Carbon tax - Labour's broken promise

In September this year Labour went into the election campaign with a Carbon tax as a central part of its Energy policy.

Increase support for renewable fuel and electricity, and by encourage electricity generators to pursue environmentally sustainable electricity generation in preference to environmentally harmful generation (for example through the carbon tax).
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Increase support for renewable fuel and electricity, and by encourage electricity generators to pursue environmentally sustainable electricity generation in preference to environmentally harmful generation (for example through the carbon tax).

Today the Government announced it is scrapping its own policy to introduce a carbon tax in 2007 in favour of some vague commitments to look at other ways to meet New Zealand's obligations under the Kyoto protocol. By denying that parliamentary numbers were a factor in the u-turn, new Energy Minister David Parker is saying Labour have changed their mind in the three months since the last election - thereby making it a simple broken promise.

No Right Turn already has some excellent analysis of why the carbon tax is needed, and explains why the lack of a carbon tax could actually end up costing New Zealand more money as we will have to buy more carbon credits to cover the 13 million tonnes of carbon reductions the tax was expected to save.

So for now I will concentrate on a few political aspects of this decision I find alarming.

The timing of this announcement is very interesting. It is also extremely cynical.

It will be no accident Labour chose today to also announce the welcome but underweight increase in the minimum wage. No doubt it hopes the attention of Labour supporters will be on the minimum wage increase in tomorrows papers, and not the broken electoral promise to introduce the carbon tax (especially those who voted Labour who might have voted Green).

On the other hand, Labour will hope business groups will welcome Labour adopting another right wing policy and will not get too snarky about having to pay their lowest paid employees a little more to feed their families (business groups are still complaining, only proving the spirit of Ebenezer Scrooge is alive and well this Christmas). Christmas week is also a handy sideshow for Labour.

David Parker says the decision to axe the tax was made independently of coalition partners NZ First and United Future. Given the short time frame since the election, this claim appears to be of questionable credibility. Under Labour's unusual support arrangements cabinet collective responsibility is only meant to apply to their cabinet portfolios. Do you think Peter Dunne as Minister of Revenue (as aspects of the carbon tax would clearly fall within his portfolio) would have been happy defending the Government's position on the carbon tax? I think not. Was a little quiet deal done at the time of the coalition negotiations? I think likely. It is about time Labour came clean and told the electorate what other policies it has sold out to its new right wing friends.

Interestingly, the Energy policy I quoted from above is dated 5th of October 2005, at least according to Labour's website.