TL;DR: The Climate Commission has delivered another funding blow to the National-ACT-NZ First coalition Government’s tax-cutting plans, potentially carving $1.4 billion off the ‘climate dividends’ being used to pay for nearly $14.8 billion of tax cuts over four years.
Adding to the $2.9 billion missing because National is not bringing in a foreign buyers’ tax and the extra $800 million cost of the reversal of interest deductibility for landlords, the Commission’s advice yesterday the Government needed to cut Emission Trading Scheme carbon unit sales by 20 million over four years represents $1.4 billion in missing revenue at current carbon unit prices of about $70.
The pressure is mounting on the Government as it finalises its Budget Policy Statement due on March 27 and the details of its May 30 Budget, where it will have to say how much it is tightening fiscal policy, the scale of its spending cuts and the details of its income tax cuts.
Elsewhere in news in Aotearoa-NZ’s political economy at 6.30 am:
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