Wednesday, September 12, 2012

Climate change: A financial drain

The Green party are highlighting a key problem of National's proposed changes to the ETS: their support for subsidies doesn't just undermine their environmental goal of a 20% reduction by 2020 - but also their financial goal of a surplus by 2015:

The National Government’s aim of returning to surplus by 2015 will be put at risk by on-going and indefinite subsidies of major polluters if planned changes to the Emissions Trading Scheme go ahead, Green Party Co-leader Russel Norman said today.

The Parliamentary Commissioner for the Environment has estimated the additional costs to the taxpayer for indefinite subsidies under the emissions Trading Scheme (ETS) could range from $330 million to $1 billion over the next four years.

“The National Government’s putting one of its flagship economic policies – the return to surplus – at risk by proposing to subsidise the cost of major carbon polluters indefinitely,” said Dr Norman.

“The additional subsidies will cost the Government up to $1 billion over the next four years pushing the surplus out by a year.

But hey, anything to keep the farmers and polluters happy, right?

National's pollution subsidies are an ongoing risk to the government's books. And they're pure wealth transfer: money taken from ordinary taxpayers (or worse, kiwi families in need via cuts) to be given to rich farmers and polluters. Its not sensible, its not rational, and above all, its not fair. And it is inevitable that a future government will have to reverse it, simply to remove this ongoing financial drain.