Call for emissions trading alignment w Australia

Media Release

Tourism industry calls for emissions trading alignment with Australia

8 May 2008

The government should seriously consider aligning its proposed Emissions Trading Scheme (ETS) with Australia, the Tourism Industry Association New Zealand (TIA) says.

The move would allow time to consider the benefits of having compatible schemes for the two countries and give New Zealand tourism businesses more time to transition to the new scheme, TIA Acting Chief Executive Oscar Nathan says.

TIA told the finance and expenditure select committee today that the introduction of the ETS has been too rushed. More time should be taken to consider the impact of the scheme on the tourism sector.

“Australian authorities are expected to publish a paper on Australia’s ETS framework in July. We are supportive of the ETS in principle but we believe the government should hold off on finalising it until we know what Australia’s plans are. We must consider aligning more closely with Australia’s scheme and their 2010 timeframe,” Mr Nathan says.

“While the trading component of ETS will not apply to tourism, the downstream fuel and electricity price increases will hit tourism businesses hard, especially small and medium size businesses.

“In the accommodation sector, for example, it is expected that financial yields for individual businesses could drop by between 3% and 14%. This is in a sector that is already characterised by low margins,” he says.

“Recent analysis by the Sustainability Council and NZIER also supports the view that the introduction of the ETS threatens the viability of many businesses in the SME sector, with the potential loss of thousands of jobs.

“Tourism businesses are already facing slowing visitor growth due to the high New Zealand dollar, economic slowdowns in some of our key markets and intense competition from other international destinations.

“This will be yet another cost increase which will make the basic costs of doing business far more challenging for tourism operators.”

New Zealand’s early adoption of an ETS ahead of other countries also places New Zealand tourism businesses at a disadvantage to our international competitors. A number of these countries have no obligations under the Kyoto Protocol, Mr Nathan says.

The tourism industry strongly supports of the government’s goal of environmental sustainability and that commitment is demonstrated in the New Zealand Tourism Strategy 2015 www.nztourismstrategy.com . Many tourism businesses are already making changes to meet the challenges posed by climate change.

“The Government has said that there will be transitional government assistance to help industries and households adapt to the ETS but there has been no detail confirmed on what this support might be for the tourism sector.

“The tourism industry welcomes the news that petrol will be exempted from ETS until 2011 but is still eager to hear what incentives will be available to businesses facing increased costs from the new scheme.”

TIA’s submission outlines a number of initiatives which the government assistance programme could consider. Read TIA’s full submission on the ETS at www.tianz.org.nz

ENDS

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