Climate change inaction leaves economic and fiscal hole

Green Media Release

19th December 2006

The Half Year Economic and Fiscal Update released by the Government today shows once again the price we are paying for the lack of urgency in Government climate change policy.

“Firstly, the ditching of the carbon pollution charge, aka the carbon tax, will cost the Government $350million in forgone income per year into the future. That’s $350million per year that can’t be used to futureproof the economy and offset the inevitable increased costs of energy,” says Russel Norman, Green Co-Leader and Economics Spokesperson.

“Secondly, our liability under Kyoto currently stands at over half a billion dollars because our emissions are increasing rapidly above our Kyoto commitments to cut emissions. The cost is likely to be considerably more than half a billion and the Update reveals that Government has still to make a decision as to how to cover this deficit. The taxpayer will pick up this tab unless the cost is passed on to the polluters, which would be a form of welfare that the country can ill afford.

“Thirdly, our very high per capita greenhouse emissions make us vulnerable to shifts in overseas consumer sentiment if European consumers punish us for our inaction. As Treasury puts it, ‘a shift in overseas consumer sentiment against New Zealand products could have a significant impact on our export levels’.

“The extra $1billion tax revenue revealed in this Update should be used to futureproof the economy from future climate change and higher oil prices by investing in energy efficiency, biofuels, carbon neutral electricity generation, tree planting, public housing and public transport.

“If the Government does go down the personal tax cut route, then the fairest way to deliver tax cuts is to introduce a tax free threshold at the bottom of the tax scale. That way everyone benefits to the same amount regardless of income.”

ENDS

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