OECD research has found that environmental regulation, when done well, doesn’t have to come at the expense of growth. There are a number of reasons why this is the case. For starters, our natural environment is an asset to the country – not only for tourism, but also for our brand and in attracting talent. For that reason it makes economic sense to protect and enhance that asset. Secondly, environmental limits should deter efforts in increasing volume and shift them toward adding value.
It’s a matter of making those constraints be revealed to business decision-makers so they react. Thirdly, smart environmental regulation normally impacts on poorly performing businesses, improving productivity overall. There is nothing wrong with poor performing businesses closing, in fact it is a part of a healthy economy. Finally, regulation can become a source of competitive advantage in the long term as new, environment protecting or enhancing businesses and industries are created.
The OECD also recommends wider use of environmental taxes as a way to reduce income taxes and invest more in restoring the environment. Environmental taxes are relatively low in New Zealand.
TOP would ensure any revenue from corrective taxes was used to reduce income tax, restore the environment and to help industry transition from being free-loaders on pollution, to being pollution-free.