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Plans for carbon tax are dropped THE New Zealand Government has made an embarrassing backdown on its planned carbon tax, but New Zealand families will still be hit in the pocket as ministers, scramble to meet climate-change obligations.Finance Minister Michael Cullen also faces a $360 million-a-year hole in his books while the potential cost of meeting New Zealand's Kyoto protocol commitments could rise by $110 million after the proposed tax - due for 2007 - was axed. Climate Change Minister David Parker announced that the controversial tax, which would have added $4 to $10 a week to household power and petrol bills, had been dumped after a review of plans to cut greenhouse gas emissions found it was no longer justified. He denied that the move was forced by political reality - partners NZ First and United Future both oppose the tax - but said it would have been difficult to get through Parliament. He said there were still plans to tax energy companies that used fossil fuels, such as coal-fired power stations, to curb carbon emissions by 2008, when New Zealand has to start meeting its Kyoto obligations. The revised tax would be passed on to consumers, but households would pay less than under the original proposal because it would not apply to fuel. Mr Parker said the Government would also consider tougher im-port controls on used cars to ex-clude gas guzzlers, and taxing companies that were big emitters, such as aluminium smelters. Incentives to encourage more forests - a key NZ First Kyoto policy - would also be drawn up, although he said this was not an easy solution as they took many years to mature into carbon sinks. When the tax was first mooted in 2002, New Zealand was on track to be 55 million tonnes under 1990 levels, but that has since been revised to 36.2 million tonnes above. |
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