$1b govt fund to insulate every NZ home

The Government will establish a $1 billion fund to insulate every house in New Zealand as part of its flagship climate-change policy.

Details of the fund were announced yesterday by the Green Party, which hailed it as a major concession gained in return for its support for Labour's controversial emissions trading scheme (ETS).

The Climate Change (Emissions Trading and Renewable Preference) Bill has been on hold for months as the Government worked to secure the support of the Greens and New Zealand First.

With National opposed to rushing the bill through before this year's general election, the votes of the two smaller parties are essential for its passage.

With the Greens having thrown their weight behind it, the fate of the scheme now lies with NZ First.

Leader Winston Peters said yesterday he expected to announce the party's position in the next few days.

He claimed much of the credit for the insulation fund.

Greens co-leader Jeanette Fitzsimons said her party decided at yesterday's weekly caucus to support the scheme.

She said that in addition to the insulation fund, set up using money generated by the scheme, the legislation would provide a cash payout to households to help offset a rise in electricity costs.

Although the bill was flawed, it was better than nothing and the party's six MPs would be voting for it, Fitzsimons said.

"The truth is that if the whole world did what New Zealand is doing in this emissions trading scheme, then the world would fail because the action needed is a lot stronger than that," she said. "However, on balance and given the very significant changes we have achieved, we have decided that it is better to make a start than to do nothing."

Prime Minister Helen Clark welcomed the decision. She said the legislation was now "poised for passage", and talks with NZ First were progressing well.

Fitzsimons said the insulation fund would be administered by the Energy Efficiency and Conservation Authority Board through a mixture of "straight-out grants" for low-income families and "heavily subsidised loans" for those with higher incomes.

She said there would be "a cash payment that is universal but differentiated" to help offset higher electricity prices from 2010.

She declined to give further details, indicating that it was a concession largely won by NZ First.

Peters refused to elaborate, saying details had yet to be finalised, but he described it as "a cost-of-living fund".

 

National opposes the bill, saying it is a rushed response to climate change that carries high economic risks.

Leader John Key said that if his party won the election it would develop its own scheme and introduce it within nine months of taking office.

"If the ETS passes before the election and National becomes the government, we will be changing the ETS to reflect our principles," he said.

 

- © Fairfax NZ News