10. JOHN BOSCAWEN (ACT) Link to this
to the Prime Minister
How much of the $3 per week he referred to as the average cost for households of the emissions trading scheme on Television One Breakfast on 24 and 31 May relates to electricity and petrol price rises, and how much relates to the flow-on effect of these costs into the price of all other goods and services that households consume?
Hon JOHN KEY (Prime Minister) Link to this
The cost of the emissions trading scheme for the average household is estimated to be $165 per year, or $3.17 a week, to be exact. I point out that that cost is half what it would have been under Labour’s emissions trading scheme. I have been advised that of the $165, $117 relates to electricity, petrol, and other energy price rises, and $48 relates to the pass-through of costs. This means that on the weekly measurement the member is using, of the $3.17-per-week cost, $2.25 relates to the increases in the price of energy, petrol, and electricity, and the remaining 92c relates to the flow-on.
Why does the Prime Minister reject the Reserve Bank analysis of the costs of the emissions trading scheme, especially when it told the Finance and Expenditure Committee on 11 March this year that although the direct impact of electricity and petrol price rises is 0.2 percent, there is an estimated additional indirect impact of 0.15 percent, giving a total impact of 0.35 percent—that is, 75 percent more than the direct impact—which means that the full impact is more than $5 per week, not the $3 he and the Minister for Climate Change Issues are promoting?
The member is incorrect. I quote from the Reserve Bank as supplied directly to me this afternoon: “the implementation of the ETS should not affect medium-term inflation … we expect to be able to look through this inflation boost.”
Will the advertising campaign that the Government is planning highlight the $3-per-week figure or the full cost of the emissions trading scheme as calculated by the Reserve Bank?
The full cost is $3.17 per week, as per the best estimates we have. I refer the member to the Reserve Bank, which said that there will be no impact on prices as a result of the emissions trading scheme shock. If the member does not want to accept that cost, he needs to go and challenge the Reserve Bank, but I have it here in writing, and the member should stop making it up.
I seek leave to table my own email from Mike Hannah, head of communications and board secretary of the Reserve Bank, sent to me this afternoon, which confirms the evidence given by the Reserve Bank on 11 March, when it said that the total impact would be 75 percent more than the direct cost the Prime Minister refers to.
Mr SPEAKER
Hon Darren Hughes Link to this
I raise a point of order, Mr Speaker. I am pretty sure that I heard the Prime Minister say at the end of his answer that the member who had asked him a question was “making it up”. For a Prime Minister to accuse one of his own parliamentary colleagues of making something up cannot be parliamentary.
We all make comments in this place that are possibly not the best, but I do not think the member was overly offended. I think the House should leave it at that.
I seek leave to table a letter from Mercury Energy to Scott Paterson of Balmoral, Auckland, advising of the increase in the retail price of electricity from 1 July this year on account of the Government-imposed emissions trading scheme and the extra costs it will impose.