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Oil and Water Mix.

Written By: - Date published: 11:17 am, June 20th, 2017 - 23 comments
Categories: capitalism, Economy, energy, Environment, Ethics, global warming, political alternatives, science, tax, water - Tags: , ,

When we turn on the tap and pour ourselves a glass of water, fill the jug, have a shower or whatever, we don’t pay for it. All of the infrastructure that delivers the water to our tap has been paid for and is maintained through rates. In times of drought, we might have by-laws enacted that mean we give up watering our lawns or washing our cars. Money does go towards providing a resource – water for households. But it’s not generally paid for on an individual ‘user pays’ basis, and in certain scenarios, regulations kick in to limit its use.

Why don’t we have a similar situation governing our use of fossil fuels?

If climate sensitivity is low (a very optimistic assumption) then we have about 20 years to make our energy system completely fossil free. That would give us an outside chance of holding any rise in the world’s average surface temperature below 2 degrees C, and ensure that only hundreds of millions of people in equatorial and the tropical regions died. That’s probably the best we can aim for now. We can price, tax, or trade in CO2 as much as we like for the next 20 years, and the result will be a world beyond 2 degrees. In the time we have available, there are no existing price mechanisms within our current economic paradigm that will reduce our fossil fuel use anything like fast enough.

But that’s okay – by taking some pointers from how we manage our water we can see possible ways forward.

In 2015, the IMF calculated that the NZ government subsidised the fossil industry to the tune of some $NZ 3.6 billion per year (up $NZ 0.43 billion from 2013).

Now we’re being told that the government intends to pay out another $NZ1 billion per year for 14 years, with the idea that those payments will somehow allow us to continue pouring ever increasing amounts of CO2 into the atmosphere. In some abstract world of economics, one where physics doesn’t exist, that might make some sense. But this is the real world. Physics exists.

So in recognition of reality, why doesn’t the government take that $NZ 1 billion, add on the other $NZ 3.6 billion identified by the IMF, and use the resultant $NZ4.6 billion to buy all of NZ’s gas and oil needs from the oil companies at current wholesale prices, and then, with a caveat that we’ll come to in just a second, provide liquid fossil to end users in much the same way we do water?

Last time I looked, NZ consumed about 2 billion litres of diesel and petrol every year. The wholesale cost of a litre of diesel or petrol is less than $NZ1. So if the government was to buy up the whole lot there’d still be some $NZ 2.6 billion left over in the first year. And with the introduction of a hard sinking cap (that’s the caveat), an increasing amount left over in every subsequent year.

Does anyone think that $2.6 billion wouldn’t be enough to cover gas purchases from the public purse and fit the 1500 petrol and diesel storage tanks in NZ with the  hardware and software required to manage a hard sinking cap on fossil availability?

Confession.

I’ve cheated a wee bit on the figures. The $3.6 billion the IMF calculated was the total cost of both direct and indirect subsidies to fossil fuel. So maybe the government would  need to introduce a new tax for high earners (who tend to be high fossil users) in order to cover any short term gap between on-going but shrinking indirect costs (eg – fossil related health expenditures) and the monies required to buy up the country’s fossil needs.

A hard sinking cap that reduces the availability of fossil fast enough, as per required by the best scientific information we have, gives us some time to adapt to fossil free living. The first year or so would likely be quite painless, and by the time it’s getting around to being difficult well, at least we’d be into the swing of things.

Our other option of course, is to keep on with the strategy from the past quarter of a century, of doing nothing useful in the hope that we (and everything around us) can adapt to all the effects that will come with an ever increasing rise in the world’s average surface temperature.

One of the above two options is complete madness.

23 comments on “Oil and Water Mix.”

  1. Wayne 1

    Bill,

    Clearly you do not live in Auckland. We do pay water rates on a volumetric basis. That is when you fill your glass from the tap, you pay for that use. These water rates pay for the water storage and reticulation system. Many other towns and cities have similar systems of water charging.

    • weka 1.1

      Given that most places in NZ don’t pay for water by the glassful, and you are old enough to remember when all water was free, your comment is pretty much irrelevant to the post and to the comparison that Bill is making as a way of looking at fossil fuel use and how to lower it fast.

      • mordecai 1.1.1

        Actually, given the proportion of the population do live in Auckland, and given that Auckland is far from the only region in which the citizens pay for water, the opening sentence of the post is downright misleading. But then given other comments in the post (eg ” then we have about 20 years to make our energy system completely fossil free.”) the entire article hardly rises above the initial error.

    • Bill 1.2

      Yes Wayne. Obviously I don’t live in Auckland.

      And obviously you didn’t read the post with any degree of mindfulness. This line about domestic water, that I’m helpfully adding emphasis to “it’s not generally paid for on an individual ‘user pays’ basis” covers off your attempt at avoidance.

      Anything to say about the substantive issues raised in the post or about the general thrust of the post?

      • Wayne 1.2.1

        Bill,

        Obviously my comment was not directed to the main point. But the opening sentence was certainly a bit odd for an Aucklander to read.

        As for rationing fuel which is what a “hard sinking cap” would be, well “no.” In principle I dont like that level of government interference.

        Price signals as per the ETS is better. It is really a question of the cost of the credits that gets added to the fuel cost.

        I prefer positive incentives, such as making electric cars more desirable.

        Perhaps a rebate of the GST. Which is different to making them GST exempt, but would provide the same economic incentive.

        That would bring the new price of the cheapest practical E cars down to around $40,000. If the cars were good enough (and the Nissan Leaf wasn’t being too range limited) then we should see substantial purchaser uptake. Even the BMW i3 would be around $55,000 or so without the GST component.

        • Bill 1.2.1.1

          Do any of those measures equate to a 15% reduction in fossil use this year Wayne? And in the following year too? And in every year thereafter? That’s the order of the cuts we need for just an outside chance of ducking 2 degrees C of warming.

          This isn’t about ideological preferences Wayne. This is about doing something that works.

      • mordecai 1.2.2

        ““it’s not generally paid for on an individual ‘user pays’ basis””
        How do you define ‘generally’? Add the population of Auckland, Rotorua etc and you’ll get a substantial proportion of the country’s population paying for their water on a usage basis.

    • RedLogix 1.3

      The whole fossil fuel/climate change issue was politicised, not because of the science, but because the right was afraid of the measures they knew would be necessary to combat it.

      • Bill 1.3.1

        Denial and/or avoidance isn’t a right/left thing RL.

        If it was, there would be plenty of examples of worthwhile action to point to that came from governments that claimed to lean to the left. But there are none. It’s been over a quarter of a century’s worth of meaningless bullshit from left and right.

        • Draco T Bastard 1.3.1.1

          True, Labour’s just as bad about propping up capitalism as National is.

        • weka 1.3.1.2

          Actually Clark’s Labour government at the department level was doing significant work on preparing NZ for the coming climate change issues and they just got ignored by the incoming National Party. Even though the left aren’t there yet, they’re still miles ahead of the right, and at least moving in the right direction.

          • Bill 1.3.1.2.1

            The rhetoric coming from Clark’s government was definitely streets ahead of anything we’ve witnessed this past, however many years in NZ, true.

            But in terms of action or proposed action, it was still very much mired in incrementalism – by which I mean the notion, that although the problem might be recognised, the solution is seen as lying in changes being made to current political and economic settings with an aim of preserving the basic underpinnings of those settings.

            Whereas that might have been possible back in ’91 or whenever, it’s just not an option now. Anything suggesting such a direction of travel today is going very much in the wrong direction.

            To expand. We need cuts that are somewhere in the order of 15% per annum.

            But the very powerful ‘high priests’ of mainstream economics has been very insistent that CO2 cuts above about 5% per annum will lead to the collapse of liberal capitalism. So that 5% as a maximum has been fed into just about every Integrated Assessment Model of global warming. Scientists have accommodated that over-riding ideological consideration by ‘fiddling’ other parameters such as peak emission dates or emission rates. (Kevin Anderson has done a lot of sterling work revealing it if you care to look it up)

            I’m away now, but will pick up on this post/ this thread tomorrow.

          • RedLogix 1.3.1.2.2

            Agreed. Same here over the Tasman, climate change is an issue that has torn apart one government after another. But fundamentally it was the left who strove for a carbon tax and the right which succeeded in sabotaging it.

            Now almost two decades later Turnbull’s govt has tacitly conceded that some form of carbon pricing is necessary … but still fights off reactionary idiocy from the right of the Coalition.

      • Andre 1.3.2

        Opinion pieces that come across as being motivated by wanting to upend capitalism and completely change the structure of society, and responding to climate change is simply a handy tool for that goal, also do a good job of politicising the issue in an unhelpful way.

        • Bill 1.3.2.1

          Opinions that come across as being motivated by wanting to preserve current capitalist settings at all costs, and in lieu of making changes that are necessary in light of global warming are dangerous opinions that deserve nothing but contempt and dismissal.

          Either we change or global warming will force the change that you, Andre want to avoid. You’re position is lose/lose. But it seems you simply don’t want to think it through and don’t give a shit if that means taking everyone and everything down on the back of the stupidity and fear you support and defend.

        • RedLogix 1.3.2.2

          Exactly. While there is plenty of evidence of villainy on the part of fossil fuel corporates funding fear and doubt denier campaigns simply to protect their shareholder profits … it hasn’t helped that various flavours of Marxism have happily fanned those fears into full flame by proposing solutions which utterly upend the world as most people understood it.

          This should have been a relatively straightforward issue to deal with, albeit challenging at scale. No more politically difficult than dealing with CFC’s and the ozone layer. Instead it was polarised into paralysis.

          Actually I don’t have too much issue with Bill’s proposal in the OP. Quite doable as long as there is a clear path painted through the phasing out of oil.

          People do value the freedom of movement the motor car brought them enormously. I still vividly recall the little baby-blue Austin A-35 that was my father’s first car, and how much it transformed my parents lives. We forget that for much of human history the vast majority of women who ever lived probably spent their entire lives within a 5 mile radius of the spot they were born. Sack cloth and ashes is not a political substitute for this freedom.

          No wonder voters have largely opted for a passive-aggressive resistance to what needed doing. No wonder most people know the science is real, but remain tight-lipped about what to do about it. Because the agenda was noisily hi-jacked on both sides of the spectrum by extremists, the majority opted to do nothing.

          Having said this, I think the mood is changing. Fence sitting is becoming less viable as each climate disaster strikes, as the brute arrogance of the carbonites becomes less tolerable, and it becomes clear that renewables, while not yet perfect, are indeed a viable alternative.

          OK so there is every reason to hope for the demise of the fossil carbon giants, and the excess concentration of power they have accumulated. But to move and motivate the great mass of people, it is crucial to have a vision of a future which they can recognise, that they see themselves being a part of, that inspires hope rather than dread.

          • Andre 1.3.2.2.1

            I was getting started on something fairly close to this in reply to Bill, but you beat me to it and did a better job. Thanks

            • garibaldi 1.3.2.2.1.1

              The sad fact is that the changes the whole developed world has to make in their lifestyles are colossal and thus won’t be done until forced upon them.
              The biggest single polluter is the American military. Anyone got any ideas on how to stop them? Any ideas on how to stop the opposing militaries?
              Who is going to stop the other numerous excesses of various industries in numerous Countries worldwide?
              The problem is so vast I can’t see human beings being capable of solving it. Going to Paris and signing an unsatisfactory document was pathetic .

  2. Draco T Bastard 2

    What’s Up With That: Building Bigger Roads Actually Makes Traffic Worse

    Interestingly, the effect works in reverse, too. Whenever some city proposes taking lanes away from a road, residents scream that they’re going to create a huge traffic snarl. But the data shows that nothing truly terrible happens. The amount of traffic on the road simply readjusts and overall congestion doesn’t really increase.

    The simplest way to start decreasing our fossil fuel use seems to be to start digging up roads.

    Just think, if we turned the road outside everyone’s house into a nice community area people might actually start talking to their neighbours.

  3. Gosman 3

    Have you ever wondered why the moves to combat climate change are stalling? It might be something to do with the continued linkage people make between the economic system and the problem. You might well be right but you also will not have much luck getting traction on change. Perhaps you don’t think it is an urgent problem though. In which case please carry on as you are.

    • weka 3.1

      Well duh. Of course it’s linked to the economic (and political) system, and of course people are struggling to accept that and know what to do. Teaching your grandmother to suck eggs there Gosman, but I see you don’t offer any solutions and I suspect that’s because you value money over life. Not to worry, you’ll go down just as fast as the rest of us.

      • One Anonymous Bloke 3.1.1

        Gosman will no doubt try and figure out how to go down faster than anyone else, for a profit.

    • roadrage 3.2

      Building solar panels costs resources, it could be argued that Trumps move to decouple from Paris was to let the US compete with China. So Trump is either irrelevant as we are moving towards compliance or his ineptness is helping. Coz the way it looks is Energy industry is already moving to the new paradigm. As for carbon targets, really, were they ever just a big talk fest.

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    3 days ago
  • Statement from the Minister of Health Dr David Clark
      This morning I have formally tendered my resignation as Minister of Health, which was accepted by the Prime Minister. Serving as Minister of Health has been an absolute privilege – particularly through these extraordinary last few months. It’s no secret that Health is a challenging portfolio. I have given ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Scholarship placements for agricultural emissions scientists doubles
    Scholarships for 57 early-career agricultural emissions scientists from 20 developing countries is another example of New Zealand’s international leadership in primary sector sustainability, says Agriculture Minister Damien O’Connor. Mr O’Connor, announcing the scholarships today, says hundreds of applications were received for this fourth round of the CLIFF-GRADS programme (Climate, Food ...
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    3 days ago
  • Funding for Foxton regeneration
    A project to help rejuvenate the Horowhenua town of Foxton will receive a Provincial Growth Fund investment of $3.86 million, Regional Economic Development Minister Shane Jones announced today. “This funding for the Foxton Regeneration project will be used to make the well-known holiday town even more attractive for visitors and ...
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    3 days ago
  • Plan to improve protection of moa bones
    Moa bones and other sub-fossil remains of extinct species are set to have improved protection with proposals to prevent the trade in extinct species announced the Minister of Conservation Eugenie Sage today. “We have lost too many of our native species, but these lost species, such as moa, remain an ...
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    3 days ago
  • Free lunches served up to thousands of school children in the South Island
    The Government’s free and healthy school lunches programme moves south for the first time creating jobs for around 30 people in Otago and Southland. “Eighteen schools with 3000 students are joining the programme – 11 have already begun serving lunches, and seven are preparing to start during Term 3. This is ...
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    4 days ago
  • Screen Sector recovery package protects jobs, boosts investment
    Thousands of Kiwi jobs and investment in New Zealand productions will be protected through a screen sector support package announced today by Associate Minister for Arts Culture and Heritage Carmel Sepuloni, Minister for Economic Development Phil Twyford and Minister for Broadcasting Kris Faafoi. The package also includes investment in broadcasting ...
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    4 days ago
  • New fund to help save local events and jobs
    The Government has established a new $10 million fund for the domestic events sector to help save jobs and protect incomes as it recovers from the impacts of COVID-19, Minister of Economic Development Phil Twyford announced today. This funding from Budget 2020 follows talks with the event sector designed to ...
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    4 days ago
  • Bill to improve fuel market competition
    The Government has taken another step in its commitment to making sure New Zealanders get a fairer deal at the petrol pump with the introduction of legislation to improve competition in the retail fuel market, says Energy and Resources Minister Megan Woods. “The fuel market study that this Government ordered ...
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    4 days ago
  • New Zealand joins global facility for pre-purchase of COVID-19 Vaccine
    New Zealand has joined a global initiative that aims to enable all countries to access a safe and effective Covid-19 vaccine, Foreign Affairs Minister Winston Peters announced today. The COVAX Facility was recently launched by Gavi, the Vaccine Alliance. The Alliance includes the World Health Organization, UNICEF, the World Bank ...
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    4 days ago
  • Right to legal representation in Family Court restored today
    From today new legislation takes effect to both restore the right to legal representation at the start of a Care of Children (CoCA) dispute in the Family Court, and allow parties to those proceedings to access legal aid where eligible. During a visit to the Family Court in Auckland today, ...
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    4 days ago
  • Transitioning to a fully-qualified home-based ECE workforce
    Home-based early childhood education (ECE) subsidised by the government will transition to a fully qualified workforce by 2025 to ensure better and more consistent quality, Education Minister Chris Hipkins announced today. “Quality early learning helps provide children with a strong foundation for their future,” Chris Hipkins said. From 1 January ...
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    4 days ago
  • Criminal Cases Review Commission gets to work
    The new Criminal Cases Review Commission | Te Kāhui Tātari Ture (CCRC) has started work and can now independently investigate claimed miscarriages of justice. “Even though we have appeal rights and safeguards against unsafe convictions, from time to time our justice system does get things wrong. The design of the ...
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    4 days ago
  • Speech by the Minister of Defence to the New Zealand Institute of International Affairs
    E ngā mana, e ngā reo, e ngā karangatanga maha, tēnā koutou Ki a koutou Te Āti Awa, Taranaki Whānui, Ngāti Toa Rangatira, ngā mana whenua o te rohe nei, tēnā koutou Ko Te Whare Wānanga o Aotearoa ki ngā take o te Ao (NZIIA), Ko te Rōpū Tohu Tono ...
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    4 days ago
  • Six months with baby and $20 more a week for new parents
    The Government’s increase to paid parental leave kicks in today with another 4 weeks taking New Zealand up to a full 6 months (26 weeks, up from 22 weeks) leave for new parents, and the maximum weekly payment will increase by $20pw, Workplace Relations and Safety Minister Iain Lees-Galloway says. ...
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    4 days ago
  • Infrastructure investment to create jobs, kick-start COVID rebuild
    A new package of infrastructure investments will help kick-start the post-COVID rebuild by creating more than 20,000 jobs and unlocking more than $5 billion of projects up and down New Zealand. Finance Minister Grant Robertson and Infrastructure Minister Shane Jones today outlined how the $3 billion infrastructure fund in the ...
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    4 days ago
  • Statement on passage of national security law for Hong Kong
    Foreign Affairs Minister Winston Peters today expressed the New Zealand Government’s deep disappointment at the passage by China’s National People’s Congress Standing Committee of a national security law for Hong Kong. “New Zealand has consistently emphasised its serious concern about the imposition of this legislation on Hong Kong without inclusive ...
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    4 days ago
  • July 1 marks progress for workers, families
    More jobs and more family time with newborns are the centrepiece of a suite of Government initiatives coming into effect today. July 1 is a milestone day for the Government as a host of key policies take effect, demonstrating the critical areas where progress has been made. “The Coalition Government ...
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    5 days ago
  • Auckland water consent referred to Board of Inquiry
    Environment Minister David Parker has today “called in” Auckland’s application to the Waikato Regional Council to take an extra 200 million litres of water a day from the lower reaches of the Waikato River for Auckland drinking water and other municipal uses.  The call-in means the application has been referred ...
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    5 days ago
  • New Zealand to host virtual APEC in 2021
    Foreign Affairs Minister Winston Peters and Trade and Export Growth Minister David Parker announced today that New Zealand’s hosting of APEC in 2021 will go ahead using virtual digital platforms. Mr Peters said the global disruption caused by COVID-19, including resultant border restrictions, had been the major factor in the ...
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    5 days ago
  • Matakana Link Road construction kicks off and drives jobs
    The start of construction on a new link road between Matakana Road and State Highway 1 will create jobs and support the significant population growth expected in the Warkworth area, Transport Minister Phil Twyford and Mayor Phil Goff announced today. Transport Minister Phil Twyford said construction of the Matakana Link ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • PPE supplies secured as COVID-19 response focuses on border
    The Government is prioritising its latest investment in PPE for frontline health workers, including staff at managed isolation and quarantine facilities, Health Minister David Clark says. “With no community transmission of COVID-19 our response now has a firm focus on keeping our border safe and secure. “We must ensure that ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • PGF funding for Parihaka settlement
    The Parihaka Papakāinga Trust in Taranaki will receive up to $14 million for a new visitor centre and other improvements at the historic settlement that will boost the local economy and provide much-needed jobs, Regional Economic Development Minister Shane Jones and Minister for Treaty of Waitangi Negotiations Andrew Little have ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Protections for workers in triangular employment
    Protections for workers who are employees of one employer but working under the direction of another business or organisation have come into force, closing a gap in legislation that  made the personal grievance process inaccessible for some workers, says Workplace Relations Minister Iain Lees-Galloway. “This Government is working hard to ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government strengthens managed isolation system
    A range of improvements are already underway to address issues identified in the rapid review of the Managed Isolation and Quarantine system released today, Housing Minister Megan Woods said. The review was commissioned just over a week ago to identify and understand current and emerging risks to ensure the end-to-end ...
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    1 week ago
  • Whakatāne to go predator free with Government backing Ngāti Awa led efforts
    The important brown kiwi habitat around Whakatāne will receive added protection through an Iwi-led predator free project announced by Minister of Conservation Eugenie Sage and Under Secretary for Regional Economic Development Fletcher Tabuteau. “The Government is investing nearly $5 million into Te Rūnanga o Ngāti Awa’s environmental projects with $2.5 ...
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    1 week ago
  • Growing Goodwood: Expanding wood waste recycling plant in Bay of Plenty, Waikato
    An extra 4,000 tonnes of offcuts and scraps of untreated wood per year will soon be able to be recycled into useful products such as horticultural and garden mulch, playground safety surfacing and animal bedding as a result of a $660,000 investment from the Waste Minimisation Fund, Associate Environment Minister ...
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    1 week ago
  • Scott Watson’s convictions to be referred to Court of Appeal
    The Governor-General has referred Scott Watson’s convictions for murder back to the Court of Appeal, Justice Minister Andrew Little announced today. Mr Watson was convicted in 1999 of the murders of Ben Smart and Olivia Hope. His appeal to the Court of Appeal in 2000 was unsuccessful, as was his ...
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    1 week ago
  • Protecting Kiwis with stronger financial supervision
    A new five-year funding agreement for the Reserve Bank will mean it can boost its work to protect New Zealanders’ finances, Finance Minister Grant Robertson says. “New Zealand has a strong and stable financial system. Financial stability is an area that we are not prepared to cut corners for, particularly ...
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    1 week ago
  • Forgotten funds and missing money
    A law change has been introduced to make it easier for forgotten funds in institutional accounts to be returned more easily to their rightful owners. Revenue Minister Stuart Nash has introduced an amendment to the Unclaimed Money Act 1971. It will update the rules controlling forgotten sums of money held ...
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    1 week ago