Friday, April 26, 2024

BLOG: Government gets its gas tax right

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It’s been a long time coming but agriculture will join the rest of the productive sector in paying for its greenhouse gas emissions. Last week the Government and farming leaders announced an interim processor tax will be introduced until 2025 when farm-specific taxes and rebates will be implemented.
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The industry is on board with the farm-level monitoring but is balking at the processor tax. It’s come up with its own plan to address the emissions problem but indications are the Government won’t take up that plan. Of course, the Government’s plan has been condemned by both sides. Greenpeace called it laughable and some in the farming sector say it’s too onerous. That suggests it’s probably hit the right note overall.

It’s important agriculture addresses the cloud over the farm. While New Zealand’s emissions profile is skewed by our abundance of renewable power generation the optics  – at a glance – don’t look good for farming. And the level of scrutiny is only going to increase. Just last week the European Union appointed a new leader who campaigned on, among other things, introducing a carbon border tax that would add cost to those wanting to sell products into that bloc.

Of course it’s not all optics. We’re beginning to see the effects of the changing climate now and keeping that change as negligible as possible is vital to preserving our farming legacy. But it needs to be practicable. It’s no good to anyone if we reach a destination having left half an industry broken down at the side of the road while getting there.

For instance, farming has a 95% discount on its emissions now but will that survive the next election or the one after that? What happens if the price of carbon skyrockets? There’s a lot to keep think about but there are opportunities here as well. Every farmer should be working out how they can get a rebate or at least minimise their loss come 2025. All farmers need is a framework that is fair and transparent. This is not a bad start.

Bryan Gibson

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