Key’s $155b subsidy to polluters

A month ago, I wrote that National’s moves to gut the Emissions Trading Scheme would increase government debt by $73 billion by 2050.

A Treasury report said that National’s ETS changes to subsidise polluters would see government debt 6-8% of GDP higher than it otherwise would be. GDP in 2050 is modelled at $914 billion, so 8% is $73 billion. It turns out that was a gross under-estimate.

Treasury has now revealed that National’s ETS will increase government debt by 13-17% by 2050. That’s up to $155 billion more debt that John Key and Nick Smith are planning to saddle our children with.

Remember that’s only the total by 2050. It will be building up the whole time until then – nearly $4 billion a year on average – and we’ll be paying interest the whole time. National’s sop to polluters will cost us as much as $100 billion, over $9 billion in 2050 alone, over the next forty years just on interest payments.

I’m not sure what is worse – that National is prepared to put us in so much debt for a short-term pay-out to their polluter mates, that the ETS won’t even reduce emissions according to the Parliamentary Commissioner for the Environment, or that Key and Smith seem completely unaware of the problems to the extent that they don’t even know how much debt they’re loading on us. No wonder Treasury has refused to endorse National’s ETS and “has formed the view that the level and quality of analysis presented is not commensurate with the significance of the proposals”.

An incompetent minister, a Prime Minister who’s too busy heading off to the next PR op, and an ideology that says profits first-people and environment second. It all adds up to a recipe for disaster.