The New Zealand Green Party co-leader Dr Russel Norman gave the annual State of the Planet speech on January 30th, in preparation for this year’s upcoming general election campaigns. The speech centered on the Green Party’s policy outlooks and election promises for the year, which deviated from the expected climate based policy proposals to arguments concentrated on the future of the economy.

Dr Russel Norman claimed that the Green party’s new focus is best described as “Smart Green economics”, and is consistent with elements of Keynesian economics and elements of free market economics, within a framework of finite resources. As the first major proposal of the Party’s new outlook, Dr Norman Russell called for a new capital gains tax to be instated in New Zealand. The Green Party leader said that a capital gains tax was the best way for the government to raise large amounts of tax revenues without harming the economy. He claimed that a capital gains tax should be instated on all properties excluding the family home, which would remove incentives for property investment speculation. It is thought that such a move would lower prices of house ownership in New Zealand, and make great strides in reducing government debt.

In the speech Dr Russel Norman also criticized Prime Minister John Key’s speech, claiming that the suggestion of selling of state assets was financially irresponsible. He claimed that it would not reap any benefits and would only result in heavy debts for future generations of New Zealanders.

Photo by Light Knight

According to a Green Party press release published on the 21st of October, Dr Russel Norman, Green party co-leader, has said that the government instituted Tax Working Group is “hopelessly compromised” and not an accurate representation of New Zealand society as a whole.

Dr Russel Norma’s objection centers primarily around the panel’s inclusion of John Shewan, a former Westpac Bank advisor. According to Dr Norman “The recent outcome of the High Court case in Auckland involving Westpac shows that members of the group set up to reform the NZ tax system have been actively involved in promoting tax avoidance to assist overseas-owned banks”.

According to the press release, the composition of the Tax Working Group is skewed too heavily in the direction of “those working for corporate interests,” and is in “no way representative of New Zealand society”. He went onto say “I have very real concerns that the Government will be getting a report back from this group later this year that favours the sectors many on this group represent rather than the vast majority of tax paying New Zealanders.”

In a speech given in Tauranga on the 20th of October Winston Peters, proposed that the Kiwibank be used as stand-alone commercial bank, separate from the Government. Further to his plan, the bank would handle of the Government’s business, which he valued at $55 billion, and the shares in the bank could only be held by New Zealanders. Winston Peters claimed that this would help profits from this activity stay in New Zealand and force interest rates to lower.

It would seem that this plan has been forming for at least a week, as Winston Peters hinted at revolutionary measures to reduce interest rates while at a speaking engagement at Waikato University a week earlier.

Naturally the proposal came under quick fire from opposing parties. Green Party co-leader Russell Norman claimed that the measure will lead to overseas ownership of Kiwibank. While the leader of the Progressive Party, Jim Anderton, claimed that Winston Peters was a serial asset-seller. At the time of writing, neither National nor the Labour Party had made comment on the proposal.

As it stands at this moment in time, the proposed retail-banking guarantee scheme does not extend to funds attained from international wholesale markets. According to Michael Cullen the government has been looking at the possibility of making this a reality, although since the New Zealand banking system was not undergoing any sort of crisis at the moment, they have to time to properly create and implement appropriate measures.

Concerns arise with the proposed scheme whereby it would seem that it would give virtual monetary guarantees to offshore stakeholders, effectively transferring the benefit out of New Zealand. While he acknowledged the difficulties, Michael Cullen also did make the point that there is a necessity for the New Zealand government to implement some measures to protect the New Zealand financial sector.

Jeanette Fitzsimons, leader of the Green Party, confirmed her party’s support of the scheme the following. She also claimed to want to see a higher collaboration between parties within Parliament in the support of this scheme. Though she did mirror the concerns of Michael Cullen, with the possibility of such a large benefit being exercised exclusively by overseas bodies.

National Party leader, John Key also supports the proposal, although with much less trepidation and more enthusiasm than Jeanette Fitzsimons. His reasoning, according to statements issued on the morning of the 20th of October, being that countries like Australia who are already implementing similar systems will find it proportionately easier to access money.