Auckland's Unitary Plan won't make a jot of difference to housing affordability

It doesn't matter whether the Unitary Plan allows for relatively intensified development inside the Rural Urban Boundary, or greenfield developments outside of it, aka subdivisions. 

That is because the problem Auckland has at its core is anti-development legislation - the Resource Management ACT (RMA).

It isn't right when developments in Long Bay, for example, take 18 years to get off the ground and can be held up by people living in the Coromandel.

The RMA came into effect in 1991. 

At that time the ratio of median house price to median income was around 3 to 1. 

That means before the RMA, a median house price was $300,000 and the median household income was $100,000.  That's easily affordable. 

Today it is almost 6 to 1. 

Even if median incomes moved to $150,000 (which they haven't), median house prices have increased to $750,000.  That's quite unaffordable.

It takes too long to build a house in Auckland, and it costs too much.

The RMA has created the situation in Auckland where perfectly responsible developments are opposed and delayed to the extent that, if they ever get off the ground, the extra costs have pushed up the price of the final product.  It has made housing unaffordable, and created a crisis.

It is therefore irrelevant what the Unitary Plan says about where properties can be built, and what land can be developed. 

Unless the RMA is dramatically reformed to create a presumption of development and a restriction on the opposition to developments, the Unitary Plan will mean nothing. 

And that is because people in Coromandel will still be permitted to oppose, and thereby delay, developments in Auckland.

Author of this blog post, Nick Kearney, is the Local Board Member for the Kaipatiki Ward. 

The inner Waitemata Harbour suburbs of Beach Haven, Birkenhead, Chatswood, Birkdale, Northcote Peninsula, Glenfield, Hillcrest and Marlborough make up the Kaipātiki local board area. It is bounded by the Northern Motorway to the east.



Nathan Guy Must Stop Making Excuses And Do Something

Primary Industries Minister Nathan Guy is looking for excuses to justify his inaction amid growing calls by kiwifruit growers that the industry needs an independent inquiry, ACT New Zealand Primary Industries Spokesman Don Nicolson said today.

“Initially the Minister said he wouldn’t initiate an inquiry because Zespri was before the Courts on a charge of smuggling.

“Now that Zespri has been found guilty, he is using the excuse that an internal inquiry is already taking place and there is no need for the Government to step in.

“But growers who have contacted ACT do not have any faith in the internal inquiry,” Mr Nicolson said.

“New Zealand Kiwifruit Growers Incorporated (NZKGI), which is charged with conducting the inquiry, is the very organisation that commissioned the 2007 Grant Samuel Report into Zespri and then suppressed it because it was unfavourable.

“What has changed in NZKGI since then?

“NZKGI has no credibility when it comes to conducting an independent inquiry into Zespri.  The report won’t be worth the paper it is written on.

“The Minister’s continued position of doing nothing is unacceptable.  By failing to take action, the Minister appears to be sanctioning Zespri's poor business behaviour that threatens our reputation.
“Kiwifruit is big business for New Zealand and our reputation relies on Zespri acting as a good corporate citizen.  If its reputation is damaged our entire industry will suffer.

“The Government forces all growers to export through Zespri.  It is therefore the Government’s responsibility to ensure that Zespri’s operations are above board.   Initiating an independent inquiry is the only way the Government can do this,” Mr Nicolson said.



Kiwifruit Collaboration Arrangements ‘Most Likely Illegal’ In International Markets

Claims by former senior personnel of Turners and Growers that Kiwifruit New Zealand’ s application process for Collaborative Marketing Arrangements (CMA) with Zespri is ‘farcical’ and ‘lacks openness, fairness and integrity’ is further indication that all is not well in the kiwifruit industry, ACT New Zealand Associate Primary Industries Spokesman  Robin Grieve said today.

 Former Turners and Growers development manager, Murray Malone, and  former Managing Director of Turners and Growers, Jeff Wesley, told rural newspaper ‘Straight Furrow’ that New Zealand’s collaborative arrangements could be seen as collusion in the eyes of international trade. 

They say, under the CMA process growers are ‘forced to collude with Zespri to fix price and to dominate market position.’  While not illegal in New Zealand, this is ‘most likely illegal in some of the target markets in which the fruit is sold including China’.

“Growers in the kiwifruit industry have faced big challenges over recent times and it is imperative that their financial returns are not compromised by an inefficient and dysfunctional marketing system which has the government’s fingerprints all over it,” Mr Grieve said.

“The government imposed a monopolistic marketing system on the industry and then just walked away, leaving Zespri without proper oversight.   Now the problems are piling up.

“Without the option to take their business elsewhere growers are trapped.   It is time the government, which denied growers the freedom to sell their produce elsewhere, takes its obligations more seriously.   

“ACT has been calling on Minister Nathan Guy to launch an independent inquiry into Zespri since it was convicted in China for smuggling.  Yesterday, ACT called for the potential inquiry to include claims by growers that they are subjected to bullying and secrecy by the company. 

“The Minister owes it to growers to initiate an inquiry to ensure his regulations are not propping up a marketing system that is costing growers’ money and possibly forcing them to act illegally,” Mr Grieve said.








Minister Can No Longer Ignore Calls For An Inquiry Into Zespri

Primary industries Minister Nathan Guy cannot continue to ignore the damning claims of bullying, secrecy and unacceptable behaviour from concerned growers who are forced by the Government to supply their produce to monopoly exporter Zespri, ACT New Zealand Associate Primary industries Spokesman Robin Grieve said today.

“ACT has been calling on the Government to initiate an independent inquiry into Zespri’s activities after it was convicted of smuggling in China.   ACT now wants the inquiry broadened to look into concerns expressed by growers about the lack of transparency and intimidation by Zespri,” Mr Grieve said.

“A One News story over the weekend revealed the growing discontent among growers concerned with Zespri’s behaviour.   A number of growers were too afraid to appear on camera but told One News they are so appalled with Zespri’s conduct they would no longer deal with Zespri if they had the choice.

 “Zespri Board candidate, Tom Wilson, confirmed their claims saying people are ‘reluctant to stand up and voice their genuine concerns’ as the ‘Zespri PR network can destroy people’.  He says Zespri’s culture is arrogant, self-serving and needs to change.  

“ACT opposes monopolies - especially government mandated ones - because they generally become bloated, inefficient, and lazy.  ACT believes it is Zespri’s monopoly status and lack of proper oversight that has caused the current problems.   They are a monopoly out of control.

"It’s time for the Minister to listen and take action by launching an independent inquiry. 

“The inquiry currently being undertaken by New Zealand Kiwifruit Growers Incorporated is not independent and therefore the validity of any findings is compromised. 

 “Growers need an assurance that they are doing business with a reputable company.  At the moment there is no way they can find out.  Growers who question Zespri appear to be stonewalled and faced with intimidation if they speak out.

“The Government is responsible for how the kiwifruit industry is set up.   It is the Government’s responsibility to get to the bottom of this issue,” Mr Grieve said. 


Labour’s Limit On Share Fund Size Intrudes On Shareholders’ Rights

ACT New Zealand will not support Labour MP Damien O’Connor’s Dairy Industry Restructuring Amendment Bill (No2), ACT New Zealand Primary Industries Spokesman Don Nicolson said today.

The Bill would limit the proportion of Fonterra co-operative shares that can be held in its shareholders fund to 20 per cent of Fonterra’s share total.

“Legislating tighter limits on the size of the fund is an unnecessary intrusion into the rights and interests of shareholders to determine the destiny of their own company,” Mr Nicolson said.

“Fonterra has sufficient constitutional safeguards and mechanisms for representation and communication to allow shareholders to determine the size of the  fund.   Shareholders are more than capable of doing this without interference from Government.

“ACT believes the Government’s regulatory involvement with Fonterra should be limited to ensuring that the supply and sale of milk and milk products within New Zealand are open to competition.
“Fonterra is the world’s largest exporter of dairy produce and New Zealand’s largest company.  It competes in an ever-changing world and needs to be able to respond to changing circumstances and continue to evolve as a company for the benefit of its shareholders.

“Excessive and unnecessary government involvement will only hinder its ability to do this,” Mr Nicolson said.


More Questions Raised About Zespri's Operations

Zespri’s apparent bad administration in China raises serious questions about their operations and reinforces the call that kiwifruit growers should be free to sell their products to customers and exporters of their choice, ACT New Zealand Primary Industry Spokesman Don Nicolson said today.

Zespri Management Consulting Corporation and one of its employees have recently been found guilty in a Shanghai Court of false customs declaration.

“If this is what has been allowed to happen in China, what confidence can growers have that this isn’t happening in Zespri’s other markets?” Mr Nicolson said.

“In November 2011, Zespri was fined in Korea for anti-competitive behaviour in the Korean market.  Just this weekend the New Zealand Herald revealed that Zespri has a serious employment issue with their highest paid offshore executive. Now rural newspaper, Straight Furrow, has revealed Zespri may be involved in transfer pricing.

“The full cost of management and governance oversight is borne entirely by growers, therefore growers need confidence that Zespri’s processes are rock solid. With all these issues coming to light, growers will be wondering, how much worse is it going to get?

“Ultimately, ACT would like to amend the Kiwifruit Industry Restructuring Act 1999 so that growers can sell their products to the customers and countries of their choice.  But in the interim, the government as authors of Zespri’s enabling legislation must launch an inquiry into this developing fiasco,” Mr Nicolson said.  


ACT Calls For An End To Zespri Export Monopoly

ACT New Zealand Primary Industry Spokesman Don Nicolson today called for an end to Zespri’s export monopoly following the revelation that a Zespri subsidiary, Zespri Management Consulting Corporation, and one of its employees were found guilty in a Shanghai Court of false customs declaration.

“In 1999, the Government passed the Kiwifruit Industry Restructuring Act to restructure the kiwifruit industry and create a monopoly exporter which all New Zealand kiwifruit growers are forced to use to sell their products,” Mr Nicolson said.

“Not all growers have been happy at being forced to use Zespri and after these latest revelations who could blame them?  What grower would want to associate with a company that has been involved in criminal activity?   The unethical actions of one subsidiary has undermined confidence in Zespri with the fallout affecting the whole New Zealand industry.

“The best way to keep a business honest is by allowing customers to vote with their feet and leave if they are unhappy.   But under the 1999 Act, New Zealand growers are unable to export their kiwifruit through anyone else and are stuck with Zespri no matter what they do.

“The New Zealand Kiwifruit Growers Incorporated is instigating an inquiry but  ACT doubts it has a wide enough scope or independence from the industry to be satisfactory.

“ACT believes ‘less is best’ when it comes to government involvement in business and in the lives of citizens.    Therefore we believe the Government should move to amend the Kiwifruit Industry Restructuring Act 1999 to give kiwifruit growers the freedom to export their products to the destinations and customers of their choice,” Mr Nicolson said.

Why ACT Is Different

Imagine what might happen if there was a centre-left coalition.  

They believe we can just pass a law saying all wages have to be paid above a certain amount.  Anyone who was working below that amount would get a pay rise.

They believe we can attain real economic growth by simply printing more money.
Everyone could then buy a new house, car and what not.

They believe the Government can spend millions of dollars on all sorts of wonderful programs, without affecting the private sector negatively, as hey, it’s not like taxes come from it.

Unfortunately that is all fantasy.

But according to other political parties, it seems that there is no reason why you cannot legislate your way to prosperity.   

ACT thinks differently.

We understand that wages are determined by supply and demand.

We understand that minimum wages price some workers - usually the young and inexperienced - out of the market.  The minimum wage diminishes their opportunity for a head start.

We understand that printing money results in inflation - an invisible tax on savings, which is the key to capital formation.  

Not only will printing money fail to stimulate economic growth in the long run, it may also cause recessions and the misallocation of resources in our economy due to the distorted price signals.

We understand that welfare programs, implemented with the best of intentions, can have detrimental outcomes: increased dependence on handouts, high marginal tax rates which remove the incentive to work and the occasional abuse of taxpayers’ dollars.

Furthermore, with the recent crisis in Greece, we understand what happens when the Government goes bankrupt.

Governments cannot spend so carelessly. That’s why ACT advocates for smaller government that operates within a disciplined budget and low taxes, which will not crowd out the private sector and prohibit the creation of wealth.     

If we look at other issues such as the "manufacturing crisis”- other parties were quick to blame the current Government and their so called "hands off" approach - as if the Government has not dug its hands into our economy deep enough.

It appears that not only do they lack understanding in sound economic theory, but some economic facts too.

Out of its 33 members, the OECD (Organisation for Economic Co-operation and Development) rated New Zealand the second most restrictive in terms of Foreign Direct Investment regulations.

Foreign Direct Investment plays a crucial role in our modern economy.  Not only does it contribute to job creation, real income growth and raising our standard of living, but also many other positive externalities such as technology and skilled-labour training.

This is why ACT wants to remove unnecessary regulation and red tape that does nothing except make it harder to do business.

I do not wish to demonise other political parties, because as I mentioned before they do have the good intentions.  Unfortunately, as they say, the road to hell is also paved with them.

One of the main insights of economics is that it demonstrates to men how little they really know about what they imagine they can design.

I believe only ACT's policies, founded on sound economic principals, understands this.

Speech by Peter Jiang to 2013 ACT Annual Conference, The Farm, Kaukapakapa, Saturday, February 23 2013.

ACT - National Agreement Nets Significant Policy Gains for ACT

ACT New Zealand Party President Chris Simmons and ACT MP Hon John Banks today announced the details of ACT’s Confidence and Supply Agreement, highlighting a number of very significant policy ‘wins’ for ACT.

Mr Simmons said the new agreement builds on the two parties’ strong, constructive partnership of the past three years and advances ACT’s core economic and social policy goals. 

“In particular ACT wanted to see controls put in place to prevent excessive Government spending and poor quality regulation, improved choice in education, especially in disadvantaged communities, and reform of other key policy areas that are currently holding New Zealand’s economy back,” Mr Simmons said. 

Hon John Banks said that the policy programme outlined in the agreement was an excellent platform for ACT in Parliament and a strong base from which to continue building the relationship between the two parties.

“It shows that National is willing to make changes in these key economic and social policy areas to ensure our joint aspirations for a more prosperous New Zealand are met,” Mr Banks said.

Key features of the agreement are:

• Continuation of ACT’s focus during the last term on publicly monitoring progress on improving the country’s economy wide performance using international benchmarks, and building on the work of the 2025 Taskforce, with a requirement for Treasury to report annually on the progress being made to improve the quality of institutions and policies, raise productivity, and reduce the income gap with Australia. 

• Continuation of ACT’s work during the last term to reduce the regulatory burden on businesses and individuals through taking the Regulatory Standards Bill through to the new Parliament, with an agreement to pass a mutually agreed Bill based on Treasury’s preferred option (option 5) within 12 months.

• Continuation of ACT’s work during the last term on the Spending Cap (People’s Veto) Bill with an agreement to incorporate a legislated spending cap through a mutually agreed amendment to the Public Finance Act. 
• Reform of the Resource Management Act, including simplifying legislation to ensure there is only one plan (a “unitary” plan) for each district.

• The provision to set up a trial charter school system - under sections 155 (Kura Kaupapa Maori) and 156 (designated character schools) of the Education Act – for disadvantaged communities, specifically in areas such as South Auckland and parts of Christchurch where educational underachievement is most entrenched.  A private sector-chaired implementation group will be established to develop the proposal for implementation in this parliamentary term.

• The establishment of a taskforce to produce a comprehensive report on governance issues relating to state policy towards state, integrated and independent schools. 

• The implementation in this parliamentary term of the Welfare Working Group recommendations 27: Parenting obligations, 28: Support for at-risk families, 30: Income management and budgeting support, and 34: Employment services.

• To introduce competition to ACC’s Work Account.

• To support National’s Post-Election Action Plan.

• The appointment of Hon John Banks to the positions of Minister for Small Business, Minister for Regulatory Reform, Associate Minister of Education and Associate Minister of Commerce. 

Mr Banks said New Zealand is facing very challenging times. 

“This agreement is a significant achievement for ACT, addressing not just economic issues but key social issues as well, in particular those that are currently contributing to our very high rates of unemployed, undereducated and socially marginalised young people. 

“I intend over the next three years to advocate for further advances in these areas as well as in the areas of government spending and regulation, labour market reform, and other policies to reduce the burden on businesses and boost productivity and economic growth.

“I would like to thank former ACT MP and Parliamentary Leader John Boscawen for the lead work he has done over the past week to finalise the terms of the agreement.  His advice and ACT Party experience has been invaluable and stands us in good stead to reinvigorate and strengthen the Party over the next three years.

“ACT looks forward to working with National, and Prime Minister John Key, to put in place policies to strengthen our country and put us on a path to prosperity,” Mr Banks concludes.

Shooting Ourselves in the Wallet

Don Brash, Leader ACT New Zealand
Bureta Park Inn, Tauranga
Monday 21 November 2011

Thank you everybody for welcoming me to sunny Tauranga once again.

Please allow me to thank in particular our Tauranga candidate, Kath McCabe.  Kath is an extraordinary person.  She speaks at least four languages, is a top environmental lawyer, and has been a tireless campaigner for the principles of the ACT Party.

Please also allow me to thank Bob Clarkson, or Bob the Builder as you may know him.  Bob has put his all into supporting ACT’s Tauranga campaign, and I can’t think of a more formidable ally in the Bay.

Bob has been a particularly innovative advocate for housing policy.  In the long term, no party is better than its policy ideas.  Bob has provided us with a forward-looking policy that would allow state house tenants to buy their houses while the state retains title for the land.  In addition to ACT’s policy of freeing up more land for home building across this great country, Bob’s innovation will form a major plank in our push to get more New Zealanders into home ownership at a time when the obstacles to buying a first home are dauntingly large.

Finally, can I thank all of the team here in Tauranga.  I understand ACT is polling at six per cent here.  Let’s hope we can replicate that across the country on Saturday.

My talk today is about the economy.  It’s one of three that I’ll be giving this week as New Zealanders close in on the polls.  This particular one focuses on the Emissions Trading Scheme, one of the most damaging policy choices that New Zealand has made in recent years.

New Zealand’s hyperactive adoption of the world’s only all-sectors-all-gases Emissions Trading Scheme will not save us money on international obligations, because after the Kyoto Protocol expires next year there will not be any such obligations.  It will not affect the global climate because New Zealand’s emissions form an utterly trivial fraction of global emissions.  It will not set an example to the world: if anything it will show the world that trying to lead on climate change policy is counterproductive.  It might improve “Brand New Zealand,” but only at an unacceptable cost. 

First, though, let me set some context.

Each economy speech this week fits into the following background.  New Zealand is stagnating, and in a global environment where countries compete fiercely for people, investment, and jobs, we must run to stand still.

We already start from a serious handicap.  We might be in a relatively good position compared to some of Europe’s basket cases, and our economic policy environment is not too bad if we compare ourselves only to them.

The problem is that we’re not really competing with them for investment and jobs.  We’re competing with our neighbours across the ditch, and you’d have to say things are not going well.

As best it can be estimated, Australians were on average 35 per cent better off than New Zealanders were in 2008, taking into account cost of living differences.  Today, that gap is nearer 40 per cent. 

It’s no accident, then, that Australia attracted nearly 300,000 people net from our shores in the last decade.  It’s no comfort to learn that on current trends we expect them to lure away a further 400,000 in the coming fifteen years.

You can see that we are behind on incomes, we’re losing people, and we face very difficult choices around taxes and spending.  We need to seriously grow the pie, seriously soon.

Success over the coming decades will require making hard choices with our wits about us.  Failure will require only that we carry on along our current path.

If we fail, we should expect to see the income gap with Australia head for 50 per cent and beyond, and New Zealand as we currently conceive it will no longer exist.  Goodbye to the first world country with first world public services, first world jobs, and first world opportunity. 

That is the backdrop against which all policy decisions should be made.  We should ask ourselves, in each case: will this policy choice make the economy more efficient and more productive so that we can close the income gap with the countries we like to compare ourselves to?

It’s actually not a choice.  If we try to choose bigger government over economic efficiency, we will end up with neither as our most productive people leave and those remaining find their golden geese have flown the coop.

With that backdrop in mind, let us consider the arguments for the Emissions Trading Scheme.

The first and most common is that our Kyoto commitments require that we, as a country, pay anyway.  If that were true, then the people who get the most benefit from carbon emissions should pay.

But nobody seriously believes that there will be a binding international agreement after Kyoto expires at the end of next year.  No agreement, no liability.

Nick Smith is on record in Parliament saying he does not believe there will be one.  The British Government has said they don’t believe there will be such an agreement this side of 2020.  The Japanese, Canadians and Australians do not intend to join a new Kyoto agreement.  India and China are not required to make cuts under the current Kyoto Protocol. The United States is not in the current Protocol and certainly won’t be joining a new one as other countries leave the old one.  No agreement, no liability.

So if we do not need an Emissions Trading Scheme to fulfil our current liabilities, what other reasons might there be?

The most obvious is that we want to mitigate climate change.  I’m not going to get into an argument about climate science.  Let us proceed from here using the assumptions of the most shrill believers in anthropogenic climate change.  Let us assume that climate change is a real threat to our way of life, that it is primarily caused by us humans, and that we should be doing everything in our power to stop it.

Even on that assumption it is pointless for New Zealand to have an ETS.  New Zealand produces 0.2 per cent of global emissions.  There is no way that New Zealand could ever expect to have a measureable effect on climate change if we shut down the entire country tomorrow, let alone making the fractional changes that the ETS might achieve.

So it’s not about directly affecting the climate.  We simply cannot do that no matter how hard we try. 

We might believe that it’s about pulling our weight, doing our fair share as good international citizens.  After all, we do like to think of ourselves as good global citizens.

But a “fair share” doesn’t mean “the lion’s share”. Why are we leading the world?

The Ministry for the Environment has a page of examples supposed to show that we’re not alone, but actually shows no other country is going as far or as fast as we are.

The European Union has a highly selective scheme that includes only so-called “major installations” in some industries and is generally riddled with exemptions.

The Japanese and Swiss have voluntary schemes.

The United States never even ratified the Kyoto Protocol and has only a few weak regional trading schemes within its borders.

There are no examples from the entire continents of South America and Asia, or the Subcontinent.

The Ministry has not updated their website to reflect the recent passing of Australia’s Clean Energy Act, but if they did they would show another country with a far less comprehensive scheme than ours.  The Australian scheme rewards rather than punishes farmers.  It does not include private transport as ours does.  And who knows whether it will survive Australia’s next election, when a popular Opposition has “pledged in blood” to repeal it?

Some might still say shame on them.  It is those other recalcitrant countries who have got it wrong while we are on the moral high ground.  The real lesson we will offer the world is that going too far and too fast on climate policy drives industry, jobs and investment away from our shores.

We will drive industry to places with worse environmental standards than ours, hurting our own economy and the environment simultaneously.  It seems unlikely that many countries will be falling over themselves to follow such an example.

Finally, some will argue that we need an ETS to shore up “Brand New Zealand.”  Being aggressive about climate change, the argument goes, will make our exports, including tourism, more attractive to foreigners.

The great difficulty here is that we don’t really know how much foreign customers actually value dealing with a country that has a comprehensive ETS.  Considering they haven’t voted for them in their own countries, we might surmise that the answer is, not much.

The truth is that some customers for some of our products will pay more for the Climate Friendly brand, and others won’t.  A much more sensible way of marketing to climate sensitive customers would be to let our export and tourist industries get on with it.

If an airline or a farmer or a manufacturer wants to pass on the additional cost of carbon offsets to their customers, nothing is stopping them.  Some businesses already do this.  We have many tourist operators who offer low carbon holidays in New Zealand.  Why should the entire economy be implicated in their decision?

There is no good reason for the ETS.  It doesn’t help with our international obligations, because after next year we won’t have any. 

It doesn’t change the global climate, because four million out of seven billion people simply can’t do that. 

It doesn’t show moral leadership, it shows the cost of self-defeating indulgence. 

It might make us popular at international conferences, but at enormous expense to all New Zealanders.

And what exactly is that expense?

The Ministry for the Environment says it will be only $167 for the average household.  That’s less than 50 cents per day.  Who knew that saving the world was so cheap?

It isn’t.

The ETS is effectively a tax on energy, and our economy runs on energy. The tax is collected from electricity, oil and gas companies and therefore goes into their costs.    Those costs go into all transport, all raw materials production, wholesaling, retailing, logistics, financing, etc.  In Australia, they called it “a great big new tax on everything”.

Next year, ETS levies will be collected on about 23 million tonnes of CO2. At $25 per tonne, that’s nearly $600 million.  Politicians trying to sell the scheme will do what politicians trying to sell expensive policies always do.  They’ll claim that some of the cost will fall on business, some on foreign buyers of our exports, and some on the guy down the street.  Basically, on anybody but the voter they’re talking to at the time.

The truth is that all costs eventually fall on workers, consumers, and investors, there aren’t any other types of people in New Zealand who can pay the costs, and all of us are at least one of those, many of us are all three.  The cost, folks, will ultimately fall on your household.

For a household of four, we’d expect the cost to be around $600 per year.  Pensioners on fixed incomes will be particularly vulnerable.

But that’s the good news, by comparison.

The bad news is that the cost is set to double because over the next three years the carbon price will double.

Costs will increase by a third in 2013, another third in 2014 and a further third in 2015. At that point, a household of four will be paying $1200 per annum – $100 each month – for the privilege of having an ETS.

Compare all this with Australia, where their Government has just enacted tax cuts and grants of almost $1800 per household to compensate them for the costs they will incur under the new carbon tax.  Our Government is offering no compensation for the same costs hitting New Zealanders.  And for good reason – the taxpayers simply can’t afford it.

Then the news gets even worse.  What I’ve described so far is what we have before the biological emissions produced by agriculture are brought into the ETS.  Labour threatens to do so by 2013, and National by 2015.

Labour’s “Fiscal Strategy” document claims that it will be taking $218 million per year.  That’s a very large chunk of the net income of farmers.  New Zealand farmers cannot recover these new costs from export markets, so it comes out of their own pockets.  Such a massive imposition by the ETS would lead to a wave of farm foreclosures, especially amongst those younger farmers with high debt levels.  And these are the exporters we rely upon to generate the foreign dollars we need to buy our imports and service our international debts.

We can only hope that Labour’s ETS figures are wildly astray, like so many of their other fiscal calculations.

The Emissions Trading Scheme is not strictly a tax in the sense that the money goes through government coffers.  It is, however, a government imposed cost on workers and consumers that benefits specific groups.

The question is, who gets the money? 

The most obvious and immediate beneficiaries are the foresters who can sell carbon credits for growing trees.  If it was only they who benefit we might say that the following has happened:

New Zealand has chosen to take a $100 per month out of the average household of four in order to plant more trees and perhaps allow forestry companies to make windfall profits out of this new market.

However, once again, it gets worse.  It’s not guaranteed that New Zealand emitters will fulfil their obligations by buying credits off New Zealand foresters.  This is where the real insanity sets in.

It is quite possible, even likely, that emitters will find it cheaper to buy credits from countries with more potential to reduce emissions by adopting better technology.  Ironically, these tend to be developing countries that don’t have much technology at the moment.  Countries like China whose emissions are growing faster than any other countries’, and who are not bound to reduce their emissions even by the current Kyoto agreement.

We can now amend our story: 

New Zealand will soon choose to take $100 per month out of the average family of four and give some of it to foresters and the rest to developing countries that are making little other effort to reduce their emissions.

As I said in the beginning of this speech, New Zealand is currently fighting desperately to remain a first world country for the next generation.

If we are to win this fight, we cannot afford poor policy choices, let alone choices that take large amounts of money out of New Zealand household budgets in order to achieve nothing but a fillip to the forestry industry and the despatch of more money overseas.

In any future government, the ACT Party will make it a priority to stop this madness.  How much power ACT has after this Saturday is up to you, the voter, this week.

However it’s my job to tell you what ACT believes, and what a vote for ACT means.

Our first priority will be to take biological emissions, meaning charges on methane belched from sheep and cows, out of the ETS.  Permanently.  Rather than National’s approach of stalling the inclusion of biological emissions, we would give farmers assured protection from the ETS by having biological emissions out of the legislation altogether.

This would be a major step in bringing our ETS at least into line with Australia’s Clean Energy Act, and would safeguard the viability of many farms in New Zealand.

The inclusion of farmers offends the whole principle of targeting increases in emissions.  Greenhouse gases are increased only when a herd or flock of livestock is being established.  Maintenance of an established farm causes no net change to the composition of the atmosphere. Our farms are not only long-established, our livestock numbers are decreasing, and net biological emissions per unit of output have fallen steadily since 1990.

Excluding livestock emissions would be a major step in bringing our ETS at least into line with Europe and Australia. No other country has even considered taxing food production at a time when the world’s greatest challenge is to feed 9 billion people by 2040. 

Our second priority would be to ensure that the coming price rise in Carbon Units is delayed indefinitely.  The current $600 cost for a household of four is a major impediment for the recovery of our economy.  Doubling it would be a death blow.  ACT will push to keep the carbon obligations frozen where they are now.

Our final priority will be to have the ETS scrapped completely, at least for the time being.  It should be held on ice until the majority of our key trading partners adopt schemes which are equally draconian and impose comparable costs on their citizens.  This is clearly a very long way off.

ACT will push to bring New Zealand back into line with the rest of the world, removing the bureaucracy and cost from our entire economy, and boosting our economic recovery.

Try putting it another way.  ACT has a policy that will put $100 per month into every household, and remove the threat to the viability of farming by 2014.  It’s simple:  Scrap the ETS.