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Carbon tax interventions getting complicated

Carbon tax interventions getting complicated

Government interventions relating to the carbon tax are becoming very complicated, Business NZ says.

Chief Executive Phil O’Reilly said the run-up to the introduction of the regime in 2007 was not making the tax any easier to bear.

“First, the Government set up negotiated greenhouse agreements (NGAs) to give relief from the tax for high energy users – many companies have spent a lot of time and money jumping through the hoops to get an NGA, but only two have succeeded so far.

“Then it exempted farms from the methane tax, requiring an equivalent contribution to research instead.

“Now it has announced taxpayer-funded grants for selected small and medium sized companies to introduce energy efficient technologies. This means all companies must pay for grants which will be distributed to only a few. In other words, companies will be taxed to fund their competitors.

“All of this cross-subsidising activity is just to introduce a tax that isn’t necessary and which will make New Zealand companies overall less competitive than others overseas.

“Why not scrub the tax and introduce measures that would allow all businesses to make choices about how they approach a more energy efficient future, for example an accelerated depreciation regime on all capital equipment.”

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