Isaac Davison

Isaac Davison is a NZ Herald political reporter.

Carbon policy dangles cash carrot

Greens propose to scrap ETS and bring in pollution tax while offering extra $6-a-week break for families.

Former Greens co-leader Jeanette Fitzsimons (left) and actress Lucy Lawless  with Russel Norman yesterday.
Former Greens co-leader Jeanette Fitzsimons (left) and actress Lucy Lawless with Russel Norman yesterday.

The Green Party is offering up tax breaks of $6 a week for households to soften the blow of a proposal to tax carbon pollution in New Zealand for the first time.

Co-leader Dr Russel Norman is boasting that Greens are now the only party heading into the September election offering an income tax break for families, coupled with the lowest company tax rate of 27 per cent.

Those tax cuts were designed to counter the impact of a bold new proposal to scrap the Emissions Trading Scheme and replace it with a $25 a tonne levy on the carbon emissions of all sectors except dairy, sheep and beef farming.

A similar policy in Australia was deeply unpopular and is expected to be dropped this year.

The proposal would be a priority for Greens in any coalition talks with Labour, which did not comment on the issue yesterday.

It would cost industry around $955 million a year.

Analysis by economic consultancy BERL said this cost would be passed on to consumers, and each household's power, electricity and food bill would increase by $100. This increase would be offset by a Greens proposal to remove income tax on the first $2000 of earnings.

BERL predicted that households would be $320 better off overall, because the tax break would offset the bigger bills.

Prime Minister John Key said the effect of the Greens' policy would be to charge consumers more and businesses more.

"The impact of that will be greater costs not only on households, but also making New Zealand less competitive and cost jobs. It's just an expensive impost from the Greens on businesses and householders. They'll be taking more off you than they ever give back."

Climate Change Minister Tim Groser said the policy failed to take into account the huge impact a carbon charge would have on New Zealand exports. "We have to compete in this world. You start to attack our export sector like this in a way that no other country is doing and you will find that the world out there is a pretty nasty place."

Dr Norman said the extra prices on farms were no worse than the annual fluctuations in the price of milk solids.

Lawless: No plan to go campaigning

The Greens flew in some Hollywood star power to help sell their big climate change plans.

But actor and eco-warrior Lucy Lawless appeared to be a reluctant cheerleader at the party's AGM, and said she had no plan to campaign with the Greens this year.

Lawless, whose flight to the venue near Upper Hutt was paid for by the party, said she attended the conference "as a mother and a citizen of this planet. My goal ... is to protect my children and to see who is going to do that best."

She said she knew little about the new policy and said she was "not here for the Greens" but liked co-leader Russel Norman's "plain speaking" and bold stance on climate change.

The Spartacus and Xena: Warrior Princess actor was not a party member and did not intend to follow Outrageous Fortune star Robyn Malcolm as a celebrity campaigner for the Greens.

The party used Malcolm to launch its election campaign in 2011 when she made a memorable attack on Prime Minister John Key.

Lawless was one of around 200 people to attend the conference, at which Greens unveiled two major policies - a carbon tax and free GP visits for everyone under 18.

Co-leader Metiria Turei said steady polling of around 12 per cent meant the Greens' target of 15 per cent of the party vote - or 20 MPs - was not unrealistic.

Members voted on the party's political positioning, deciding that a coalition with Labour was possible while National was a potential but "highly unlikely" partner. The party did not discuss potential links with New Zealand First or Internet-Mana.

Campaign director Ben Youdansaid 700 new members had been recruited in the past two months and the party had a funding war chest 30 per cent larger than last election - believed to be more than $1 million - with four months to go.

Now
• Companies buy carbon credits to cover pollution, currently priced at $5 a tonne.
• Forestry granted credits for absorbing C02.
• Medium-level polluters get 60% of credits free, and heavy polluters get 90% of credits free.
• Agriculture exempt.

Green proposal
• ETS scrapped, with savings used to create a Climate Commission to advise the government on carbon pricing.
• Carbon tax introduced for all sectors except dairy, sheep and beef charged $25 a tonne of C02.
• Agriculture charged $12.50 a tonne and forestry credited $12.50 a tonne.
• First $2000 of income tax-free.
• Companies get 1% tax cut.

- NZ Herald

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