John Key MP National Party Finance Spokesman

06 May 2005

Brits describe Kiwi carbon tax as 'experiment'

National Party Finance spokesman John Key says Labour's carbon tax is being described as an 'experiment' by the influential English newspaper The Guardian.

According to an article in The Guardian this week 'the experiment will be watched closely by bigger countries which are also committed to reducing carbon emissions but are failing to reduce energy demand'.

The paper also says 'New Zealand is believed to be the first to ask the public to pay directly for the costs of reducing global warming. Proposals for a Europe-wide carbon tax were abandoned in the 90s'.

"Labour is boldly going where no-one else has gone before, in the process it is walloping Kiwi power consumers and motorists with an extra unnecessary tax," says Mr Key.

According to answers in Parliament yesterday, the Government has been hugely underestimating the likely impact of the carbon tax.

"Labour's carbon tax could end up costing New Zealand consumers far more than the $210 per year indicated by Labour.

"That costing was based on the presumption that carbon credits would be valued at $15 per tonne of CO2 emissions. The reality is far worse.

"According to Labour's own Q and A on the matter, they have given themselves the flexibility to increase this cost by as much as two thirds, to $25 per tonne.

"The international price for carbon emissions that will be used as a benchmark by the New Zealand carbon charge is already trading at 17 Euros, well above the $15 (NZ) mark quoted by Labour.

"Of course business will also look to pass on the increased costs to consumers, further fuelling inflation, and in turn risking interest rate rises.

"National would repeal the carbon tax and provide much needed relief to Kiwi energy consumers. Commonsense suggests we should reserve judgment on this uncertain science until the second Kyoto commitment period that begins in 2013," says Mr Key.

ENDS

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