Garth George on the ETS

Time to Get Really Angry

Every one has skeletons in their closet, probably Garth more than many. We remember him for a time being a cheerleader for everything associated with Helen Clark. This lasted for two or three years, until Clark's incessant arrogance, elitism, and nannying offended him. We also recall how he once proclaimed Jeanette Fitzsimons to be a saint, far above the grasping and grovelling realms inhabited by ordinary politicians and lesser mortals.

But, although late to the cause, Garth now seems to have worked out that environmentalism is a deadly ideology. He has levelled his guns upon our monumentally stupid ETS, and opened fire. This week's column in the NZ Herald is superb. He points out that the meagre money-in-the-hand tax cuts are being eroded by this monstrous new government tax already. He scolds the National Government for declining to be honest with the NZ public over the impact upon our very fragile economic recovery that this stupid new ideological tax will have.

He publicly lauds Rodney Hide's attempts to set the record straight. Some excerpts:

Nowhere in the Budget coverage and commentary that I read did the effects of the ETS get even a look in, except for a couple of paragraphs "reporting" Act leader Rodney Hide's Budget speech to Parliament. Not surprising, I suppose, since the media seem as besotted with the ETS as some National ministers.

Yet Mr Hide had much to say on the matter, and every word of it is worth considering. So let's take a broader look at what he said. Having paid tribute to the Budget in general - as he is required to do under Act's confidence and supply agreements with National - Mr Hide said there was one glaring failure, "an elephant in the room", that threatened to undo all the good work being done.

"Here we are," he said, "tuning up the car for peak performance, new tyres, tank full of gas, any aerodynamic impediments removed. But some silly bugger has locked the handbrake into place. The handbrake is the emissions trading scheme. The rest of the world has the handbrake off, and we have it locked on."

Mr Hide said New Zealand was the only country with an all-gases, all-sectors ETS. This was "a damaging and incomprehensibly foolish imposition on our fragile economic recovery". It would slow the country's ability to create jobs, and to generate higher incomes for working people, and would "stop us catching Australia".

"This is a folly on the scale of past National-inspired disasters. This is up there with Rob Muldoon's attempts at central planning. It matches and surpasses Bill Birch's disastrous think big."

What is it about National politicians that has consistenlty led them to overreach with "big world-leading plans" that end up so destructive to our national wellbeing? It is arguable that more wealth has been destroyed by National governments than socialist Labour governments many times over. Is it because National politicians think they understand economics, markets, and capital and that, therefore, they can command and shape economic reality with an infallible imperiousness that can only be described as reckless folly? A little knowledge is a very dangerous thing. Markets and economies are inherently complex and deep. Those who presume to shape them and make them are courting disaster for everyone. The ETS is a classic example.

The Government is borrowing $240m dollars a week just to stay afloat. This is an enormous amount of money, which we and our children, and our grandchildren will have to pay back. It is hoping that economic growth will recommence so that we can eventually produce our way out of debt. They owe it to us and to our children to do nothing to impede economic growth, upon which we now all depend more and more as each week passes. At the same time, it is imposing an enormous, comprehensive tax upon us all. Why? Well our most arrogant National Prime Minister believes, Canute-like, he can shape world markets and world economic affairs with this gesture--empty as far as the rest of the world is concerned, destructively real as far as New Zealanders are concerned. The hubris and arrogance is both breathtaking and ridiculous. Key now presents himself and all of us to the world's derision as stupid, as pitiable, and as foolish as Don Quixote.

Higher energy costs would bite savagely deep into New Zealand households, which would also be facing higher GST, into farm profitability and into the profitability of processing industries.

Mr Hide said New Zealand's trading partners were not proceeding with emissions trading schemes. The Australians had dropped theirs and Europe had an ETS in form only, but not in substance.

"We are the odd ones out. We are sacrificing international competitiveness for the sake of nothing more than empty posturing and strutting on a now empty world stage."

"Strutting on a now empty world stage", says it all. There are few other nations that have been foolish enough to enact and ETS, and all of them have so many loopholes that they amount to little more than token gestures.

The Minister for Climate Change Issues, Nick Smith, is wont to point out that the European Union has an emissions trading scheme.

So it has, but the EU scheme does not apply to any gas emissions except carbon dioxide. And even that does not apply to the transport industry or to households and small business or to agriculture, construction or waste management. So since it applies only to heavy industry and electricity generation, almost 60 per cent of EU emissions are omitted.

And even in electricity generation the European scheme has become so complex, so full of exceptions and allowances, that it has not built any measurable carbon price into electricity for the first five years.

So what the devil are we playing at?

In New Zealand, the universality of the system means that far from being an empty token, it will be truly and throughly damaging. When governments turn and wage war upon economic production and cannibalistically gnaw at the bones of struggling households they have lost the right to govern in our view. The most fundamental duty of "first, do no harm" has been breached. The current crop of leaders who have so quickly transformed themselves into arrogant, imperious divine-righters need to be tossed out.

So, what to do? We call upon ACT to withdraw from its confidence and supply agreement with National now over the ETS disaster, asking the public to support its stance at the next election. This is an issue which is surely worth dying in the ditch over. If the public were to be foolish enough not to support ACT sufficiently so that as a result of the election it would have a strong mandate to insist that its support to any government be conditional upon scrapping the ETS, then so be it. We would then deserve our fate. And ACT could wind itself up as a political party with honour.

But we believe that by the time the full destructive impact of this ideological tax becomes evident, the voting public will wise up very quickly.