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National’s ETS changes leaves another half billion hole

Economic Development Spokesperson

National’s ETS changes leaves another half billion hole

Nationals ETS policy, announced today will cost approximately half a billion dollars over four years which they have not accounted for, Labour Economic Development spokesperson David Parker says.

“National’s policy would deepen the billion dollar hole it has dug in its budget with lost dividends from asset sales,” David Parker said.

“Once again National has tried to pull the wool over the eyes of New Zealanders. It has cynically announced this policy after the Prefu has been published, in which National banked the revenue from these sectors (page 97). That amounts a fiscal hole of $500 million, according to the Caygill ETS review.

“It’s not the first time National has cooked the books. Today’s, tax revenue loss is in addition to the hole caused in the last Budget when National banked the proceeds of its asset sales programme without accounting for the hundreds of millions loss in dividend streams every year.

“John Key needs to come clean and explain to taxpayers how this balances the books,” David Parker said.

“New Zealanders have already started paying for their electricity and transport emissions. Farmers can already pick-up carbon credits for their forests. Now John Key is saying the agriculture should not have to pay for increasing agricultural emissions.

“The lack of any meaningful analysis of the effect on prices is also unwise. Electricity prices are theoretically driven by the long-term cost of new generation. Given that the most cost effective source of new generation is currently geothermal, the changes proposed may decrease revenue to the crown but have little if any impact on power prices.

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“More importantly, National’s policy is once again un-costed. The Caygill review estimated that the cost of the changes was $500 million over four years. If agricultural emissions are left out completely (which the Caygill review did not recommend) the costs will be higher.

“If agriculture doesn’t get brought in at all, as National’s announcement strongly implies, costs would be significantly higher still.

“Agricultural emissions are half of New Zealand's greenhouse gas emissions. They have increased by 5 million tonnes pa since 1990, and are currently going up by around 600,000 tonnes per annum. National is giving farming a free pass to pollute and is expecting the taxpayer and other sectors of the economy to cross-subsidise agriculture.

"Some of the changes proposed changes to allow for off-set planting following deforestation may be sensible given the absence of a successor agreement to Kyoto, but the un-costed exclusion of agriculture is economically and environmentally wrong.

“John Key calls his policy ‘moderate’. What he should call it is a large drain on the taxpayer,” David Parker said.


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