Media Release Tuesday, December 4th, 2001

Minister's comments expose Kyoto truth

Energy Minister Hodgson's attack on the Employers & Manufacturers Association yesterday (EMA Northern Misleading Public over Climate Change) emphasises how little Government knows about the impact its policy will have on the economy, the association says.

"Minister Hodgson told a breakfast meeting at Takapuna on November 20th that Government's own economic modeling work showed the ratification of the Kyoto Protocol could see the price of electricity rise by seven per cent and the price of petrol go up 11 per cent," said Alasdair Thompson, EMA's chief executive.

"He said these price rises would not damage New Zealand's exporters because our exchange rate would sink in response to them and that would preserve our competitiveness.

"About 90 other business people heard the Minister make these comments; I fail to see how our reporting of them is either confused or dishonest or silly, as the Minister says.

"If the Minister doesn't know what the costs of the Kyoto Protocol will be, that's precisely the point New Zealand business is making.

"Government is asking all New Zealanders to sign a blank cheque for it to spend on ratifying Kyoto.

"The last Labour Government in 1984 did something similar. It set out to achieve free trade unilaterally without researching what would happen.

"Unlike that economic liberalisation programme, for which substantial mid to long term benefits could be expected and were delivered, albeit with severe disruption, Kyoto represents completely new and uncharted territory for any country anywhere at any time.

"According to the independent NZIER report Government is asking every home in New Zealand to pay about $1000 a year on average for many years to implement it.

"Minister Hodgson has not made any attempt to explain or quantify what benefits there may be available to New Zealand from ratifying the Protocol ahead of our trading partners.

"Business wants to see far more detailed research undertaken to understand how Kyoto will impact on our economy, and to reveal how New Zealand can benefit from signing the Protocol before most other countries."

Comments: Alasdair Thompson tel 09 367 0911 (b)

09 303 3951 (h)

025 982 024

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