Hon Dr MICHAEL CULLEN (Leader of the House) : I move, That it be an instruction to the Committee of the whole House on the Customs and Excise (Motor Spirits) Amendment Bill that it take the bill part by part.

• Motion agreed to.

Hon Dr MICHAEL CULLEN (Leader of the House) : I move, That it be an instruction to the Committee of the whole House on the Films, Videos, and Publications Classification Amendment Bill that it take the bill part by part.

• Motion agreed to.

Hon Dr MICHAEL CULLEN (Leader of the House) : I move, That it be an instruction to the Committee of the whole House on the Ngāti Awa Claims Settlement Bill that it take the bill part by part.

• Motion agreed to.

JOHN KEY (National—Helensville) : I rise on behalf of the National Party to oppose Part 1. I find it quite amazing to see what the Government is proposing. For the benefit of those people who have not had an opportunity to read the bill, I simply say that this is a Government that wants to index the duty on petrol and motor spirits. It wants to index its right to build inflation into its revenue stream, year in and year out. The Minister does not want to come to this Parliament and say so. The Government does not want to ask to pass on to the people of New Zealand the additional costs of inflation in its revenue stream.

I say to the Minister and to the Government that this proposal is actually quite logical. We do this in a number of areas. We do it for tobacco and alcohol, and there is some quite compelling logic about doing it for motor spirits. But it gets a bit rich when this comes from a Government that, when it looks on the other side of the ledger—when it looks at the income tax paid by New Zealanders—does not want a bar of this kind of approach. The Government is very happy to look after its revenue stream. It is more than happy to have the effects of inflation nullified by the Act of Parliament that will be amended by this legislation. The Government is more than happy to know that if inflation is rampant in New Zealand and we are facing ever-decreasing amounts of income in a real sense, it is protected. That is absolutely fine from the Government’s perspective. But the poor old workers out there will have to pay for the inflation on petrol as a result of this legislation. They have to pay for the inflation on tobacco—on cigarettes. But those people do not get the effects of inflation on their income.

Labour members smugly sit back in their green seats. They do not have to be out there working hard for a living all day. They do not care about the poor workers out there. They do not care about the policemen. I asked the Minister of Revenue a very interesting question a few months ago. I asked him if he could tell me how many policemen in New Zealand pay the top rate of personal taxation. Mr Hughes is giving me the fairly standard “deer in the headlights” look of the Government, so let me tell him how many pay the top rate. Thirty-nine percent of all policemen in New Zealand pay the top rate of taxation. That is right—they are the elite rich, according to Helen Clark and Michael Cullen. Wonderful! “Join the police force and get rich” will be the new advertising slogan under Labour. Thirty-nine percent of policemen pay the top rate of taxation, which was raised under a Labour Government to 39c in the dollar. Two or 3 years ago the number of policemen paying the top rate of taxation was 13 percent. That is right—it has gone from 13 percent to 39 percent in 3 years. Why? Because the effect of inflation has pushed the wages and salaries of policemen and policewomen into a higher bracket. Their real, after-tax income is not going up. Their real, after-tax income is, in fact, stagnant. They are not getting ahead, and that is why they do not feel any better off.

On the wages and salaries side of the ledger, the Government says: “We don’t care about inflation; tough luck. Just pay the higher rates of taxation. Let us have more money, and we’ll go out and waste it on all sorts of things like twilight golf, hip-hop tours, and anything else we can dream up.” You name it; the Government will spend money on it. It does not care, because it is rolling in clover. Why? It has so much money coming in, because it is prepared to index its revenue.

The Government talks a lot about its confidence and supply agreements and its coalition arrangements with various parties. It happily took the confidence and supply support of United Future. It was happy to come to this House and say: “We’ve got a strong confidence and supply motion.” We all know that when one of the Government’s tax bills was before the House late last year Gordon Copeland, the finance spokesman for United Future, put up a Supplementary Order Paper that would have seen the indexation of income tax. And what did the Minister of Finance do? He vetoed it. He said: “No, I am not prepared to accept inflation when it is on your side of the ledger, but when it comes to the Government’s revenue—when it comes to my coffers—I want the lot.” That is not fair.

Hon RICK BARKER (Minister of Customs) : This is a very interesting bill. It is the first time that Parliament has had a bill like this referred to a select committee and the first time there has been the opportunity for public submissions on a bill like this. I would have thought that the least the Opposition could do was congratulate the Government on improving the process.

The truth is that there has been a huge under-investment in transport infrastructure in New Zealand over a considerable period of time. National Party members from Auckland have whinged constantly about the poor quality of transport in Auckland, yet National in its 10 years in Government did nothing about it. But this Government has invested a substantial amount of money in Auckland roads. If members were to go to Auckland today, they would see quite a lot of roadworks going on. But much more needs to be done.

The Government will invest a substantial amount into transport infrastructure, not only in Auckland but in every region around the country. Every cent raised by this proposal will be invested in transport infrastructure throughout New Zealand on a population basis. For example, there will be a substantial quickening of the building and improvement of roads in my region, the Hawke’s Bay. The people of the Hawke’s Bay welcome that. Likewise, the people of Canterbury want to see improvements in their roads. The people of Southland want to see improvements in their roads and this bill will do that.

The bill provides for the duty to be indexed to inflation, and, as the previous speaker said, there is precedent for that. Funding for roading will be guaranteed and there will be a clear stream of funding to help improve New Zealand’s infrastructure. If we want New Zealand to grow, we have to have better, improved roads.

I want to refer to a point made by Mr Key. I was interested in what he said about the top rate of tax in terms of police officers. If 13 percent of police officers were paying the top rate of tax before, and now 39 percent are doing so, he should be congratulating the Government on increasing the salaries of police constables in a very short period of time. It just shows that the member cannot count. He cannot do maths.

John Key: I certainly can.

Hon RICK BARKER: The member cannot. He has claimed that police officers’ pay is static. That means that it has not improved or changed. If the member thinks about it for a moment, the point is that the top rate of tax is 39c, and 39c out of every dollar means that officers get 61c in the dollar. I would have thought that if they get an extra 61c for every extra dollar earned, they are improving their position. That member simply cannot count.

This bill is a good bill. The public want to see our roading infrastructure improved and this bill will deliver for all reasons, for all New Zealand.

CRAIG McNAIR (NZ First) : In speaking to Part 1 of the Customs and Excise (Motor Spirits) Amendment Bill, I will read an excerpt from the commentary on the bill: “… as oil prices are at high levels, the Minister of Customs”—who is in the chair—“proposed that we amend the bill to allow for the excise duty increase to come into force on a later date by Order in Council, to allow the implementation of the increase to be delayed.” My question to the Minister in the chair, Rick Barker, is this: does he honestly think the average New Zealander will accept an explanation like that? It is the biggest load of hogwash I have ever heard. I want to say to this Government—I wanted to say it to that Minister, but he has, sadly, just left the chair—that it is a disgrace.

The average New Zealander out on the street will not believe it. This Government thinks the average New Zealander is dumb. That is what it thinks. But we on this side of the House know that New Zealanders are not dumb. As the New Zealand First spokesperson, as a New Zealand First member, I say that this Government will realise, come the 2005 election—which is only 6 or 7 months away, depending on when the Prime Minister wants to call it—that the people of New Zealand are not dumb.

This Government wants not only to put up petrol tax again but to toll the Albany to Pūhoi realignment, which is the State highway in the Rodney electorate, where I come from. This Government says it needs even more money. Not only will it keep taxing us to the hilt on income, and through other taxes like petrol tax, but it says it will toll, it will tax us through GST, and it will tax us every way we turn. Every way we turn we will be taxed. This Government always tells itself: “Just a little bit more and it will be enough.” But the fact is that for this Government it will never be enough, because it will constantly be throwing its money into pet projects like the arts, like the hip-hop tours that John Key mentioned. There will never ever be enough.

Delaying the 5 percent rise in petrol tax until after the election is manipulative, deceptive, disgraceful, and morally wrong. But this Government does not care about morals, or whether something is wrong. We have seen that. It cares about whether it can collect money; that is all this Government cares about. It wants to toll a State highway. It wants to tax New Zealanders again, and again, and again.

Who is it taxing? It is taxing the hard-working New Zealanders, who will, in the upcoming election in 7 months’ time, say that they have had enough. They have had enough of this Government’s social engineering, they have had enough of its political correctness, and they have had enough of its high taxes. The Minister was just talking about a police constable who, after taxes, superannuation payments, and so on, gets $500 a week in his or her hand and is meant to feed a family with that. Now, this Government would, after the election, tax every motorist another 5c in every dollar.

That is disappointing. New Zealand First says that it is not good enough constantly to try to find other areas in which to tax New Zealanders, and then to spend the revenue on pet projects like hip-hop tours and other ridiculous things. New Zealand First says “Look out!”.

RODNEY HIDE (Leader—ACT) : I have, just now, been going through the Customs and Excise (Motor Spirits) Amendment Bill, and I realise—and this might be a shock to members of the House and to the public—that this bill will not pass. When we look at the commentary on the bill and read the minority views, we realise that they add up to the majority. What we see is that the National Party is opposing this bill—good on them—that the New Zealand First Party is opposing this bill—good on them—and that the ACT party, of course, is opposing this bill. I also see, when I look over the page, that the Green Party is not prepared to support this bill. The Green members are happy for taxes to go up, but they think that the bill does not go far enough. They say that taxes should also go up for diesel users, as well. So the Green Party, along with the other Opposition parties, is a dissenting voice. So, clearly, the Greens will not vote for this bill. Then there is the brave, bold United Future party—and, blow me down, they do not support it either. United Future believes that it is okay to put taxes up on petrol, but that there should be a reduction in income tax.

Gordon Copeland: That’s right.

RODNEY HIDE: Mr Copeland says that that is right. I have news for him. Nowhere in this bill is there a reduction in income tax.

Hon Maurice Williamson: So they won’t be voting for it.

RODNEY HIDE: They will not be voting for it. This bill is dead. This bill is dead because the United Future party, the Green Party, and the other Opposition parties have put on record their opposition to it.

Hon Maurice Williamson: Why don’t we put it in the bin?

RODNEY HIDE: Well, why waste time? Why debate it—unless, of course, the Greens want to get up and say that they wrote those words but did not mean them.

Hon Maurice Williamson: They wouldn’t do that.

RODNEY HIDE: No, they would not do that, because I hear them so often talking about their truthfulness, their honesty, and their principles. So what they wrote is what they mean. I turn to the United Future members. About them, I have no doubt. They are good, Christian people. They are the honest brokers of Parliament. They are the honest members of Parliament who hold the Government to account.

Gordon Copeland: We’ll stand by what we wrote.

RODNEY HIDE: Gordon Copeland says that the United Future party wrote that it believes the bill should be accompanied by a drop in income tax. That is a test, is it not? We are in an election year, and there is a question about political parties, is there not? Can people trust them? Can people trust a party to deliver on what it promises? Can people trust a party to deliver on what it says? The United Future party has said unequivocally that this bill should be accompanied by a drop in income tax. That is what it is telling its supporters and its members—so they will vote against this bill.

Hon Member: It’s a dead duck.

RODNEY HIDE: It is a dead duck, and it should be. Why is the Government putting up taxes to build more roads? It does not need more money. What about the surplus? What about alternative funding mechanisms? What about the petrol tax that already exists? Who trusts Labour to spend this 5c increase on roading only, as it promised? Was that not what the roading tax—the petrol tax—was originally meant to be? Of course it was!

Hon Maurice Williamson: It’s a Tui tax.

RODNEY HIDE: Yeah, right! Then the Government says it will allocate 35 percent of the increase to Auckland, and the rest will be allocated on a population basis around New Zealand. What percentage of people live in Auckland? About 35 percent. What a lot of rubbish! Then we see that the Government will inflation-proof it. That is a good one for the United Future party, too.

Dr the Hon LOCKWOOD SMITH (National—Rodney) : The public might have no idea from this debate that we are debating Part 1—“Amendments enabling indexation of duties on motor spirits by reference to diversion amounts”—of the Customs and Excise (Motor Spirits) Amendment Bill. Part 1 is the part that indexes the rate of excise duty on petrol or motor spirits to the consumer price index.

There is an important constitutional principle here that in all my years in this Chamber has been adhered to very closely, which is that no Government has the right to increase taxes on people without the representatives of the people actually passing it—accepting it.

Shane Ardern: No taxation without representation!

Dr the Hon LOCKWOOD SMITH: My colleague Shane Ardern reminds us that there should be no taxation without representation. It has been an important constitutional principle that only this Parliament can increase taxes. Sure, Governments can propose that there should be increases in taxes, but they bring them to Parliament. Part 1 of this bill says to hell with Parliament; it says that this Labour Government of Helen Clark is so all-knowing, so wise, so wonderful—after all, Helen Clark once referred to herself as an extraordinarily successful and competent Prime Minister, and she tells the public so; she is a “victim of her own success”, is our Prime Minister—that it can ignore that constitutional principle and put up taxes just by Order in Council. That means that taxes will be upped when the Government decides to up them, and Parliament can whistle in the wind.

I think that is an important issue. It is something this Parliament should not hand over to the executive without a lot of careful thought. If the Government were to bring to Parliament a comprehensive proposal stating that it wanted to be more efficient, and that, as the petrol excise is increased every year according to the consumer price index, it would make that automatic, but that, to make sure the proposal was a balanced one, it would also address, for example, the income tax side and index the thresholds for that, that would provide some balance. Maybe Parliament would be prepared, in those circumstances, to say that that would be fair to the taxpayers whom we represent. But this bill is not fair, because it empowers the executive to put up the taxes on petrol without Parliament having any say. The people we represent will get clobbered because the income tax they pay is not indexed. The thresholds on which their income tax are based are not indexed to the consumer price index. So the people we represent are not being treated fairly by this.

This bill is a real test for United Future. We know that United Future believes that the income tax thresholds should be indexed to the consumer price index. We know that United Future, in its minority report from the Finance and Expenditure Committee, stated that it believes that this increase in petrol tax should be offset by a reduction in personal income tax. This is a test for United Future. Will it vote for anything it believes in—for something as important as this—or will it just keel over and be another little limp-wristed doormat for this Government? This will be a real test, because this is an important issue. This Government giving this executive the power to increase taxes is an important issue, and United Future should stand on principle for something and vote with the Opposition to try to prevent the Government from carrying this proposal out.

Hon Maurice Williamson: They won’t? They won’t.

Dr the Hon LOCKWOOD SMITH: No, I am not sure how United Future will vote. I suspect it may well vote with the Government, because I do not think its members have enough you-know-what to vote against the Government on this issue. This will be the test.

I suspect the Greens will vote with the Government because they are in the Government’s hip pocket—but I should not say that. [Interruption] Watermelons? Well, yes, we know about the Green Party. I suspect it will vote with the Government, but United Future should show some principle.

GORDON COPELAND (United Future) : I would like to confirm that, as the previous speaker said, Part 1, “Amendments enabling indexation of duties on motor spirits by reference to diversion amounts”, of the Customs and Excise (Motor Spirits) Amendment Bill is about indexing the excise duty on motor spirits for inflation. We have just heard a very interesting speech by a member who said that that is a dreadful thing to do, that it bypasses parliamentary processes, and that it is unfair and unjust, etc. A number of National Party members were seeking the call, and I invite them to say—as the previous speaker did not—whether they believe that the indexation of excise duty on motor spirits is wrong. Are they prepared to make a commitment here in the Chamber today that should they be fortunate enough to be elected later this year by the people of New Zealand as the new Government, they will repeal that section of the legislation? If they are not prepared today to say that, then it will be quite clear to everybody listening to, and participating in, the debate that that is just another bit of politicking.

If indeed National members believe they will form the Government, then it is about time they started to tell the people of New Zealand exactly what they will or will not do when they become the Government. My challenge to them is quite clear: if they want to repeal the provision, they should get up and say so.

Secondly, while I very much accept the praise and support of the National Party, New Zealand First, and ACT for the indexation of inflation brackets when it comes to personal income tax, which is our policy, and which we have clearly stated we will do if we have a hand in the next Government, I would like those other parties to go a little further and say that if they are part of the next Government, they will do that, too—they will index the inflation brackets. It is all very well to come here and praise the policy of other parties; that is good, it is a tribute and, I suppose, a compliment, to the fact that the indexation of the tax brackets is obviously and patently necessary in any fair and just tax system. Otherwise, without coming near Parliament the executive could increase the effective rate of income tax just by doing nothing, and that is not good enough. It is something that we want to see changed.

My simple request is to let the other parties take the opportunity to state what they intend to do about this bill that we are debating today, should they be part of the next Government;

Hon MAURICE WILLIAMSON (National—Pakuranga) : I am hugely disappointed in the Minister in the chair, Rick Barker, because he has shown a complete lack of understanding of a term referred to in financial circles as “fiscal creep”. We are not talking about the Minister of Finance; we are talking about a process that happens when indexation occurs. I shall put it to the Minister in the chair. My colleague John Key pointed out that some time ago only 13 percent of police officers were paying the top rate of tax of 39c in the dollar but now 39 percent of them are paying it. The Minister said that showed how great the Government was in having increased their pay. What he did not seem to understand was the time value of money.

I put it to him that back in 1999, when this Government came to power and legislated for the 39c rate, a lot of police officers would have been earning around $59,000 or $58,000 or maybe even $57,000 a year. Now, those police officers, receiving just straight inflation adjustments to their pay—that is, no improvement in their actual standard of living, because it is just correcting for inflation alone—will have accumulated around 12 percent. I have an accumulative inflation figure over that time, of about 12 percent. So if one accumulates 12 percent on that $58,000, one is talking of, say, another $7,000 pay. That means those officers are receiving exactly the same amount as they were beforehand. They were being paid $59,000 and now they are on, say, $66,000, which is the exact stand-still pay rate. The Minister said those people had now all moved from the 33c top bracket to the 39c top bracket and that they were much better off. In fact, they are no better off. If their pay has only kept pace with inflation, and their tax rate on that money is higher than it was, they are worse off. We have a Minister who said to this Committee that those policemen should be grateful to the Government—

Opposition Member: He’s dumb.

Hon MAURICE WILLIAMSON: Clearly, he is a dumb Minister if he does not understand the principle of “fiscal creep” and that 5 years ago that money was worth a lot more per dollar than it is now. So we get to the principle of Part 1—that is, indexing the revenue stream. The Minister has come along here with a bill and said that instead of just collecting so many cents petrol tax per litre he wants that figure as the starting point, and then every year, as the consumer price index goes up, he wants to catch a little bit more, and then a bit more, and a bit more. I ask why he does not do that at the other end in terms of the income tax brackets at which a person slips into the 33c in the dollar rate and the 39c.

I shall give the Committee an example of what will happen, if that does not occur at some stage. Within 25 to 30 years every worker in this country will be earning more than $60,000. In fact, $60,000 will probably be the pension or the unemployment rate in 25 to 30 years, if one looks at what “fiscal creep” means. If this Government does not do any indexation, everybody in New Zealand will be on the 39c top tax rate. But maybe that is what Labour actually wants. I have suddenly realised that I am wrong. That is the great plan! Why did I not spot it? I thought Labour said, originally, that it was done to catch the top 5 percent of high-income earners, but, of course, I was wrong. It was to do with catching everybody. There will not be a single sausage out there in the workforce who, one day, will not be on $60,000. I tell the Minister that with “fiscal creep” they will all be on the top tax rate paying 39c in the dollar.

If the Minister genuinely believes that the Government just wants to catch the top rich and he believes that indexing is right, let us do it for both. Let us put up an amendment right now to do it for both; to take the 39c at $60,000, correct it every year, so that—my colleague John Key will have a more accurate figure—we would be up to a figure of $67,000 by then, and we say that it would kick in only at $67,000, and within the 25 to 30 years I was talking about, when everyone is on $60,000, they would not pay that tax rate until they were on the $250,000 mark. But, oh no! We heard nothing: not a sausage, not a mutter, not a murmur from the Minister.

Then United Future came out with an absolutely lame-duck report saying they would be supporting the bill, so long as there was a corresponding reduction in taxation. Then we heard the previous speaker, Mr Copeland, double dog National to explain its policy. Our policy is to reduce taxes for all New Zealanders when we become the Government. Income tax, GST, and other costs will be reduced, so that the total tax take will drop across the whole country. It will not be with regard to just petrol tax; it will cover company tax, personal tax—the lot. There is his answer.

Dr MURIEL NEWMAN (Deputy Leader—ACT) : I rise for the ACT party to oppose the Customs and Excise (Motor Spirits) Amendment Bill. I remind the Committee that this is the fifth tax increase on motorists since Labour has been in power. Each one has been presented to Parliament with the reason that Labour wants to reduce congestion in our cities or to improve the standard of roading in New Zealand. However, I think most Kiwis understand that it is simply a way to grab more taxes. So this is yet another tax-grab bill by the Labour Government.

I was not on the Finance and Expenditure Committee, but I note in the report to the House that the bill was referred to that committee on 4 November last year and had to be reported back on 26 November. That gave just over 3 weeks for submissions to be called for, advertised, and sorted through. Is it any wonder that on an issue as big as putting up petrol prices and petrol tax, there were only 16 submissions? This is yet another example of the Labour Party’s undermining of the democratic process by ramming legislation through so quickly that people who are concerned—and I say that would be every motorist and every small business in New Zealand in particular—do not have time to take part in the whole submission process. When submissioners are given 3 weeks, from beginning to end, it is no wonder that, essentially, the Labour Party seeks to lock out those people who might be opposed to this legislation.

The first part of the bill deals with inflation adjustments. We have already heard in this debate how the Labour Government has inflation-adjusted excise duties on alcohol and cigarettes, and now it will add petrol to that group. We have also heard how that undermines the whole sovereignty of Parliaments. Asking a Government to come to the House with its hand out, or its hat out, to beg for the numbers in Parliament to be allowed to put up taxes is a very key part of the Westminster democratic process. We want Governments to come, cap in hand, to their Parliament to ask for permission to put up taxes in a country. What the Labour Party is doing, in a very sneaky way, is taking that role outside of this House and doing it by regulation, through Order in Council. In that way it will not invoke the wrath of taxpayers up and down the country, who will say: “Hang on a minute. Government, you are being too greedy.”

What is peculiar at this particular time, as we pass this bill, is the fact that Labour is already going to be sitting on a treasure chest of some $6 billion—the amount by which it has overtaxed New Zealanders. There is a huge surplus. Yet the Government is deciding that it has to pull more money out of the families of motorists, up and down the country.

We have heard about the problem of indexing taxes. It is interesting; I asked our research unit to tell me what would happen if we indexed tax rates. When Labour came into power it said there would be no tax increases for anyone earning under $60,000 a year. Well, if we had indexed taxation it would be only people earning over $68,000 a year who would be on the top tax rate, only people earning between $43,000 and $68,000 a year would be on the second tier of 33c in the dollar, and anyone earning under $43,000 a year would be paying the bottom rate of 19.5c in the dollar. So instead of the Government being fair and deciding that it would index income tax rates as well as all those user charges, it has tried to pretend that it does not need to.

PANSY WONG (National) : I take issue with Minister Barker, who said we should congratulate him or the Labour Government on the process of bringing this bill into the House. The fact is that members of the Finance and Expenditure Committee were forced to have a very short time frame in which to invite submissions. Basically, the bill was introduced on 4 November and submissions closed on 26 November.

Deliberation on the submissions took only about an hour, and the committee’s consideration took only about 2 hours, because the chairperson and the Labour members kept rushing the process and saying how important it was to get the bill back to the House. So I do not think any brownie points or congratulations are due to that Minister or the Labour Government.

The second point is that even during that short time we heard 16 submissions. None of the submitters supported either Part 1 or Part 2. One submission, which was from roading contractors, was not against the bill, mainly because their members want certainty that they will have the funds to build the roads, and, basically, they said that any source their funding comes from is fine. So technically we are talking about zero support—100 percent zero support—for this bill. So one has to ask, what does it take, under the democratic process, to make this Government take note?

I also feel it is important to read, for the public, what an individual submitter wrote to the select committee, just in case this tax-and-spend Government thinks it is penalising only the so-called high-income earners, or people who can afford to drive, by introducing this indexation. One individual submitter wrote this in a submission: “I and many others like myself are home helpers out in the community and we are very poorly paid. Out of that pay we must use our own cars without the benefit of a petrol allowance, and the ever-upward cost of petrol is reducing our income to a point where some of us are seriously considering giving up this valuable service.” He also mentioned the other volunteers who are on fixed incomes and are contributing to society by volunteering their services as Meals on Wheels drivers, Red Cross support drivers, Cancer Society drivers, etc.

I know it is a waste of time for us to plead with members of the Labour-Progressive minority Government, because they are hardened and they believe in taxing and spending. So my question, once again, is directed at United Future. Members of United Future and the Green Party today, after listening to this individual submission made to the select committee, have a chance to help those New Zealanders who have volunteered to drive to support other people in need. Those members can help today by not supporting the bill. This bill does not have to go through. Today, during the Committee stage, is the moment for both the Greens and United Future members to show that they are genuinely representing their supporters by coming into Parliament and doing something good—that is, not depriving those fantastic volunteers out there who are subject to this indexation of petrol tax.

There is a convention by which every year the Minister of Finance has to bring to this House a bill to confirm the taxation rate—every year, because it is important. Petrol tax is a very important tax. I would say that literally New Zealanders who are of driving age do at some stage get behind the wheel and will have to pay this petrol tax. Compared with income tax, it is a tax that probably even more people pay. It is totally unacceptable that Part 1 gives the Government an automatic increase in taxation revenue for roading projects. We can demonstrate in further debate—because we will take more calls—that there are already funds to finance the increased need of more New Zealand roads.

DARREN HUGHES (Labour—Otaki) : I move, That the question be now put.

PETER BROWN (Deputy Leader—NZ First) : This part deals with the indexation of the fuel tax. New Zealand First does not support that. We do not believe it is necessary. I know that the Minister will bear these figures out and support me in this, because the growth in vehicle traffic grows greater than inflation every year. On top of that the average car consumes more petrol per year. I know that cars can go further, on average, on a litre of petrol, but they are actually burning more. So the Government—

John Key: Not in Auckland they can’t be, because they are at a standstill most of the time!

PETER BROWN: I think the member is making a very good point.

Hon Rick Barker: It’s all the fault of the National Government—9 years of neglect under National!

PETER BROWN: But believe it or not, on average in New Zealand more petrol is being used—

Simon Power: I raise a point of order, Madam Chairperson. I apologise to my colleague from New Zealand First, but you could, if you saw fit, remind the Committee that there is a convention that a Minister in the chair, with a live microphone, is not to interject whilst other members are making their contribution to the Committee.

The CHAIRPERSON (Ann Hartley): The member is quite right, and I certainly so caution the Minister.

PETER BROWN: The point I am making is that the Government is getting more and more revenue from motorists by natural gains in that there are more cars and more fuel is consumed. It is way ahead of inflation.

I want to turn my attention to United Future, because Gordon Copeland offered us a challenge. He asked the major parties, National in particular, whether they would repeal this. Let me tell the honourable member that if we do not get taxation indexed we would repeal this. I am convinced we would repeal this. Although I have not discussed that detail with my caucus, I know the feeling on this matter in my caucus. We do not think it is fair, or justified, to index petrol but not taxation. The member sitting there—Gordon Copeland—who is nodding his head, has an absolute power at his fingertips. He can say to this Government: “Look, we don’t agree with this unless you do both bits. We will not support this bit unless you do the other bit that we want.” He claimed that his was the instigating party in wanting taxation indexed. I do not believe that to be true. I believe that the member does want it to be indexed, but his is not the only party. It is certainly a worthwhile idea to be given strong consideration.

He can go to this Government and say: “Look, we give you supply and confidence. We give you it very, very cheaply, but, on this issue, unless you give us both, we’re not going to support it.” I know that the bill will still have the numbers to get through, because the woolly-woofter Greens will support it. But the member does not have to tie himself along with the Greens on these sorts of things. The Greens would tax everybody out of existence. I see Sue Bradford is shaking her head, but the Greens state that they believe diesel users should contribute to the non-road costs they impose on the economy through an excise tax on diesel. They want to tax diesel operators—the trucks and goodness know what. They want to slam it on to them. That is the truth of the matter. It is more taxation. There is no account of where it will go, and, no doubt, they will want to index it through inflation.

However, I say to United Future members—because from time to time a degree of common sense comes through from those members in some of their announcements—that they should show some strength of conviction and, if they cannot show New Zealanders that they stand for something, show us in this Committee that they really do believe that taxation should be indexed. That party has spent oodles of thousands of dollars of taxpayers’ money saying that there should be no GST on rates—there have been big notices all over the place—because it is a tax on a tax. That is absolutely correct. Would those honourable members remove GST from the tax that is on petrol? No, they would not. I have already asked them that. So the principle of not taxing a taxation does not count for too much, but when Grey Power or somebody else says: “Take it off rates.”, they go along with it knowing that they will give the Government confidence and supply and whatever, and that they will do nothing about the taxation, at all.

It is no wonder MPs and politicians generally have a bad name with the public. Nobody really knows what those members stand for or where they will put a stake in the sand. We will not support the indexation of petrol.

MOANA MACKEY (Labour) : I move, That the question be now put.

SIMON POWER (Senior Whip—National) : I raise a point of order, Madam Chairperson. I seek some guidance from you. During the course of the debate Mr Hide pointed out that the National Party, New Zealand First, ACT, Green Party, and United Future had all submitted minority reports on this bill. Would you be able to advise the Committee whether that in any way binds the way that those parties vote on the bill?

GORDON COPELAND (Whip—United Future) : I would like to say, because I think it is pertinent to the point of order, that Mr Hide misquoted. Our minority report states that United Future supports the 5c per litre increase. Therefore, the point raised in the point of order does not arise.

The CHAIRPERSON (Ann Hartley): It is not a point of order to debate. Members of the select committee vote how they see it at the time.

Peter Brown: Madam Chairperson—

The CHAIRPERSON (Ann Hartley): I have ruled on the matter.

PETER BROWN (Senior Whip—NZ First) : I raise a point of order, Madam Chairperson. I would not have raised this point, but my colleague saw fit to raise a point of order on the commentary. The commentary lists the select committee membership as the standard committee. However, on this particular bill the Rt Hon Winston Peters was replaced by my good self. I do not know whether that is important in the scheme of things.

The CHAIRPERSON (Ann Hartley): No, it is not; that is a matter for the select committee to record. I will just repeat that the minority view is the view of the select committee member; it does not bind his or her party in any way.

SIMON POWER (Senior Whip—National) : I raise a point of order, Madam Chairperson. I thank you for your ruling on that. However, I seek clarification. Under the heading “Minority views” there are paragraphs from National, New Zealand First, ACT, Green Party, and United Future. That would indicate to the Committee—and I appreciate that they are not bound—that the United Future and Green Party members of the select committee were in fact in the minority and opposed to the bill, if they did, indeed, contribute a paragraph to the minority view part of the commentary. I know that does not bind them when voting now—you have made that ruling and I do not dispute that for one moment—but it puts us in an interesting position and I now look for clarification. Does it follow from your ruling that Gordon Copeland, the member from United Future, and the Green member Rod Donald, were in the minority in opposing the bill at the select committee stage?

The CHAIRPERSON (Ann Hartley): No, it is not a matter for the Committee of the whole House now. That was a matter for select committee members at the time. It is their report.

Simon Power: Is my interpretation correct? I accept that it is not a matter for this Committee.

The CHAIRPERSON (Ann Hartley): It is not up to me to interpret that.

SUE BRADFORD (Deputy Musterer—Green) : I raise a point of order, Madam Chairperson. I had not intended to do this, but because this has happened I would like to point out that like our colleague Mr Copeland, the Green Party states in its minority report that it supports the increase to the level of duty on motor spirits, which is a clear indication of support for the—

The CHAIRPERSON (Ann Hartley): I remind members that they are debating points that could be brought up during the discussion of the Committee of the whole House. They are not points of order.

SIMON POWER (Senior Whip—National) : I raise a point of order, Madam Chairperson. I did not want to interrupt the voting any further than I already have, but before we get on to Part 2, the member Sue Bradford raised a very interesting point. I do not look for a ruling now, but perhaps we could have a considered ruling from the Chair later in the piece. I believe Ms Bradford said that the Greens supported the bill during the select committee stage and that that was to be the interpretation to be put on its minority report. How can that be right? How can a minority report that opposes the majority view contain a view that supports the bill? It may well be that we need this matter clarified for select committees. I do not ask you to make a ruling at this point, but you can see the dilemma that we are in.

The CHAIRPERSON (Ann Hartley): It is certainly my understanding that it is the committee’s role, and I have certainly heard discussion on this previously.

The CHAIRPERSON (Ann Hartley): This debate includes debate on the schedule.

SHANE ARDERN (National—Taranaki-King Country) : I rise in opposition to Part 2 of the Customs and Excise (Motor Spirits) Amendment Bill. I do so for this reason. This graph that I have managed to get from the Parliamentary Library shows me that now, at this point in time, 51 percent of the price of every litre of fuel that people purchase in New Zealand is tax—without the 5c per litre increase being proposed. If we look at the breakdown of where that tax of 51 percent goes, this is what we find. The accident compensation levy accounts for 9.4 percent of it, the petroleum fuels monitoring levy accounts for 0.1 percent, the National Land Transport Management Fund gets 33 percent, local authorities petroleum tax makes up 1.2 percent, GST makes up 22 percent, and petroleum excise tax accounts for 34.3 percent. All of that makes up 51 percent of the total price of a litre of fuel. So the question I have for the Minister is this: if 51 percent of the price of a litre of fuel cannot fix the problem we have with New Zealand roads, then how can he suggest to the Parliament today that a further 5c per litre slammed on to poor old “Joe Hard-worker”, the Labour voter, will fix it?

It gets worse. If we do a little bit more research, we find that in the last decade the combined distance travelled by the motorists of New Zealand has increased from something like 15 million kilometres per year to about 30 million kilometres per year. The question that comes from that—and I would be prepared to let the Minister take a call to explain it to us—is: how much of that extra cost, which is put on people in terms of getting to work, comes out of the average weekly wage? It is a simple question. How much of an increase has there been in the cost of transport, or in the cost of going to work, in the last 10 years, with that massive increase? The Minister sits there and shakes his head. I am sure he has no idea of the answer to that question.

I ask this Minister, who is part of a Labour Government that has, so far, introduced 24 new taxes since it has been in power, this question: at what point he does he believe that poor old “Joe Hard-worker”—traditionally a Labour voter, but no more—has suffered enough at the hands of this Labour Government? I say to the Minister that having 51 percent of the price of petrol as a plethora of taxes is enough, and that another 5c will not fix the problem.

I need to address a further point, and it concerns the issue of this Government setting a precedent like none that has ever been set in this Parliament before. It is an absolute abuse of the Westminster system. I could read out a whole list of things that this Government has done, but the debate today needs to focus on the fact that the Government is increasing taxation without representation. The Committee is today debating legislation that indexes the price of petrol to the consumer price index. I ask the Minister whether he can show me an example of this having happened before. Where has there been such a blatant increase in taxation? I am thinking about the 24 new taxes that this Government has introduced since it came to power, and about this extra 5c. Where in a Parliament anywhere in the world have we seen such a blatant abuse of executive power? I would be very interested to hear the Minister’s answer to that, and I am sure that most New Zealanders would.

It is also interesting to note that throughout the whole of this parliamentary term, a number of parties have said that they are against increases in tax. Then we look at what United Future is likely to do today when we get to the final stage of the debate on this bill. Will it support this bill? That is what we want to know. We know the Greens will support it—the Greens follow blindly wherever Labour goes—and we know they will be morris dancing outside later on. But will United Future members support this legislation today? That is a question we need an answer to. I suspect that, once again, they will roll over and say: “Yes, sir, no sir—or madam. How many bags full, and how high should we jump?”.

Hon RICK BARKER (Minister of Customs) : It is a pleasure to follow Shane Ardern, who is the thinking National Party MP. I want to take up with him several of the issues he raised. He talked in his speech about the abuse of power by the executive. I would have thought the fact that Parliament is debating this legislation shows parliamentary power. This is not about the abuse of power by the executive. This bill will proceed only if 61 or more MPs vote for it. That is parliamentary power. It is not executive power. The member should get his terms correct.

Secondly, he said that the Government is abusing the Westminster system. We are using the Westminster system. I say to the National Party that it should take some of its back-bench MPs and introduce them to a training session. This is all about using the Westminster system. Mr Ardern went on to argue that this bill represents taxation without representation. The fact that he has come to this Chamber from Taranaki and is representing the views of his constituents is representation about taxation. I say to the member that he should be in touch with the constituents in his area, because they want better roads.

Darren Hughes: Jim Bolger understood that.

Hon RICK BARKER: Jim Bolger understood that and, as I have been through the Taranaki area, I can see why there is a great need for improvement on the roads. We cannot improve the roads on the current level of funding. I tell the member to have faith and to be a believer. This Government says that with an extra 5c per litre on petrol, it will make significant improvement in roads in Auckland, Hawke’s Bay, and Taranaki. That member should have faith and be a believer.

I say to members that this is a very simple part. It has two clauses. The essence of it is simply to make it clear that there will be a 5c per litre increase in the rate of excise duty and that there will be some changes to the schedules. This part is the guts of the legislation; it is where the amount goes up. There should not be too much debate about that, because every member wants to see improvements in the roads in the area he or she represents. If we want roads improved, then we have to put money into them, and this is the means of doing that. I look forward to the support of the member for Taranaki - King Country.

CRAIG McNAIR (NZ First) : In speaking to this part the Minister, the Hon Rick Barker, said that this is a very simple part. But it is also a very bad part. This Government is not only collecting $6 billion in excess revenue and taxing New Zealanders to the hilt, but also it is implementing tolls, like in the Rodney area, where I am based. Tolls anywhere are bad enough, because they are just another excuse to tax New Zealanders twice, but if that is not enough, this Government wants to toll a main State highway in Rodney—the Albany to Pūhoi realignment—as well as raise taxes on petrol after the election.

New Zealand First says no to tolls and to the 5c increase in petrol tax. The National member Shane Ardern mentioned in his speech that since this Government came to power in 1999, it has brought in 24 new taxes. Out of those 24 new taxes, this will be the fifth tax increase on motorists. That tax now stands at 18c per litre.

I was on the Finance and Expenditure Committee that heard submissions on this Customs and Excise (Motor Spirits) Amendment Bill. The committee reported back: “Submitters generally expressed opposition to the increase in excise duty, suggesting that the funding required should be provided from the duty currently allocated as general Crown revenue,”. Only about half of the money collected from road users actually goes back into roads—we all know that. New Zealand First says that that is a disgrace. But New Zealand First does more than just say that, and does more than United Future members, who get up in the Chamber and say that the Government should decrease taxes, and so on, and that they would do this and that. However, when they come into Parliament they do exactly the opposite. New Zealand First, in our 1996 coalition agreement, set the whole legislation in motion to start implementing that very view—of making sure that the money collected from road users actually went back into roading.

This Government not only has a $6 billion surplus and is now tolling State highways and spending money on its pet projects, but it is spending millions of dollars on policy advice—which is more than the Government needs to spend in a whole lot of portfolios. For example, in the youth affairs portfolio, which has spending power of only $11 million all up, it is spending $1.3 million on policy advice. We in New Zealand First say that that is wrong. It is wrong that with the amount of money the Government is spending, throwing all around the place, and giving to its mates here and there, it still has to go to hard-working New Zealand motorists, Government supporters, and take another 5c per litre from their pockets—as if they are not paying the Government enough in tax as it is. As I said when I spoke on Part 1 in the Committee stage a few minutes ago, this Government will pay for that come the election in 6 or 7 months’ time. It will pay for that.

I was very interested in what the Minister of Customs was saying just before I spoke. He said that this was democracy at work and representative government, because we are actually debating it in Parliament. Well, I say it is the last time we will debate it.

GERRARD ECKHOFF (ACT) : Before I start my contribution to this Customs and Excise (Motor Spirits) Amendment Bill I remind Government back-bench members that this is actually a debate. It is an opportunity for them to stand up and justify the legislation before this Committee. I have sat through Part 1 but I have not heard even one member justify a 5c tax increase on his or her constituents. But it is early, so I hope that during debate on Part 2 I will be able to look forward to a contribution from Government back-bench members to justify this huge tax increase, as I said earlier, on their constituents. I make the point that I will be talking about that, and I will be talking about Mr David Parker, the member for Otago, and his contribution during the election campaign and beforehand as to how the Government back bench justified this significant increase—this yet-another-tax on the constituents they purport to serve.

I suspect that the constituents they purport to serve will be saying they did not vote in Mr Parker from Otago to whack them with another 5c tax. So that message will be going back.

Some colleague from this side of the Chamber talked about “no taxation without representation”. I think it was Mr Shane Ardern, was it not? Of course, I remember where that famous phrase came from. It was from the incident of the Boston Tea Party, was it not, where the English decided to tax the people of the American colony? What happened? The English were thrown overboard with the tea.

Shane Ardern: A revolution!

GERRARD ECKHOFF: A revolution started. It takes one little spark to trigger a major bush fire, perhaps—and this could be it. The people of this country are sick to death of the Prime Minister telling them they are very well off. If we go to speak to the people of this country—to mum and dad out there, who get out of bed in the morning, go to work, and pay their taxes—we will find that in fact they are not happy. They do not have the discretionary spending that members of this Government have. The average Joe Smith or Joe Bloggs—call him what we will—does not have that discretionary spending. There are at present 22 percent of full-time workers in this country paying the top rate of tax, and they are now being asked to pay—well, not asked, because they have not been consulted; they are being told to make—a 5c contribution that will go to the Government coffers, yet again.

I was recently at a function of rural people, of farmers. They asked me whether it was really correct that when they filled up the old farm truck and headed up their roads—roads the Government contributes nothing to—they would actually have to pay 5c a litre, which would go towards Auckland’s costs. I said: “My friend, a vast majority of those 5c will end up in Auckland.” Well, I cannot really tell the Committee what their reaction was, but let me assure members that there will be a profound reaction. They should try telling that to a Canterbury or Otago taxi driver, in tootling down the highway, as I have done. I have asked how they feel about that 5c going towards Auckland roads. Well, unless one is well strapped in one will almost go through the windscreen. They are hot about it, because they know they have never been consulted on this issue. They also remember the Prime Minister’s comment that there would be no increase in income tax. It is sort of like robbing Paul to pay Paul, is it not? We do not take it out of people’s income tax; we take it out of their so-called discretionary spending. That is something we will remind the Government about, on a constant basis during the next few months.

Hon MAURICE WILLIAMSON (National—Pakuranga) : I am delighted to speak to Part 2, because this is simply about an extra 5c a litre being added to the petrol tax.

Hon Judith Tizard: John Key’s agreed to it.

Hon MAURICE WILLIAMSON: Well, unfortunately Judith Tizard interjects and asks whether I disagree with her, and let me tell her, yes, I do—for this reason: I have no doubt that roading in New Zealand is in desperate need of a lot more spending. I am happy to say that in Auckland, as in just about every other part of the country, the amount of money currently being spent on roading infrastructure is woefully low. It is way below the OECD average and way below that of those comparable countries we like to compare ourselves with, as in the case of Australia, the United States, or any individual state. In fact, in nearly every one of those jurisdictions I quote, there is not only a public spend as a percentage of their GDP that is substantially above ours but also there is a big chunk of private money spent, as well.

The Government lauded the Land Transport Management Act a couple of years ago. It was going to have the private sector in there doing things, but I ask whether members have seen a single private sector project—no! [Interruption] OK, so let us strike that down first, just before Judith Tizard gets all excited about it. We truly believe that there should be more money being spent on the roads than is currently being spent. The next question is: so where does it come from? Well, that is easy. It is really easy. There are two things—in fact, there are three points to make. First of all, the Government is currently running a surplus of around $7 billion. It’s around seven. I know that it has all those zeros. I worked it out: it has a seven and three zeros, and then millions after that. That is the Government’s surplus.

John Key: $7,000 million.

Hon MAURICE WILLIAMSON: It is $7,000 million—thank you—which is seven by 10 to the power of nine, for those who are scientific in their view of it. I can understand why the Labour Party would have been wanting to do this in its last time in Government, between 1984 and 1990, because it was running deficits every year it was in power. That meant it was not taking in enough even to cover the cost of running the show as it was, so I would understand that if it wanted to put some more money into roading, it would have to go out and rack up the petrol tax. But, right now, here is point one. There is a $7 billion surplus on the books. Michael Cullen is very proud of it. So why does the Government need in addition to take another $200 million, which pales into insignificance relative to that figure of $7 billion?

The next point I make is that the people who are driving around on those roads are already paying their fair share towards roading, at any rate. Well, hang on, one should look at the accounts. There is $600 million a year already coming off the motorist by way of petrol tax that does not go to roading. Now, I am hoping that Judith Tizard will leap in and say: “Oh, it does indeed”, or that it is wrong, or anything else. I really wish she would, because I know that Michael Cullen does that.

I got a copy of Hansard from May of 1995, when the Hon Winston Peters put forward a bill saying that all petrol tax collected should go to the roads, and guess what? There is one Dr M Cullen voting “Yes”. There we are! Dr Michael Cullen, now Minister of Finance, voted in this House, because he thought it was right then—it is the old Steve Maharey principle: it was right when one was in Opposition and not right when one is in Government—that all the petrol tax collected from the motorist went to roads. If the Minister did that alone and took the $600 million, he would not need this piddly $200 million. He would not need to even think about this figure. It is 18c he is ripping off to the consolidated account, and now he will add another 5c on and say: “What a good boy am I.” What a joke!

Then we come to the third point I want to make about Transfund, the body that gets all the money into its kitty to spend on roading. Now, we would have to say that last year it must have ended up completely strapped for cash, it had no money left, and it could not move. [Interruption] That is right. My colleague Shane Ardern from the Taranaki - King Country area is dead right. It had $239 million unspent in its coffers. When I asked Transfund why it ended the year with all that money when there is so much need for new roading out there, it said it could not find any projects that were ready to go. What does that tell us about this situation? So the Government will take another $200 million from the motorist, when it could not spend the $230 million that stayed as a carry-over surplus in the Transfund account, but it is taking $600 million out of petrol tax already that does not go near it. So I make that point, because I know Labour is trying to portray it as National not wanting to spend more on the roads. Oh, yes, we do! We think there is a desperate need for a big ramping up of expenditure on roads, but I say to the Minister that the Government is already getting the money. It is getting it in spades, and I use that expression carefully.

JOHN KEY (National—Helensville) : I want to follow on from the words of my colleague Mr Williamson, who is quite correct. National does want to invest far more heavily in our infrastructure. But I want to draw the debate to Part 2 in a couple of ways. The first is to say, without stating the obvious, that there is a reason why the Labour members who are in the Chamber today are not hooting, hollering, and getting terribly excited in this debate. The very simple reason for that is that this is a deeply unpopular tax. I will tell the Committee why it is so deeply unpopular and why we know that to be so. There is something very sinister, very deceitful, and rather dishonest happening with regard to this legislation.

The Hon Dr Michael Cullen, the Minister of Finance, was very happy to put this tax on when it was to happen well and truly before the election. He was very happy to do that, except that one day late last year he toddled down to the Chamber, and in the answer to a supplementary question asked by the honourable member Peter Brown, he said he was suspending the introduction of this petrol tax on the basis of world oil prices. So I got to my feet and I asked Dr Cullen to tell us, expressed in New Zealand dollars—because there is the oil price component in the exchange rate to consider—exactly what the rate was that he was targeting. Well, he did not have an answer to that. The normally chipper, chirpy Minister of Finance, who gets a bit lippy in the Chamber, did not have an answer to that one. He did not want a bar of it. When we went off to the officials and asked them what the answer was, they said that they had given him lots of advice. That answer did not quite correlate with the written parliamentary question where I asked Michael Cullen to produce the advice and he said that he did not have any.

There is a reason that the Government does not want the petrol tax to come in. It has nothing to do with economics, the impact on the economy, or whether oil prices are US$40 or US$45 a barrel. This Government is running the biggest surplus in New Zealand’s history, while workers are going down the drain with higher mortgages and higher credit card bills. The Government does not have the guts to front up and—

The CHAIRPERSON (H V Ross Robertson): To infer that anyone lacks courage is a personal reflection, and is out of order. The member will desist from that.

JOHN KEY: This Government absolutely lacks the fortitude to come to the Chamber and tell the people of New Zealand it is going to take another 5c per litre in petrol tax from them, at a time when it is running a $7.4 billion surplus. It is not 5c per litre, for the record. It is 5.6c per litre, because there is GST to add on top of it.

I want to add a second point. [Interruption] No, it never ends. Not only do Government members not want to front up, but here is a very interesting point. Michael Cullen has spent the last 4 or 5 years trying to tell every journalist in the country that we do not understand accrual accounting. We are all idiots; we are looking at a $7.4 billion surplus. According to the very bright Michael Cullen, we do not understand accrual accounting. There is a $7.4 billion surplus, but we should be looking at available cash, because that is the issue in accrual accounting in all the capital expenditure. So, what is the Minister doing? Let us look at that. He is putting a $200 million petrol tax on at a time when he could go to his other capital expenditure and spend the same amount—$200 million—on roads every year, and it would cost his surplus $12 million. That is the truth of it.

Dr the Hon Lockwood Smith: Really!

JOHN KEY: Yes. It is $12 million, because he has to pay it exactly right—the financing cost.

So when it comes to suiting Michael Cullen, we are all idiots and do not understand accrual accounting, but when it comes to fronting up, he is not happy to front up, at all.

National will build a lot more roads than this Government ever will. National will get Tauranga, Auckland, and many other parts of the country going again.

Hon Judith Tizard: Will take credit for what we have done!

JOHN KEY: Judith Tizard has nothing to be proud of with regard to what is happening in Auckland, because very little is happening, indeed. Every year we have spent the same amount of money—that is the great illusion and great myth from the Labour Government. It is not true. And National will do it at a time when every worker in New Zealand will have more from his or her taxes, because we are not greedy and we know the difference between foolish and wise Government spending. This Government does not know that.

This measure is a disgrace. That is why those members hang their heads in shame—and so they should.

PETER BROWN (Deputy Leader—NZ First) : Well, that was a very interesting contribution made by my colleague John Key. I thought he made some worthwhile points, as did the Hon Maurice Williamson. I was a little worried when Maurice Williamson was talking about privatisation. I thought that he was perhaps talking about the same sort of privatisation that Tranz Rail had. Dr Elder of Solid Energy said this morning that he would buy some ships, because when the railway lines were looked after by private people, they were effectively stuffed. So he said he would go into buying his own shipping fleet.

We do not need privatisation to put our roads in order. We need a funding stream that is continuous and sustainable—and we have it. In addition to all the fuel levies that go on to the roads, the petrol motorist pays something like $600 million a year, which goes into the consolidated account. As John Key said, that is not justified when there is a $7 billion surplus. There is not a Government member who will stand up and justify that. Government members do not have the fortitude—I think that is the word that I am allowed to use—to stand up and say the 5.6c per litre increase is justified, although the Government is taking $600 million from the motorist. So 18.475c per litre plus GST goes into the consolidated account.

Where will this money go? Maybe the Minister will answer that, because it is a serious question.

Shane Ardern: You will never get a serious answer from that Minister.

PETER BROWN: I think that the member might be right, but I will try. Will the money that will be regionally distributed be allowed to be spent on the Tauranga Harbour link?

Shane Ardern: A small percentage.

PETER BROWN: Well, it is my understanding that not one cent will be able to be spent where the region would like it to be spent, on its No. 1 priority. I would suggest that it is the same with the Albany to Pūhoi realignment: not one cent of this regional money will be spent on the main priority of that region. I do not know whether Government members are aware of that. Maybe the Minister in the chair, Judith Tizard, can tell me whether I am factually correct in saying that, and, if I am correct, why in Tauranga—[Interruption] I cannot answer so many questions at once. I am concentrating on the Minister in the chair; I can see she is taking my point on board. Will she explain why this money, which is supposedly collected on a regional basis, cannot be spent on a region’s highest priority? I cannot understand why it would not be the case.

Equally, I cannot understand why the Māori Party is voting for this bill. The many, many Māori people in this country love their cars. They are like me; they love their cars. I love cars, and I want decent roads to drive on, for safety’s sake. I am certain that is the same for Māori, and I do not believe that the average Māori member will want to have imposed on him or her—

Hon Maurice Williamson: This member loves ships, too.

PETER BROWN: I do love ships, also—and there are not very many of them, either.

John Key: Not on the roads!

PETER BROWN: No. I want to know why the Māori Party is supporting this bill.

I also want to know from the United Future members—and I am certain they will take a call—how they can justify to themselves, never mind to Parliament, adding 5.6c per litre to the price of petrol, knowing that Transfund could not spend $240 million—

Hon Maurice Williamson: $230 million.

PETER BROWN: It could not spend that amount of money, even if it tried. Yet United Future is saying that it supports an increase in the price of petrol of 5.6c per litre, 5c of which is to go into the regional-based petrol tax and 0.6c to GST. In the last year or so United Future has come out and said that it objects to a tax on a tax, but it is going to support this increase. There is absolutely no justification for it. There is plenty of money—oodles of it. All that needs to be done is to get the funding stream stabilised.

Hon ANNETTE KING (Minister of Health) : I move, That the question be now put.

Dr the Hon LOCKWOOD SMITH (National—Rodney) : In speaking to Part 2, I am staggered that this Government, in 2005, has come into Parliament with a proposal such as this—one it believes will solve the roading crisis in New Zealand. It reminds me of someone setting out to build a home with the contents of his or her piggy bank. Do members remember the little money boxes we had as kids? My colleague, who is to be the next Minister of Finance, had a money box. He did not grow up in a rich family. Back when I was a kid we used to put pennies, thruppences, sixpences, and shillings in our money boxes. This legislation is like using the cash from that money box to build a house. To think we could solve the roading crisis in New Zealand with a bit of cash like this, ripped off motorists, is just pig ignorant.

John Key: It’s laughable.

Dr the Hon LOCKWOOD SMITH: It is laughable. There should be a proper rational strategy for investing in our roading infrastructure. As my good colleague John Key pointed out a moment ago, with accrual accounting it should not be the whole cash expenditure that is coming into our annual accounts; it should be the cost of financing that infrastructure investment. The Labour Government is approaching this matter in such a childish way. We should never forget, of course, that Helen Clark knows best—that our terribly popular and competent Prime Minister, who is a victim of her own success, knows best in these matters! But this is just pig ignorant. I say to the Minister in the chair, Rick Barker, that he does not know the situation, because he probably does not get up north very often. Last Sunday I was heading north from Auckland—

John Key: Slowly.

Dr the Hon LOCKWOOD SMITH: I was OK; I was heading north, but I pitied the poor, suffering New Zealand voters and taxpayers who were heading south. Following the speeches made by Don Brash, Ōrewa is a very famous place. As people head north from there, they go through a place called Hatfields Beach, where Rob Muldoon used to have a bach. Last Sunday, the traffic was travelling at 5 kilometres an hour south through Hatfields Beach. As people travel north from there, they go up the Waiwera hill, then down it to Waiwera. The traffic on Sunday was travelling at 5 kilometres an hour, bumper to bumper. Going further north from Waiwera, travellers go up and down the Pūhoi Hill, where the Albany to Pūhoi realignment B2 will dump four lanes out on to the poor old State Highway 1. That Sunday, the traffic was still bumper to bumper, gridlocked at 5 kilometres an hour heading south. In fact, by this stage the traffic was stationary.

Heading north from there, people come to a passing lane that Transit has been building. It has taken Transit more than 12 months to construct a passing lane that is not even half a kilometre long, and it is still not finished. That is how efficient Transit is. The traffic had absolutely stopped at that point. As people head north from there, they go up Schedewy’s Hill on to Windy Ridge, and the traffic situation was still the same. This was an ordinary Sunday afternoon.

John Key: It was a hot Sunday afternoon.

Dr the Hon LOCKWOOD SMITH: It was an ordinary, hot Sunday afternoon. It was not a long weekend but an ordinary Sunday afternoon, and back almost to Warkworth, the traffic was gridlocked. It was totally gridlocked.

Yet this Labour Government is increasing the price of petrol by 5c per litre. That increase will be felt by taxpayers, although the total amount of money raised will not be much at all. It will do nothing to solve the roading crisis, because Labour does not have its mind around the full extent of that crisis. It does not have its mind anywhere near it. The crisis is getting worse by the quarter. Every 3 months at the moment it is getting exponentially worse, but the Labour Government just sets up committees and taxing facilities and does nothing to solve it.

What is more, the public will feel it, because right now businesses are being charged levies for higher fuel prices. It is very cynical that if this legislation passes, as it will, because United Future will support it—

Hon Maurice Williamson: No it won’t.

Dr the Hon LOCKWOOD SMITH: It will; it is just a doormat. The worst feature is that this bill gives the Government the power to decide when to impose this tax, and we know that it will use that power cynically. Michael Cullen will not seek to impose it until after the election, because he knows that the public will be very angry when the extra tax on fuel goes on. The public is not silly. It knows that this is not the way to properly finance our roading.

MAHARA OKEROA (Labour—Te Tai Tonga) : I move, That the question be now put.

JOHN KEY (National—Helensville) : The Customs and Excise (Motor Spirits) Amendment Bill is only a relatively small piece of legislation, but it packs a lot of punch. It is a real punch in the guts to a whole lot of New Zealanders who are trying to work out why, when Michael Cullen has $7,000 million of surplus money available to him—[Interruption] That is right: $7 billion - odd. They are sitting at home now, probably wanting to have a nice sherry and watch the news in an hour’s time, trying to work out why they will have to pay 5.6c a litre in petrol tax—why they will have to pay more in petrol tax than they could possibly imagine.

They will be discussing this issue as we move towards the election. Why? Mark my words: even though this bill, if it is enacted, will allow the Minister of Finance to put on that petrol tax in a few weeks’ time, when it is available to him, he will not. He will not, because he knows that it is deeply unpopular, he knows that he cannot justify his position to the electorate, and he knows that thousands and thousands of motorists up and down the country know when they are getting ripped off. I say to Mr Barker that they know when their income is rising in nominal terms but not in real terms. They know the impact of inflation. They know how deeply unfair it is when they have to pay the top personal rate of taxation on some income, so that, in real terms, they get nothing. Now they are having to wear this on the other side.

They know another rip-off when they see it. They know a Government that does not have the courage—if I can use that term—

The CHAIRPERSON (H V Ross Robertson): No, the member cannot imply that anyone lacks courage.

JOHN KEY: The Government does not have the intestinal fortitude, then, to test this measure with the public prior to the election. The Government is happy to put the indexation on immediately—no problems there—but it is very happy to leave this measure until after the election. I predict today that it will not matter whether the price of oil is $40 the day before the election, and, lo and behold, the extra petrol tax cannot go on; it could be $45 the day after the election, and if Labour wins the tax will be on, with plenty more to come, because this Government simply loves to tax people and simply loves to spend more.

Mr Barker made what I thought was a very interesting comment. He said it was only another 5c. It is only another $200 million from the fixed incomes of New Zealanders. It is only another couple of hundred million dollars. When the Government is amassing a surplus of $7 billion - odd, what difference does it make? [Interruption] Yes, the Government is taking $34 billion of extra tax this year. Who really cares whether it takes an extra couple of hundred million dollars?

Labour has tried pretty hard to create the image that it is doing so much more to build roads. That, of course, is a mirage. Maurice Williamson pointed out in his address, quite correctly, that in fact this Government is spending less, in terms of a real percentage of GDP, on roading than it has spent before. It is not spending more; it is spending less. It is spending less than Australia, less than America, and less than England. It is spending less than most other OECD countries. And those are countries that have welcomed the private sector, as well.

When New Zealanders go to Sydney, Melbourne, or Brisbane for their holidays, they notice the difference between the kind of holiday they have there and the kind of holiday they have in New Zealand. The holiday they have in New Zealand is primarily spent in the car. They set off on Friday night for what is normally a 1-hour drive to their beach house, and they get there some time on Saturday afternoon. In a fit of frustration they pack up on Saturday night and pop back into town on Monday morning. It is basically a really interesting exercise in how to have a holiday in a car. No wonder New Zealanders are buying bigger cars; they have to have bigger cars, because they sleep and shower in them! [Interruption] That is right.

I recently had a very interesting experience, which I will relay in order to show how bad things are. At a public meeting just the other day, a member of the public said to me: “When you become the Government in a few months, fix the roads.” I asked why. He said that he had just dropped his son at the airport for a flight to Nelson. His son had rung from his home in Nelson and said: “How’s it going, dad?”, to which the reply was: “I’m still on the north-western motorway; I haven’t got back from the airport.” That is how bad things are. His son had flown to Nelson, but he was still on the north-western motorway—and the Government says it is fixing the problem! I do not think so.

Hon RICK BARKER (Minister of Customs) : This is a very short piece of the bill. I thank the Finance and Expenditure Committee for the change it made to make Part 2 come into effect on 1 April, and for some other changes, consistent with that, to do with the Governor-General. In response to John Key’s—

Dr the Hon Lockwood Smith: It doesn’t come into effect on 1 April.

Hon RICK BARKER: Clause 2 comes into effect when the Governor-General signs it, on the date of royal assent—[Interruption] Yes, I have got that.

I want to come back to the point made by Mr Key and to contrast it with the comments previously made by Dr Lockwood Smith. Dr Lockwood Smith lamented the fact that people are stuck in traffic as they go north of Auckland. I remind him and the member behind him, Maurice Williamson, that Maurice Williamson was Minister of Transport in the National Government for 9 years and did nothing about it, whatsoever. Dr Smith laments the fact that an overtaking lane is being put in and has taken 12 years to build. Well, in the 9 years when the National Party was in Government no bulldozers were there at all.

The fact is that roading is being done in this country, and this Government, with this extra 5c in tax, will fix a lot of projects that have been waiting a long time. In my area of Hawke’s Bay there would have been a long, long wait before the overbridge at Meeanee was fixed. This extra amount of money will ensure that that is done and done quickly, and my people are very pleased about that. A lot of other things will be done. This 5c will make sure that we have better infrastructure.

The National Party can go on as much as it likes about how bad the roads are, but it has not yet thought up a way to fix them other than the proposal before us. I say to the National Party that this Government takes these issues seriously. We will fix them. The National Party had 9 years in Government and did nothing. We have done vastly more in the short time we have been in Government. We will have vastly improved the roads by the time we too have spent 9 years in office, and we will do even better in the years after that. Make no mistake about it: this Government is committed to improving infrastructure, despite what Maurice Williamson said. He was in Government for years and he did nothing.

Dr the Hon LOCKWOOD SMITH (National—Rodney) : Speaking to the title and commencement clauses of this legislation, I say that was an appalling, pathetic speech by—was that a Minister? That was not some back-bench Labour lackey with no understanding of what has gone on in this country; that was the Minister of Customs.

Hon Maurice Williamson: He’s in charge of the bill!

Dr the Hon LOCKWOOD SMITH: Rick Barker is in charge of the legislation, and he has no idea when it comes into effect. He has no idea about the levels of spending on road construction in this country in the 1990s. That was just an appalling contribution by a Minister in charge of legislation.

Let us get a couple of facts straight. In the 1990s the whole motorway construction from Albany right through to Pūhoi was funded to be carried out as a single construction under the National Government. Under the National Government it was built all the way past Ōrewa. Then Labour was elected and construction stopped, because the Government did not want to spend any money in the area north of Auckland. Labour wanted the money to be spent somewhere else. In Labour’s efforts to spend the money somewhere else, it set up committees—and is still setting up committees—and nothing has happened. Meanwhile, taxpaying New Zealanders are stuck in gridlocked traffic.

A worse performance by that Minister, Rick Barker, was that he did not even know when his own bill commenced. He said that Part 2 comes into effect on 1 April, and it does not. That was correct when he introduced the bill. As it was originally drafted, Part 2 was meant to come into effect on that date. The extra 5c per litre in petrol tax was meant to be imposed on 1 April, but, of course, we all know what happened then, and it is amazing that the Minister did not seem to know that. Dr Cullen became all nervous about it because, as we all know, fuel prices went up. Dr Cullen became all nervous about a further 5c per litre charge going on top of the high fuel prices just before the general election. So let me inform the Minister, who is now back in the chair, that this part does not come into being on 1 April. It will come into being when Dr Cullen says it can.

That is about the most cynical move that I have ever seen. We will have taxation coming into effect in this country when Dr Cullen decides it is politically expedient for it to do so. That is pretty disgraceful. It is appalling that the Minister did not even know that when he made his contribution a few moments ago.

Hon Rick Barker: I did—I knew that.

Dr the Hon LOCKWOOD SMITH: If the Minister, as he is now saying from the chair, knew that, why did he say that Part 2 comes into effect on 1 April? It does not come into effect on 1 April. That was in the bill that he drafted. But, of course, Dr Cullen had the Finance and Expenditure Committee change that. The Labour members on the select committee, under Dr Cullen’s instructions, have changed it, so that Part 2 now comes into effect when Dr Cullen decides it will come into effect. We will have an increase in taxation when Dr Cullen decides on it. It cannot be before 1 April, but the tax will come in when Dr Cullen considers it politically expedient to tax motorists further.

I object to that, as does the National Party. We find that to be a dishonest approach to taxation. If Labour thinks that is the best way to fund roading construction—which is desperately needed—it should bring the law in and let the voters have their say on it, instead of having a weaselly clause that enables the Government to delay the extra 5c per litre in petrol tax until after the election. It will not matter how high petrol prices are after the election. If Labour wins the next general election we can bet our bottom dollar that the day after it wins, lo and behold, the cost of petrol will go up by 5c a litre. But it will not go up before the election unless there is a massive reduction in petrol prices, and I do not think that that is about to happen.

Parliament should not be asked to pass such politically cynical legislation, especially when the Minister in charge of the bill did not even know what he was doing.

BRENT CATCHPOLE (NZ First) : I have listened to the arguments about this legislation. Rick Barker, the Minister of Customs, said his little piece, and it was clear that he did not understand the bill. I am quite sure that he had no involvement in drafting it; Michael Cullen has obviously been the one behind it. This bill brings in another tax on the motorist. We in New Zealand First want to make it clear that we are opposed to a further tax on the motorist. This measure is not necessary. The Government collects approximately $700 million from the motorist every year that is not spent on the roads.

We in New Zealand First suggest that the Government looks hard at where that money is going, because that money could be going towards the roads. It could be going towards relieving the problems right throughout the country. In Canterbury there are a number of roads that are desperately needed to unclog the rush hour traffic. The same goes for Wellington, for Tauranga, and—in an even bigger way—for the largest city of New Zealand, Auckland. In Auckland the traffic grinds to a halt, not just for an hour but for 3 to 4 hours in the morning, and again in the afternoon. That means that the ports cannot operate properly. The Minister should have a look at this bill. He does not need to charge the motorist an extra 5.6c per litre of petrol. The motorist does not need it. Along with the high oil prices, this measure is another kick in the teeth for motorists. The Minister does not need to add on this tax. He has $700 million per year that could be put towards roading.

Let us have a look at some of the roads that are desperately needed. The Albany to Pūhoi realignment B2 (ALPURT B2), which Maurice and Lockwood Smith were talking about—

Hon Rick Barker: Maurice?

BRENT CATCHPOLE: Maurice Williamson, not the Morris car.

The CHAIRPERSON (H V Ross Robertson): Order!

BRENT CATCHPOLE: I was responding to the Minister.

The CHAIRPERSON (H V Ross Robertson): You must not use nicknames.

BRENT CATCHPOLE: Maurice Williamson and Lockwood Smith both referred to ALPURT B2. It is a road that should have been completed; it has been in the pipeline for more than 10 years now. Five of those years were spent under the National Government, and we are now into the sixth year of this Government. The Labour Government has seen that the road is required, and the Environment Court said that the road had to be completed and out of the centre of Ōrewa by December 2003. That deadline was extended by 1 more year. At this stage, that particular intersection is outside the realms of what the resource consent allowed.

The Government needs to get serious about the roads and put money into the roads as it is needed. My colleague Peter Brown got the Minister of Finance Michael Cullen to admit that he was going to defer the enactment date of this legislation because the extra 5.6c per litre tax on petrol would look very bad in an election year. The Minister wrongly identified that this provision would come into effect on 1 April of this year. It will not; the Minister knows that. It is up to Dr Cullen to decide when it is expedient to introduce the extra tax. I tell members that it will not be expedient to do so before this election. So why, then, are we putting this extra tax on petrol if it is to be deferred until after the election? It is not necessary. The Government has the $700 million. It should spend it on the roads, and spend it now in order to make sure that the roading system is up to the standard needed in this new millennium.

I take issue with United Future. It claims to be against a tax on a tax, yet it is supporting this legislation, which includes a provision to put GST on a further petrol tax. That is another tax on a tax. I thought United Future was against taxes on taxes, but this bill allows for that and United Future supports it. Its members should be ashamed, and they know it.

GERRARD ECKHOFF (ACT) : I will respond to the previous speaker, who asked a question—a rhetorical question, perhaps—about why we are not spending the money now available on the roads. Well, there is an extraordinarily simple reason why that is not happening. It is called the Resource Management Act. They are three of the most despised words—[Interruption] Yes, we should all make the sign of the cross. The Resource Management Act is the Dracula of all the appalling legislation under which this country is suffering. We can confidently predict that there will be no substantial roads built in this country as long as the Resource Management Act exists in its present form.

I live in Coal Creek near Roxburgh, in Central Otago. I can go to Auckland and object to Aucklanders having decent roads, I can quite legitimately object to the construction of highways in Auckland that would allow for the free flow of traffic up and down through that massive infrastructure. I can do that. That is an absolute nonsense.

Hon Maurice Williamson: You don’t even have to go there. You can do it from where you live.

GERRARD ECKHOFF: Exactly. I might even try that one of these days. But that is the nonsense of this whole bill. We are collecting a tax to spend, so that “Scrooge McCullen” can wallow in his massive—

The CHAIRPERSON (H V Ross Robertson): No, the member cannot refer to members by nicknames or Christian names. He should look at Speakers’ rulings 26/7 and 26/8. He will use the member’s full name or title.

GERRARD ECKHOFF: Thank you for that direction on the subject of the correct title for the Minister of Finance, Mr Chairman. As has been previously alluded to, there are massive sums of money available right now. It is really a question of whether the Government wants to prioritise its spending. Does it think the movement of traffic throughout the country, especially Auckland, is important? If it does think that is important, there is one thing it must do: it must amend the Resource Management Act and make it workable. I am only too willing to help the Government on that subject.

But there is no need to whack the productive sector, the people who get out of bed in the morning and go to work in their cars, or even jump on the bus from time to time, I guess. There is especially no need to whack the people of rural New Zealand, whom I represent in this House, who fill their trucks, the old Toyota, or the Nissan, or whatever it might be, with petrol—yes, they use petrol, not just diesel—and use their own farm tracks and their own infrastructure. The money from their petrol tax goes somewhere else. That is a nonsense, and it appals the people of rural New Zealand.

The capital that the Government will accumulate under this tax will sit there and accumulate interest. The Government will take a whack on that interest as well—it will take tax on that interest. The capital will sit there for years to come, because, in fact, we will not be able to spend the money on the roads due to the Resource Management Act.

There is another point I would like to make on the issue of indexing this tax to inflation. If the Government stopped spending—if it held its expenditure to, say, the last Budget’s expenditure—then inflation would drop to virtually zero. It is Governments that cause inflation in this country, not the public. If Government expenditure was held to previous levels, inflation would not be a problem in this country. So we have the dual scourge of Government spending and Government taxation, which will destroy, ultimately, the infrastructure in this country. There have been no significant developments in this country since the Resource Management Act was passed—that is, no developments worth over $300 million to $500 million have occurred in the last 10 years. So how on earth will the roads be built with this tax that will be imposed?

SHANE ARDERN (National—Taranaki-King Country) : I have been sitting here during the debate wondering—particularly after the Minister of Customs’ contribution—why it is that the real transport Minister, the Hon Harry Duynhoven, the Minister for Transport Safety, is not sitting in the chair instead of the Minister of Customs, Rick Barker, who is a relatively new Minister and who clearly has no notion whatsoever what the bill is about. That Minister said to me that I was wrong, that we do not have taxation without representation, but I once again submit to him that this bill provides for the raising of taxes by the power of the executive through indexing that tax to the consumer price index. It will not have to come back to Parliament. I say to him again that he should jump to his feet, defend that position, and tell me where else a Westminster system has such a draconian tax as that.

Let me also remind the Minister in the chair that before me here I have a couple of cards. The pictures on them look vaguely like our Prime Minister—one cannot be sure just by the pictures—but there is no doubt that the pictures are of Helen Clark, when one turns them over and reads the statement written on the back. This is the 1999 pledge: “My commitments are: no rise in income tax for 95 percent of taxpayers earning under $60,000, and no increase in GST.”

Here is a question for the Minister—I am sure he will be able to answer it. Is it true that the 5c petrol tax in this bill also includes GST? There is a question. Is that not an increase in GST? I am sure the Minister will be able to answer that. It may not be an increase in the rate of GST, but it is certainly an increase in the total take.

Then I go to another card. This one came out around 2002, for members who have forgotten it. It is called “Next Steps”. Once again it states on the back: “Our commitments to you: no rise in the rates of income tax, GST, or company tax.” That may be as it stands, but the Minister should tell me whether an extra 5.6 percent on every “Joe Hard-worker” and every company out there, plus GST, is not directly contrary to the pledge on this card. Is it not? Maybe it is sophistry and maybe one can use the spin that comes from the ninth floor to manoeuvre one’s way out of it; maybe not. I know for a fact that the real transport Minister, the Hon Harry Duynhoven, certainly will not find this a popular tax to sell in New Plymouth, the energy capital of New Zealand. I know he will be struggling in trying to get the good citizens of New Plymouth to see the merit of it, as I know there are a huge amount of projects up there on the drawing board that cannot get through the Resource Management Act process. That member will also know that $230 million - odd was left unspent by Transfund, through Transit; $230 million - plus was handed back to the consolidated account because projects that are on the drawing board could not get consent.

Here we are today, passing yet another sneaky little Labour tax through Parliament in the dead of night, as usual, when people are out working and doing what they need to be doing and when nobody is listening to Parliament on the radio—although they might be because they could be in the gridlock on the Auckland motorway on the way home—and will not know that this debate is going on. That Minister sits there and says that this tax is in the best interests of New Zealand because we will build new roads. I say to that Minister that that is an absolute joke. This will not fix the roading problems. The Government has a $7 billion surplus but yet again, it says to “Joe Hard-worker” out there, the blue-collar, traditional Labour voter: “Look, front up again. We’ve only stung you with 24 new taxes. Here’s another one. You can pay. It doesn’t matter that you’re $250 a week behind your Australian colleagues already. That doesn’t matter, and look, we will fix your roads.”

GORDON COPELAND (United Future) : I want to take a brief call on the title debate on the Customs and Excise (Motor Spirits) Amendment Bill. I think it is fair to say that there are some things in Parliament that we agree about and some things we disagree about. The thing we agree about is the fact that New Zealand desperately needs new roads. I must say that I am absolutely amazed at the capacity of our fellow countrymen to put up with the shocking roading conditions in this country, particularly in Auckland.

I was reminded during John Key’s speech of my days before I entered Parliament, when I used to regularly fly up to Auckland for a board meeting on Pah Road, about halfway between the airport and the city. I would get up in the morning in my home in Wellington, get dressed, do all the usual things, have breakfast, get a cab to the airport, and get a plane to Auckland. I would then get a cab from the Auckland airport to my meeting at Pah Road and when I got there I would find that we could not start the meeting, because a couple of my fellow directors had not arrived from the North Shore.

That used to happen regularly. I am absolutely staggered that we in this country have this great capacity to put up with intolerable roads. Really, the people of this country have just about had it up to the eyeballs with all of us in this Parliament and with every single party. They are looking to us to show some leadership and to have some roads built. Whatever anyone may think about that 5c, at least there is the express intention to get on and do the job. But I say to the Government and to the other parties: “Look, let’s get on and start building some roads. Let’s cut through the red tape, let’s use the PPP thing that’s in the transport legislation, and get on with the job. If necessary, let’s borrow some money, but for goodness sake, let’s get on and start building some roads, particularly in Auckland.”

It may be that the Resource Management Act is holding it up, and Gerard Eckhoff might be right about that being the problem. Everybody here identifies a problem, but it is up to this Parliament to start to solve the problem and get on and start building the roads. That is my first point.

The second point is that we disagree on something in this Parliament and that is that every party in this Parliament, with the single exception of the Labour Party, believes that it is time to cut the rate of tax that is being levied on the citizens of this country. Even the Progressives, and everybody else here, will keep at the Government, because a Budget is coming up, and the fact of the matter is that everybody is saying, and I agree with them entirely, that New Zealand households are burdened with huge debts at the moment—mortgages, credit cards, you name it, and the rate of tax that we are imposing on our fellow citizens is too heavy. It has become a heavy burden on their shoulders.

It is about time that the Government said: “Look, we recognise that. We know that we have a great dosh of money in the bank.” It is time the Government started to take seriously the action of cutting taxes in this country.

I appeal again to the Government, as I have throughout this debate, and say to it that today we are increasing a tax, but it has a Budget coming up—in May, the Government, and the Labour Party in particular, will have an opportunity to decrease the tax burden on this country. It should take the opportunity to do that while it is presented, because it will be the last opportunity before the election. If the Government does not do that, and if New Zealanders do not see a tax cut, I say: fine, we will go to the ballot and let the people decide once and for all whether they want lower taxes or to keep on going down the road with a Labour Government to an ever-increasing impost against their pocketbook. I think that most people in New Zealand have said “Enough is enough” when it comes to taxes. Let us try to reverse the trend and start reducing them.

PETER BROWN (Deputy Leader—NZ First) : I have to respond to the United Future member’s contribution, because I thought he made a lot of sense. But I cannot understand why, with his impassioned plea to cut tax and cut Government revenue, he will vote for this bill.

Gordon Copeland: I’m not the Government.

PETER BROWN: He is not the Government, but he will support it. Why is he supporting it? I have given up on United Future’s philosophy and principles. I do not think it understands its own philosophy, and it seems to have lost its principles a long way down the route.

I shall take the House back a few years to when the Government first became the Government, in 1999. There was a senior Minister, I think he was Deputy Prime Minister at the time, who called himself the “Minister of Low Petrol Prices”, and that was the Hon Jim Anderton. Do members remember him? Do they remember that? He was the “Minister of Low Petrol Prices”, albeit self-appointed, but, boy, did he brag about that title! He told all and sundry that that was who he was. What has happened since? We have had the highest petrol prices ever in the history of this country, only a few weeks ago oil companies were announcing record profits, and the Government takes from the petrol motorist more taxation than ever before. So I think the “Minister of Low Petrol Prices” was an abject failure. He got it totally wrong. He is supporting this bill, and his colleagues are following that support. They are totally wrong.

The Minister of Customs took an earlier call. I invite him to take another one now to answer the question I will put before him. I know the answer. Where will this regional tax be spent? Will there be any prohibitions on a particular region using that tax? For example, can Tauranga use the regional tax that will be collected under this measure on the harbour bridge link? I can tell the Minister that the answer is no, and that is a disgrace. The Government will impose 5.6c on every petrol motorist, on the basis that the money will go to the regions for them to use it as they wish, but it will say that those areas cannot use it on their No. 1 road priority if it is tollable. It will whack them for that, too. That is—no, I cannot say that. But I will say that that sort of stance is hypocritical to say the least.

I know that the contractors in this country want certainty; they are making that clear by press statement and media report. So does the general public. So what is certain about this bill? When will it come in? When will it start? Nobody knows. Will we pull out a raffle ticket? I tell the Minister now that if he does not put in this measure before the next election, then it will not occur, because New Zealand First will have a presence in this Parliament far greater than it has now, and we will not allow it to be proceeded with. The Minister should show some gumption and tell us that it will come in next week or the week after. If he waits until the election, it is dead and buried—I can tell him that. New Zealand First will not have a bar of the petrol motorist being lumbered with another 5.6c.

Jill Pettis: So how are you going to build the roads?

PETER BROWN: How will I organise the roads? I shall tell you very, very briefly, but Gordon Copeland—

The CHAIRPERSON (H V Ross Robertson): Order!

PETER BROWN: I am answering the question. I like questions from the Government. She’s showing some interest.

The CHAIRPERSON (H V Ross Robertson): The member is bringing me into the debate.

PETER BROWN: People can go down any road in this country and see buildings most of which are mortgaged. Most of the vehicles on the road, be they trucks or vehicles, are either paid for by hire purchase or leased. In other words, where it is possible, where it is needed, people borrow against future income. Over the next 10 years this Government will take—less this tax—something like $16 billion, and an additional $7 billion that goes into the Crown account. That is $23 billion that, if necessary, we could borrow against. It is not borrow and spend; it is borrowing to get the roads moving. If the member took the trouble to read the Allen report—and it is written in simple English; I am certain the member could understand it. [Interruption] She could not? It will tell her the economic advantages of borrowing to put the roads in place—to advance the roads.

Why will the Government not say when this measure will come in, or stipulate the criteria? What does the level of the oil price have to be?

JOHN TAMIHERE (Labour—Tamaki Makaurau) : I move, That the question be now put.

Hon MAURICE WILLIAMSON (National—Pakuranga) : Thank you for that. I am delighted that I was not stopped by a closure motion. My adoring drive time audience will be out there right now, stuck in the traffic, gridlocked, and listening intently to this speech.

Two issues have arisen during the passage of this bill. First, if members seem to be opposed to this bill, then Labour portrays them as not wanting any more roads to be built. Well, let us just get that clear before we then talk about the date this comes into effect. The fact is that if the Labour Government—and I made this point before—between 1984 and 1990, which the Hon Phil Goff was a member of, had wanted to put another 5c on the petrol tax, I could have understood that. During that time the Government accounts were in deficit. Every year it was spending more than it was bringing in. If that Government had wanted some money to spend on more roading projects, clearly, it would have had to find it somewhere. It was already short. Is that the case today? Do we have a Government today that has a deficit on its books? The answer is no. Does it have a really minor surplus that is quite fragile, such that it could not afford to sacrifice even the $200 million that this bill will bring in? The answer is no. What is the surplus? It is about $7,000 million per annum.

Clayton Cosgrove: Jealous!

Hon MAURICE WILLIAMSON: Well, actually I am angry more than jealous that we are taking much more off the punters of this country than is needed. But let us just take the petrol tax that is taken off them. I challenge Clayton Cosgrove to do one of his little roadside tricks as he did with the boy racer and come with me to the southern motorway in Auckland. We will stand on the side of the road with a sign saying: “Honk if you think the Government should take another 5c in petrol tax from you.” I tell that member that we will be standing all day by the side of that motorway before we hear a honk, because the public do not think it is needed. They do think we need some more infrastructure, but they know that the Government has a $7 billion surplus, and they know that the Government takes $600 million a year in petrol tax that does not go on the roads. Yes, other parts of the petrol tax do, but $600 million does not.

Then we get to what I think is the most cynical move of all, and that is the date that this increase will come into effect. When the bill was introduced the Government was flying high. Nothing could stand in its way. It was going to be a third-term Labour Government—something the world has dreaded for years, but it was looking as if it might be a possibility. So it made the date 1 April. That is when this measure was to come into effect. But suddenly Michael Cullen found a cold wind blowing up his kilt, and he went: “Oh dear! We’ve got an election coming up not long after that. We’ve got high petrol prices worldwide.” I do not blame Jim Anderton for the entire world petrol price being high; I blame him for part of it—because I blame Jim Anderton for nearly everything—but in fact there has been the Iraq war, supply problems, Organisation of Petroleum Exporting Countries problems, and so on. But I ask the Minister what the price of a barrel of light sweet crude oil is today, or what a barrel of Brent crude oil costs today.

Peter Brown: $44.

Hon MAURICE WILLIAMSON: It is about US$44 or US$45. So what Michael Cullen has done with this cynical little amendment is make this increase come into effect not on 1 April—goodness me no; that would be just as the election campaign was getting away—but when the timing is right. We all know what that means. It means that as soon as he has an election under his belt, so that the increase will not cost him, he will be straight in. Michael Cullen will have the papers drawn up; he will have them waiting at the Cabinet Office for the seal to be put on them. The good news is he will not actually be in Government after the next election to do it.

However, here is the point. Here is the challenge, just in case that dreadful prospect happens. What if, after the election, it costs US$45 for a barrel of Brent crude oil? That is what it costs right now, and it probably is too high, as the Minister says. The reason why he does not want to bring the increase into effect on 1 April is nothing to do with elections, nothing to do with politics, and nothing to do with anger from the public about being socked even more tax; it is just about the price of crude oil. All right; can I get a commitment from the Minister in the chair that if light sweet crude oil or Brent crude oil stays at the US$45 mark after the election, the same attitude will apply, and this increase will not come in? There is not a mutter, not a murmur, not a whisper. How is that—not a mutter, not a murmur, not a whisper? What if world petrol prices stay at the same level they are now? The increase will not be brought in because of high petrol prices; that is the answer from the Minister of Finance—he will not bring it in because of high petrol prices. But when asked whether, if petrol prices are at that same level after the election, he would carry on with that attitude, there is not a mutter, not a murmur, not a whisper.

CLAYTON COSGROVE (Labour—Waimakariri) : I move, That the question be now put.

LINDSAY TISCH (National—Piako) : It is pleasing to lead the debate for National on this very important legislation. We have supported it through the first and second readings. We will be supporting it through the Committee stage, although during this stage we do have some concerns, which the Minister in the chair, I hope, will be able to clarify and to articulate the Government’s position on for us. There are some areas that we do not think strengthen the bill at all, but at the end of the day this legislation does improve the 1993 Act, and for that reason we will be supporting it. I know that the ACT member Stephen Franks has an amendment. I have gone through it and looked at the points that he brings forward, and I tell that member that National will be supporting his amendment. We will also be supporting the amendments of the Minister in relation to the penalties. When we look at the genesis of this bill we see it goes back many, many years to the inquiry that was held on films, videos, and classifications. During that period a number of submissions were received, which form the basis of the bill that we are debating tonight.

I want to start by looking particularly at the meaning of “objectionable”. One of the points I made during the first and second readings was that what may be objectionable to one person may not be objectionable to somebody else. That will be a matter of choice. But it is very clearly defined in clause 4 what the word “objectionable” relates to. I think it is important that we consider the court cases that have come before us, and in particular the Living Word Distributors court case, which changed in some respects what the censor could do. The censor believes that with that Court of Appeal decision, his job has become extremely difficult. I will, in further debates, articulate the reasons why that court case has, in some respects, actually not limited, but has expanded the criteria.

If we look in the Act under section 3, “Meaning of Objectionable”, at what that term actually means, we see that it does fall within the scope of subsection (1) where the subject matter or the gateways are matters concerning sex, horror, crime, cruelty, and violence. One of the points that has been of concern to the select committee is that the Act talks about “matters such as”. That is where the definition can be expanded and broadened. The phrase “matters such as” does not actually specify everything, whereas in earlier interpretations the use of the word “includes” certainly made it quite specific that sex, horror, crime, cruelty, and violence were included. There was much debate about that, and it is not a new issue. That debate has gone on since way back in 1993, and it has certainly come through here. However, we have to realise that this bill aims at effects, not at the causes. It is the effect of objectionable material that is the concern. The bill is concerned with the effect, be it of nudity, language, or publications.

The bill also moves beyond that and in clause 4 tries to include under “a matter such as sex” a visual image of “1 or more children or young persons who are nude or partially nude”. That is an area that Mr Franks’ amendment covers. I do not have his amendment in front of me at the moment, but I think that it seeks to clarify clause 4 and to make it very clear. It will be on the definition of “young person”; the bill does not really define what a young person is. In its submissions the Law Society stated that term is not defined, and although an appropriate definition of child or children may be readily discerned, the phrase “young persons” is already used in the principal Act and it is not stated what the age for a young person is. However, it is also in new section 3(1A), inserted by clause 4. The definition of a “young person” is important because of that. Is a young person somebody who is 18 years of age or younger, or who is 16 years of age? During the select committee stage in the Government Administration Committee we asked the advisers for their interpretation of a young person. In terms of the intent of the bill, specifically under clause 4, the Minister may like to clarify for us his interpretation of the very important term “young persons”, because that is crucial to the whole argument.

Another area that we should be very mindful of is what will happen with regard to the penalties regime. The penalties have been substantially increased, and it is crucial that we look to make sure that the penalties reflect the crime. Penalties are covered specifically in clause 27. We need to be able to make the penalties so severe that there is a deterrent there that will stop somebody from infringing the law or from taking advantage of young people. If we look at what the penalties regime does, we see that it brings in some quite severe penalties for that particular offence, and that is important. I know the Minister will move an amendment to the penalties on his Supplementary Order Paper 326, because offences relating to the possession or importation of objectionable material that involve knowledge of that are areas that we have debated at some length. Those are important factors that we need to take into account. If we look at clause 27 we can see that it relates to the display of objectionable publications to someone under the age of 18 years. Under the new penalties provisions a person is liable for up to 10 years’ imprisonment.

It is important in the penalties regime to bring it into line with those of other countries. Other jurisdictions around the world have different penalty regimes, and we want to make sure that the reasons that we are imposing penalties will be in sync with those regimes. In fact, we find that some jurisdictions—namely, Canada, the United States, and some of the Australian jurisdictions—have enacted distinct child pornography offences, with correspondingly high penalties. That is something that we discussed during the select committee stage, but in our case we felt that rather than have stand-alone provisions, we should have a unified censorship regime under which all publications are dealt with by one classification agency under a single set of classification criteria, using uniform classification procedures. We felt that we did not have to move in the direction of Canada, the United Kingdom, and some of the Australian states. Amendments in this bill to the schedules to relevant Acts identify the penalties: the length of time for imprisonment, and the fines that are incurred. That strengthens the bill quite deliberately. We know that people who are in possession of objectionable material and who have knowledge of that, or who are trading in the business will be caught by that offence, and that it is a very serious offence. The legislation allows for that.

There is also the area of importing and exporting, which is covered in clause 24. That is a serious situation. I want to acknowledge, as I did in the second reading, that the Customs Service is at the forefront in policing it.

STEPHEN FRANKS (ACT) : I rise for the ACT party to advise that this bill, which should be able to be supported by every party and every member in this Parliament, is a highly objectionable bill—unless the Minister is prepared to use the Committee stage to remove its objectionable parts. The Minister in the chair, the Hon Phil Goff, knows that censorship is always a fraught topic. It is very difficult, indeed, to find a balance so that censorship powers cannot be misused by an establishment, or by one group getting its hands on the levers of power to suppress the opinions of others.

In this case we are amending an Act that everyone knows will always be problematic. We are amending an Act that the Court of Appeal interpreted—to tell the censor on three separate occasions that he was going too far in the direction of suppressing free speech, and doing it for purposes not related to the purposes the community, through Parliament, had seen as requiring the intervention of the law. Those purposes would be pretty commonly agreed—horror, torture, exploitation of children, and the kinds of things that a general consensus says represent objectionable material. In this bill, hiding under the guise of being something to deal with child pornography, we have the censor coming back and wanting to reverse—

John Tamihere: What do you know about it?

STEPHEN FRANKS: Mr Chairman, I ask whether you could comment on that. I believe that the member had absolutely no foundation for making such a comment. I know of no reason. It is the sort of thing for which there should be an immediate request for the member to withdraw and apologise.

The CHAIRPERSON (H V Ross Robertson): I am sorry, I did not hear what the member said, but if objection has been taken I ask the member to withdraw.

John Tamihere: I withdraw.

GERRY BROWNLEE (Deputy Leader—National) : I raise a point of order, Mr Chairperson. My point of order relates to Supplementary Order Paper 327, proposed by the Hon Margaret Wilson, which was seen in the House for the first time today. That Supplementary Order Paper talks about the preamble. It states that we are to insert, after what is described as “recital 10 of the Māori text (after line 29 on page 7)”, new recital (10A). A Māori text follows that.

My first point is that I am just a little uncertain about what the Minister means by recital (10) in the preamble. If we turn to page 7 of the bill, we see that there is no recital (10A); there is certainly a recital (10). If this is to be something new, I would have thought there would be a corresponding text to go into the preamble, printed in English, in the pages that follow. I do not see that from the Minister’s Supplementary Order Paper. I also find that there is no recital (10A) in the English text, either.

So there are two points: firstly, can we have an explanation of why there is just a Māori text for a new recital (10A); and, secondly, can we have a translation.

The CHAIRPERSON (Hon Clem Simich): I thank the member for that. The matters he has raised are debating matters and I have no doubt that the Minister, if he wishes to, will answer them as we get into the bill.

GERRY BROWNLEE (Deputy Leader—National) : I raise a point of order, Mr Chairperson. I think that they are actually procedural matters. I have in front of me a preamble, which is part of the main body of the bill, that has a Māori text and an English text. The Supplementary Order Paper the Minister wants to introduce has a new recital that is provided only in Māori. I would like to know why there is not an English text to go with that, and whether you will allow this Supplementary Order Paper to stand. I think it would also be helpful at this point, before we begin, to have an interpretation of the Supplementary Order Paper on the table.

What is usually the case in these situations is that, although we start out in a different part of the bill, we do have the opportunity to read a Supplementary Order Paper—remembering that this bill has been introduced to the House, has had its first reading, and has been to the Māori Affairs Committee, where it had its full 6 months consideration. But today, as we are about to debate the bill in Committee, we get a new Supplementary Order Paper from the Minister. I do not think it is unreasonable for me to want to know what the Supplementary Order Paper is about so that I can think about it over the ensuing hours of debate and so that I can give a reasonable view to the House on its content when we arrive at that point.

Hon MARK BURTON (Associate Minister in Charge of Treaty of Waitangi Negotiations) : I may be able to help the member. I think it is a perfectly reasonable question. I have consulted my official about this, because I wanted to make sure that the advice I give the member is correct. I understand that there was an omission of recital (12) in the English part of the preamble from the Māori version. The recital, which starts with the words: “The Crown and Te Runanga o Ngāti Awa”, etc., simply translates that into the Māori preamble, thus making the one reflect the other. But I take the member’s point. That fact could have been better explained to assist members, and I apologise for that.

GERRY BROWNLEE (Deputy Leader—National) : I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Hon Clem Simich): Before I come to the member’s point of order, I just say that the advice I have is that this is a debating matter. It is not procedural. If the member wishes to take it further, then he should raise it with the Speaker.

GERRY BROWNLEE (Deputy Leader—National) : I do not think that is necessary. I understand that this is a bill that most of the House wants to support. However, as we have an interpreter in the Chamber, I do not think it is at all unreasonable to ask for a translation of the recital (10A) Māori text in order to verify that it will be recital (12) in the English text. I think we are entitled to ask for that, and I cannot see why the Chairperson would not want to grant it.

The CHAIRPERSON (Hon Clem Simich): The member is quite right. But the matter is still a debating issue, not a point of order, and I cannot direct that that course of action be taken; nor do I wish to be given the explanation from the Minister.

Gerry Brownlee: It is only about six lines. Just translate it.

Hon MARK BURTON (Associate Minister in Charge of Treaty of Waitangi Negotiations) : Before the House resumes tomorrow, I am happy to provide a note to members to give comfort about the explanation I have given. I undertake that that note will be provided and circulated tomorrow morning.

The CHAIRPERSON (Hon Clem Simich): I think something good has come out of your point of order, Mr Brownlee.

GERRY BROWNLEE (Deputy Leader—National) : I raise a point of order, Mr Chairperson. I refer now to the matter of the amendment in the name of Mr Pita Paraone. It raises the interesting option for the Committee to omit from clause 13(3)(a) subparagraph (xx), which refers to Ngāti Awa ki Tamaki Makaurau, and subparagraph (xxi), which refers to Ngāti Awa ki Poneke. What effectively this suggests is that the select committee wrongly included two groups as, I assume, hapū. I want to know, if you might give a ruling, the appropriateness—

The CHAIRPERSON (Hon Clem Simich): I thank you for raising that issue and we will—

GERRY BROWNLEE: I have not raised it yet.

The CHAIRPERSON (Hon Clem Simich): No, but the member was well on the way to raising it, if he had not already raised it. We will wait for another day for that matter to be settled, or, indeed, it may be settled by the Speaker.

• Progress reported.

• Report adopted.