17 June 2005

Billion-dollar bungle

Many of you would have seen today's reports on the botch-up of carbon emissions and the additional cost that New Zealand will face as one of the countries that has ratified the Kyoto Protocol.

Last year when the Labour Government decided to sign the Protocol after a very narrow parliamentary vote, 60-56, Climate Change Minister Pete Hodgson claimed that in the first commitment period, up to 2012, New Zealand would benefit by some $200 million through sales of carbon credits.

Sadly, the most recent revelations show that rather than a profit it is likely to be a very substantial cost to taxpayers. Calculating our costs on a figure of $15 per tonne, New Zealand would owe $1 billion in Kyoto charges prior to 2012. However, the current international price for a tonne of carbon is $34. So, given Labour's commitment to stick with the Protocol and the carbon charging system yesterday, New Zealanders can expect at least a further $2 billion worth of taxes between now and 2012.

We in the National Party have had reservations for some time and did not support the ratification of the Protocol. We certainly signed the agreement in 1998 that looked at the whole issue of climate change. But signing on to a regime that costs us dearly, while China, United States and Australia will not be facing these charges, seems to us to be quite inappropriate.

Many people ask 'How does all this Kyoto stuff work'. Well, in essence, the world has a store of carbon (CO ), either in a solid or a gaseous state. The argument is that when the world's stores of CO are released into a gaseous state, the effect is a warming of the global temperature, and it is estimated that at our current rate, average temperatures will be 2 to 3 degrees higher by the year 2021. It may not seem like much but the effect would be quite considerable.

One way of reversing the situation, in other words taking the gas out of the atmosphere and re-sequesting it in a solid state, is through forestry. Unfortunately, New Zealand has not seen the investment in forestry in the last 10 years that would have been ideal.

So, one way of meeting our commitments, without incurring carbon charges, could be encourage greater forest planting. But it should be remembered that it takes 5 years before there is any significant carbon storage from that source. We should also be looking at ways to reduce emissions, particularly through the use of non-fossil fuels and better engine efficiency in our vehicle fleet.

Over the next couple of weeks National will be checking the veracity of all the information that has been put on the table. When there is a major miscalculation such as this it is very important to be sure that the new information is accurate. Once all that's done you can expect a strong statement from Dr Brash about how New Zealand will deal with its issues relating to climate change and our position on the Kyoto Protocol.

PSA fails its members and joins the political debate

This week saw the Public Service Association involved in a political debate when The Dominion Post newspaper published an article in which officials made misleading and inflammatory comments about the National Party. The public service is supposed to politically neutral, but the PSA is clearly not. Many PSA members will be disappointed that their union has chosen to embroil them in the election by embarking on a pro-Labour propaganda campaign when they have received specific instructions from their managers to watch their step in the lead-up to the election.

I acknowledge that the overwhelming majority of people who work in the public service do an excellent job, but I do feel it is completely unacceptable for the union that represents people who are supposed to be politically neutral to take this overtly political stance.

When you look below the surface it becomes clear why the PSA is supporting Labour so strongly - because the Labour Government is offering bribes to public servants to join the union. Staff in the Department of Courts and at Work & Income are being offered a one-off payment as long as they become members by a certain date. In the case of Courts it's $640 as long as they sign up by today, and Work & Income staff got $1,200 and an extra two days annual leave as long as they became a card carrying member by May 13.

This is yet more evidence of the machine that John Tamihere says is being driven from the ninth floor of the Beehive.

Ralph Norris

News this week that Ralph Norris, CEO of Air New Zealand, is soon to take up a position as CEO of the Commonwealth Bank of Australia gives occasion to reflect on the success of Air New Zealand in recent years after it faced the possibility of liquidation after the Ansett debacle just a few years ago.

Mr Norris has been a very successful operator and was directly instrumental in bringing down domestic airfares and creating genuine value in a company that was under considerable stress. I wish him every success in his new job. I'm sure he will take to the Commonwealth Bank the success that he bought to Air New Zealand, which has a very bright future.

ENDS

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