Greens encourage productive investment but add a carbon cost

21 September 2011

Changes to monetary policy, a better balanced tax system plus Research and Development (R&D) tax credits are the highlights of the Green Party economic plan according to the New Zealand Manufacturers and Exporters Association (NZMEA). Other measures such as retaining state owned monopolies, and further developing capability in New Zealand by building local preference into Government procurement policy and recapitalising Kiwibank will be helpful. Taking the lead in pricing carbon would be harmful; such a move would build competitive disadvantages into New Zealand based supply chains.

NZMEA Chief Executive John Walley says, “Currently monetary policy that overvalues our exchange rate, our imbalanced tax system that promotes investment in unproductive assets and low investment in R&D are negating exporters’ ability to earn New Zealand a living. It is good to see some of those issues being addressed in the Green’s policy document.”

“Rushing on carbon cost is less helpful. While the move to apply carbon costs to all emitters, including agriculture, is a sensible approach, there is little point applying costs to New Zealand emissions if similar costs are not imposed in other jurisdictions. This will simply make firms here uncompetitive while we import the same products with no impact on the carbon emitted. The embedded carbon from imported products must be considered.”

“One thing that should be encouraged from this release is its coordinated capability building approach. We encourage a similar approach from the major parties rather than a set of tactical responses to deep seated structural problems. We need to earn more and spend less to get the current account under control; only a well-rounded policy package can achieve this.”

ENDS

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