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Wednesday, 21 April 1999
Page: 3968


The PRESIDENT —We now proceed to foreshadowed amendments. I call Senator Margetts to move her foreshadowed amendment on sheet 1317 in respect of the A New Tax System (Goods and Services) Bill 1998.

Amendment (by Senator Margetts) put:

At the end of the motion, add:

"but that the Senate:

(a) notes that:

(i) carbon taxes have been applied as the major element of an Ecological Tax Reform Package successfully in a range of European Countries including Denmark, Finland, the Netherlands, Norway, and Sweden with positive outcomes for energy and efficiency;

(ii) there has been a significant increase in the use of economic instruments (including taxes, excise and other incentives) in Finland, Belgium, Norway, Sweden, France, the Netherlands, Denmark, Germany, Austria, Canada, the United Kingdom, Japan, and the United States of America, and that the United Nations has noted that the current evidence shows that these instruments have been both environmentally effective and cost effective;

(iii) the Blair Labour Government is currently seriously investigating how and at what levels an ecological tax reform package could be introduced in the United Kingdom;

(iv) the introduction of a carbon tax would be a large step forward in ensuring the price of fuels reflect their true social and environmental costs and would:

(a) reduce use of fossil fuels and related carbon dioxide;

(b) increase efficiencies of energy use in general and fossil fuel use in particular;

(c) increase the economic attractiveness and substitution of alternative fuels and technologies;

(d) provide a stable source of revenue for the development and implementation of strategies for the efficient uses of current energy sources and, increasingly, use of non-renewable sources of energy;

(v) payroll tax is a tax on jobs costing Australian businesses over $8 billion per year;

(vi) two recent reports commissioned by the Australian Chamber of Commerce and Industry and Australian Business, respectively, from the Allen Consulting Group and Chris Murphy of Econtech call for the abolition of payroll tax;

(vii) the "double dividend" of reducing environmental deterioration and increasing employment is achieved if payroll tax is abolished alongside the introduction of a carbon tax; and

(viii) the abolition of payroll tax will impact on State revenue and vertical fiscal imbalance and compensation would be required; and

(b) resolves that the following matters be referred to the Economics References Committee for inquiry and report on or before the last sitting day in 1999:

The need for development of a detailed and fully costed Ecological Tax Reform (ETR) package, with specific reference to:

(i) the introduction of a carbon tax and the abolition of payroll tax;

(ii) the establishment of a Green Tax Commission to monitor the impact of an ETR package and continue to develop further elements of an ETR package;

(iii) introduction, within such a package, of complementary measures including:

(a) incentives for:

. renewable energy industries;

. energy efficiency in products and processes;

. motor vehicle fuel efficiency such as differential pricing for:

- leaded/unleaded fuels;

- gasoline (quality);

- diesel (quality);

- sulphur content;

. long term investments in water conservation and recycling projects; and

. cleaner production and waste minimisation; and

(b) extra charges on goods such as batteries, plastic carry bags, paper carry bags, disposable containers, tyres, disposable cameras, lubricant oil, oil pollution, solvents and disposable tableware; and

(iv) revenue implications for States associated with the abolition of payroll tax and the possibility of directing carbon tax revenue to compensate for this loss.