Maori Party links ETS support to benefit boost

Maori Party co-leader Pita Sharples. Photo / Martin Sykes

The Maori Party wants to force the Government into increasing benefit payments as part of its deal over the emissions trading scheme.

Maori Party co-leader Pita Sharples yesterday revealed hiking benefits to ease price increases caused by the scheme was part of its negotiations with National.

Dr Sharples said they were discussing "an increase in the benefit just over this period to allow people to cope with the new expenses".

"We're still negotiating that one but we basically got heard that at least there should be a slight increase in the benefit during that period."

That benefit rises are even up for discussion shows the heavy price National is prepared to pay to get its scheme through and avoid having to deal with Labour.

Dr Sharples categorised the discussions about raising benefits as one of the "gains" the Maori Party won to flip-flop and support National's scheme, after initially opposing it and wanting a carbon tax.

The Maori Party is so far only supporting National's scheme to the select committee stage, meaning it can still extract more for its ongoing support.

The deal will give National 63 votes, a majority, to pass its scheme.

Increasing benefits would come at a cost to the Government's books and Dr Sharples' comments caught Social Development Minister Paula Bennett by surprise.

"I don't want to see benefits going up at all," she said.

Dr Sharples did not elaborate on how much he wanted benefits to rise or for what time period.

Prices for consumers will increase because oil companies, electricity generators, industry and producers will have to pay for the tradeable rights to emit the greenhouse gases blamed for global warming.

Climate Change Minister Nick Smith, who is leading negotiations, said through a spokesman that he understood the Maori Party was keen to have further discussions on raising benefits.

Dr Sharples said it decided to support National after being approached by tribal leaders, who have major interests in agriculture, fishing, forestry and farming and will benefit from its more emitter-friendly scheme.

He said another gain was the scheme's halving of the impact of power and petrol prices in its first 2 years.

Prime Minister John Key initially said he was keen for a grand coalition with Labour on the scheme, as an accord with the two major parties would give it ongoing durability and certainty for consumers and business.

But it did not inform Labour of its deal with the Maori Party, leading Phil Goff to accuse them of "bad faith negotiations" and quitting the talks. There was a resulting to-and-fro between Labour and National over who was at fault.

Mr Goff said it could not support the scheme in its current format that will use taxpayer subsidies to limit power and petrol price rises and ease initial costs for polluting industries.

Mr Goff disputed the Government's estimate that taxpayers will have to pay $400 million over the next four years, saying the bill could be up to $1.6 billion depending on the international price of carbon.

He said National was loading the cost of pollution on to the average New Zealand family through taxes rather than on the heavy polluter, which also meant there was less incentive for heavy emitters to reduce pollution.

Labour would change the scheme if elected to government, Mr Goff said, meaning it did not have any durability.

Prime Minister John Key said they had walked a delicate path and the alternative to consumers bearing some of the costs would be industries closing down.