Goff: Key tax claim dishonest

Labour Party leader Phil Goff. Photo / Dean Purcell

Opposition leader Phil Goff called Prime Minister John Key dishonest after he suggested Labour's plan to slap farmers with a carbon charge early to fund research and development tax breaks would drive up dairy prices.

Mr Key warned that Labour's plan was flawed, unrealistic and would damage the farming sector.

He savaged Labour's election promise to force farmers into the ETS in 2013, two years early, and use the $800 million raised to fund five years of tax breaks on R&D.

He also repeated his warning that another Labour policy - lifting the minimum wage to $15 an hour - could force about 6000 New Zealanders out of work.

Mr Key said the only impact of the ETS plan "will be to make our biggest exporter uncompetitive on a world scale and ultimately make New Zealanders pay more for milk, butter, cheese, meat and all the staples of a NZ diet".

However, Mr Goff said that was "a dishonest comment".

Yesterday, Mr Goff met Fonterra chief Andrew Ferrier, who told him the introduction of the ETS would not affect domestic prices for milk and other dairy goods. That was a view supported by the executive director of the Sustainability Council, Simon Terry.

Mr Key said National would bring agriculture fully into the ETS if other countries did the same. Adam Bennett