John Key MP National Party Leader

18 May 2008

National won't cut corners on ETS at kiwis' expense

National wants to get the emissions trading scheme right and is not prepared to cut corners when kiwis' financial security is at risk, National Party Leader John Key told the party's Lower North Island conference in Wellington today.

"As a responsible international citizen, New Zealand must do its best to reduce greenhouse gas emissions. A well-designed, carefully-balanced ETS is the best tool available for efficiently reducing emissions across the economy.

"Labour has been racing towards a political deadline - the 2008 election - and has been prepared to cut corners to get there.

"National is not prepared to cut those corners - not when the financial security of Kiwis is at risk, and not when getting this wrong means exporting jobs, ratcheting up inflation, and viciously squeezing household budgets.

"We believe that the current rushed timetable for the design of the ETS and the Select Committee process is reckless, given the importance of the issue. Therefore, I'm calling for a delay in the passage of this legislation.

"National will not support the bill going to a second reading until we are satisfied that it meets a series of key principles:

1. The ETS must strike a balance between New Zealand's environmental and economic interests. It should not attempt to make New Zealand a world leader on climate change. Kiwis simply can't afford to pay the price for that particular experiment.

2. It should be fiscally neutral rather than providing billions of dollars in windfall gains to the government accounts at the expense of businesses and consumers. National does not think it's responsible for government to use green initiatives to pad the Crown coffers while thinning out Kiwis' wallets.

3. It should be as closely aligned as possible with the planned Australian ETS, with common compliance regimes and tradability. In my second speech as National Party Leader, I called for close co-operation with our biggest trading partner on this issue, and I continue to call for it. Given the Australian timetable for developing an ETS, I believe it's still possible.

4. The ETS should encourage the use of technologies that improve efficiency and reduce emissions intensity, rather than encourage an exodus of industries and their skilled staff to other countries.

5. It needs to recognise the importance of small and medium enterprise to New Zealand and not discriminate against them in allocating emission permits.

6. It should have the flexibility to respond to progress in international negotiations rather than setting a rigid schedule. This way, industry obligations can be kept in line with those of foreign competitors.

"National does not expect to be the sole judge of whether the revised bill meets these principles. We believe that the views of New Zealanders must be heard and responded to.

"For that reason, significant amendments to the bill should be tabled in Parliament, referred to the Select Committee alongside the bill, and subject to public submissions.

"This will most likely mean carrying the legislation into the next Parliament, but National believes that's a small price to pay for ensuring New Zealand gets the best ETS possible."

ENDS

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