Energy Intensive Industries Package Release

Energy Intensive Industries Package Release

Introduction

New Zealand Chambers of Commerce and Industry is an umbrella organisation serving the interests of 30 Chambers of Commerce nationwide. These, in turn, represent over 20,000 businesses – most of the small to medium enterprises that are the backbone of business in New Zealand.

The Chambers exist to promote, support, and encourage sustainable, profitable businesses. Business is the key wealth creator in our economy. Sustainable, profitable businesses provide economic growth and ensure that additional resources are available to support our communities and create jobs for New Zealanders.

For businesses to achieve this, they themselves require an environment that is supportive, and a culture that encourages, rewards, and celebrates success in all its forms.

Commentary

In principal, the Chambers support today’s release announced by Minister Hodgson, in particular, the sentiment which seeks to reduce financial burden that is likely to impact businesses with the impending introduction of the carbon tax in 2007. Given that New Zealand is committed to the implementation of our Kyoto targets, it is encouraging to see that the Government is aware of the financial impact that these commitments will have on the SME sector, and that it is prepared to help them through this period. However, the Chambers do have some concern over the selective nature of the grants scheme which applies only to targeted sectors and companies, and await to see how other businesses and sectors excluded from this initial package fare in the post carbon tax environment.

Despite this welcome move from the Government, the Chambers wish to stress that it is imperative that alternatives or successor agreements to the Kyoto Protocol framework currently being implemented in New Zealand, continue to be explored now and into the future.

While it is increasingly accepted that action must be taken to address the level of CO2 emissions globally, this must be undertaken in a constructive manner with the support and backing of the private sector so as to deconstruct the “environment vs economy” model that has been legislated into the New Zealand business landscape through New Zealand’s Kyoto Protocol commitments.

The Chambers of Commerce would like to see the New Zealand Government working alongside other Governments, Australia in particular, as well as international NGOs to develop more economically efficient mechanisms for addressing climate change and to reduce emission levels.

Wellington Regional Chamber of Commerce CEO Charles Finny commented that any future agreements New Zealand enters into need to take account the interests of New Zealand Businesses more fully. “Whether it is a Kyoto II post 2012 or some other arrangement that is negotiated internationally, the New Zealand Government needs to work alongside the business community to develop a mechanism which is both environmentally effective and economically sustainable.

“While the Kyoto Protocol is commendable in its ambition, it is perhaps not the best solution for New Zealand, given our rather unique economic landscape. With the imposition of the Carbon Tax, we will be seeing some real issues regarding competition and leakage. In particular we wish to ensure that New Zealand businesses do not have to struggle to compete with similar economies that are not being constrained in a similar way by emissions taxes.

“It is essential that Government and business work together to find environmental solutions that continue to enable our economy to grow and increase our standard of living. Businesses will not buy into Government initiatives that are viewed at the SME or big business level as another compliance cost, however well intentioned the legislation may be.

“The Chambers of Commerce are committed to working with the Government, businesses and environmental organisations to work towards environmental solutions that can embrace the development of new technologies and innovative approaches to the Climate Change challenges. However, we will be making sure that this is done in such a manner so that our members are not disadvantaged or constrained in their growth. The Government needs to be aware that for the end goal of reduced emissions to be reached, business needs to be engaged in the process. Let’s work towards a system that ensures rewards for innovation and emissions reduction rather than one that hampers businesses in their pursuit of growth.

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