Carbon Tax Will Burn Region’s Businesses

4 May 2005

Carbon Tax Will Burn Region’s Businesses

The Wellington Regional Chamber of Commerce today warned the Government that unless great care was taken over its implementation, the recently announced carbon tax could potentially cause an economic slow down.

The Government today announced that the carbon tax – a key part of the Government’s climate change policy – would be levied at $15.00 per tonne on fossil fuels and industrial process emissions.

The tax is part of the Government’s implementation of the Kyoto Protocol. The first commitment period is from 2008 to 2012.

Wellington Regional Chamber of Commerce chief executive Charles Finny said the carbon tax could hurt small and medium sized organizations as well as larger ones who are unable to secure a NGA or qualify for a grant to mitigate the impacts of the tax.

“This tax, particularly on petrol - coming on top of the five cents already introduced this year, will potentially have a large impact on the region’s businesses, particularly those high energy users in the construction, transport and manufacturing industries.”

He urged businesses to quickly get up to speed with what the impact of this tax, and the Kyoto protocol implementation, would mean for them.

“The government is providing limited mechanisms for some businesses to get some relief from the impact of this but business needs to be proactive about getting involved in that process,” he said. However, despite these measures, for many businesses the impact of the carbon tax will simply be unavoidable.

“Our members, predominantly small enterprises are going to be adversely affected by this tax which is many aspects seems misdirected –small enterprises are responsible for a tiny fraction of greenhouse emissions and yet they are the only ones with no avenue of recourse from the government to avoid the tax increases on their businesses.”

“Potentially within the next 18 months, negotiations around the second commitment period from 2012 will begin. We do have concerns on behalf of our members that the government will be negotiating on behalf of New Zealand businesses without knowing the full effects of this first round and the real impact of the carbon tax.

“We would hate to see the same presumptions being made a second time round and would urge the government to take a fully inclusive and proactive approach to engaging business during this next negotiation period – we do not want to see our members disadvantaged or less competitive vis a vis key trading competitors such as China, the United States and Australia as a result,” Mr Finny said.

ENDS

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