Friday, December 16, 2005

Business NZ go back to the 70s

A report commissioned by Business NZ and a host of other industry associations has been slammed by the Greens for damning the carbon tax.
The report states that carbon tax will result in energy input costs increasing between 11% and 35% for the seven companies surveyed. Which is no surprise, it IS a new tax after all.
Business NZ rightfully damns it as making New Zealand less competitive. The Greens, prophets of armageddon, see it as a "thinly disguised attack from big business on one of the few positive moves New Zealand has made toward protecting the planet for future generations". Of course the carbon tax will make not one iota of difference to any global warming, but will boost the coffers of the state - it is a transfer from the private sector to the government - and since the Greens don't like businesses much and like government, it makes sense for them. They are correct about one point though - the carbon tax will increase the incentive on businesses to reduce energy costs, that's economic fact. That is why the Greens support it, it will have a marginal effect on energy demand, because it is fiddling with the price of energy.
However, the Greens neglect to note that businesses have powerful incentives to be efficient now, through the profit motive (which they don't like). The commercial sector is far more ruthless than the state sector, and private individuals. That is why the carbon tax makes a marginal difference.
So why is Business NZ going back to the 70s? It is because it suggests:
“This study indicates that New Zealand should seek some way other than a carbon tax to meet their Kyoto commitments - perhaps by way of assistance to help companies invest in energy efficient technology - instead of purchasing carbon credits on the international market.”
It wants a subsidy - it goes from opposing a new tax (which is fine) to wanting to tax OTHERS more, to pay for energy efficient technology. However, this is happening anyway. Take aviation, where the average jet airliner has improved in fuel efficiency by 1-2% per year, due to improvements in engine technology and the weight of airframes. That is achieved not by government intervention, but by the demand of airlines for lower costs - technology and capitalism working for good.
Business NZ should stop calling for subsidies, it IS a slip back to the 1970s when business in NZ lobbied government for special treatment, protection, tax incentives, subsidies and the like, instead of wanting to be left alone - it is NOT a sign of good business to seek the government to help you out. Governments almost always only help at the cost of others - you should only call in the government when you or your property are under threat of force or fraud - you call them, don't let them call you.

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