Vegfed calls on Government to scrap carbon tax

Media Release
12 September 2005

Vegfed calls on Government to scrap carbon tax

The New Zealand Vegetable & Potato Growers' Federation (Vegfed) is calling on the post-17 September Government to scrap the carbon tax and “get real” about helping growers address the climate change issue.

Vegfed President Brian Gargiulo says that the tax must go. It is a blunt instrument that will hurt growers and fail to create the low carbon future that the current Government needs to meet its Kyoto commitments.

“Over the past months New Zealanders have faced 50% fuel price rises and yet fuel consumption is only just changing. It takes an awful lot for people to change their behaviour and the carbon tax, at around five cents a litre on petrol, is just not going to cut it. Consumers need to know that the tax on fuels will directly increase the cost of all goods at retail, including all fresh and processed fruit and vegetables.

In our industry, the carbon tax is actually a disincentive to growers to invest in energy efficient measures. No matter how much growers reduce their energy use they will still have to pay the tax on the energy they do use. Instead of punishing everyone with a tax we all need to be looking at commercially sustainable ways of improving energy efficiency and rewarding best practice. Not only will this reduce NZ’s CO2 emissions it will also make us more competitive, encouraging growth and development.”

Vegfed wants the post-17 September Government to do a fundamental rethink about current climate change domestic policy.

“New Zealand can’t take an isolationist position on climate change. There is a global debate going on about this issue and we need to be at the table protecting our interests.

“But Vegfed has serious concerns about how the current Government is implementing their policies and the impact that this is having on New Zealand’s growers,” Mr Gargiulo says.

The vegetable industry is worth $1.5 billion to the economy each year but, like most of the New Zealand economy, it is predominantly made up of small and medium sized enterprises (SMEs).

Mr Gargiulo says current climate change policy barely caters for SMEs and it is a Government fallacy that there are energy efficiencies in the vegetable sector that can easily be addressed.

“Our growers, whether they are the smaller traditional ones, the larger broad acre producers, or the more energy intensive greenhouse producers, wouldn’t have survived the international market place without already moving toward world’s best practice.

Most growers are already very energy efficient but there are always ways to improve. We want new policy so that government will work with us to create these gains and an even more competitive industry that encourages growth, economic activity and continued high levels of employment.

But from now on, whatever energy efficiency gains are made will be small and hard won. They are going to require a level of capital investment that is simply beyond the scope of most growers,” he says.

“Achieving measurable significant efficiency in energy use in the vegetable industry requires knowledge and capital investment neither of which growers can very easily achieve on their own. We challenge Government to think a bit more creatively about some of the things they can do to work with growers to achieve energy and economic efficiencies that will benefit everyone.”

In particular, Vegfed wants the Government to:

- Scrap the carbon tax and use the current climate change review to refocus climate change policies to better recognise that most New Zealand businesses are small or medium sized by world standards.

- Implement relevant project and funding schemes to help growers reach even higher levels of world’s best practice for the purposes of lowering emissions.

- Create incentives for growers to take up new technologies and practices that are proven under New Zealand conditions.

- Be totally realistic about how much more energy savings the sector can practically achieve.

- Recognise that industries like the vegetable sector account for a tiny proportion of New Zealand’s overall emissions and have already invested heavily in energy efficiency.

ENDS

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