A newly released government paper shows that by 2050 government debt will be $54-$73 billion higher than it otherwise would be due to National’s subsidies for carbon polluters.
According to the paper:
Treasury has modelled these costs [the free allocations to polluters] and, while the model has limitations, they estimate that, if a 1.3% phase out rate is maintained into the long term, the proposed policy settings for intensity based allocation indicate a cumulative increase in Government debt of around 6-8% of GDP by 2050.
The Treasury budget model gives GDP out to 2050, when it will stand at $914 billion a year, or $403 billion in today’s dollars. 6-8% of that is $54-73 billion nominal, or $24-$32 billion in today’s money. The annual interest bill alone will be staggering.
Make no mistake. National’s subsidy to polluters today will be paid for by our children and grandchildren in the decades to come.