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Greens to whack oil companies in bid to boost clean-tech investing

The opposition Green Party has fleshed out a proposal to set up a government-backed investment bank backing 'green capital' projects, which it would fund by hiking tax rates on oil companies by more than half.

Co-leader Russel Norman today announced his party's green investment bank policy, which would look to drive greater investment in the clean-tech sector, at a cost of about $120 million in its first three years of operation. The bank would initially invest the bulk of its capital in priority areas such as carbon reduction and energy and resource efficiency involving firms at a late stage of development.

The Greens, likely to be a junior partner if Labour wins this year's elections, anticipates up to $100 million could be invested within the bank's first year of operation, with investments rising to as much as $1 billion by 2020.

The party would raise the overall tax take on oil companies to 70 percent from 46 percent, something it says will bring New Zealand in line with the international average. The bank would be expected to cover operational costs from investment returns. The bank will have to be financially self-sufficient, achieving a target rate of return at or above the government's bond rate, the paper said.

"Without the right policies, price signals and supportive partner institutions in place, private capital has continued to fund carbon and resource intense investments in New Zealand while starving the emerging clean-tech sector of the capital it needs to take off," the policy document said. "This is not a smart of sustainable way to run our economy for the long-term."

The announcement comes ahead of the National-led administration's sixth budget on Thursday, which will affirm the trajectory towards fiscal surpluses as the nation's economy continues to accelerate.

Norman floated the proposal in an interview with TV3's The Nation programme in March, saying he had been looking at the UK's Green Investment Bank and Australia's Clean Energy Finance Corp as models to help fund the clean-tech sector.

The policy document said an independent working group would be set up to determine the final shape and size of the bank, with the second years devoted to establishing the entity. A government line of credit would be opened in the third year.

The bank would be run on a for-profit basis, seeking private sector partners until a time when clean-tech investments become commercially viable for mainstream investors.

The policy paper also said one of the Green Party's priorities in government will be to establish a fair price carbon to support green investment, without indicating what that price is.


RAW DATA: Green Investment Bank - Green Party policy paper (PDF)1.63 MB

Comments and questions

Yay, we can have our own Solyndra's to throw money at!!

Gee, I wonder who that tax increase will get passed on to?

Does Dr. Norman realise all the steel required for any kind of "green" project will have to be made at an industrial steel plant / foundry - of which requires extensive energy to run - and that energy must be sourced from reliable generation - i.e. thermal / coal-fired power plants?

...and the plastics are all derivatives of petrochemicals / Oil & Gas in one form or another...

So the essential, basic building blocks that build the components of "green-tech" can not be manufactured in NZ, but rather made anywhere else as long as the Greens can't see where - and imported into NZ to be used as component parts for all this "green-tech"?

Yet, Oil & Gas / Petrochemicals and coal-fired power plants can only be sourced outside of NZ?

Sounds like ideological muppet NIMBYism

So we're not allowed to use our current tools to build new ones? I'm sure Norman is well aware of what it takes to produce "Green" solutions, but he most likely also knows you have to work with what you've got.

What next from the Greens! The only thing stopping any business project obtaining finance from a commercial bank is simply because it doesn't make commercial sense. There is no reason for the taxpayer to cover this risk. Cunliffe should come out and state clearly that Labour would not be put over a barrel over such a proposal in their coalition agreement. Unfortunately he won't so voters will not know what they will end up with if Winston picks them as the government.

Well said Dirty Harry.
If these Greentech ideas are so good, a commercial bank would lend on them especially if Mr Mills and co. put their hands in their OWN pockets for part of it. What's stopping them?
Maybe he has read some more about how Germany's going and realised he was horribly wrong to use them as an example a few weeks ago.

Ok, so it's green party policy to put new taxes on petrol to fund KiwiSolyndra.

How much Russel? 10c a litre? $1 a litre? Or is this one of these labour-like brain farts that the details haven't been worked out yet? Or to be more correct, you aren't going to tell us how much until you've been voted in and it's too late?

Ross, hear, hear. If these ideas are so good, why aren't they already being done - no politicians needed. The greens talk about evil crony capitalism, and here they are proposing their own crony capitalist scheme. But they will be giving public money to "their" mates, so that makes it alright. There's a word for that.