The Greens are declaring principles triumph through politics, as Russel Norman announces an exciting new tax. A tax on water. But wait, there's more.
Firstly, Russel deals to the principles:
Mind you, this is not the first time that the Greens have admitted Labour's environmental credentials are all just hot air. We have yet to see if their principles extend to action on this score - they have always voted with Labour when it came to the crunch.
Russel then details how one government department sells access to conservation land to another government department who wants to pollute it. He's outraged that DoC is complicit in helping Government SOE Landcorp pollute. I'm outraged that our tax dollars are on this insane money-go-round that ensures the bureaucracy grows bigger to handle the inherent waste and abuse of a government mini-economy. There's an overlap there for the both of us, so we are both mutually outraged in a heartening sign of left/right consensus. Who said I never agree with the Greens?
And then we get to the Green solution. A tax on water.
And we need to future-proof our economy by getting the right price signals in place
The future is water tax.
The Greens believe in internalising the true environmental costs into market signals.
That's eco-speak for a tax on water.
That’s why today I’m announcing the first part of our approach to ecological tax shifting. I’m proposing a resource levy on all commercial water use and to use the revenue from that levy to reduce rates and income taxes.
So it's a tax on water, but our rates and income tax will go down. Presumably go down more than Cullen's rock bottom offer. Because these are not tax cuts, they are "fiscally neutral" tax shifting policies.
We are not proposing to privatise water
Heh - that's funny. I don't think the Green's would privatize anything. That's right wing thinking.
or to introduce tradeable water rights.
Well, thank goodness for that. Kyoto introduced tradable polluting rights, and it's a complete farce.
We are not proposing to charge for drinking water for humans or for stock.
I'm glad to see they bothered to distinguish between humans and animals. But it makes me wonder how they plan on metering this exactly, as cows drink free but carrots do not. Where do the meters go?
This is not an extra tax, it is fiscally neutral. This is not a tax that will put up interest rates like National Labour’s tax cuts are doing, it is as fiscally responsible as the Finance Minister used to be. This is not an approach to tax that cuts the money available for health and education nor does it lead to government borrowing like National Labour’s tax cuts. This is responsible economics and I challenge Father Coke and Mother Pepsi to follow our lead.
It's not an extra tax in the same way a 10% GST was introduced in exchange for lowering income taxes. Then they put up income taxes. And GST. Hey, here's a thought - when Russel said "I’m announcing the first part of ... ecological tax shifting" do you think maybe that taxing all water usage is the second part?
It's a tax that could potentially put up interest rates, because it isn't globally fiscally neutral. You see, what Russel is offering is to make all things farms and industry produce more expensive for them, but our rates and income tax goes down, so we can afford it. But will that make us richer? Because suddenly, 90% of our produce (fruit, wine, meat, wool) and even things like aluminium, will be more expensive to export, which will potentially have huge negative flow on effects to the level of investment, the exchange rate, our balance of trade figures, our international competitiveness in markets that we already run the risk of being shut out from.
Our full tax shifting policy will be released closer to the election.
Which means in a nutshell, I'm not going to put too much more analysis into this, as I haven't seen the figures. I'm not totally against resource levies, but to support them in principle, without seeing the figures and understanding the impact on our ability to sell product overseas, I'm staying in the "skeptical" camp. That's also partly because the rebate affects both rates and income taxes. Given this is a tax on business, I'd expect the majority of the tax credit to be against commercial rates. At that point, the policy would appear more balanced, and worth consideration.
Actually, if it is truly fiscally neutral, then surely a business water levy would equal a business rates reduction. Except I doubt that is what Russel means, because there would also have to be a benchmark amount of water usage that he deems acceptable for the rates reduction, and some industries will use more water than that benchmark.
That’s green economics and it’s the only kind of economics the future can live with.
Err, maybe, in a dream. But that dream would require the rest of the world to come on board.
The Greens are also futureproofing our economy by protecting our two most important export industries, primary production and tourism, that both trade on our clean and green reputation.
Given some of their other statements, this one nearly made me lose my coffee. Look, I agree with the greens that Labour are not cleaning up our rivers, and we do need to keep these issues in the lime light. We agree on the goals, not the method. Still, maybe Russel would have left me intrigued with the overall policy thrust, content to wait until the details were released with cautious optimism that the Greens had come up with some good ideas. But he spoilt it all by reminding me just how insane they are:
Good work by Sue Bradford has raised the minimum wage for young people. But I want to compliment her most of all for resisting the personal and vitriolic attacks mounted against her last year. Attacks which opposed her efforts to protect children against physical abuse in the same way adults are protected.
Making it illegal to beat children is surely one of the Greens’ greatest achievements.
Puh-lease. It's always been illegal to beat children. What the Green's changed was the law that said a parent cannot be locked up for applying reasonable force for the purposes of discipline. This was because they were worried that a judge might think reasonable force means putting a kid in hospital. Given some of the completely irrational rulings by judges recently, I understand their concern, but again, agree with the goals but not the means.
But enough negativity. They've floated an idea, and it's going to generate a fair amount of discussion. Grist for the mill. The libertarian types go on about "property rights". Whose property is water? Is this a resource owned by all New Zealanders, and therefore, something we can levy, or is it owned by whoever can build the best dam, and stuff the people living downstream?
Related Link: Green Principles water under the bridge
Firstly, Russel deals to the principles:
Our rivers are quite literally so full of crap that they are dangerous to human health.That's actually just the tip of the iceberg. He rips into Labour repeatedly. Some might not notice, because he also rips into National, Federated Farmers, Jim Anderton, Dept of Conservation and I suspect those annoying people who let their dogs sh*t on my lawn. But I notice those pointed comments towards Labour. Helen Clark better sell those brand new BMWs and offer to take the airport bus, because this is going to get ugly.
The Labour Party has a policy that all rivers should become safe for swimming. The Ministry for the Environment is promising all rivers will be safe to swim in by the next generation.
We don’t believe them.
We don’t believe them because the promised and long-awaited government “Sustainable Programme of Action on Water” is well over-due, we don’t believe them because the science shows that many of our streams and rivers are getting worse, not better.
But most of all we don’t believe them because we can see through our own eyes what is happening around New Zealand.
Mind you, this is not the first time that the Greens have admitted Labour's environmental credentials are all just hot air. We have yet to see if their principles extend to action on this score - they have always voted with Labour when it came to the crunch.
Russel then details how one government department sells access to conservation land to another government department who wants to pollute it. He's outraged that DoC is complicit in helping Government SOE Landcorp pollute. I'm outraged that our tax dollars are on this insane money-go-round that ensures the bureaucracy grows bigger to handle the inherent waste and abuse of a government mini-economy. There's an overlap there for the both of us, so we are both mutually outraged in a heartening sign of left/right consensus. Who said I never agree with the Greens?
And then we get to the Green solution. A tax on water.
And we need to future-proof our economy by getting the right price signals in place
The future is water tax.
The Greens believe in internalising the true environmental costs into market signals.
That's eco-speak for a tax on water.
That’s why today I’m announcing the first part of our approach to ecological tax shifting. I’m proposing a resource levy on all commercial water use and to use the revenue from that levy to reduce rates and income taxes.
So it's a tax on water, but our rates and income tax will go down. Presumably go down more than Cullen's rock bottom offer. Because these are not tax cuts, they are "fiscally neutral" tax shifting policies.
We are not proposing to privatise water
Heh - that's funny. I don't think the Green's would privatize anything. That's right wing thinking.
or to introduce tradeable water rights.
Well, thank goodness for that. Kyoto introduced tradable polluting rights, and it's a complete farce.
We are not proposing to charge for drinking water for humans or for stock.
I'm glad to see they bothered to distinguish between humans and animals. But it makes me wonder how they plan on metering this exactly, as cows drink free but carrots do not. Where do the meters go?
This is not an extra tax, it is fiscally neutral. This is not a tax that will put up interest rates like National Labour’s tax cuts are doing, it is as fiscally responsible as the Finance Minister used to be. This is not an approach to tax that cuts the money available for health and education nor does it lead to government borrowing like National Labour’s tax cuts. This is responsible economics and I challenge Father Coke and Mother Pepsi to follow our lead.
It's not an extra tax in the same way a 10% GST was introduced in exchange for lowering income taxes. Then they put up income taxes. And GST. Hey, here's a thought - when Russel said "I’m announcing the first part of ... ecological tax shifting" do you think maybe that taxing all water usage is the second part?
It's a tax that could potentially put up interest rates, because it isn't globally fiscally neutral. You see, what Russel is offering is to make all things farms and industry produce more expensive for them, but our rates and income tax goes down, so we can afford it. But will that make us richer? Because suddenly, 90% of our produce (fruit, wine, meat, wool) and even things like aluminium, will be more expensive to export, which will potentially have huge negative flow on effects to the level of investment, the exchange rate, our balance of trade figures, our international competitiveness in markets that we already run the risk of being shut out from.
Our full tax shifting policy will be released closer to the election.
Which means in a nutshell, I'm not going to put too much more analysis into this, as I haven't seen the figures. I'm not totally against resource levies, but to support them in principle, without seeing the figures and understanding the impact on our ability to sell product overseas, I'm staying in the "skeptical" camp. That's also partly because the rebate affects both rates and income taxes. Given this is a tax on business, I'd expect the majority of the tax credit to be against commercial rates. At that point, the policy would appear more balanced, and worth consideration.
Actually, if it is truly fiscally neutral, then surely a business water levy would equal a business rates reduction. Except I doubt that is what Russel means, because there would also have to be a benchmark amount of water usage that he deems acceptable for the rates reduction, and some industries will use more water than that benchmark.
That’s green economics and it’s the only kind of economics the future can live with.
Err, maybe, in a dream. But that dream would require the rest of the world to come on board.
The Greens are also futureproofing our economy by protecting our two most important export industries, primary production and tourism, that both trade on our clean and green reputation.
Given some of their other statements, this one nearly made me lose my coffee. Look, I agree with the greens that Labour are not cleaning up our rivers, and we do need to keep these issues in the lime light. We agree on the goals, not the method. Still, maybe Russel would have left me intrigued with the overall policy thrust, content to wait until the details were released with cautious optimism that the Greens had come up with some good ideas. But he spoilt it all by reminding me just how insane they are:
Good work by Sue Bradford has raised the minimum wage for young people. But I want to compliment her most of all for resisting the personal and vitriolic attacks mounted against her last year. Attacks which opposed her efforts to protect children against physical abuse in the same way adults are protected.
Making it illegal to beat children is surely one of the Greens’ greatest achievements.
Puh-lease. It's always been illegal to beat children. What the Green's changed was the law that said a parent cannot be locked up for applying reasonable force for the purposes of discipline. This was because they were worried that a judge might think reasonable force means putting a kid in hospital. Given some of the completely irrational rulings by judges recently, I understand their concern, but again, agree with the goals but not the means.
But enough negativity. They've floated an idea, and it's going to generate a fair amount of discussion. Grist for the mill. The libertarian types go on about "property rights". Whose property is water? Is this a resource owned by all New Zealanders, and therefore, something we can levy, or is it owned by whoever can build the best dam, and stuff the people living downstream?
Related Link: Green Principles water under the bridge
I would have thought you might endorse the use of market signals to ensure efficient and appropriate use of limited and shared resources.
ReplyDeleteThe alternative is simply regulation and compulsion.
Why do you hate the market? Yes, loaded question. But it needs to be asked. Every time anyone has tried to create a market to efficiently allocate resource - and costs - the people who hav to bear the costs of the resources they use work VERY hard to subvert the market.
It comes across, over time, as a form of theft....raiding the commons for profit while refusing to recognise the cost.
It may work for a while, but if a market regime can't be made to function, we all must know that regulation and compulsion will be the inevitable alternative.
Norman's and the Greens approach is utterly orthodox in its economic approach. Characterising allocation of costs to users of SHARED resources - and water is a shared resource - as a "tax" isn't fair or accurate.
Truthseeker,
ReplyDeleteRegulation and compulsion is not necessarily a bad thing. "The Market" might decide that it's more economically viable for slaves to do the work - however, regulation and compulsion prevents absolute slavery at this time.
Norman's and the Greens approach is utterly orthodox in its economic approach. Characterising allocation of costs to users of SHARED resources - and water is a shared resource - as a "tax" isn't fair or accurate.
I didn't realise we paid God for water to fall out of the sky! But then again, not much of it is falling right now (hydro lakes in nth island low) - maybe God wants something other than money?
Truth Seeker, you need to re-read my post. I distinctly said I'm not necessarily against the concept.
ReplyDeleteHow the Greens implement this though could still be a million miles from what is fair and reasonable - I've seen this before.
I take your point though that "resource allocation" sounds much better than a tax.
BTW: You reckon the government will ever regulate the quantity of air we take from the commons that we use for breathing? What if long distance runners use more than their fair share? Should I pay for that? Especially if they breathe out CO2 - that's a Kyoto tax, or world commons resource or something.