Wednesday, July 4, 2012

When is a job loss a Bad Thing?

The government has announced it's decision to push out both the dates and levels at which New Zealand will face higher carbon costs under the country’s emissions trading scheme. 
Heaven forbid we (as in New Zealand farmers) should have to make any sacrifices to bring the planet's inexorably rising CO2 levels under control. Indeed, with the government building motorways like it's 1959, the average person might never know we had a problem with fossil fuel by-products.
An item on Morning Report explained the government's position. According to Climate Change Minister and former trade negotiator Tim Groser, "Not one country in the world has put a carbon price on biological emissions and we are not going to be the first to do this until we see broader progress internationally." Those who remember New Zealand trade negotiators' insistence that New Zealand had to lead the world in setting up free trade agreements and dismantling protection for local industries will find this reluctance to be a good global citizen puzzling.
Even more puzzling was the PM's response. We can't have a fully functional ETS because we, um, might lose jobs: "Ultimately, if more pressure is put on businesses and those businesses close as a result of these policies then New Zealanders lose their jobs and we're not prepared to sacrifice jobs in a weak international environment when other countries are moving very slowly. I think  that New Zealand's doing it's bit, um, but we've never said we want to lead the world in this space and we certainly don't."
Let's get the easy stuff out of the way first. New Zealand is not "doing it's bit". On the contrary, it is a regular recipient of the Fossil of the Day award at climate change talks.
But what about the concern for jobs? Well, you wouldn't know it from the last week. 85 jobs have been lost in Auckland's Norman Ellison Carpets; 70 at Flotech in Manukau, and 100 at Summit Wool Spinners in Oamaru. Then there's the 174 meatworks jobs and the 17 furniture manufacturing jobs in the small Tauranga suburb of Greerton.
This is almost 300 jobs vanished in the space of a couple of weeks, in the case of Flotech and Norman Ellison, largely due to the high exchange rate. Why is it OK for these jobs to go, but not have any be lost as a result of imposing a charge on carbon? Are jobs lost because of the high exchange rate somehow different? 
Questioned about the exchange rate in parliament, the PM was like, meh, what can ya do, and came out with a bunch of economically illiterate spiel about keeping government spending down to keep the exchange rate down. The only reason current policy settings will force the exchange rate down is because running the economy into the ground will mean all those Japanese housewives finally see the writing on the wall and sell their NZ dollars. That won't make all those industries come back, though. It will just make us even more competitive with the Philippines as a place for rich Australians to set up call centres.