Tuesday, June 3, 2014

Green Naivety: Carbon Tax.


Julie Anne Genter is a New Zealand Green MP, and promoting the NZ Green Party policy this election year of a carbon tax, including on agriculture - dairy, initially, with other livestock to follow presumably. Julie wants to tax our dairy industry from the peak it is on, and the important place it holds for sustaining the standard of living of all of us. I simply copy and paste the below relevant timelines: note I do Twitter quickly, so mine are full of typos.

Some summary points before starting, though. The Green Party says that households will be better off by $326 per annum via a tax cut (tax free threshold on first $2,000 of income). Two points: I can eat and drink that sum in a single meal out with Mrs H: it will do nothing to allay the additional costs of fuel - thus increasing cost of every product freighted - power, and food. But more importantly, the Green's will only be getting this policy through via a coalition with Labour, who are promising higher personal income tax rates: I expect to see personal rates back to at least 39% from $70,000: therefore, guess what will happen ... there'll be a carbon tax PLUS higher income tax for middle and upper income earners. It is guaranteed the majority of households will be worse off.

Also, as I sum up at end of first timeline below, and deal with in second timeline, the Green Party's economic naiveté is, as ever, jaw dropping. First they believe that very specialised dairy capital - such as $1 million rotary, computerised cow sheds - can be put to other uses on the flick of their tax switch: it can't - that capital is destroyed; no one profits through that. Moreover, the current level of dairy farm land (and rising) is producing milk because there is a world-wide market for it. Green's such as Julie believe if you use a tax to make it uneconomic to produce milk, because the tax is designed to increase the cost of production - and I seriously believe Julie thinks this won't increase the 'price' of the food bill in total (it will) -  then 'magically' you can 'more efficiently' grow some other food type - even if that is so, if all this dairy land can produce another food type/s more 'efficiently', that is pointless if there is no market for such crops. The market at this time calls for a supply of milk solids: if the Green Party is to responsibly implement their carbon tax policy, have they identified in their five year Soviet styled plan those other uses this land can be put to with equally profitable markets (or markets, per se), and compensation for those farmers whose dairy capital has been destroyed?

 













































 

Note in that above tweet I obviously mean food y becomes less pricy, ‘relative’ to the now more expensive food x.

 





 

 

Second timeline:

 

Regarding this policy, and the obvious Green Party desire regarding dairy to ‘knock the bugger off’, then responsibly they must issue with that policy advice on the export market/s they have identified which can replace the worldwide demand for diary produce, with that analysis considering the capital that has been invested in dairy and destroyed, and so not available to set up the next ‘more efficient’ - a term which now means nothing - enterprises the Green Party think these dairy farms can be immediately changed to. As I state below:

 




























 

 

The above said, and such as my predilections are as evidenced in this blog, one aspect of our modern factory dairy farms does, too often, horrify  me: animal welfare. I think way too many dairy farms are concentration camps for cows: and any dairy cocky who condones killing their bobbies by bashing them many times in the head with a hammer, too tight to afford a goddamned bullet, can go to hell. You are cruel swine.
 

Otherwise, I’ll close on some very good points made by economist Matt Nolan on the problems with the Green Party’s carbon tax (and noting Matt is generally for taxing externalities); this carbon tax is virtually all pain for New Zealand, while letting our competitor economies leech off our (enforced) sacrifice, and with the minuscule size of our economy, that is a national economic suicide: see On Free-Riders and Externalities

 

 
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