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Subsidising fuel will make things worse

10 September 2005

Subsidising fuel will make things worse

It is very understandable that people are looking for a way to reduce the pain of high petrol prices, but removing tax would put off much needed adjustments to the permanent end of cheap oil, Green Co-Leader and Transport Spokesperson Jeanette Fitzsimons says.

A NZ Herald poll released this morning shows 77 percent of those surveyed support reduction in petrol taxes.

"If we believed this steady rise in the price of petrol was a temporary phenomenon and prices will one day come down permanently to where they were two years ago, then the Greens would support some temporary tax relief," Jeanette Fitzsimons says.

"However, what we are experiencing is actually a signal that petrol prices are on a one-way, long-term trend upwards as we reach the end of cheap and accessible oil, so the very worst thing governments can do would be to subsidise fuel.

"Let's be clear: cutting petrol tax would be a subsidy, because it would shift the cost of the things it funds, such as land transport, off motorists and on to taxpayers.

"People are now starting to think about the adjustments that need to be made to prepare for this massive change in the basic economics of our civilisation.

"Companies are thinking about bio-fuel, there is a reduction in the number of big, thirsty new cars being bought, and an increase in sales of smaller efficient ones. Some people are thinking of living closer to work, walking school buses are gaining momentum, and use of public transport is increasing.

"Subsidising fuel at this point will kill off these much needed initiatives and allow some New Zealanders to bury their heads in the sand for even longer.

"Every new gas guzzler we import will be here costing us money for ten years. Every decision to live further from work and commute long distances condemns us to higher fuel bills in the future.

"Adaptation to high fuel costs will be painful, but the sooner we start the easier it will be," Ms Fitzsimons says.

Three weeks ago, the Green Party launched its 'Toolkit for Peak Oil', a comprehensive package of measures to prepare for and adapt to the end of cheap oil.



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