Hard hitting analysis from Fran O'Sullivan today. It squares fully with our own anlysis.
Finance Minister Michael Cullen now has all the ammunition he needs to force an urgent rethink on New Zealand's controversial suite of climate change policies before the economy suffers serious damage.
Cullen doesn't say so in public. But it's well known he has growing concerns over the zealous approach his Cabinet colleague, David Parker, continues to take to climate change in the face of obvious policy defects.
New Zealand is already heading towards economic recession. Increasing power and fuel prices further to curb the country's growing greenhouse gas emissions issue - while farmers make the problem bigger by continuing to expand agriculture emissions - is sheer madness.
Households, already suffering from rising mortgage costs, fuel and food bills, will not vote for a government planning to increase their financial pain next year by introducing a scheme which will impact on their budgets, while farmers escape their share of the cost burden until 2013.
Parker professes not to be worried. But my pick is that Cullen will be concerned at the raft of reports by respected forecasters like Infometrics and the Institute of Economic Research that say the emissions trading scheme will have a major economic impact: 22,000 jobs gone by 2012, wages down by $2.30 an hour by 2025 and a cost to households of $600 a year by 2012, rising to some $3000-$5000 a year by 2025, depending on the international carbon price.
