Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Cullen Assumes NZ Will Escape Oil Prices Fallout

14 November 2007

Cullen Assumes NZ Will Escape Fallout From Rising Oil Prices

Green Party Co-Leader Jeanette Fitzsimons today criticised the lack of concern being shown by Finance Minister Michael Cullen about the chronic inability of Treasury, the Reserve Bank and MED to accurately forecast the price of oil, or even whether it is likely to rise or fall.

"While oil prices have been soaring inexorably over the last four years Treasury, the Reserve Bank and the MED have just as consistently been predicting that oil prices have reached a plateau, or will soon fall. In similar vein, Dr Cullen has expressed his confidence in the House this week that current oil prices will soon decline, just as they did after the 1970s oil shocks ," Ms Fitzsimons says.

"Today's oil prices bear little or no relation to solutions possible in the 1970s. OPEC is no longer dominated by a Saudi Arabia willing and able to meet the low cost energy needs of the West by boosting production. Increasingly, the price of oil is being driven by production problems in the large traditional fields, by the extraction costs due to political uncertainty and weather challenges posed by new fields and by the inexorable rise in demand from developing countries such as China and India.

"Dr Cullen needs to stop looking in the rear view mirror for re-assurance. There is a peak oil crisis unfolding right in front of him. To plan for it properly, he needs to address the failings in his key Government forecasting agencies. If the Reserve Bank is so regularly wrong about the price of oil, how can it properly judge the likely level of inflation - and choose where to properly pitch its responses?

"When Treasury also can't even come close to accurately forecasting oil prices, we have to ask what contribution this has made to its inability to correctly forecast the size of the surplus. If the true price of oil was being incorporated into transport planning, it is also unlikely that the recent massive investments in new large roads would have been sanctioned. For graphs of Government oil price forecasts compared to reality see www.greens.org.nz

"Both Government and the private sector look for and need certainty on which to base their planning. The entrenched inability of key Government agencies to forecast the true price of oil has implications far beyond what Dr Cullen has so far been prepared to concede - in the House, he was only willing to admit that monetary policy may have been looser than it should have been thanks to inaccurate oil price forecasts.

"New Zealand is sleepwalking into peak oil - with little acceptance or planning for the social and economic changes it will entail. Dr Cullen has to instruct his key forecasting agencies to jettison their optimistic assumptions about low and declining oil prices, so that Government can begin to plan realistically for the combined consequences of peak oil and climate change," Ms Fitzsimons says.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Sector Opposes Bill: Local Government Bill Timeframe Extended

The Minister of Local Government Peseta Sam Lotu-Iiga has asked the Select Committee to extend the report back date for the Local Government Act 2002 Amendment Bill (No 2). More>>


Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>


Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>


General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Gordon Campbell: On Our Posturing At The UN

In New York, Key basically took an old May 2 Washington Post article written by Barack Obama, recycled it back to the Americans, and still scored headlines here at home… We’ve had a double serving of this kind of comfort food. More>>


Treaty Settlements: Bills Delayed As NZ First Pulls Support

Ngāruahine, Te Atiawa and Taranaki are reeling today as they learnt that the third and final readings of each Iwi’s Historical Treaty Settlement Bills scheduled for this Friday, have been put in jeopardy by the actions of NZ First. More>>


Gordon Campbell: On The Damage De-Regulation Is Doing To Fisheries And Education, Plus Kate Tempest

Our faith in the benign workings of the market – and of the light-handed regulation that goes with it – has had a body count. Back in 1992, the free market friendly Health Safety and Employment Act gutted the labour inspectorate and turned forestry, mining and other workplace sites into death traps, long before the Pike River disaster. More>>

Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news