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Kyoto tax liability vital election consideration

Monday, August 22nd, 2005

Kyoto tax liability vital pre-election consideration

The review of the Kyoto Protocol needs to be considered in the context of the promises on taxation being made by the main political parties, the Employers & Manufacturers Association (Northern) says.

Government has acknowledged the costs of Kyoto are much greater than Climate Change Minister Hodgson first thought, said Alasdair Thompson, EMA's chief executive.

"Minister Hodgson used to say 'why wouldn't we sign up (to Kyoto).....it would be like ripping up a cheques for hundreds of millions of dollars not to.'

"Industry warned government its calculations on the value of the surplus carbon credits were wrong, and New Zealand's liability is going to be far worse than the minister has so far admitted.

"Government's carbon credit calculations were incorrect to begin with, and business concern is growing that the latest calculations on the extent of the liability are still wrong.

"The review will no doubt seek to allocate the new level of liability back to industry, farmers and foresters.

"Authoritative researchers BERL and Castalia have said up to $14 billion should be allowed to cover our obligations under Kyoto.

"That's well over 10 per cent of New Zealand's total GDP that could end up being spent paying Russia for carbon credits.

"It would also mean the price of petrol rising to $1.70 litre from the Kyoto impact alone.

"According to the Ministry for the Environment's Bill Bayfield, the review will look at the whole issue of carbon taxes and emissions, including whether the $15 per tonne of carbon emitted should be revised upwards.

"The review should include the possibility that New Zealand should withdraw from Kyoto in 2008 and instead join the climate change pact announced last month by Australia, the US, China, India and South Korea.

"Even if New Zealand believed it was necessary to keep faith with Europe's carbon derivative traders, the introduction of taxes on carbon usage is not the only or the best way to respond to human induced climate change."

ENDS

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