect and process the additional data needed for this work.
  • Assistance for business to report on environmental and social performance, as well as financial performance.

Investment

The Green Party will invest in the social and physical capital we need for a future that uses resources sparingly and provides for the wellbeing of people. We will:

  • Introduce ethical investment guidelines for all Government investment funds
  • Invest in leading edge science and technology, with collaborative basic research, and focussing applied research on sustainable production and care of resources
  • Properly fund environmental and Treaty education
  • Wipe one year's student debt for each year worked in New Zealand
  • Invest in preventative health care, to keep people well rather than wait till they are sick
  • Invest in better urban planning, making cities more liveable with enough public housing, integrated with better public transport to reduce fuel use.

Supporting sustainable business

  • Make sustainability a key goal of all business support programmes provided through government funded organizations
  • Support businesses to adopt sustainable certification programmes
  • Value our manufacturing base, continue to promote Buy Kiwi Made and support the initiatives of manufacturers to work collaboratively to improve the manufacturing sector in New Zealand.
  • Encourage business-to-business local procurement practices.
  • Improve funding and support delivered through the Ministry of Economic Development by focusing on clustering that increases energy efficiency and use of transport hubs
  • Raise the current cap on age and numbers of apprentices.
  • Introduce an 0800 and online 'champion' service for small businesses who are having problems dealing with the bureaucracy of government departments.

(See our Sustainable Business policy for much more detail)

The tax shift

We will reform the tax system so everyone pays less income tax, clean businesses are rewarded and wasters and polluters pay more. All sources of income will be taxed in the same way, so that speculation is not rewarded compared with genuine wealth creation.

Income tax

  • Introduce a tax-free threshold of $10,000, and provide for a standard marginal tax rate of 19.5% from $10,000 to $42,500, by 2011. This will simplify tax rates and give all tax payers around $20 a week more than under Labour's 2011 tax rates. It will reduce government revenue by $2.4 billion which will be made up with the measures outlined below.
  • Support the implementation of other aspects of the tax changes announced in the 2008 budget, so that legal and effective tax rates are as follows by 2011: $0-$10,000 0%, 19% for $10,001 to $42,500, 33% from $42,501 to $80,000 and 39% from $80,001.
  • Ensure beneficiaries receive the benefits of the proposed changes by passing tax cuts on to those on benefits and adjusting benefit abatement rates.

Capital Gains Tax

  • In order to treat all income the same, introduce a comprehensive capital gains tax on inflation adjusted capital gains at the time the capital gains are realised.
  • Exempt the family home from capital gains tax.
  • Over time, tighten the rules around Loss Attributing Qualifying Companies (LAQCs) and equivalent tax deductions.

Eco-taxes

  • Empower central and regional government to introduce a water levy on commercial use of all water used on a volume basis. This would not apply to households or stock drinking water.
  • Begin a phased process of ecological tax reform by setting up an Ecological Tax Reform Commission to examine all existing taxes and possible new eco-taxes. They would consider levies on resources such as minerals mined, commercial fish caught, and various forms of pollution and waste.

Tobin tax

We would join the group of countries working to agree on a tax on international currency movements, to set up a fund to provide capital for poor countries to improve their social and environmental wellbeing. This would discourage currency speculation without being high enough to impede genuine trade.

Monetary Policy

Inflation is now being driven by new factors such as the world prices of oil and food, a carbon price to address climate change, and shortages of key resources. These cannot easily be controlled by changing interest rates, the one tool available to the Reserve Bank. The Green Party proposes:

  • Better coordination of monetary and fiscal policy.
  • Economic policies to minimise the effects of resource shortage driven price shocks.
  • Measures to limit future asset (especially house) price inflation.
  • Consideration of a more actively managed exchange rate through measures designed to reduce the attractiveness and profitability of currency speculation.

Trade

The Green Party will:

  • Encourage fair trade with developing countries that supports sustainable development.
  • Develop a Code of Corporate Responsibility for all corporations operating in New Zealand.
  • Require all international treaties to be voted on in Parliament before being signed, must give full effect to our Treaty of Waitangi obligations, and must put the rights of peoples and governments before those of multinational company investors.
  • Uphold international labour and environmental agreements through an International Trading Organisation and regional trading agreements to replace the WTO).
  • Oppose trade deregulation in public goods, services and utilities, and where desirable, roll back GATS commitments.
  • Stop importing goods produced by slave, prison or child labour.

Building the Local Economy

The Green Party will:

    support NZ businesses by committing to Government procurement of local goods and services wherever we can.
  • allow only New Zealand citizens and residents to buy NZ land.
  • create an enabling environment for community banks and credit unions.
  • support local community development and transition town initiatives aimed at dealing with the impacts of climate change and peak oil.
  • insist on country of origin labelling so people who wish to can support local producers

Meaningful, well-paid work

  • Increase the minimum wage and ensure it cannot fall below 66% of the average wage.
  • Ensure government policy recognises the contribution of unpaid work to society and the economy, including the work of parents and caregivers.
  • A greater commitment to proactive job creation, including more public sector support for self-employment, small businesses, co-operative and community-owned enterprises, and for employment resource centres and agencies that train and support people going into business.
  • Promote and ensure equal opportunities and pay equity.
  • More resources for vocational advice and employment support, including for women, Maori and Pacific Island peoples, disabled and other statistically lower-paid groups.
  • Access to careers advice and job search support for all registered unemployed (and other beneficiaries should they so choose) as soon as they register as jobseekers.
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