Govt has no plan for high oil prices

Minister of Finance Bill English demonstrated that the Government has no plan for coping with high oil prices, said the Green Party today.

An independent report published by the Parliamentary Library last week states that another oil supply crunch is likely to occur soon after 2012 and high oil prices will be sustained in the future because low-cost reserves are near exhaustion.

In response to Oral Questions asked in the House today, Mr English stated that the Government had not conducted any research into the effect of high oil prices on travel patterns.

Mr English was also unable to answer if oil price shocks had been considered in the business cases of the Roads of National Significance—new motorway projects that will cost at least $11billion over the next 10 years.

Documents released to the Green Party under the Official Information Act do not show any consideration of the risk of high oil prices in the economic evaluation of these projects.

Mr English said that the Government “guessed” that most people would continue to use cars even in the face of higher fuel costs.

However, a research report commissioned by the New Zealand Transport Agency in 2008 states that high oil prices will result in much higher demand for walking, cycling and public transport over the next few decades, and that new motorways should not be built until other solutions are in place.

A Colmar Brunton Poll in August this year found that 7 out of 10 New Zealanders thought that the Government should invest in oil alternatives and public transport now.

Green Party Co-leader Dr Norman said that traffic volumes on State Highways fell significantly in 2008 and 2009 due to high oil prices, and that high transport costs were a significant factor in the economic recession.

“It is unbelievable that this Government is throwing billions of dollars away on projects that will not help the economy at all, in a time when economic recovery is perilous and we are deeply in debt.

“The $11 billion they are spending on motorways is $11 billion that we won’t have to invest in our rail network and bus services, which are already creaking at the seams due to high demand.

“The more New Zealand households and businesses have to spend on imported vehicles and fuel just to get around, the lower our economic productivity will be. It’s not rocket science; high transport costs will be bad for the economy.”

New Zealand’s economy is extremely vulnerable to high oil prices because our transport sector is so reliant on imported oil. Oil and vehicles make up 30 percent of our total imports.

“The NZTA report states that the solution to both congestion and high oil prices is to invest in rail, buses, walking and cycling now.

“This means that the only way to improve the economic productivity of the country is by not spending any more money on new motorways, and instead investing in cost-effective solutions that give people more travel choices.

“We need to future proof our transport system now. The Government has the means, New Zealander’s want and need more travel choices, there’s no excuse not to act,” said Dr Norman.

For more information:
Dr Russel Norman MP, 027 458 5181
Julie Genter, Political & Media Advisor, 04 817 6767

Link to Russel Norman’s question to Minister of Finance Bill English today:
http://inthehouse.co.nz/node/5703

Link to NZTA Research Report “Managing Transport Challenges as Oil Prices Rise”:
http://www.nzta.govt.nz/resources/research/reports/357

Link to Colmar Brunton poll results:
http://www.voxy.co.nz/national/seven-out-ten-kiwis-want-govt-prepare-peak-oil/5/60441

Link to Parliament Research Report “The Next Oil Shock”:
http://www.parliament.nz/en-NZ/ParlSupport/ResearchPapers/4/6/a/00PLEco10041-The-next-oil-shock.htm

ENDS

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