Greens offer alternative budget

The Green Party has released its alternative budget calling for an earthquake levy, capital gains tax and reduced spending on roads.

The Government will announce its "zero budget" on Thursday where money will be reprioritised and changes made to Kiwisaver, Working for Families and student loans.

The Green Party budget would:

* Impose a temporary income levy to raise $1 billion a year for five years to rebuild Christchurch and reduce the need for borrowing (raising $5.4b over five years).

* Introduce a tax on capital gains (excluding the family home) to encourage private saving and strengthen the Government's books which would raise more than $4.5b year, once the scheme had been in place 15 years.

* Reprioritise government spending on new motorways into debt reduction and alternative modes of transport which would save more than $7b over 10 years.

* Impose a resource charge on commercial water use to encourage conservation and see more sustainable forms of production. The party said it would save $746m a year over time.

* Raise the minimum wage to $15 an hour. The Greens said this would save $153m a year given the higher tax take and reduced welfare payments.

Green co-leader Russel Norman said the party's alternative budget allowed revenue-raising while moving the economy onto a more sustainable footing.

"Market mechanisms, like a price on water, would help shift the economy in a smart green direction and help the Government balance their books at the same time.

"Likewise, cutting a billion dollars in subsidies to greenhouse gas polluters would be good for the Government's bottom line and begin the transition to a low carbon economy."

Dr Norman said the Government was using a record predicted $17b deficit to justify cutting services and selling assets.

"A smart government would balance their books by considering some revenue options, like a temporary earthquake levy, while revisiting some of the ways it's spending money poorly, like the $7 billion it's pouring into motorways when oil prices are high.

"A clear majority of New Zealanders indicated that they are prepared to pay a small temporary levy on their income to pay for the rebuilding of Christchurch. So why are we adding $5 billion more to a record deficit instead?"

The Greens said the lack of a capital gains tax distorted the tax system.

"If the National Government are serious about rebalancing the economy towards greater investment in the productive sector rather than more housing speculation, they'd be following the advice of the OECD, the IMF, and their own Savings Working Group and introduce a comprehensive tax on capital gains except for the family home," said Dr Norman.

"New taxes on capital gains and water would raise substantial additional revenue, broadening the tax base and enabling the Government to lower debt and live within its means once again."