US President Donald Trump is a dab hand at telling Americans down is up, war is peace and tariffs are not a tax.
It looks like our PM has gone to him for lessons.
In Parliament on Tuesday, Labour leader Chris Hipkins asked Christopher Luxon if he stood by the promise he made to New Zealanders before the election that no new taxes would be introduced by a Government he leads;
… if so, how is introducing a new gas tax that every New Zealand household will pay consistent with that promise?
This followed the announcement by Energy Minister Simon Watts that the Government will contract to build a liquefied natural gas (LNG) import facility “in a critical step to strengthen New Zealand’s energy security and support economic growth”.
The press statement made no mention of a levy.
But an accompanying fact sheet said the cost of the infrastructure, which will be incurred every year, regardless of whether New Zealand uses the facility or not, will be paid for via a levy on electricity.
The levy for the infrastructure is paying for the insurance that LNG provides. It is therefore appropriate that the electricity system bears this cost.
An indicative estimate of the levy on electricity to pay for the LNG facility is between $2 and $4/MWh.
The expected price reduction in forward prices is at least $10/MWh.
Given that the electricity prices businesses and consumers face are driven by forward prices, this provides a savings-to-cost ratio of between 2.4 & 4.9
The Cambridge Dictionary says a levy is an amount of money, such as a tax, that you have to pay to a government or organization.
We therefore looked forward to Luxon reconciling the gas tax with his promise that no new taxes would be introduced by a Government he leads.
His answer:
Well, that’s not what we’re doing. We’re opening up an LNG importation facility so that we can lower power bills. If the member doesn’t support that, he’s supporting higher power bills.
He dipped further into the Trump Guide to Bald-faced Denials With a Straight Face in response to the next questions:
Rt Hon Chris Hipkins: Does he agree with Nicola Willis: “If it looks like a tax, if it quacks like a tax, it’s a tax.”?
Rt Hon CHRISTOPHER LUXON: Well, it’s a charge that electricity companies will pay so that consumers pay lower power bills—it’s that simple. It’s as simple as that.
Rt Hon Chris Hipkins: Is it a tax, a levy, a fee, a charge; regardless of what he calls it, is it an extra cost every New Zealand household will pay every time they pay their power bill?
Rt Hon CHRISTOPHER LUXON: In answer to the first part of the question, absolutely not, because it will lead to lower power bills, not higher power bills. That’s why we’re doing it. But with respect to the definition and the semantics of different words, maybe it’s just a rhetorical flourish—a bit like whether they’re going to work with Te Pāti Māori or not.
Your PoO team looked forward to Luxon giving a clear explanation in response to a subsequent question.
Rt Hon Chris Hipkins: How does introducing a new gas tax that every New Zealand household will pay every time they flick on a light switch help them with the cost of living?
Alas, Luxon favoured vituperation over enlightenment.
Rt Hon CHRISTOPHER LUXON: What a load of rubbish, and the member clearly is not understanding what this proposal is actually about. This is about creating an LNG importation option so that we can lower the dry-year risk and, in turn, lower electricity prices. An LNG facility will lead to lower power bills.
Luxon unhelpfully offered to help Luxon with the definition of a tax.
What is a tax? Is it a capital gains tax, a wealth tax, a death tax, a trust tax, increasing income and corporate tax—all tax policies that that member hasn’t ruled out, that will hurt New Zealanders for sure.
That triggered a riposte from Hipkins:
Does he agree, then, with the Cambridge English Dictionary when it says that the definition of a levy is “an amount of money, such as a tax, that you have to pay a government or an organization”?
The bizarre response from Luxon was:
It’s somewhat semantic. I just say to the member that what we’re doing is lowering power bills.
Luxon was more informative when Cabinet colleague Chris Bishop asked if could confirm that putting in place an LNG facility was an insurance policy, and the modelling “suggests” power bills will be lowered as a result.
Rt Hon CHRISTOPHER LUXON: What I can confirm is the advice we have received is that it will lower power bills for every household by about $50 a year, it will create value to the economy of about $1.2 billion, and it will protect 2,000 jobs.
PoO wonders if Luxon got around to learning about levies over the next 24 hours.
Next day at question time, the issue was revisited.
Rt Hon Chris Hipkins: Why should New Zealanders believe that paying a new gas tax to pay for a new gas power plant that might never produce a single megawatt of electricity will ever lower their power bills?
This time the PM did not bridle at the mention of a “gas tax”.
Rt Hon CHRISTOPHER LUXON: Well, as we discussed yesterday, we’re going to save average households about $50, according to the projections. We’re making an investment in a LNG import facility so we can lower power bills. If the member doesn’t support it, he wants higher power bills.
Rt Hon Chris Hipkins: Why should New Zealanders have faith in his claim that his new gas tax will lower the cost of their power bills when the official advice his own Cabinet was presented with questioned whether any savings will ever be passed on to consumers?
Rt Hon CHRISTOPHER LUXON: I disagree. That’s not what the advice said.
A bit later, it should be noted, the “levy” became a “charge”:
Rt Hon Chris Hipkins: Does he agree with his Energy Minister’s own Cabinet Paper, which states that the liquefied natural gas facility will be paid for via a levy on electricity?
Rt Hon CHRISTOPHER LUXON: There’s a charge charged to electricity companies as we discussed yesterday, but the great thing is there’s a saving to power bills for every single consumer in this country.
And then the PM suffered a relapse and reverted to the previous day’s denial position.
Rt Hon Chris Hipkins: Is it a tax, a levy, a fee, or a charge?
Rt Hon CHRISTOPHER LUXON: What it is is lower power bills for New Zealanders.
Rt Hon Chris Hipkins: Will he guarantee, therefore, that the increased cost on electricity that his Government is imposing will not be passed on to consumers?
Rt Hon CHRISTOPHER LUXON: Well, there won’t be a higher cost.
Among other things we wonder about, here at PoO, is whether we can ignore the levy, charge, tax, fee or whatever it should be called if ever it might be added to our power bills.
If the PM says that’s not what it is, then maybe we don’t have to pay it.
Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.
… if so, how is introducing a new gas tax that every New Zealand household will pay consistent with that promise?
This followed the announcement by Energy Minister Simon Watts that the Government will contract to build a liquefied natural gas (LNG) import facility “in a critical step to strengthen New Zealand’s energy security and support economic growth”.
The press statement made no mention of a levy.
But an accompanying fact sheet said the cost of the infrastructure, which will be incurred every year, regardless of whether New Zealand uses the facility or not, will be paid for via a levy on electricity.
The levy for the infrastructure is paying for the insurance that LNG provides. It is therefore appropriate that the electricity system bears this cost.
An indicative estimate of the levy on electricity to pay for the LNG facility is between $2 and $4/MWh.
The expected price reduction in forward prices is at least $10/MWh.
Given that the electricity prices businesses and consumers face are driven by forward prices, this provides a savings-to-cost ratio of between 2.4 & 4.9
The Cambridge Dictionary says a levy is an amount of money, such as a tax, that you have to pay to a government or organization.
We therefore looked forward to Luxon reconciling the gas tax with his promise that no new taxes would be introduced by a Government he leads.
His answer:
Well, that’s not what we’re doing. We’re opening up an LNG importation facility so that we can lower power bills. If the member doesn’t support that, he’s supporting higher power bills.
He dipped further into the Trump Guide to Bald-faced Denials With a Straight Face in response to the next questions:
Rt Hon Chris Hipkins: Does he agree with Nicola Willis: “If it looks like a tax, if it quacks like a tax, it’s a tax.”?
Rt Hon CHRISTOPHER LUXON: Well, it’s a charge that electricity companies will pay so that consumers pay lower power bills—it’s that simple. It’s as simple as that.
Rt Hon Chris Hipkins: Is it a tax, a levy, a fee, a charge; regardless of what he calls it, is it an extra cost every New Zealand household will pay every time they pay their power bill?
Rt Hon CHRISTOPHER LUXON: In answer to the first part of the question, absolutely not, because it will lead to lower power bills, not higher power bills. That’s why we’re doing it. But with respect to the definition and the semantics of different words, maybe it’s just a rhetorical flourish—a bit like whether they’re going to work with Te Pāti Māori or not.
Your PoO team looked forward to Luxon giving a clear explanation in response to a subsequent question.
Rt Hon Chris Hipkins: How does introducing a new gas tax that every New Zealand household will pay every time they flick on a light switch help them with the cost of living?
Alas, Luxon favoured vituperation over enlightenment.
Rt Hon CHRISTOPHER LUXON: What a load of rubbish, and the member clearly is not understanding what this proposal is actually about. This is about creating an LNG importation option so that we can lower the dry-year risk and, in turn, lower electricity prices. An LNG facility will lead to lower power bills.
Luxon unhelpfully offered to help Luxon with the definition of a tax.
What is a tax? Is it a capital gains tax, a wealth tax, a death tax, a trust tax, increasing income and corporate tax—all tax policies that that member hasn’t ruled out, that will hurt New Zealanders for sure.
That triggered a riposte from Hipkins:
Does he agree, then, with the Cambridge English Dictionary when it says that the definition of a levy is “an amount of money, such as a tax, that you have to pay a government or an organization”?
The bizarre response from Luxon was:
It’s somewhat semantic. I just say to the member that what we’re doing is lowering power bills.
Luxon was more informative when Cabinet colleague Chris Bishop asked if could confirm that putting in place an LNG facility was an insurance policy, and the modelling “suggests” power bills will be lowered as a result.
Rt Hon CHRISTOPHER LUXON: What I can confirm is the advice we have received is that it will lower power bills for every household by about $50 a year, it will create value to the economy of about $1.2 billion, and it will protect 2,000 jobs.
PoO wonders if Luxon got around to learning about levies over the next 24 hours.
Next day at question time, the issue was revisited.
Rt Hon Chris Hipkins: Why should New Zealanders believe that paying a new gas tax to pay for a new gas power plant that might never produce a single megawatt of electricity will ever lower their power bills?
This time the PM did not bridle at the mention of a “gas tax”.
Rt Hon CHRISTOPHER LUXON: Well, as we discussed yesterday, we’re going to save average households about $50, according to the projections. We’re making an investment in a LNG import facility so we can lower power bills. If the member doesn’t support it, he wants higher power bills.
Rt Hon Chris Hipkins: Why should New Zealanders have faith in his claim that his new gas tax will lower the cost of their power bills when the official advice his own Cabinet was presented with questioned whether any savings will ever be passed on to consumers?
Rt Hon CHRISTOPHER LUXON: I disagree. That’s not what the advice said.
A bit later, it should be noted, the “levy” became a “charge”:
Rt Hon Chris Hipkins: Does he agree with his Energy Minister’s own Cabinet Paper, which states that the liquefied natural gas facility will be paid for via a levy on electricity?
Rt Hon CHRISTOPHER LUXON: There’s a charge charged to electricity companies as we discussed yesterday, but the great thing is there’s a saving to power bills for every single consumer in this country.
And then the PM suffered a relapse and reverted to the previous day’s denial position.
Rt Hon Chris Hipkins: Is it a tax, a levy, a fee, or a charge?
Rt Hon CHRISTOPHER LUXON: What it is is lower power bills for New Zealanders.
Rt Hon Chris Hipkins: Will he guarantee, therefore, that the increased cost on electricity that his Government is imposing will not be passed on to consumers?
Rt Hon CHRISTOPHER LUXON: Well, there won’t be a higher cost.
Among other things we wonder about, here at PoO, is whether we can ignore the levy, charge, tax, fee or whatever it should be called if ever it might be added to our power bills.
If the PM says that’s not what it is, then maybe we don’t have to pay it.
Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.
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