MAJOR ELECTRICITY USERS' GROUP

Friday, 16th January 2009

Deferring the ETS to minimise job losses

“The pros and cons of deferring the Emissions Trading Scheme (ETS) should be considered by the Prime Minister’s Summit on Employment next month,” said Ralph Matthes, Executive Director of the Major Electricity Users’ Group (MEUG). He was commenting on the call for solutions to forecasts of diminishing employment opportunities for this year through to 2011.

“Although a Special Select Committee under the Chairmanship of Hon Peter Dunne has been established to review the scope and timing of an ETS it is clear that all factors which will negatively impact on employment must also be included in the Summits review. The Summit may provide additional material for the ETS Committee to focus on.

“When the ETS legislation was enacted in September last year the forecasts were for continuing economic growth.

“Since that date we have seen forecasts of global economic growth tumble with negative flow-on effects for the New Zealand economy and jobs. If the ETS is implemented in the form proposed last year New Zealand will simply compound this already grim outlook.

“We have time to get our response to climate change risks right including aligning implementation timetables with our major trading partners. MEUG suggests this provides a welcome window of opportunity to defer implementation of the ETS and thereby mitigate risks affecting economic growth and jobs.

“Careful consideration of the option of deferring the ETS, reviewing its scope and reconsideration of other options (eg a C tax) is needed. This work is also urgent because employers and investors making tough decisions right now have to assume the worst in that the ETS will be implemented as enacted. To avoid harming job and investment prospects, decisions on possible deferment and or re-scoping of the ETS is urgently needed” concluded Mr Matthes.

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