Tax fossil fuel profits to pay for cyclone cleanup, says Green Party’s Julie Anne Genter

Green Party finance spokeswoman Julie Anne Genter wants a tax on excess profits. Photo / Marty Melville

Green Party finance spokeswoman Julie Anne Genter said fossil fuel companies should pay for the cost of climate change-induced storms, like Cyclone Gabrielle.

The Government is still assessing the cost of Cyclone Gabrielle and Prime Minister Chris Hipkins and Finance Minister Grant Robertson have been coy about whether they’ll use an additional tax of some kind to pay for it - saying the Government is looking at revenue tools for the 2023 Budget.

Genter said the Green Party’s existing excess profits tax would hit some fossil fuel companies.

She said it was “a fair way to raise revenue and help us pay for cyclone recovery”.

“Globally we have seen a call for excess profits tax, whether that is windfall or permanent especially on fossil fuel companies because they made record profits in 2022,” Genter said.

“Essentially they’re being financially incentivized to carry on activities that are causing the climate chaos, which governments and the public have to pick up the tab for,” she said.

“It’s morally wrong that our economic system is rewarding the corporations that are causing climate chaos, it is a case of privatising the profit and socialising the losses,” she said.

Genter said energy companies and banks have booked “super profits for a number of years”.

She said the tool should be looked at as a way of raising revenue without putting up taxes on households struggling with the cost of living.

“It’s fair to look at a tool like this that would enable Government to raise more revenue.

“It’s not fair and it’s not necessary that New Zealanders tolerate shareholders getting richer and richer while the public is asked to pay for the cleanup,” Genter said.

“We should be protecting middle and low-income New Zealanders. There’s no need for them to pay more, but there is an opportunity to raise more revenue from the wealthiest and from large corporates who have been making record profits,” she said.

National leader Christopher Luxon said the cleanup should be funded through debt, like the Canterbury Earthquake rebuild.

However, Reserve Bank Governor Adrian Orr warned on Wednesday that funding the rebuild through taxation or reprioritising existing Government spending was necessary in order to avoid creating additional inflation in the economy.

He also did not dismiss research by the Kansas City Federal Reserve economists that excessive profit margins were contributing to inflation as companies used the inflationary environment to fatten margins.

He noted that both the United States and New Zealand were developed economies at similar points in the economic cycle, appearing to suggest that although he had not yet seen the research himself, its findings could very well apply in New Zealand.