How is the Green’s free power for bludgers policy going to fit inside the Labour/Green fiscal envelope?

Just a few months ago the Greens and Labour pledged to be fiscally responsible.

The Labour and Green parties are promising to be fiscally responsible if they win the Treasury benches at the September general election and will set up a body independent of government to make sure they stick to their rules.

The opposition bloc have a memorandum of understanding to try to topple the National-led government, which has been in power since late 2008, and today released a set of budget responsibility rules to shore up their fiscal and economic credentials. At the top of the list is maintaining operating surpluses, which they anticipate being able to deliver “every year unless there is a significant natural event or a major economic shock or crisis”. Those surpluses will be in place once the parties’ policy objectives are met and won’t be delivered by underfunding public services.  

The rules also target reducing net debt to 20 percent of gross domestic product, something the existing administration is trying to achieve, and will prioritise long-term investments including restarting contributions to the New Zealand Superannuation Fund, building infrastructure to cater to the expanding population, and mitigating the impact of climate change. They also plan to keep government spending at about 30 percent of GDP, and will set up a working group of independent experts to advise on how to establish a progressive tax system to rebalance the economy and put it on an environmentally and economically sustainable footing.

All great stuff. However they have run into a little problem. National has just committed to spending $2 billion on pay increases for care workers…and now the Greens have announced a free power for bludgers policy.

More than half a million houses will have their winter power bills partially paid for under a new Green Party policy to slash bills by up to $300 a year.

The “Winter Warm Up” payments were one part of a new Green Party power policy, unveiled today. The party has also set a goal for 100 per cent renewable energy by 2030, and new rules to encourage competition and transparency within the electricity industry.

Released by co-leader James Shaw and the party’s energy spokesman Gareth Hughes, the policy would commit $112 million for bill subsidies and require New Zealand’s 29 lines companies to consider joint ventures and mergers.

“It is unacceptable that so many Kiwi families are getting sick because they can’t afford to switch the heater on,” Hughes said.

The subsidy would cover 75 per cent of the average winter cost increase, and would vary region to region. Households in Christchurch could expect to receive $328 per year, to pay for power, while a household in the warmer Auckland climate could receive a total winter payment of $206.91.

The Greens first campaigned to better insulate these houses, and now that has been done by the National government they are moaning that the houses are cold?

They also have massive plans for more renewable energy…which is the most expensive energy possible.

But the real problem is how the Greens can even deliver this policy and how will it fit in under their fiscal responsibility plan.

 

-NBR, Fairfax

 


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