New research supports Greens’ climate tax switch

New research shows that taking strong action to reduce climate pollution could boost New Zealand's economic growth and allow for tax breaks for ordinary New Zealanders, the Green Party said today.

New research by University of Auckland economists shows introducing a carbon tax, and raising the carbon price to $75 a tonne, could reduce emissions by 14.2 percent, and increase GDP by 2.2 percent per year – raising enough tax revenue to allow for a 2.5 percent cut in GST.

“Our plan is to introduce a comprehensive carbon tax and then recycle the revenue back to families and businesses through a tax-free income band and a cut in the company tax rate. A politically neutral Climate Commission would recommend the carbon price, which would determine how much was available for redistribution.

“This research is yet more evidence that we need much stronger action from this Government on climate change. Not just because it’s the right thing to do, but because it means a stronger, cleaner economy, with better jobs.

“The Government continues to protect polluting businesses, delaying the shift to a cleaner economy, by capping pollution charges at an artificially low price of $25 per tonne of emissions.

“This research shows National is letting polluters off too lightly, and that New Zealand risks missing out on the benefits of growing a much cleaner economy, and better jobs in the long term.

“By introducing a carbon tax cut, we can not only reduce pollution but support growth in the clean economy, in clean energy jobs and better public transport," said Mr Shaw.

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