The upcoming election has provoked a lot of discussion over National's plans to sell state assets such as Kiwibank to its rich Aussie mates. Meanwhile, a rather nastier form of privatisation has slipped completely under the radar. The other day I was reading United Future's Energy Policy, and came across this bit:
It is UnitedFuture policy to... oppose a standard royalty rate on new offshore oil discoveries being fixed in advance. We believe that the general policy should be a zero royalty rate with the government reserving the right to apply a royalty, on a case-by-case basis specific to rate of any medium to large oil field discovered.What does this mean? Well, firstly, under existing law, all petroleum, gold, silver, and uranium in New Zealand belongs to the crown. So do a lot of other minerals, due to its ownership of land and non-transfer of minerals on alienation. In exchange for the right to extract and sell publicly-owned minerals, the government demands a slice of the pie, in the form of royalties. The rates have varied depending on when a discovery was made and permits granted, but from the end of next year it will be a straight 5% of the value of any oil or natural gas extracted, plus 20% of accounting profits. This earned us about $135 million in 2006 [XLS], and it will be much higher now due to the Tui oilfield. That's $135 million we don't have to pay in taxes. And Peter Dunne wants to reduce it to zero, effectively giving away our mineral wealth for free.
Strangely, Dunne hasn't exactly been highlighting this policy. Neither has he been asked questions about it. Its time he was. This is a serious policy, with significant effects, which signs away public property to multinational corporations like Shell for free. Dunne should front up and explain why he thinks that is desirable.
