5 June 2013

Government should stop tax breaks to rich oil companies

The Government should stop its multimillion dollar tax breaks to the oil and gas industry and use the money saved to support the transition to clean energy, says Green Party energy spokesperson Gareth Hughes.

Mr Hughes was responding to new information in the WWF New Zealand report “Fossil Fuel Finance in New Zealand,” that shows the profitable oil and gas industry gets over $40 million in tax breaks each year from the Government. The OECD NZ country report 2013, released today, also recommends removing these tax breaks.

“It defies economic logic that one of the most profitable industries in the world is getting tax breaks from our cash strapped Government,” said Mr Hughes.

“The tax breaks relate to foreign owned oil companies exploration activities. New Zealanders are subsidising offshore oil companies’ dangerous deep sea drilling projects.

“Hard working New Zealanders and businesses who pay tax on all their income will be surprised to learn that the highly profitable oil industry gets significant Government tax breaks.

"According to WWF’s report, the Government hands out $46.29 million in support for the wealthy oil and gas industry, yet it can only scrape together $1.9 million to feed our poorest kids.

“The fossil fuel industry is contributing to runaway climate change, and yet the National Government is transferring public money to facilitate more fossil fuel extraction,” said Mr Hughes.

The OCED report says, “tax concessions distort investment decision in favour of fossil fuel production over more sustainable sources of growth and counteract New Zealand’s efforts to address global climate change and should thus be discontinued.”

"New Zealand could be leading the world in solutions to climate change. Instead this Government has made us laggards, rolling out the red carpet for the petroleum industry and providing subsidies instead,” said Mr Hughes.

“This is yet another example of the Government giving favours to their polluting mates while good local and sustainable energy development is overlooked.”

References:
WWF’s report Fossil Fuel Finance in New Zealand: http://awsassets.wwfnz.panda.org/downloads/wwf_fossil_fuel_finance_nz_subsidies_report.pdf
OECD NZ country report 2013: http://www.oecd.org/newzealand/new-zealand-2013.htm

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