The ETS must be delayed

Press Release by Employers & Manufacturers Association (Northern) at
11:15 am, 08 Apr 2010

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."