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Key comes clean on the ETS

Written By: - Date published: 3:00 pm, June 30th, 2010 - 27 comments
Categories: capitalism, class war, ETS, john key - Tags: ,

In a moment of uncharacteristic political honesty, John Key has come clean on his ETS:

Households will bear more than their fair share of increased energy costs when the next phase of the emissions trading scheme takes effect on Thursday, Prime Minister John Key has acknowledged.

The Sustainability Council recently suggested households would bear half of the cost of the ETS during its first five years despite accounting for just 19 per cent of all emissions.

Yesterday, at the start of a week in which the transport and electricity sectors come under the ETS, the PM conceded that “a disproportionate amount” would be paid by households under the scheme.

Got that householders? You’re copping a “disproportionate amount” of the cost. As well as inflation, a rise in GST, and whatever associated gouging our captains of finance can piggyback on all of the above. Nice. But – why are households getting clobbered? What’s the excuse? Key explains:

“But that’s because if we are too heavy handed with businesses … on day one, that runs the risk of those very same households potentially losing their jobs. That’s just the balance here.”

No one wants to see jobs lost – but what is the real scope of that problem compared to the disproportionate costs being loaded on to every household? Where is the government leadership, creating new jobs, moving us to a green economy? As usual, it seems, capitalists only believe in capitalism when it suits them. In theory a business which is uneconomic should go under, and new, more efficient businesses spring up to take it’s place. In practice National’s scheme is all about keeping things sweet for their mates – muffling the price signal that an ETS is supposed to send by (as usual) socialising the costs. So, sorry householder, sucks to be you I guess.

27 comments on “Key comes clean on the ETS”

  1. Adrian 1

    On Open Mike I outline a another new tax that I just found out about that comes in tomorrow to add to the ETS, 7% on life insurance premiums. WTF ? This is a whole new category of tax , because it’s not GST or excise just a levy on insurance. What pisses me off is there has not been a word from Labour about this or any of the other imposts happening tomorrow, silent as a graveyard the day before fucking taxes go thru the roof.

    • kriswgtn 1.1

      maybe Labours waiting for them to hang themselves

      I am perplexed as to figure out what their plan is- Wonder if Goff will seize the moment tomorrow?

      Prob not

      and this what Labour needs to get out there and demand to be heard by so called media in this country
      or maybe the hierarchy in the party are setting up Goff to fail so finally he can be replaced???

  2. Bunji 2

    Privatise the gains, socialise the costs, we see it over and over again. Vodafone with the ultra-fast broadband: “if the road transport companies get away with the public paying for their network, why shouldn’t we too?”, mining companies over having to pay royalties for getting to sell our mineral wealth, canterbury farmers with water, and polluters with the ETS.

    So true R0B that “capitalists only believe in capitalism when it suits them”…

  3. Andy 3

    The ETS will push up the cost of Electricity whether it comes from renewable sources or not, thereby giving windfall profits to energy companies.

    After 10 years, the government project that our emissions will be approximately the same as in 2010, having spent billions of dollars

    We could have spent this money on building a more sustainable future, e.g better insulation, double glazing, better energy transmission.

    Any savings in emissions after 10 years will be wiped out by the Chinese in a matter of hours (that’s a hockey stick graph I can show you)

    If we end up having to pay for carbon credits from the international market in 2020, to make up the shortfall, this will mean another massive bill.

    Complete and utter madness.

    • Lanthanide 3.1

      “The ETS will push up the cost of Electricity whether it comes from renewable sources or not, thereby giving windfall profits to energy companies.”
      Yes, and for companies that generate CO2 emitting power, the increased revenue will pay their carbon liability.

      For companies that generate power without emitting much CO2, the increased revenue will become profit, and allow for more reinvestment in more renewable energy.

      In the long-run this will mean more renewable energy generation being built and less CO2 emitting energy generation being built. Isn’t that the whole goal?

      In the short term it hurts and seems unfair, but in the long term this is exactly the point of the ETS.

      • Andy 3.1.1

        But why would they re-invest in renewables, when a fossil fuel component guarantees them extra profits?

        In the short term, we are unlikely to achieve 100% renewable, especially as geothermal comes under the ETS

        • insider 3.1.1.1

          Because if they can build and generate renewables for less than the cost of fossil fuels they will earn higher profits than FF generators. Most would want to invest where the margins are greatest. You may only just be getting by with your FF returns even if the price is higher, due to fuel costs and cost of capital (that’s assuming you are not running much)

          Of course on the other hand it could encourage companies to continue to invest in some FF generation to bid them in to make them the marginal generator and lift the prices for their renewable stuff. That’s a bit risky though. YOu make money by running a lot or running more rarely but at really high prices. If you run rarely and don’t get the prices then you are going to be a loss maker

  4. kriswgtn 4

    ETS is revenue gathering.

  5. gingercrush 5

    It’d also be nice if you mentioned that with National’s ETS, planned increases of power prices and petrol costs was cut from the ETS that had Labour and Greens support. Labour/Greens ETS loaded direct costs that was more problematic for both households and businesses. National’s ETS is indirect.

    Though of course Labour/Greens don’t mention this. Labour also ignore that under their watch power prices jumped through the roof and many regions in New Zealand would have seen severe petrol costs rising. Not to mention every year they loaded costs on to New Zealanders and didn’t cut taxes whatsoever.

    • pollywog 5.1

      So whats your solution GC ?

      Fire up the De Lorean, time travel back to the Labour years and have a quiet word in Helen’s ear about where her madness will lead ?

      I’m more concerned with what Key, English and Smith have done in loading me up with debt and higher costs i know won’t make one bit of difference to global warming but will damn sure put some extra dosh in them and their business interests pockets.

  6. Santi 6

    the ETS is a crock of shit of monumental proportions concocted by Smith & Key.

  7. Carol 7

    Key was on Campbell Live tonight, answering some pretty tame questions on it. Key gave examples of how much it would mean a week for a person on an “average wage” of $50,000. Well that sounds pretty high to me. But maybe a mean/median wage would be a truer indication, being that 50% of the population earned less than that.

    What percentage of the population earns less than $50,000?

    • Bill 7.1

      Possibly reading too much into it, but….

      The point about stating the average wage to be $48 000 ( or $50 000 if nice round figures are preferred) is that it sends out a message to those on the median average wage ($25 000 or whatever) that things will get better.

      Most people imagine that the median average is what is being quoted. And most people would aspire to be at least average in terms of earning capacity. So we have enormous numbers of people reasoning that although things are a bit of a struggle at the moment on $25 000, that’s okay because there is the realistic possibility nay, the probability, that things will gravitate towards the average… that sits at twice the present wage level.

      So head down, bum up and give it time. Just work a bit harder and the just desserts will surely come. And if not, then they themselves are at fault as it was they who failed to aspire to being merely average…

      The whole scenario sits in opposition to people facing the rest of their working life understanding that there is very little or no prospect of things improving at all. It shields wealthy elites from facing the rightful anger of a majority of people who, instead of feeling angry and pissed off, internalise a deliberately foisted misperception of failure and beat themselves up rather than the bastards who actually deserve the kicking.

      • Herodotus 7.1.1

        There has been a common basis that with the likes of WFF and other govt assistance that this boosts families to around $50k which is about the same as the average expenditure from house hold survey.
        What gets me is how pensioners are suppose to survive on their $18k p.a. in the hand for a single person or $24k (??) for a couple. At least those at the beginning of their earning have some hope of a better world, how do we look after those at the other end of the scale.
        Statistics depersonalises real peoples experiences just like watching the news and the suffering that we all see on the screen, we the viewer are removed from reality.

        • Bill 7.1.1.1

          Boosting a family income ( ie household income) to $50k has got nothing to do with average wage levels.

          Two people on $20 odd thousand with no kids have a combined income more or less equivalent to the repeatedly quoted average wage of $50k.

          But so what?

          And you’re contention that those at the beginning of their earning have some hope of a better world, by which I take you mean higher comparative wage levels, just isn’t reflective of the reality whereby wage levels have stagnated and decreased since (roughly) the 70s and each ensuing generation has less financial wealth (comparatively speaking) than the one that preceded it.

          Anyway, putting aside the intergenerational downward drift of earning capacity, most people right now, no matter how many years they have been working, earn somewhere around $25 or $30k. There really isn’t much in the way of upward mobility for an individual during a working life and that’s a fact that has to be masked. People must be led to believe or allowed to believe that things will get better…a $50k average.

          And definitely discouraged from ever pointing an accusatory finger at the main beneficiaries of all this stuff and nonsense that sees most compelled to struggle to merely stand still.

        • prism 7.1.1.2

          Herodotus –
          Mr Key tells me that the retired are now getting fortnightly –
          Single on own $636.24 (after 1/10/10 $667.50 – $17555 p.a.)
          and
          Married-d/f couple ea. $489.42 (1/10/10 $511.06 – for two $26,575 p.a.)

          Added to that may be Accommodation Supplement up to $100 per week I think. Then there is small amount of tax taken off – the financials are handled by the IR Dept which watches over beneficiaries’ incomes and adjusts taxes for extra earnings.)

          Mr Key explains that changes will ‘make the tax system fairer and encourage people to save’.
          And ‘The National-led Government is careful to spend money wisely and we are on track to rein in growing debt. The largest amounts of new spending in the Budget are going into education and health, to increase spending in schools and early childhood education, and to boost elective surgery.’ (Joke – elective laughter! Want to lose 10 ugly lbs? Cut off your head.)

  8. Herodotus 8

    So the entire population will pay something in the order of $150/family (as per JK’s est.) and there is still massive uncertainity as to where this windfall for the govt is going. Lab had a ETS with similar issues of transpareny as to where the money was destined to go.
    But we can mine coal ship this off to China they burn and emite, CO2 increases and China contributes nothing to compensate the planet, and yet we are unable to utilise this coal as the cost to NZ is prohibitive. Where is the logic here and how are NZ households to survive, this is a continuation of the death by 1000 cuts of the family. At least we like USSR have cheap alcohol to dull the pain, and an informed media to keep policy makers honest.
    NZ is crying out for some leader to lead, refer Q&A on Sunday with 2 impressive examples of what we require.

    • Carol 8.1

      On Campbell Live Key said the ETS money would be ring-fenced for tree planting & research into lower carbon tecnhlogies. But would that account for where it all goes? And how much research could NZ usefully do in this area?

  9. Hilary 10

    Carol – From memory about 75% earn less than the average wage of around $48,000, and the median is just under $30,000. The most common amount for individuals to receive is around $15,000. Somebody will know the correct numbers and terminology. But an earner on $50,000 is already doing better than most.

      • Carol 10.1.1

        Thanks, Hilary and Herodotus. That confirs what I thought. And for those of us working people living alone, talking about the average household income, just makes us seem pretty poor.

        So Campbell should have pulled Key up in the use of the average wage, because it makes it sound like most people won’t feel that much financial impact from the ETS (and GTS etc). Whereas, for the large numbers of people on lower incomes, it may not be such an easy change/s to live with.

        • just saying 10.1.1.1

          Don’t want to deviate too far from the actual topic, but I do want to say that the majority of New Zealanders are almost invisible in the media, and this is playing into the hands of the rich elites. Poverty and hardship are increasingly considered a matter of personal failure and shame despite being the experience of most of us. I suspect a lot of household debt is being entered into to temporarily create the appearance of relative prosperity, despite creating greater hardship further down the road. A kind of sad and self-defeating ‘fake it till you make it’ (or win lotto).

          ‘Middle new Zealand’ is already largely a thing of the past.

          People will get angry when they stop feeling ashamed – it’s only a matter of time.

          • pollywog 10.1.1.1.1

            Yeah…and what with Pasifikans being bottom of the heap, you don’t want to make us angry ! you wouldn’t like us when we’re angry…

            …at least they’re building us flash new prisons so we got a nice comfortable place to go for time out when we get too angry.

            Such caring and forethought. It’s positively heartwarming

  10. Draco T Bastard 11

    As usual, it seems, capitalists only believe in capitalism when it suits them.

    That should be Dictatorial Capitalists only believe in personal responsibility when they can push their own responsibility on to everyone else.

  11. Rosa 12

    Just Saying, your comment is spot on. How arrogant of Key, with his fortune safely tucked away, to be heavily taxing ordinary and poor Kiwis (especially after saying pre-election that National was about slashing taxes, such lies!) basically just so NZ and the PM, looks great on the dishonest world stage. Shame on National for this, I hear that many heartland National voters are deserting Key in droves. So should we all. Key is an opportunist and a true Leftist, pretending to be Conservative! Time for a tea party perhaps?

  12. Andy 13

    Well, we make it onto WUWT today

    http://wattsupwiththat.com/2010/06/30/new-zealand-begins-emissions-trading-scheme-meanwhile-the-gorepachauri-chicago-climate-exchange-is-flatlining/

    Interesting that the CCX has carbon trading at 10c a tonne when we are paying $12.50.

    Note the link through to the advisory board of CCX:

    Somehow, one gets the feeling we are being scammed, and the rest of the world are laughing at us

    A sad end to a promising economy.

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