Infometrics Brad Olsen says higher fuels prices throttle economic activity. New future regional taxes may have the same impact that rising crude prices are already having. Crude prices may fall, but taxes never do

Infometrics Brad Olsen says higher fuels prices throttle economic activity. New future regional taxes may have the same impact that rising crude prices are already having. Crude prices may fall, but taxes never do

This article was originally posted at Infometrics and is reposted with permission. The original article is here.


By Brad Olsen*

Motorists have been incensed this week, with the price of 91 octane petrol heading over $2.30/l in some parts of the country. Increased fuel prices aren’t yet at the highest (real) levels we’ve ever seen – but they’re close. Based on the unrest in the Middle East, fuel prices might remain elevated for some time. This will hurt more than just the classic Sunday drive, with airfares, freight costs, and eventually goods prices also needing to increase to cover higher fuel bills.

Fuel prices – the story that won’t die

Fuel prices have attracted plenty of media attention over the last couple of months, after the government announced it would look to increase national fuel levies by 3-4c/l each year for the next three years. On top of this, Auckland Council is currently consulting on a regional fuel tax of 11.5c/l as part of its Long Term Plan process – a topic we’ve previously covered.

Already suspicious of price spreading by fuel companies, motorists and politicians did not react favourably at a leaked email from BP outlining its pricing strategies in the lower North Island, raising prices in the hope its competitors would respond.

This week the story was about the highest price on record, with parts of Christchurch and Wellington seeing prices jump above $2.30/l. This price was the highest, in nominal terms, ever seen at the pumps, beating the $2.27/l recorded in mid-2013. However, adjusted for inflation, the 2013 price is equivalent to around $2.47/l in today’s dollars. Inflation-adjusted prices were even higher in 1984/85 and September 2008.

Source: Infometrics, MBIE, Statistics New Zealand

There’s good reason for all the news coverage: fuel costs have a large bearing not only on consumer confidence and household spending, but also hit transport costs and push up prices for goods. But why have fuel prices in New Zealand suddenly spiked now?

Threats from Trump and Tehran spook prices

The Middle East is the key player in the fuel market, and anything that spooks investors and feels like instability generally sees prices soar. Last week’s announcement by US President Donald Trump that America was withdrawing from the Iran nuclear deal was exactly the sort of event that prompts sharp rises in crude oil prices. With the US looking to re-implement tariffs on Iran, the likelihood of greater Middle Eastern instability rose. Iran is a key part of the Middle East, with high fuel production, nuclear ambitions, and a relatively aggressive mindset to international relations.

This instability, alongside agreements by OPEC to keep a lid on crude oil production, has held prices up over the last year. Yet the surprisingly and unsustainably low prices that were seen after 2014 could only mean that a price rise was inevitable. With the price now increasing to over US$70/bl (currently trading at US$71.84/bl for West Texas Intermediate), it has again become profitable for operators in the US and Canada to start up shale oil production. Over time, this increase in production will put downwards pressure on prices, with the latest oil futures showing prices falling to US$54/bl by the end of 2024.

Source: New York Mercantile Exchange

The price paid by New Zealand consumers is likely to remain high for some time, with crude oil futures showing prices around US$70/bl in December this year. The NZ dollar has also been a weaker performer of late, exacerbating the price pinch.

Flights and goods the next to see prices rise

Fuel price rises have already hit some businesses, with Air NZ outlining a 5% increase in domestic fares last week, in part due to rising aviation fuel prices. Pressure is likely to be mounting on international fares as well, where the fuel component of cost is higher due to the distances involved. Aviation fuel has seen a similar price bounce to petrol, with airlines passing on what they can to maintain profit margins

Source: US Department of Energy

With higher fuel prices expected to persist for some time, we expect transport operations to begin passing on increased costs in the near future. This trend will affect everything from fruit and vegetables to concrete. Transport companies have made clear in recent discussions about fuel taxes that higher costs will be passed on to customers.

The path to cheaper prices

So where to from here? Some politicians and political commentators are calling for the fuel tax rises to be called off, but this move is unlikely given the government’s push to spend more on transport infrastructure. Although the point is well-made that a large component of fuel prices in New Zealand is tax, less tax would probably mean that motorists do more driving and buy greater volumes of petrol, but leave the government less able to finance maintenance and upgrades to the roading network.

Eventually, we would expect more stable geopolitical conditions in the Middle East, combined with increased supply via shale oil production, to dampen crude oil prices.


Brad Olsen is an economist at Infometrics. This article is reposted with permission. The original article is here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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With Love from Taxinda.... Lets get rid of the COL and stupid taxes like this next polling day...wake up NZ the zombies are here...

Ummmm it was Auckland council who just banged on the fuel tax.

In any case it is way to cheap, it must be because everyday I pass suckers one up in their car stuck in traffic going nowhere. If petrol is so expense why do perfectly healthy adults and kids drive everywhere?

rastus the CoL just passed legislation allowing Auckland Council to levy the fuel tax.

Yes I know that. But the council voted for the levy. our elected officials.

The Council is run by an ex-Labour politician who much like our PM has never had a job outside of politics to know the plight of a common Kiwi.
These career politicians are no different than bankers deciding where to put other people's money without any sense of ownership or accountability.

..sounds like a child sulking. Welcome to democracy.

I don't know if being deceive into voting power to a group who had no intention of for filling their promises qualifies as the definition of democracy.

I am absolutely outraged that they said point blank they would not raise taxes then applied a fuel tax. I don't actually care about the tax, I don't mind paying tax to get stuff done. But I very much care about being deceived and you should too

..rest assured Grendel, as a swinging voter (and not a member of a blinkered tribe) I will vote based on what gets done. National lost my vote after doing having it for many many years. Tribal members need to become swingers if they want change.

The Auckland fuel tax was part of their election campaign platform!

Can't call it deceptive when it was all over their manifesto documents and website.

The did not say they would not raise any existing taxes, they said they would not introduce any new taxes (apart from what was in their manifesto).

In fact, on their tax page on the website you find these words: "Alcohol, Petrol and Tobacco Levies - will be adjusted as per normal government practice and as set out in Budget documents."

Oh I see the old fine print tactic. I get it. Well played Taxinda, well played.

Lol, fine print, it was in normal text under both the tax policy page and the transport policy page on the website. The only one that deceived you was yourself.

Exactly. The CoL voters need to suck it up. They voted for this. Own the outcome.

11
up

I'll happily own the outcome of government's actually governing - you know - confronting issues, asking questions, having a plan that lasts longer than the next property cycle.

I'd love to see how the B-Team would be managing all this if they were in government - "ah, budget surplus next year I promise....ah don't worry about water quality, housing market fundamentals are strong....more immigrants brings more wealth, oil companies are our friend, er....just wait for the trickle down - no I don't mean the trickling cow poo, I mean the clean water....oh, who is this M Bovis guy?"

No problems with owning CoL....happy to have voted for at least a Govn that is trying to make things better as opposed to a Govn that a) does almost nothing and b) what it does do is make things worse in order to drive its ideology.

You should actually be happier about this policy than the alternative. I'm not a fan of this policy because it effectively hands yet another boost to those in inner city suburbs who have already received much in betterment. The council has increased this tax instead of increasing the land-value-based component of rates, the alternative option.

It's a tax that disadvantages the poor who are forced to live further out, and advantages the wealthy who are able to travel less.

I agree with you on this Rick. Thank goodness it's not in the form of rates rise or land-value-based type taxes *phew*

You hit the nail on the head. I didn't commute by car when I was working and now don't commute at all now that I've been made redundant so a fuel tax is for others to pay, particularly hard on the working poor. Until a land tax is instigated, people like RP and I are not going to pay our fair share of tax.

Ok , we should be happy with it - thank you for thinking for us.
Are YOU happy with this COL policy ?

Very well put. Motoring, commutes... its all a choice. Don't like high petrol prices, find another way to get to work such as public transit, cycling, work from home, car pool, etc.
Fuel prices are too low. Look at all the SUVs on our roads, the idiots speeding through town at a higher l/km consumption rate.
I see all the motorist lined up to buy fuel at the gas station like drug addicts. This stuff is way too cheap.

Your delusion that car ownership in this country is a lifestyle choice shows how ill-informed you are about socioeconomic realities.
Public transport is a joke in our cities, don't even think it is an option to consider for suburban and rural NZ. Lower and middle income earners aren't your regular CBD workers but are usually the ones who toil in kitchens, retail stores, care centres, dairy farms, orchards, etc. They have no option but to drive to work due to location and timing constraints.

Also, housing and renting shortages have ensured people cannot afford to live near place of work. Cycling home from work after several hours of manual labour is not doable. I don't subscribe to socialist ideology, but if you want cheap eats at restaurants and restocked shelves at supermarkets, we should do something about this.

According to Bloomberg, we have one of the highest rates of car ownership and petrol consumption per capita in the world. We could end up being one of the worst hit economies in the world by rising oil prices.
https://www.bloomberg.com/graphics/gas-prices/#20181:New-Zealand:USD:g

All by choice. Give up the large yard/house and live in the city in an affordable, but heaven forbid smaller apartment. Support leadership that invests in public transit and cycle ways (Labour/Greens). Being a motorist and addicted oil is a lifestyle choice.

Lined up at the pumps waiting for their fix at $2.30/litre. Hilarious.

Prefect for Agenda 21 / 2030

You know this Government is turning out to be a major disappointment , one stupid decision after the next , and they are going to slaughter the goose and give the carcass to the "poor"

As opposed to sit there and do nothing at all for 9 years while things noticeably get worse?

Given they are so heavily boxed into the corner I give them credit for at least trying. Even if they fail they will have at least tried unlike the last lot for 9 years.

Trying and making things worse is not better. Beside they said they had a plan, I believed and vote on that basis and I am having the worst buyer's remorse I can remember, we are 9 months in and going backwards faster than before.

"The road to hell is paved with good intentions"

and exactly how are they making things worse? They are boxed into the corner by a) 45% of voters clearly saying they didnt want to change 9 years of do nothing b) and any impacts of say nationalising other ppls assets.

So in effect they have inherited a downward spiral which looks worse than it did and now they are trying to pull out of it. Meanwhile you expected instant results to to fix what can best be described as nearly 20 years of do nothing while things got worse.

Are you writing to them or contacting members of the government in some way to push them?

I would recommend it - because you know they're receiving massive pressure from vested interests to (for example) water down the foreign buyers ban, and to not take action on the RUB, the RMA, the building supplies cost situation etc.

They need constant pressure from voters reminding them to do the job they campaigned on. The last thing voters need is another John Key, campaigning on issues then deciding "Oh, it's quite nice having my dream job, just gonna hang out for a while, mm'kay."

Perhaps I should mail Megan Woods a few pies. She loves energy as long as it's calories and not oil exploration.

What are you talking about steven? Labour are a different coloured boot attached to the same establishment as National. We see the same old:
Support Fletchers
Bail out farmers
Foreign MPs with multiple rental properties
Immigration tap a full four quarters open
Keep the fake education visa mills churning.
Throw tax money at landlords
And if that's not enough let's add a few boats loads of "refugees" and let 3rd strike offenders out on parole.

I wouldn't say they're trying at all. If they're really trying it's akin to letting a monkey operate a nuclear power station.

The road to hell is paved with good intentions. Soon we'll be banning cutlery and locking up journalists like the UK.

The petrol companies are more likely to absorb higher costs by lowering margins in Auckland and increase prices in the regions. The government is either hypocritical or clueless when it promises prioritisation of regional development over Auckland's. Their preferred method of policy making is 'trial and error' it seems.

Meh, they are much the same as the last lot, just with a different bunch of mates who get the handouts and policy nods. Neither major party is anything other than mediocre at this stage.

Hence why I just signed up as a paid up member of TOP. Won't know how good they really are till they get into govt, but at least they are putting out good policy and willing to smash the status quo.

Prices are mandated in aggregate (CPI) to only increase ~2% per annum, why is everyone having such a massive sook?

What don’t these working and lower middle-class families understand? Auckland doesn’t want you clogging up their suburbs, hospitals, schools and roads any more. That’s why they implement sales taxes that target you and drive you out.

Regarding foreign energy reliance we just banned off-shore drilling so…better play really nicely with the current playground dictators.

Wow, I hadn't realised the massive voting power of kiwis extended to influencing international oil prices! We must live in a really powerful country that tells the Trumpster what to do in Iran, tells OPEC how much to produce and ensures the kiwi dollar has parity with the USD.

I couldn't care less about regional fuel taxes - the roads & railways have to get built especially so the moaners can drive their Bentley & Daimler SUVs around with the boat. Blame Jacinda all you like - at least we don't have to listen to the bluster & BS of Collins and the Nat's B-Team while they look the other way at NZ oil companies and their cartel behaviour.

Two simple facts - we've under-invested in transport for decades while trumpeting imaginary budget surpluses, and our dollar has gone down on the back of stronger interest rates in the US & an end to Quantitative Easing. Time to pay the tax man to get stuff done.

Add more simple facts, we have under-invested in Public Health, so this so called surplus of National's is nothing more that smoke and mirrors in multiple sectors. Of course under-investing in the Public service forces ppl to go buy private healthcare which lines the pockets of the right comfortably.

Really we need to get past the bullsh*t of how well neo-liberalism has done for the last 30 years.

The HH-index for our fuel retailers is huge. If I recall correctly Z (owns Caltex) are 49% of the retail market. The NZ refinery is another monopoly link in the chain.

It's not so much about the tax but the massive profits these companies are milking. You'll find this with just about everything on this island. Food. Fuel. Timber. Cement.

The ComCom are weak and useless. The politicians could fix this but they know their careers depend on allowing these companies to milk the middle class. So instead they stuff the ballot for 2.9 years and then launch a "fuel price investigation" around election time. Nothing changes. You and I exist to be milked.

But on the upside we might change the climate by 2100. Jacinda has got this. "In climate research and modelling, we should recognise that we are dealing with a coupled non-linear chaotic system, and therefore that the long-term prediction of future climate states is not possible."

"Extreme events are, almost by definition, of particular importance to human society. Consequently, the importance of understanding potential extreme events is first order. The evidence is mixed, and data continue to be lacking to make conclusive cases."
https://www.ipcc.ch/ipccreports/tar/wg1/505.htm

You cannot stop lying can you?

So cherry pick and take out of context a page with no original link. When I go look, wow, you appear to have gone to a paper published in 2001? are you really that desperate that you are quoting 17 year old papers?

Lets look at the next qualifying paragraph that clearly lays the context,

"Though the conclusions [from this old report - added steven] are mixed in both of these topical areas, certain results begin to appear robust. There appear to be some consistent patterns with increased CO2 with respect to changes in variability: (a) the Pacific climate base state could be a more El Niño-like state and (b) an enhanced variability in the daily precipitation in the Asian summer monsoon with increased precipitation intensity (Chapter 9, Section 9.3.5). More generally, the intensification of the hydrological cycle with increased CO2 is a robust conclusion. For possible changes in extreme weather and climate events, the most robust conclusions appear to be: (a) an increased probability of extreme warm days and decreased probability of extreme cold days and (b) an increased chance of drought for mid-continental areas during summer with increasing CO2 (see Chapter 9, Section 9.3.6).

So then look at the last 17 years, and the history of weather events and records actually supports that paragraph.

these denier clowns seem to think if they can win a debate on social media that they will change an outcome. All credit to you to challenge them steven, but they are so discredited/stupid they no longer deserve any attention at all

Fortunately they are geting less and less attention each day by msm. On the positive note, climate/enviro/pollution etc know gets mentioned almost daily on news reports.....not so long ago it was pretty absent. The pendulum has swung.... the head in the sand brigade are loosing ground.

Here is an excellent lecture about latest climate change from Dr Jennifer Francis a world expert. She explains her subject of research with extreme clarity. A search using her name will bring up other lectures. There are also similar lectures to subjects such as PhD students which of course tells us that one may probably trust its content.
https://www.youtube.com/watch?v=wtmuBoolHQg&t=981s

Profile probably has insufficient time to stay up to date with what is happening regarding climate change issues. Here is a truly fascinating study that is very very pertinent to NZ. It raises a lot of interesting questions for forward thinking persons. Perhaps a future that will entail very long drives for Aucklanders with a batch on the Coromandel. https://teggtalk.wordpress.com/2017/05/07/greater-sea-flooding-risk-firt....

Yeah models. A 2018 paper comparing models vs observations. "Comparisons with other, independently-constructed datasets (radiosonde and reanalyses) support this hypothesis. Given this result, we estimate the global TMT trend is +0.10 ± 0.03°C decade−1.

The rate of observed warming since 1979 for the tropical atmospheric TMT layer, which we calculate also as +0.10 ± 0.03°C decade−1, is significantly less than the average of that generated by the IPCC AR5 climate model simulations. Because the model trends are on average highly significantly more positive and with a pattern in which their warmest feature appears in the latent-heat release region of the atmosphere, we would hypothesize that a misrepresentation of the basic model physics of the tropical hydrologic cycle (i.e. water vapour, precipitation physics and cloud feedbacks) is a likely candidate."
https://www.tandfonline.com/doi/full/10.1080/01431161.2018.1444293

sorry Didge this was meant to link to your modelling video.

TMT = mid to upper troposphere. Climate models are primarily concerned with modelling surface temperature. What's going on higher up is more uncertain, there have been issues with satellite calibration too. +0.10/decade is very close to the observed surface warming.

Paper also includes weather balloon data if you have a personal bias against satellite data. 0.10/dec is slower than the 1910-1940 warming rate and completely consistent with inter glacial warming. What do you think the warming rate should be?

Actually no, I think you are in-correct on in-sufficient time. Quite the opposite, over the last 3~5 years profile has consistently looked for such items/sentecnces/paragraphs/reports to link to quote out of context in order to justify the denier position. Given this thread as an example it pretty clear someone if not "profile" is looking very hard for these "talking points" and using them when they find them.

If indeed whom ever actually is doing this had an open mind then it would I believe have been changed long ago by the shear weight of evidence sieved through.

What is interesting is often when you look for "astro-turfing" via google the same talking point re-surfaces frequently. Yet not so much with profile's posts suggesting he is actually doing this work himself, or has access to denier work google and I have not come across yet.

The good news is I agree with you, the nutjob denier's are now marginalised by even the mainstream press and even most mainstream political parties. the GOP is an obvious exception but the signs are many of the congress and senators are desperate to exit the denier space they are trapped in.

So this really leaves the like of ACT (and further right), like 0.5% of the population or less.

Thanks for the link, NZ related info is especially interesting after all I and my children live here!

dp

Thanks for the feedback Steven. Here's a paper from the other day showing how difficult it is to predict future climate change if you prefer newer, shiner stuff. P.S. I prefer to cherry pick rather than post the whole IPCC report for practical reasons.

"By examining a suite of 24 simulations with deep convection, shallow convection, macrophysics/microphysics, and radiation parameterizations reordered, process order is shown to have a big impact on predicted climate. In particular, reordering of processes induces differences in net climate feedback that are as big as the intermodel spread in phase 5 of the Coupled Model Intercomparison Project."

"Comparison of model solutions against observed data for a set of 24 simulations with different process orderings has shown that the impact of process order can be dramatic."
https://agupubs.onlinelibrary.wiley.com/doi/full/10.1002/2017MS001067

Climate models are continually being improved but already they are proving to be very useful tools for estimating future trends, Currently their major fault is that they are UNDER estimating both rising temperatures and sea levels. https://www.skepticalscience.com/climate-models.htm

The paper linked stated the complete opposite - as does the recent observations vs models paper. "The rate of observed warming since 1979 for the tropical atmospheric TMT layer, which we calculate also as +0.10 ± 0.03°C decade−1, is significantly less than the average of that generated by the IPCC AR5 climate model simulations. Because the model trends are on average highly significantly more positive and with a pattern in which their warmest feature appears in the latent-heat release region of the atmosphere, we would hypothesize that a misrepresentation of the basic model physics of the tropical hydrologic cycle (i.e. water vapour, precipitation physics and cloud feedbacks) is a likely candidate."
https://www.tandfonline.com/doi/full/10.1080/01431161.2018.1444293

Which supports the original IPCC assessment that Steven disagrees with - "In sum, a strategy must recognise what is possible. In climate research and modelling, we should recognise that we are dealing with a coupled non-linear chaotic system, and therefore that the long-term prediction of future climate states is not possible."

I dont disagree with it when you read the full context its clear it was foretelling things as they are worked out. On top of that the so called un-certainties that existed in 2001 are now in 2018 well put to rest.

So if you want to remain in the pre-historic past, be my guest. Meanwhile what looks like the majority of voters now see CC and want action.

The uncertainties are still there or do you just ignore weather balloon and satellite data? Trouble is all the observations have to match the hypothesis or the hypothesis is crap. Predicting the future is hard. What do you think the inter glacial warming rate should be?

“The rate of observed warming since 1979 for the tropical atmospheric TMT layer, which we calculate also as +0.10 ± 0.03°C decade−1, is significantly less than the average of that generated by the IPCC AR5 climate model simulations.” Observations completely in line with boring old inter glacial warming that has given us the world we have today.

Dp

@ Profile. Nitpicking. Not only that but I suspect that your uptickers have vested interests.

I up-ticked because I enjoy Profile's presentation style. He/She doesn't seem to be arrogant and full of pi$$ and vinegar.

but sure is full of bullsh*t and lies.

Always classy Steven.

Haha, proof in action. I use marginally perjorative monikers to provoke a reaction and it achieves the desired goal (I don’t want to let COL supporters have a day go by without reminding them that 45% of voters do not want their choice of government). If the eco warriors want to recruit more followers then Didge’s approach is their worst strategy.

Dont bother....it is really simple, a) there are good enough models all showing there will be substantial global warming and hence climate change. b) those existing and even old models when run against historic data since gathered show the trends clearly. c) based on the science the majority of ppl want something done, of course its as long as someone else is paying.

Everyone agrees Awklands traffic problem is now very bad and getting worse with continuing immigration and associated car registrations. With super city boundary there is a big block to levy it against.

Personally id rather extra property rates, and tripple for owners living and paying paying tax elsewhere (que Singapore, Australia, China, India, US, UK etc), and domestic land bankers doing nothing.

A four birds strategy. 1) Raises funds, 2) disincents international realestate speculation, 3)puts higher cost on central owners who travel less, and have higher incomes who can more afford it (Hoskings types), and 4) disincents bare undeveloped land in the region, pushing owners to develop.

No not rates. We'll kindly accept your regional fuel tax instead LOL!!

Of course not

Imposing this tax on Aucklanders isn’t fair when the rest of the country benefits from a strong Auckland economy. I hope the fuel companies do the right thing and spread this cost across the country.

I suspect you will find most regions have the opposite view. Awk being the only city in NZ you could blot out completely with little of no impact elsewhere. Last of port traffic moves to Tauranga, next to no manufacturing done any more, remove 1.3m of the population including a lot of benefits, free up a heap of electricity usage from the grid, and services businesses could relocate elsewhere.

What does Auck produce that the rest of the country is critically reliant on....?

Average thinking ! Auckland share of GDP end of 2016 figures was 37.2%, take AK out and NZ would be a small backward economy, the centre of economic growth is in main centres it's 2018 not 1918, of the near half a million jobs created since 2008 50% of them have been in Auckland, with the best pay as well.

Oil prices have little impact. $50 to $80 per barrel only lifts cost per litre by about $0.23. The enormous and increasing govt taxes and falling NZD are the problem.

It's scandalous that the woman said, "no new taxes for 3 years" and then saddles the country with several of them.

It's scandalous how their actual statements on the campaign trail have been completely and quite dishonestly misrepresented by media, talkback hosts, other voters etc.

Are you talking about National or Labour?

...or both. Neither can be trusted and the current government is the best of a bad bunch - IMHO.

Delivering for New Zealanders? I still haven't received my pizza.

Or a house to eat that pizza in, "Labour’s KiwiBuild programme will build 100,000 high quality, affordable homes over 10 years, with 50% of them in Auckland. Standalone houses in Auckland will cost $500,000 to $600,000, with apartments and townhouses under $500,000. Outside Auckland, houses will range from $300,000 to $500,000"

I will repeat this link because it surely brings into perspective the miserly attitudes of many herein, particularly it seems those of one eyed National party supporters. I suspect in coming decades there will be more taxes regardless of which parties are in power. https://teggtalk.wordpress.com/2017/05/07/greater-sea-flooding-risk-firt...

ah, well it will be the expected bailouts the one eyed National supporters demand on their sea front properties when they get washed away.

Or suing the council when their property becomes un-sellable when the private insurance companies declare their properties un-insurable due to CC risks and the council didnt put a LIM on it noting the risks.

So its one huge moral hazard game by mostly the well off whereby they expect others to pay for their stupidity.

Oh so very true Steven. Furthermore, it is going to happen faster than even fairly well informed observers have imagined. I have previously pointed out that a constant refrain from those working at the coal face of climate change is "we did not think it could happen so fast." It is now happening fast enough that even here in NZ, we are starting to see observable proofs. Living within a long commuter drive from Auckland, I now watch cyclone reports with the same concerns I did when I lived in Queensland, and I very purposely bought land well above sea level when I returned.

I think the fuel tax is great. At worst it will only add a handful of dollars to the weekly fuel bill. Collectively it will generate huge revenue to support the transport infrastructure the city desperately needs. And it is a gross generalisation to say it will hit the poor. Lots of poorer people take public transport.