Follow Australia - Postpone the Emissions Trading Scheme

Dr Muriel Newman of the New Zealand Centre for Political Research is calling on the National-led Government to postpone the Emissions Trading Scheme.

The call follows a move by the Australian Government to transfer the 154 staff in its carbon trading division to other duties after Prime Minister Rudd twice failed to have his emissions trading legislation passed through the Australian senate.

Given our government used alignment with Australia as a key argument in favour of passing our ETS, it should now follow Australia's lead and postpone the introduction of our scheme - which is due to come into effect on 1 July.

The back down on emissions trading by the Australian Prime Minister follows a similar back down in France where President Nicolas Sarkozy has been forced by public protest action to withdraw plans for a carbon tax. The plan would have made France the first big economy to tax carbon emissions, aiming to encourage French consumers to stop wasting energy, but businesses warned it would penalise French industry and harm the competitiveness of French companies.

In light of the parlous state of the New Zealand economy, householders and businesses cannot be expected to shoulder the huge costs associated with the ETS. The anticipated 5 percent increase in power bills and 4 cents a litre rise in the price of petrol, will be felt throughout the economy, increasing GST costs (at a time when the government is planning to increase GST rates anyway), and adding substantial inflationary pressure.

The New Zealand Centre for Political Research has published research on the ETS since the scheme was first mooted and New Zealanders have consistently and overwhelmingly opposed the introduction of such a scheme in the Centre's opinion polls on the basis that it would do nothing for the climate but would gravely damage the New Zealand economy. This damaging effect will be exacerbated if National's 'all gases, all sectors' ETS goes ahead as planned in July, as many Kiwi businesses will relocate to Australia to gain a competitive advantage, rather than stay put and be penalised.

John Key must honour his promise to New Zealanders that under National, New Zealand will not lead the world on climate change by postponing the ETS. A benefit of doing so would be the availability of half a billion dollars of taxpayer funding that his government earmarked for subsidies to business in the last budget. That money could then be far better used elsewhere.

ENDS

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