The ETS must be delayed

The ETS must be delayed

The introduction of the Emissions Trading Scheme must be delayed, the Employers & Manufacturers Association (Northern) says.

"The New Zealand economy is in no state to lead the world with an emissions trading scheme covering the entire New Zealand economy," said EMA's chief executive Alasdair Thompson.

"In these circumstances EMA recommends the government legislate to align the entry of our industry sectors into the ETS with those of our trading partners, once they have their schemes in place.

"Our financial situation is far too fragile to absorb the extra $255 million the government calculates the ETS will cost all of us.

"The cost is effectively another tax that will impact on every family.

"It will come on top of changes to GST, and also higher ACC levies which are cutting into the take home pay of all employees right now.

"The ETS will also hit hard the competitiveness of many of our leading industries, including all our major food producing exporters.

"They will face cost increases that their competitors overseas and in the New Zealand market do not face.

"It will cost jobs.

"New Zealand is the only country in the world to be introducing an ETS that covers all sectors and all so called greenhouse gases.

"It was disingenuous of Minister Nick Smith to say on Radio New Zealand this morning that the EU has an ETS in place - theirs covers only four percent of EU output; ours covers 100 per cent of output.

"His main reason for proceeding now was that not to would lead to perverse outcomes in the forestry sector. However forestry could be incentivised to keep planting under a low level carbon tax which could be used to give them a credit though not part of an ETS.

"Other reasons the ETS must be delayed are:

* A new energy tax is effectively a tax on exports.

* When deciding on an ETS it was assumed that global carbon markets would rapidly develop. The opposite has happened. Carbon markets have all but disappeared.

* Globally there has been a dramatic shift in public attitudes regarding climate change.

* Australia won't enact an ETS this year which means Australia has an immediate advantage in competing for international investment.

* Since our ETS is also intertwined with Australia's planned law and because theirs is not going ahead, our bureaucracy will struggle to be ready for the July 1st start.

* It's difficult to reconcile our 'world-beating' legislation with National's manifesto promise to take a middle-of-the-road stance on climate change.

"If the ETS proceeds on July 1st we fail to see how the government can expect the ongoing tacit support of the business community."

ENDS

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