Pumping at the polls

by frog

A few weeks ago, I couldn’t shake the feeling that National would announce a cut in petrol tax before polling day. It seemed like the sort of opportunistic and short-sighted thing the Nats would do if behind, and now John Key is starting to make those precise noises.

After saying for weeks that the country couldn’t afford both its tax cut package and cuts in petrol tax, National is trying to soften its stance. If the last few polls before next Saturday show National behind, don’t be surprised if the party makes an announcement a day or two before polling day saying it’ll get rid of 5 cents a litre of petrol tax until petrol prices come down again. Of course, petrol prices won’t come down again for any period of time, if at all, because we’re facing a structural problem (too much demand, not enough supply), not an event-contingent one.

So, temporarily cutting petrol tax would be the wrong decision, as Jeanette explains in a press release she has just put out:

It is very understandable that people are looking for a way to reduce the pain of high petrol prices, but removing tax would put off much needed adjustments to the permanent end of cheap oil.

If we believed this steady rise in the price of petrol was a temporary phenomenon and prices will one day come down permanently to where they were two years ago, then the Greens would support some temporary tax relief. However, what we are experiencing is actually a signal that petrol prices are on a one-way, long-term trend upwards as we reach the end of cheap and accessible oil, so the very worst thing governments can do would be to subsidise fuel. Let’s be clear: cutting petrol tax would be a subsidy, because it would shift the cost of the things it funds, such as land transport, off motorists and on to taxpayers.

People are now starting to think about the adjustments that need to be made to prepare for this massive change in the basic economics of our civilisation. Companies are thinking about bio-fuel, there is a reduction in the number of big, thirsty new cars being bought, and an increase in sales of smaller efficient ones. Some people are thinking of living closer to work, walking school buses are gaining momentum, and use of public transport is increasing.

Subsidising fuel at this point will kill off these much needed initiatives and allow some New Zealanders to bury their heads in the sand for even longer. Every new gas guzzler we import will be here costing us money for ten years. Every decision to live further from work and commute long distances condemns us to higher fuel bills in the future. Adaptation to high fuel costs will be painful, but the sooner we start the easier it will be.

frog says

Published in Campaign | Environment & Resource Management by frog on Sat, September 10th, 2005   

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