by Steve McKinlay
13 September 2005, Wellington
«A leader must have a vision.»
Don Brash, Leaders Debate (sometime last week)
Never mind if that vision is an apparition, youíd think the vision that Don Brash had was one of Virgin Mary Mother of God indicating that oil will return to $35 a barrel.
We want everyone to think very carefully about this. The Brash/Key decision to cut petrol tax is nothing more, nothing less than a blatant cynical election bribe. Lets examine why.
The argument is that the cut is a temporary subsidy while petrol prices are high. Sure enough itís only been promised for 6 months. However current petrol prices are not temporarily high. In fact this is the beginning of a future where fossil fuel prices will only trend in one direction, up! The end of cheap oil is here; as all time global oil production maximises and demand continues to soar the scarcity factor in oil will only push the price higher. Unless significant (several billion barrel +) oil fields are found, or demand significantly reduces no long-term downward trend in oil prices will be seen. Get used to it.
We have always argued that as the price of oil moves higher and as shortages begin to manifest lobby groups (such as motorist lobby groups, farming groups, etc.) will complain vehemently for subsidies. Well, lo behold, the National party are the first pack of soft-bellied politicians to cave into subsidy demands. Removing tax from petrol places the tax burden on all tax payers, including those like me (who rides a Vespa to cut my petrol costs) and even more so, on those who use public transport, donít have a car, ride bikes, walk etc. Be angry, you are now subsidising the plonkers who drive Ford Explorers and Toyota Pradoís ó that really irritates us.
The GST argument. John Key like the pot-licking economist he is argues that the extra GST collected by Government in higher fuel costs justifies the tax cut. This is a nonsense. Imagine you have a fixed 200 dollars of disposable income every week (hopefully you have more, but lets keep the figure simple) You have to share this cash round, so if you save a bit there, you might have a bit more to spend on Courtenay place on a Friday night. If you spend all this money the GST component is about $23. You will only NOT pay GST if you donít spend the money. There is absolutely no evidence whatsoever that higher fuel costs result in higher GST collected by Government. You simply have less (GST generating) money to spend on other stuff.
Higher fuel costs at this time are a clear signal to the market (and the individual) that alternatives are worth investigating. By reducing tax on fuel you are signalling back to Wanktank V8 drivers that itís ok to continue burning petrol with utter disregard for the situation we will shortly find ourselves in. There is no incentive for people to get rid of their global warmers in exchange for something more sensible (and fun) (like a Vespa), or indeed public transport. Thus we are exacerbating the problem; we are developing a false sense of security in the clueless herd. When really high petrol prices come ($3 a litre) what do you do then?
We need any extra tax collected to begin to build infrastructure that does not depend directly upon fossil fuels. National (United no Future and ACT, but they are now irrelevant) are sadly totally delusional about the future of energy. Our exurbian and happy motoring freeway lifestyles are reflections of a century of prosperity predicated upon cheap accessible oil. That time is over. Instead of trying to recapture the glory days we need to get realistic and begin building a future that is not oil dependant. We need to begin doing this now.
If you are clever, if you have any wetware between the ears youíll see Nationalís ploy for what it is. You will realise that reducing the petrol tax is not only pointless but counter-productive in dealing with the end of cheap oil.
If any of these issues concern you, you must vote for a party that clearly acknowledges the very serious social, economic and political issues related to energy in particular the coming Peak Oil crisis. A vote for anything else is merely a delusional wish based on the unsound assumption that the golden age of happy motoring will never end.
Steve McKinlay for
13 September 2005
More information about global peak oil and resource depletion can be found at http://ontic.blogspot.com.