05 May 2005

Yesterday the Governemnt gave further detail on its carbon tax policy that it will be introducing in New Zealand from April 2007.

The carbon tax will be set at $15 per tonne, which will add around $4 per week on the typical household bill. The government has used the following costs as an example of the type of financial impact the carbon tax will have:

• One cent to the cost of a unit of electricity;
• 4 cents to a litre of petrol;
• 46 cents to a 9kg bottle of LPG;
• 68 cents to a 20kg bag of coal.

The Government has stated that the carbon tax will not lead to an increase in Government revenue. The net proceeds from the tax will be used elsewhere, so does this mean carbon tax revenue will be tagged and not put into the general surplus? The Government plans to announce the logisitics of carbon tax usage as part of the business tax package in the budget.

HAVE YOUR SAY Additionally the Government has also released a consultation paper on how the carbon tax will apply to specific industries that are directly affected. Click to view the paper Implementing the Carbon Tax

The closing date for submissions is 8th July 2005