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Joint statement on GST package



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' Australian Conservation Foundation. Conservation Council of the South East Region and Canberra, Conservation Council of South Australia, Conservation Council of Western Australia, Environment Victoria, Environment Centre of the Northern Territory, Friends of the Earth Australia,

Greenpeace Australia, Humane Society International, National parks Association of Victoria, Nature Conservation Council of NSW, Queensland Conservation Council, Tasmanian Conservation Trust, The Wilderness Society, World Wide Fund for Nature Australia.

Australia’s leading conservation organisations meeting in summit in Mittagong today, unanimously condemned the ‘in principle’ tax agreement as highly damaging to the environment and an international embarrassment.

“We are deeply concerned that the package will lock Australia into a polluted and inefficient future, eventually leaving us uncompetitive with countries that are now taxing pollution and rewarding clean fuels and industry.

“Our analysis indicates that the Australian tax payer is being asked to provide an additional $2.8 billion dollars per year for air pollution, ill health, and greenhouse gas emissions.

“While the package has a range o f incremental initiatives, such as rail subsidies and a sunset clause on the diesel rebate in 2002, these are smothered by the massive price cuts for dirty diesel. It is o f critical importance that the energy credit scheme, which will replace the diesel rebate, be included in the GST legislation and provide guidance out of this madness o f supporting polluters.

“Over three years the package invests 8 billion dollars into pollution and 3 billion into trying to clean it up. This is unacceptable.

“Massive tax payer funded subsidies for fossil fuel take Australia backwards when other OECD countries are introducing additional fuel taxes to reduce greenhouse and meet their Kyoto greenhouse commitments.

“The package will substantially increase greenhouse gas emissions in the transport sector right at the time when we urgently need to reduce emissions to protect Australia’s climate.”

The leaders o f Australia’s national and state conservation groups urged the Democrats to undertake an independent analysis o f the tax package figures provided by the Government in order to deliver and environmentally positive outcome.

“Australia will rue the day if this is passed by the Senate, and will pay dearly with climate change impacts and hundreds o f millions of dollars o f extra health costs.”

30th May 1999

JOINT STATEMENT ON GST PACKAGE

Contact: Group spokesperson Peter Garrett President, Australian Conservation Foundation ph 0418 501 395. Greenpeace media contact Rupert Posner 0411 179 529

Democrats original position compared with the proposed tax deal “The Democrats believe that these tax cuts on fossil fuels are excessive and not sufficiently justified on economic or environmental grounds. ” Democrats Election Policy 1998

“The changes to taxation o f petrol fly in the face o f Australia’s commitments at Kyoto to reduce greenhouse gases. Reducing the price paid for fuel will inevitably lead to an increase in consumption and less attention being paid to fuel efficiency measures. ” Democrats Election Policy 1998

“Australia’s energy taxes are already among the lowest o f OECD countries, and while other countries are increasing taxes on energy in an effort to reduce greenhouse gases, Australia appears set to move in the other direction" Democrats Election Policy 1998

Only 4 out of 12 major Democrat proposals are part of the proposed Tax deal

Democrat Senate Committee Recommendations - March 1999 Democrats Proposed Tax Deal - May 1999

1. Petrol and diesel to be taxed through the existing system rather than the GST

• no fuel credits for business and the savings be allocated to reduce other business costs (P105)

Not implemented

• $2 billion annual business fuel subsidies

2. Sales tax be applied on new motor vehicles with low fuel-efficiency based on a sliding scale (P106)

Not implemented

• no vehicle fuel efficiency measures

3. Public transport be GST exempt (p106) Not implemented

4. The existing diesel rebate be maintained for agricultural off-road use but capped at 1999/2000 levels on a flat pro-rata amount for all off-road use. (p106)

Not implemented

• off-road diesel rebate extended by $150 million per year taking the total rebate to $1.75 billion per year

5. Companies with vehicles over 20 tonnes would receive a better regional transport rebate if using cleaner or renewable fuels (p106)

Not implemented

• threshold reduced to 4.5 tonnes and 20 tonnes for “cities”

• only 2 cents taken from Government proposal for 25c/litre rebate available for dirty diesel

6. Rail transport receive a 100% rebate (p106) Implemented

7. Renewable energy and energy efficiency be GST exempt (p107) Not implemented

8. Grants be provided for conversion to gas use for heavy vehicles (p107)

Implemented

9. Recycled oil incentives (p107) Implemented

10. By 2002 Australian emission standards to match European standards (p107) Not implemented • by 2002/3 EURO 2 standard for all new

diesel vehicles which is Europe’s 1995 standard

11. A higher diesel excise be imposed on fuel with a high sulphur content (p107) Im plemented • but not until 2003 and only providing 1 c/litre

higher cost

• this compares with a price incentive of 23c/litre rebate for the use of this fuel

12. Tax credit for diesel only available for 0.005% diesel as of 1 January 2002 (amendments)

Not im plem ented

• dirty diesel credit available till 2006

The proposed tax deal does set a sunset clause for the diesel fuel rebate on 30 June 2002. Unless details of the Energy Credit Scheme that will replace it are in the tax legislation, all changes to diesel rebates should be deferred.