KEY POINTS:
Delaying the introduction of transport into the emissions trading scheme would spare motorists extra costs but do little to reduce the overall impact on households of climate change policies, United Future leader Peter Dunne says.
Transport was due to come into the emissions trading scheme (ETS) in 2009
and was predicted to increase petrol prices.
But the Government is expected to delay the phase-in of petrol into the ETS until 2011.
Prime Minister Helen Clark yesterday said she was "very conscious" of financial pressures on households and businesses and the Government was looking at ways to help relieve some of those price pressures.
Helen Clark hinted that rising oil prices might be doing one of the jobs that the ETS was intended to achieve, that is reducing petrol use.
"Petrol consumption is down, that is fewer greenhouse gas emissions. So we need to take all those things into account," Helen Clark said.
The necessary legislation is being considered by a select committee which is holding more hearings in Auckland and Wellington this week.
Mr Dunne said the Government's decision to delay the introduction of transport into the ETS was a welcome but essentially kneejerk reaction.
"Delaying the introduction of transport into the regime will spare motorists additional petrol costs in the interim but it really does nothing to address the overall likely cost impact on New Zealand households of climate change policies," he said.
Depending on the price of carbon, households could be up to $25 a week worse off once the ETS was introduced.
Helen Clark yesterday said the Government had always said it would do something to assist "vulnerable consumers" when they were hit with higher power bills due to the ETS.
But Mr Dunne said the Government should give a clear estimate of the likely impact on household budgets overall from these climate change moves and the steps it would take to ensure families were properly compensated for the cost increases.
The Government has also moved to assure voters that it will act to reduce the pain of energy price rises caused by regional petrol levies to fund infrastructure projects.
It will veto a quick 5c jump in the price of petrol next year in Auckland to help pay for transport projects, saying regional petrol taxes will be phased in.
Legislation is before Parliament that would allow councils to levy up to 10c a litre, but Prime Minister Helen Clark said such large increases would not be allowed immediately.
"There was a consultation in Auckland on going straight to a 5c levy. That's not something the Government is prepared to agree to. We have made that plain to Auckland."
As a result there would initially be a "much reduced amount" asked for in the first year, 2009.
Finance Minister Michael Cullen yesterday said the regional petrol tax in Auckland was necessary because it would help pay for electrification of the rail system.
He said the Government remained keen to pass the bill, but any petrol tax would have to be phased in over a period of years so that the initial impact was very small on motorists and the household budget.
Green Party co-leader Jeanette Fitzsimons today reiterated that the party would not support an ETS if it was watered down to the point it offered "no significant environmental benefit".
"We are not in this game just so some can make money speculating on carbon prices. Emissions reductions need to be real and soon, or it is not worth doing it."
She said the Government was coming under pressure from business interests and the National Party to delay the transport sector's entry into the scheme and give larger free allocations and longer phase-in times to other sectors.
However delaying transport's entry into the scheme could hurt people more in the long run, if as a result they failed to change their behaviour and continued buying large vehicles.
"It means another two years of worse traffic congestion and air pollution in cities. And it means a larger tax bill for everyone if transport users are not paying their way and credits have to be bought by the taxpayer."
- NZPA
