Government's oil and gas ban could cost country $28b, new economic analysis finds

Benedict Collins
Source: 1News

The Government's oil and gas ban could cost the country $28 billion dollars, according to new economic analysis.

The report, by the NZ Institute of Economic Research, found the ban would be felt most keenly in Taranaki, with a 42 per cent drop in exports and another big drop in living standards there.

But it warns the impacts will be felt across the country - with a cost of $15,000 per household when averaged across the country.

The Petroleum Exploration and Production Association, or PEPANZ, paid for the report and its chief executive, Cameron Madgwick, says it makes for sobering reading.

"It reveals some very very large costs to New Zealand and in particular Taranaki," Mr Madgwick told 1 NEWS.

"The Government should really now take the time to assess this new information that wasn't available to it at the time it made its decision and reconsider it."

NZIER's report predicts that losing the oil and gas industry will cost $28 billion over the next three decades - the equivalent of building 20 new Dunedin hospitals or buying 43,000 KiwiBuild homes in Auckland.

National Party leader Simon Bridges labelled it a "disaster".

"What [the report] shows is the reckless decision - really made on the hoof by the Government - has an eye-watering cost," Mr Bridges said.

"I think New Zealanders will be pretty shocked, actually, to see this eye-watering cost and what that means for the regions, what it means for jobs - how it literally makes us poorer."

But Energy Minister Megan Woods disputed the report's predictions.

"This could be the case if the Government buried its head in the sand and did nothing - we have made a bold decision and the right decision for New Zealand," Ms Woods said.

"But we're not just sitting back and magically hoping the future plays out in Taranaki. We're working on the ground with that community.

"We've put $20 million through the Provincial Growth Fund into various projects."

Ms Woods rejected PEPANZ's call for it to reconsider the ban in light of the new report.

"PEPANZ, of course, is the oil and gas industry's lobby group. I'm not surprised that that's the view they're taking, but no, that's not something we're considering."

New Plymouth Mayor Neil Holdom says the Government must honour its promise to the region to help it transition.

"They've made a commitment that they are going to help Taranaki's economy - the test of that will be what comes out at the next Budget," he said.