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Corporate welfare

Written By: - Date published: 10:43 am, September 18th, 2009 - 14 comments
Categories: climate change, economy - Tags: , ,


I’ve got no problem with the government helping out those who are genuinely in need but forcing the taxpayer fork out $400 million (or is it 1.6b?) to subsidise corporate polluters is a disgrace.
This is corporate welfare at it’s worst. These businesses are simply bludging off the taxpayer. While you’re doing your bit by taking shorter showers, swapping out lightbulbs, recycling your rubbish and taking your own bags to the supermarket the government’s forking out millions of dollars in handouts to let these guys keep on polluting.
Where’s all that talk of personal responsibility now eh?

I’ve got no problem with the government helping out those who are genuinely in need but forcing the taxpayer to fork out $400 million (or is it really closer to $1.6 billion?) to subsidise corporate polluters is a disgrace – even more so when the reality of the cost burden is obscured by slick PR assuring us that the result will be an effective reduction in costs for families.

The polluter subsidy is corporate welfare at its worst. These businesses are simply bludging off the taxpayer. While you’re doing your bit by taking shorter showers, swapping out lightbulbs, recycling your rubbish and avoiding plastic supermarket bags the government’s forking out millions of dollars in handouts that encourage these guys to keep on polluting.

Where’s all that talk of personal responsibility now eh?


14 comments on “Corporate welfare”

  1. George D 1

    $430 million excludes agriculture.

    At current prices agriculture emissions cost the country $820 million. If they double, $1640 million. If they quadruple (a worst case scenario), then that’s $3280 million dollars.

    Agriculture will have 90% of its emissions paid for by the taxpayer. In perpetuity.

  2. factchecker 2

    This is absurd.

    Government has suddenly created massive cost imposts on business by making them pay for the carbon they use. That cost is a wholly artificial creation. In the absence of government action, those businesses would not have to account for that cost.

    Kyoto gives NZ a certain nunmber of carbon credits. In order to offset the impact of the costs that the government is putting on business, those credits get distributed to businesses, then phased out over time.

    It would be a subsidy if the government was giving businesses carbon credits for free and with no costs being loaded on. Ie if they did not have to account for carbon and got free credits to sell. But that’s not what’s happening.

    • snoozer 2.1

      No. kyoto doesn’t give us any carbon credits, where did you get that silly idea?

      Kyoto sets binding emissions targets for countries and allows countries who ‘under-emit’ to sell surplus emission credits to countries that ‘over-emit’.

      Kyoto has created an international carbon credit market.

      Now, there is a cost to New Zealand for every unit of carbon we emit, because it is one we can’t sell on the international market or one we have to buy.

      The question is: who carries that cost? the taxpayer or the polluter?

      That’s what the ETS is about – a good ETs would put the cost of polluting on the polluter, and by discouraging them from polluting, allow NZ to sell more or buy fewer credits o nthe international market.

    • Draco T Bastard 2.2

      That cost is a wholly artificial creation.

      Wrong, it’s just hasn’t been taken account of before. Now it is and the taxpayer, rather than the polluter, are going to be paying for it. This is a massive subsidy to business.

    • Noko 2.3

      Economics is a wholly artificial creation.
      With very real consequences, but artificial nonetheless.

    • lprent 2.4

      It is a subsidy. They are planning on selling them at about half the current market rate to the polluters who come on board in what – 2013? That means that the taxpayers cop the earlier costs, and then subsidize the bastards for the foreseeable future. Morever the rate is flat regardless of what the market settles at.

      Since the market rate is liable to rise and so is the pollution (there is nothing in the governments ETS that will cause polluters to reduce emissions in the short-term), we will wind up buying credits on the international market for much higher rates than the current market rate. This is ignoring the additional cost structures that are likely to be part of whatever agreement comes out of Copenhagen.

      Nett effect, taxpayers are subsidizing polluters. Your comment shows an unbelievable ignorance of the Kyoto agreements that Simon Power signed us up for under the Shipley government. Perhaps you should educate yourself about what actually happens with the international market in carbon credits rather than what you theorize it should be….

  3. Armchair Critic 3

    Your comment is absurd.

    Governments have recognised that the costs exist and part of the action the governments are taking involves trying to assign the costs to the activities that create the costs. The objective, in theory, is to make the people involved in the activities pay for what they do, rather than ignoring or socialising the cost. Same applies to the consequences of undertaking these activities, the effects should not be ignored or socialised. In short – government has not suddenly created massive costs.

  4. Draco T Bastard 4

    Where’s all that talk of personal responsibility now eh?

    NACTs view on personal responsibility is that we should take personal responsibility for them (and their mates) to remain rich. Ergo, multi million dollar subsidies from the taxpayer to them (and their mates).

    • Swampy 4.1

      You’d change your tune soon enough if the fact Labour expects us to sign up to a more grandiose scheme than the rest of the world causes a lot more businesses to close up their manufacturing in NZ.

  5. BLiP 5

    Profits privatised, costs socialised. National Ltd 101. Never mind changing Whanganui’s name, we might as well call Aotearoa Gooberville.

  6. David 6

    Whether it’s the National-Maori pollution market or the Labour-Green version, either way corporate polluters get to buy bogus emission “off-sets”, rather than actually reducing emissions, and pass the cost on to their customers.

    All these schemes ignore the fact that to transition to a low carbon economy will require a massive transformation of how we do just about everything. And this will require planning and co-ordination and should require democratic participation, not rising prices and blind faith in the market.

  7. Swampy 7

    Which taxpayers did you have in mind i.e. how much tax is paid by the business sector itself. At a guess they are paying enough tax to cover these amounts.

    • Macro 7.1

      You overlook the subsidy.
      This is an ADDITIONAL $1.2+ billion per year the Govt has to find from somewhere – every taxpayer – OR reduce Govt spending by an extra $1.2+ Billion. ie further welfare – health – education – defence – police – etc etc CUTS.
      Either way – NZ has just been SHAFTED for a few insulated houses – that would have been insulated anyway.
      And NOT ONE MOLECULE of CO2 reduction to be seen.

      captcha “protests” I see them coming pretty soon!

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