Business Struggles With Winter Energy Costs

Business Struggles With High Costs Of Winter Energy

Figures just released by Statistics New Zealand prove business bore the brunt of the winter’s energy crisis and there are fears the worst is yet to come.

The Employers & Manufacturer’s Association (Central) says the figures show the New Zealand economy will suffer far more in future years if the Kyoto Protocol is ratified without serious attention to the costs it will force on to business.

Statistics New Zealand figures showed:

- commercial electricity users paid prices up 3.2% between June and September this year, North Island business paid 4.1% more and South Islanders paid prices up 0.9%,

- commercial gas prices rose 0.8% in the September quarter on the previous quarter,

- bulk diesel prices for commercial users rose 1.5% from the June quarter to September 2001.

At the same time, prices dropped for household users.

The Bank of New Zealand’s economic forecasts released yesterday show the winter power crisis slashed 0.2% off the country’s economic growth, at a time when the low exchange rate made it possible for New Zealand exporters to build revenue.

EMA Central chief executive officer Paul Winter says these two sets of figures show New Zealand must make the most of its competitive advantages, at all times, to achieve sustainable growth.

“Ratification of the Kyoto Protocol threatens New Zealand’s ability to compete overseas,” Mr Winter says.

“We produce cheap power, but when the prices rise, our economic growth suffers.

“Ratification of the Protocol will increase energy prices in this country further, quite possibly to a point where it will become uneconomic for some New Zealand manufacturers to continue to operate from here.

“Others will simply go under as they struggle to compete with companies in other countries not constrained by the high cost of complying with the Protocol,” he says.

“Our ratification of the Protocol, well before our major trading partners and competitors like Australia, the United States and Singapore approve it, will make our fossil fuel costs uncompetitive.

Mr Winter has grave fears the Government’s consultation process on the Kyoto Protocol has failed to generate the community-wide interest and concern needed to ensure the country does not suffer excessively from its ratification.

ENDS

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