Gerry’s biofuel subsidy blunders

by frog

I was aghast when Minister Brownlee stormed into office in 2008, declaring that a cost free, modest biofuel sales obligation was poor economics and bad for the market, and that it must be repealed and replaced with a subsidy.

Surely for the National Party, setting a standard and letting the market decide how to achieve it is the simplest, lowest cost way to encourage a biofuel market, but Gerry doesn’t live in the same universe as the rest of his colleagues.

This is now abundantly clear, given his mis-handling of the mining debate, his ill-timed oil drilling permit and his meaningless and expensive re-shuffle of the electricity market.

The Minister is now changing the criteria for the biofuel subsidy because of the poor response.

How he got $36 million out of his Cabinet colleagues for a subsidy while every other Minister was being forced to cut back is a mystery. Fortunately, there has been very little take up of this ill-conceived plan, and Cabinet could spend it on something useful, like restoring cuts to DoC’s funding.

Just how ill-conceived the plan is needs little explanation. The Minister is standing there with $36 million in lollies and no one is interested.

Meanwhile, having repealed sustainability standards along with the biofuel obligation in 2008, on Morning Report the Minister was hiding behind a lack of sustainability standards as his excuse for killing the obligation!

The Government should cut its losses with the subsidy and support Kennedy’s member’s bill to restore the biofuel sustainability standards. The Minister’s performance, while bad for the country, is just what the opposition needs going into the next election cycle. ;-)

frog says

Published in Economy, Work, & Welfare | Environment & Resource Management | THE GAME by frog on Tue, July 6th, 2010   

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