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Mopping up the fossil fuels subsidy shame

Written By: - Date published: 8:08 am, December 3rd, 2015 - 17 comments
Categories: climate change, crosby textor, david shearer, energy, Environment, ETS, john key, labour, Mining, Minister for International Embarrassment, national, political parties - Tags: , , ,

National Ltd™’s Todd McClay was up to his usual tricks in Parliament this week.

McClay’s speciality is helping mop up National Ltd™ messes. He’s had a lot of practise. His deeds this year range from denying a minor MP was caught out in a bald-face lie through to the roll-out of a sophisticated strategy designed to obfuscate National Ltd™’s possibly-illegal, multi-million dollar bribe to a Saudi Arabian farmer.

This time, McClay was helping mop up John Key’s stunning, world-stage display of hypocrisy in Paris. McClay was asked in Parliament how much revenue New Zealand had forgone due to National Ltd™’s 700 percent increase in fossil fuel subsidies. Careful not to implicate himself for misleading The House, McClay said he could not answer the specific question because he had “been advised” no such data exists.

How convenient.

It does seem odd, though, that McClay’s immediate predecessor was able to provide precise figures when the exact same question was asked in 2012. Curiouser and curiouser is the fact that a stated goal of National Ltd™’s official, APEC-assisted, peer-review of New Zealand’s fossil fuel subsidies was . . .

. . . promoting transparency around present fossil fuel support measures more broadly (including subsidies), and drawing lessons from past reforms of these measures; promoting ambition for reform of inefficient fossil fuel support measures by maintaining a free and frank dialogue; and, building political awareness of the issues around reform . . .

Transparency? Drawing lessons? Free and frank dialogue? Political awareness? What. Ever.

The Minister of Mopping Up, Todd McClay, with the Minister of Fucking Up, John Key.

The Minister of Mopping Up, Todd McClay, with the Minister of Fucking Up, John Key.


From the private sector, among those helping McClay mop up was PwC’s “Tax And Private Business Leader”, Geof Nightingale. His approach was plain ole denial. Apparently, in his version of reality, there are no “subsidies or concessions for [fossil] fuels and the regimes they operate under.”

As a High Priest in the Cult of Neo-Liberal Economics, Nightingale can get away with that statement because, according to the ideology, such subsidies are not subsidies. Rather, they are just one of the many nifty work-arounds neoliberals have concocted for what they call “distortionary behaviour”. Outside the world of imaginary economic theories, this particular “distortionary behaviour” is actually the legal requirement for international corporations to pay tax and the full cost of their own speculation in the countries where they operate.


Shhhh . . . just let it disappear into the Christmas break.

Shhhh . . . tell them there’s nothing to see here and it will all disappear into the Christmas break.

17 comments on “Mopping up the fossil fuels subsidy shame ”

  1. Wayne 1

    I saw the answers given in Parliament yesterday by Bill English in respect of questions from Meteria Turei.

    Really there are two world views at play here.

    National (and given past practise, Labour is of the same view) does not regard the fact that oil exploration expenditure is tax deductible as an expense as being subsidy to the companies. On that basis all expenses incurred to gain income and thus deducted as expenses by businesses would be deemed to be subsidies. Neither are NIWA and GNS expenses in mapping of the ocean floor and geology regarded as a subsidy to the industry.

    The Greens (and BLIP) apparently do think such expenditure are subsidies.

    In Paris, Mr Key was referring to direct subsidies on fuel. That is, the world price of fuel is reduced to the consumer by the Government either requiring the fuel to be sold at less than market prices, or the company (usually state owned) is receiving a direct payment from the government so its products can be sold cheaply to consumers.

    That is a generally well understood definition of fuel subsidies, and regularly appears in the literature relating to domestic fuel prices in various countries. New Zealanders, both private and business, pay the world price for their fuel.

    Presumably BLIP is aware of this fact.

    • Bill 1.1

      Well yes Wayne, there are various ways to compile or spin numbers.

      I mean (and I signposted this in Blips other post), when the deeply conservative IMF calculates that the externalities associated with the fossil fuel industry costs the NZ tax payer US$ 2.5 billion a year…

      And yes, most of that money would have been spent anyway. But the public money going to health costs associated with fossil (through air pollution, AGW etc), well…that could have been money better spent if society didn’t pick up the tab for private concerns that pursue private profit, yes?

    • tracey 1.2

      If it weren’t tax deductible, how would that money be treated?

    • savenz 1.3

      In the real world that most people live in, giving money to corporates to run their businesses is called subsidies.

      Yep in the land of neoliberalism there is not such word presumably because it functions as hiding corporate welfare.

      Clearly the world media is not up with John Key’s avoidance the same way as his fawning media here.

      Hence his speech deemed so outrageous it secured New Zealand the very first ‘Fossil of the Day Award’, gifted by the international coalition of environmental NGOs, Climate Action Network (CAN).


      • Smilin 1.3.1

        Yep Key is the villain in any piece of the pie you want to point to .

        Question: how long is goin to take for the awareness of the disaster we are goin to be in by 2050 to be a do now not later solution if these conferences are hijacked by liars like Key .

        • savenz

          I guess that is why they are organising the police state now. Expecting things to get worse as resources are plundered and more disasters come our way.

          They clearly are not keen on stopping it, reducing it, or co operating on climate change. Look at TPPA (40% of world economy), but climate change is not only not mentioned (and EVERYthing else is), they have already cottoned onto how to profit further from it by making the governments guarantee polluters their future potential profits.

    • BLiP 1.4

      Really there are two world views at play here.

      Yep – there’s one intent on eliminating any interference in the activities of business and there’s another which sees business as being a subset of society and society as being a subset of the environment. As it happens, I don’t have any problem with subsidies and tax breaks for business, so long as it is New Zealand businesses and the business activity does not compromise the environment and respects the New Zealanders who work for it. There are all manner of business opportunities in the energy sector which deserve subsidies, tax breaks, incentives, and encouragement. Lets get on with developing those rather than fossil fuels.

      My other objection is the blizzard of semantic dribble applied to hide what is happening and the point blank refusal of National Ltd™ to tell New Zealanders – in plain English – what is happening. Disappearing data, gagging scientists, economic make-believe, lies, hypocrisy and double-standards are all features of National Ltd™. I would have much more respect for the government were it to just spell it all out rather than spin spin spin.

      Labour is of the same view

      Yep. Labour is mired in the neoliberal movement towards eliminating government. In this case, it was actually Labour which installed the fossil fuel industry’s tax-dodge into New Zealand society in the first place. Labour was also quite happy to commence the privatisation of social services via its stalking horse Whanau Ora. There were various “distortionary behaviours” Labour had to deal with in that area too. In the fossil fuels area, it seems entirely likely Labour would have done the same thing as National Ltd™, although it would probably have gone about it differently. Labour would have had the Greens alongside to keep them honest.

      Presumably BLIP is aware of this fact.

      Yep, I am well aware of the fact that neoliberal economic fantasies are littered throughout academic papers and reports.Its the sort of bollocks which has been used to say crazy things like “creating a competitive market for the supply of electricity will reduce prices to consumers”. Look where that’s got us.

    • acrophobic 1.5

      There is something deeply disingenuous about the Greens position. If they declare oil exploration as an expenditure to be non-tax deductible, then what about all other forms of research and development? Why is oil exploration to be declared non-deductible but not research on alternative fuels? The answer is simple. As Bill English said, the Greens consider fossil fuels to be evil, while continuing to enjoy their benefits at every turn.

      • BLiP 1.5.1

        Why is oil exploration to be declared non-deductible but not research on alternative fuels?

        Congratulatons. You are a moran.

        https://blog.greens.org.nz/2009/06/16/when-are-subsidies-sustainable/ <— 2009. That position hasn't changed.

        • acrophobic

          What does a 6 year old blog about biodiesel and sustainability have to do with my comment? Apart from the somewhat misleading headline, there is nothing in the blogpost that addresses my comment.

          Tax deductibility for a legitimate business expense is not a subsidy any more than the cost of R&D. Exploration is a legitimate business expense. As I said, this is about the hypocrisy of the Greens perception that fossil fuels are evil while flying to climate change conferences, wearing clothes utilising fossil fuels in their supply chain and driving cars powered by fossil fuel engines.

          • BLiP

            The links shows that the Greens are quite happy to subsidise fuels and have been for more than six years. This negates your assertion that the Greens are opposed to such subsidies. Now, would you please provide evidence of your assertion that the Greens perceive fossil fuels as “evil” otherwise I am going to have to assume you are simply repeating Bill English’s lie – an ad hom he employed because he could not provide a sensible response when his position was challenged in Parliament.

            • acrophobic

              Where did I say the Greens ‘opposed subsidies’? The issue my comment addressed was tax deductibility. The Greens oppose tax deductibility for oil exploration, but not for other R&D expenditure, and not, according to your own comment, for research on other ‘fuels’. Meanwhile they continue to use fossil fuels with a passion. They are hypocrites.

              As to the idea that the Greens view fossil fuels as ‘evil’, you can think what you like, but before bursting into print it would pay to do some reading. Here’s some material to get you started:



              I’ll take the Greens a lot more seriously when they start living the life they wish to assign to others (one without fossil fuels) for themselves.

              • BLiP

                I’ll take the Greens a lot more seriously when they start living the life they wish to assign to others (one without fossil fuels) for themselves.

                Okay, so you’ve descended into semantic wriggling after being shown the Greens support fuel subsidies and have done for a while. I’ll take that as a WIN. Same too with your ridiculous claim that the Greens think fossil fuels are “evil”. On that score, it seems you’re just doing the same as National Ltd™ and descending into ridiculous nonsense for lack of anything sensible to say in defense of your position.

                Now, about this so-called hypocrisy: please provide the evidence to support your statement that the Greens wish to assign others to a life without fossil fuels?

                [lprent: Taking it as a win is usually a bad idea. The pwned heresy usually makes the moderators lives a lot more difficult. And as you know, I like to pass these things along.. ]

                • acrophobic

                  I agree with the moderator, but I can’t let your continued misrepresentation of my position stand. For clarity, here’s my quote (which YOU posted):

                  “Why is oil exploration to be declared non-deductible but not research on alternative fuels?”

                  I’m arguing precisely that the Greens DO support tax deductibility for alternatives. I’m just saying they are hypocrites.

                  As to your final question, read my citations.

  2. Detrie 2

    The fuels issue aside, the frustration in this and most other issues is getting honest answers. Anyone who dares listen to national ministers knows the frustration of getting an simple answer to a simple question. Denials, deflection, I don’t know or can’t recall is common. It never used to be this bad. A few decades back ministers were accountable and at least made an attempt to be [somewhat] honest. Today mocking the person that asked the question is the norm, even admired in some circles.

    Some say we should just accept that most politicians in power today will lie to us with few regrets. I don’t agree. We’re not allowed to lie in court, for fear of severe punishment. The same should go for those that make the laws.

    • acrophobic 2.1

      I totally agree with you, but my refusal to join any political party has been largely derived from the observation of successive Governments behaviour in the House, aided and abetted by a sequence of incompetent Speakers and a set of Standing Orders that seem to actively discourage transparency.

  3. IT’s amazing that they are not being called out more over these obviously untactful and disgraceful cover-ups. I mean at the end of the day if things aren’t rectified and culprit isn’t reprimanded, what’s stopping them from continuing to screw up? Even missing your car finance payments is punished by late fees, we should at the very least hold them to some form of accountability shouldn’t we!

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