National Party finance spokesperson, Amy Adams says the decision to ban oil and gas exploration will have negative effects on the economy in the future. (Photo: Mark Mitchell)

National: Lack of treasury input on oil decision 'beggars belief'

Author: Newstalk ZB Staff ,
Publish Date: Thu, 7 Jun 2018, 5:32AM

The revelation the Government didn't get analysis from Treasury before axing oil and gas exploration has staggered National.

Finance Minister Grant Robertson told a parliamentary committee yesterday that Treasury provided no advice about the potential fiscal or economic risks from banning future offshore oil and gas exploration licenses.

Robertson responded to questions from National Party spokesperson for finance, Amy Adams, at the Finance and Expenditure Select Committee, saying;

"The advice that I have received from Treasury is that the uncertain nature of revenue associated with oil and gas exploration means that they don't include that in forecast revenue.. once it is inside the economy then you can make judgements about it."

He also underscored the forecasts contained in the latest budget wouldn't change because existing permits remain in place and exploration is underway.

Beyond that "they don't know the fiscal implications of not developing an unknown oil and gas reserve," he said.

The finance minister underscored that "it is impossible to factor in something where you don't know the outcome of the exploration."

Adams says it's simply unbelievable considering what was at stake.

"What that will do to electricity prices, what it will do to GDP generally, to not have sought and received any sort of economic impact from Treasury, is really staggering."

Adams says the decision will have a significant impact as gas reserves diminish over the next few years.

"It beggars belief. Not only is it a two and a half billion industry that employs 8,000 odd people, when you think of the impacts on the entire economy, on the cost of living, of starting to get gas shortages in the next couple of years."

She says the electricity network will have to be doubled to replace the gas usage.

Ministers claim the ban won't stifle existing investment and is simply the start of a 30-year transition away from fossil fuels in pursuit of a net zero emissions economy by 2050.

It was revealed on Tuesday that the move was made without a formal Cabinet paper and with minimal analysis from officials, according to a dump of documents and emails from Energy and Resources Minister Megan Woods.