The Climate Change Commission will soon provide final advice to the Government on the steps that need to be taken to build a net-zero carbon future for Aotearoa New Zealand by 2050. Once the Government receives that advice it will publish a plan setting out how it will cut emissions over the next 15 years.

In his Budget 2021 speech, the Minister of Revenue, Grant Robertson, notes that the “draft report of the Commission makes sober and essential reading”.

Because of the timing of Budget 2021, the Government has said it will commit to making further changes in Budgets 2022 and 2023, although the Minister announced today it is his intention that “from Budget 2022 onwards we will hypothecate (or recycle) the revenue generated from the Emissions Trading Scheme into emissions reductions programmes.”

What does Budget 2021 provide:

$300 million to accelerate investment in low-carbon technology
$67.4 million to implement the Carbon Neutral Government Programme, including a significant boost of $19.5 million to the successful State Sector Decarbonisation Fund, and $41.8 million for leasing low-emissions vehicles
$19.7 million to support the Government’s policy response to the Climate Change Commission’s final advice
Commitment to recycle future Emissions Trading Scheme (ETS) revenue to achieve more emissions reductions from Budget 2022
The extension of the Warmer Kiwi Homes programme for another 47,700 homes
The primary sector also receives support through Budget 2021 to tackle on farm emissions. This includes $37 million towards national integrated farm planning system for farmers and growers, $24 million towards agricultural greenhouse gas mitigation research and development and $900,000 to collect vital statistics on agricultural production, such as greenhouse gas emissions.

Primary Sector impacts

BDO Partner Frazer Weir outlines - “The New Zealand primary sector understands the importance of managing climate change for the long-term sustainability of the industry. It is pleasing to see some proactive investment in planning and Research and Development, however further investment is needed given the importance of the sector to the economy”.

Please contact your BDO advisor to know more.