The ETS, power prices and income compensation

The Maori Party seems to be having difficulty getting the National Party to agree to raising the core benefit to compensate for higher electricity and transport fuel prices under the ETS. This is not surprising as the party that slashed benefits in 1991 has never shown any remorse for that, or any interest in raising them.

Raising benefits is the correct way to compensate for higher prices, rather than the Government’s proposal for a three year transition where the energy and transport sectors only have to purchase one tonne of emissions units for very two tonnes emitted by their products, effectively halving the price from $25/tonne to $12.50. A rise in the core benefit would achieve two things:

  • it would give financial relief to the households who most need it, without subsidising those who don’t;
  • it would not dilute the price signal  that makes it worth while to save energy and fuel.

So beneficiaries could take their higher benefit and use it to purchase more efficient appliances or vehicles in order to reduce fuel and power costs permanently.

It is not clear from the Government’s announcements so far whether the family assistance measures negotiated  between the Greens and the Labour Party as part of the 2008 ETS legislation will be allowed to stand. First, the billion dollar home insulation fund which is in the legislation but may be repealed by National’s bill, was to have offered 100% subsidy for low income households and a lesser subsidy for those who could have afforded to put up some of the money, and none for those on the highest incomes. When we worked with National to reinstate the scheme, it was a bottom line for them to have no income cap, so 100% funding for poor families was not affordable.

It was also part of the agreement last year, though not implemented through legislation, that every household would get a one-off payment in compensation for the higher power prices, and the CPI based benefit adjustment would occur in advance rather than in arrears. Those changes were to cost $180m but may not survive.

We argued with Labour for a general benefit rise last year, and failed. National should reconsider it this year.

16 Comments Posted

  1. Is the camp meant to demonstrate how we’ll all be living if the carbon dioxide ration and tax scheme gets implemented?

    It looks a bit like the famous Jorvik Viking Centre in York; but with lesbians.

  2. Not the way I see it.

    We are meant to look like credible members of a government-in-waiting that knows what is wrong with the present government and can expose its lies, deceptions and illogic. Which is to say, we need to be considerably more painful and dangerous to them than any burr under the saddle.


  3. As part of an overall media strategy to reinforce opposition to the National Ltd government and shift perceptions accordingly, the headline is a fail at all levels.

    It sticks out like a sore thumb in the list of Press Releases. It is a personal vanity for Norman who is immediately identified as a Dr – (woopy-dee-doo) – and thus perceived as linked to Brash and Bollard who, in turn, are working assiduously to carry on with a neo-con agenda. It alienates and confuses existing and likely supporters. It detracts from the content – as any media/communication 101 studies student knows, the punters quickly forget detail but remember headlines. It supplies the opposition with ammunition with which to poke holes in other areas. And, the punctuation is wrong. F F S !

    The only relation to “cheeky” that the headline has is that it makes Norman look like more of an a-rse than he already is.

  4. BliP is a capital gains tax a good idea or a bad idea?

    It’s a cheeky headline, and works because agreement with National and Bollard on anything is so rare.

  5. You know, I’m starting to wonder the same thing. Since being disenfranchised after Ruthel Da Muthel signed the MoU with John Key I haven’t being paying much attention to the Greens – imagine then my surprise when I found this with the headline: Dr’s Brash and Bollard on the right track, says Dr Norman

    Watch as the Greens get hammered for the next two years, not with the content of the release, just the headline. Woeful! Is Dr Norman a Crosby/Textor mole?

  6. phil, did you l…it…e…r it eh?

    with “inventive formatting” (visual dribble…!)

    that puts you into moderation on that blog nowadays, thankfully.


  7. Doesn’t being butt a burr, put us in an unenviable position Phil? 🙂

    Despite that, I’m of your opinion also.

    Edit: 5 minutes Frog? That’s a long time to wait for publication.

  8. Better than the last change.
    Doesint have the ascetic appeal of the last theme though and posts should probally be offered in full on the main page with shorter versions availible to the side; it would make it easier for non-dedicated, or less computer literate, readers to browse.

  9. you are meant to be the unending burr under the saddle..

    you do realise/know that..?

    and that imperative is just getting louder and louder all the time..



  10. and ..just taking a macro/historical-view ..for a mo’..

    we all accept that key learnt a lot..from watching clark..

    ..and what he would have learnt from that observation..

    is how clark kept the lips zipped in the green

    with a couple/few baubles/titles..

    so..what the greens have to seriously consider going forward..

    is key ‘playing’ you..?

    the same way clark did..?


  11. i went to red alert..

    and asked if goff was going to apologise for the child poverty stats…

    the question was censored-out by trevor mallard..

    cd someone else go over there and have a go..?

    (it may be something i

    i do recall recently commenting on kiwiblog that mallard should be prostrate in apology..for those ‘sins’ of labour..

    instead of running around like a chimpanzee with a hard-on..

    d’yareckon that mighta dun it..?..)

    but seriously..!

    the silence from all the political players..since those oecd stats were released… such an indictment..


    why no questions in qustiontime about this..?)


  12. Yes raise benefits. For all sorts of good reasons.

    But the most important thing is to (a) do away with fixed charges and (b) introduce progressive pricing for utilities to house holds.

    That would do far more to (a) encourage saving and (b) make the heavilly regressive eco-taxes progressive


  13. It’s all predictably depressing.

    “We argued with Labour for a general benefit rise last year, and failed. National should reconsider it this year.”

    One of the great areas of consensus in New Zealand politics. No way will Labour ever raise the benefit from poverty levels. They claim to care about the poorest, but they sure as hell never show it with their actions.

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