ETS Mistake Shows National’s Numbers Can’t Be Trusted

John Boscawen MP, ACT New Zealand

Press Release Friday, May 14 2010.

Reports yesterday that the number of firms eligible for free emissions allocations under the ETS are estimated to increase from 65 to 800 shows that when the legislation to amend the scheme was passed last November, no-one truly understood the details of the scheme and the impact it would have on our economy," ACT Climate Change Spokesman John Boscawen said.

"The number of firms eligible for free emissions allocations under National’s ETS has increased by 1,200 percent. While this is good as it will minimise the cost imposed on trade exposed businesses, it is still a fundamental miscalculation. You don’t miss the mark by over 1000 percent unless you truly didn’t understand what you were passing," Mr Boscawen said.

"The fact is, when drafting their allocation formula, Nick Smith and his officials overlooked the overwhelming majority of firms that might be eligible for allocations. This shows that their understanding of the effect of the ETS on our economy is lacking.

"The same fundamental miscalculation occurred in respect of foresters who are claiming credits for trees planted since 1989. The Government originally estimated that only 50 percent of foresters would apply for registration and free credits. It has had to revise this figure to around 90 percent.

"Foresters can’t believe their luck and will now benefit from a one off substantial gain at the expense of all New Zealanders who use electricity. It is one thing for the taxpayer to provide incentives for new trees to be planted after January 1 2008, but it’s criminal to penalise all New Zealanders - particular those on low-incomes - to provide windfall profits to foresters who planted trees in the 1990s with no expectation of these retrospective subsidies.

"These revelations bring into question the credibility of all the other data released by Nick Smith and his office relating to the impact of the ETS on our economy and highlights why the Government should slow down and reassess the impact of the ETS before pushing it through," Mr Boscawen said.

ENDS

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