The Opportunities Party (TOP) is about truly sustainable progress that makes us all better off.
To achieve that vision we need a nimble, clever government to set the rules of the game and a vibrant business community to play the game to the best of their ability. The trouble is that currently, the rules of the game encourage businesses to do things that don’t make us truly better off. These rules work together like a jigsaw, environmental policies like fresh water and climate are important, but so are other things like tax policy.
Some of the Establishment parties target particular components of the solution in imperfect ways, but only The Opportunities Party has a plan that fits together to encourage truly sustainable growth.
New Zealand’s Economic Story
Since the 1980s governments of all hues have been happy to stand by and watch New Zealanders invest their money in unproductive assets like housing and land hoarding, rather than businesses. As a result, our productivity has been woeful, and in order to secure economic growth we have relied on increasing volume rather than adding value. That means more hours of work, more cows, more tourists, more nitrogen in our rivers… you get the picture. International experience shows we can shake this woeful trend and improve the environment at the same time.
The National Government has dragged their feet on reducing emissions, relying on forests planted in the 1990s and cheap fraudulent foreign carbon credits to meet their targets. Now we are paying the price; New Zealand faces a massive challenge to meet our relatively unambitious 2030 target.
Climate change isn’t going away, and we need to be fossil fuel-free by 2050. Achieving this vision requires using the Emissions Trading Scheme as it was initially intended – dumping the junk credits, closing it to international trade and capping the sale of credits at the 2030 target. This will see the price of carbon rise, which will send the right long-term investment signals. In particular, a higher carbon price (and a boosted Afforestation Grant Scheme) will make it a no-brainer to plant the nation’s 1.1m hectares of erosion-prone land as a matter of urgency.
The revenue generated from a higher carbon price can be invested as the Green Growth Advisory Group recommended – on improving the energy efficiency of our homes and businesses. The Net Zero Report showed this investment would provide the best possible return, in many cases actually saving money overall. It won’t get us to to the ultimate target but it is the obvious place to start. We have already seen the fantastic return on investment from the Warm Up New Zealand scheme; instead of cutting this we should be expanding it.
On agriculture, we need to stabilise emissions, but this is best achieved via our Clear Water Action Plan.
Clear Water Action
Planting our erosion prone land will reduce the amount of sediment ending up in our rivers, providing a massive boost for freshwater quality. However, that alone won’t be enough.
We also need to make polluters pay for the damage they do to fresh water quality. The guiding principle for TOP’s environmental policy is that we should leave the environment in a better state than we found it, and the way to achieve that is by making polluters pay. Take the tricky issue of nitrogen leaching for example. Each catchment would set an allowable leaching level per hectare, taking into account the land type. Any farmer leaching more than that would pay, and any farmer leaching less than that would receive the money. All money stays within the catchment and within the farming sector. Over time the allowable leaching rate would be reduced until the water is truly swimmable.
Finally, we urgently need to put a price on the use of fresh water by businesses. What other input can businesses use for free? The revenue from these water markets will fund the resolution of Maori Treaty claims over fresh water, and allow local authorities to invest in improving water quality and desperately needed infrastructure.
Unlike Labour and the Greens, we aren’t afraid of using market mechanisms and incentives to help prod businesses toward a more sustainable state. And unlike National, we don’t believe that this poses an unnecessary risk to our economy. The OECD has shown that clever environmental regulation and use of incentives can improve both the environment and economy at the same time.
It’s About More Than Environmental Policy
Other policies impact our environment, such as our tax system. Thanks to the loopholes in our tax system both our housing market and farming are dominated by speculation for capital gain. Analysis by TOP and Motu has shown these loopholes in our tax system also contribute to the further intensification of land use, which in turn damages our environment. That is why any environmental regulation will be much weaker if we don’t sort out our tax system.
As mentioned above there is no validity in claiming that good environmental stewardship will damage our economy. However it is valid to ask if we remove the ability to increase volume, how will we grow our economy? If we do move away from dumb and dirty growth, how will we encourage clean and clever growth instead? Thankfully TOP has solutions here also.
If we remove the loopholes from our tax system as TOP proposes this will shut down speculation in housing and encourage a substantial shift in our investments toward productive assets. This will be a huge boon for business, providing access to the finance they need to grow; finance that has for too long been hoovered up by the demand for investment in housing. It will also ensure that our land use is focused on getting a sustainable return, rather than chasing tax-free capital gains. This will make alternative land uses that don’t rely on capital gain (like forestry and horticulture) far more economic.
Lastly, putting superannuation on a sustainable footing would also free up the NZ Super fund to increase our investment in infrastructure and R&D. All this will help boost our country’s productivity, and allow our economy to flourish in a way that doesn’t rely on churning out more volume and stuffing our environment.
Win-wins are possible; we can improve our environment while having a vibrant economy and fairer society. The only thing we lack is the political will to do what is needed.
We hope you have been following our staged dynamic release of Vivid Economics Net Zero New Zealand Report. On Friday 23 June, we released chapter three, the penultimate instalment that puts forward four domestic emission reduction scenarios through to 2050 which would position New Zealand to achieve emissions neutrality later in the century.
Our Pure Advantage contributors have provided analysis and context for New Zealanders throughout the report and we hope their contributions will better inform you about the opportunities and challenges we are facing to meet our obligations in accordance with the Paris Agreement.
At the culmination of the chapter, there is an opportunity to vote on the future you would like for yourselves and subsequent generations. Please take the time to engage with this and share amongst your friends and family; it’s up to us to decide how we achieve a low emissions pathway to a Net Zero New Zealand.