ACF submits plan for 'environmentally friendly' budget

August 7, 1996
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Title

ACF submits plan for 'environmentally friendly' budget

By Lisa Macdonald

For the first time since they were elected to federal parliament, the WA Greens did not make a federal budget submission this year. Like the Australian Greens, the WA Greens told Green Left that a shortage of resources, combined with a hostile government which "probably wouldn't take any notice anyway" made it an impossible exercise.

In fact, only the best resourced of Australia's peak environment groups, the Australian Conservation Foundation, has produced a submission which addresses environment issues this year.

From page one of Funding our Future, the ACF accepts and supports the business-driven goal of cutting government expenditure to cover the budget deficit. This basic framework determines everything that follows in the 145-page submission on the environment.

Funding our Future makes 136 recommendations for implementation during this term of office. They range from funding regional and national biodiversity plans, establishing a bureau of environmental economics, and diverting labour market program funds to expand the government's proposed "Green Corps" and environmental traineeships, to abolishing tax deductions and rebates for environmentally damaging industries and implementing a number of "eco-taxes", expanding public transport services and cycleways, and funding more programs to support Aboriginal people.

According to ACF, the implementation of its recommendations would require a $2.3 billion increase in annual outlays. Nevertheless, the submission argues that the government should remove the link between funding of the Natural Heritage Trust and the partial sale of Telstra: "The introduction of environmentally based forms of revenue generation [environmental levies, taxes and charges] is a more appropriate approach than public asset sales" because "they provide a basis for removing hidden 'environmental subsidies'".

In a general sense, this is true. Increasing charges and taxes on those who directly profit from large-scale natural resource extraction and polluting production is both socially equitable and, short of bringing such industries under public ownership and control, one of the most effective means of curbing environmentally destructive practices in the short term.

In this vein, the submission proposes a "farm tax" (removal of tax deductions for land clearing), the abolition of the diesel fuel rebate for forestry and mining, a 15% export woodchip levy and the gradual imposition of a sales tax on water used for agricultural purposes.

However, this is as far as ACF is prepared to go. Unlike the Australian Greens, the ACF does not even canvass alternatives to the sale of Telstra such as increasing personal taxes of the very rich, or redirecting funding from military to environmental programs.

Environmental levy

Rather, ACF's major proposal for raising more funds for environmental expenditure is an "environmental levy" on personal taxable income of 0.5%. The money raised by this levy — estimated at $1.25 billion annually — makes up roughly a third of ACF's $3.8 billion worth of revenue-raising proposals and is the financial backbone of the submission.

The environment levy would operate in the same way as the current Medicare levy. Like the Medicare levy, introduced by the Hawke Labor government only after overcoming considerable public opposition, this new flat tax would transfer another slab of the costs of industry's environmental damage onto the mass ordinary people.

ACF says the levy should exempt "low income earners", but how low is "low income"? In ACF's proposal, only single people who earn less than around $14,000 per year, and sole parents and couples with a combined income of less than about $25,000 would be exempt. This means that people surviving on only $210 per week, before tax, would have to pay up, every year, to repair the environmental destruction of this country by the likes of BHP, CRA, Lend Lease and Boral Ltd.

In the same spirit of "victim pays", Funding our Future recommends a carbon levy of $8 per tonne of emitted carbon and the establishment of a "national network of vehicle emissions testing stations" as part of an eventual "annual roadworthiness testing program" to weed out older, more polluting cars. Once again, poorer people and those who have difficulty accessing public transport services will be especially badly affected; the compensation of up to $1000 that ACF recommends for people whose cars are found to be unroadworthy would hardly buy a replacement vehicle that is!

Business subsidies

While most people would agree wholeheartedly with many of the recommendations in the submission (few would deny the need for better public transport and urban development plans, more pollution monitoring and public education on environmental problems, for example), ACF's almost uncritical acceptance of the economic and political status quo in 1996 Australia means that it is unable to produce even an ambit claim of radical reforms in the interests of the environment.

For example, while decrying an over-reliance on market mechanisms to fix up many of the global environmental problems in which Australia shares (e.g. greenhouse gas emissions), the submission identifies public subsidies of private industry as a key means of achieving clean, green production in Australia: "Public support for 'green' industry in the form of research and development assistance and direct funding, provides a major avenue for increasing international economic competitiveness, developing environmentally sound products and processes in Australia and also generating additional employment.

"International experience indicates that for 'clean production' to overcome barriers to market entry, it requires financial incentives, infrastructural development and directed protection ... which in turn encourage and support a culture of private sector innovation and investment."

Thus ACF advocates a wide range of tax incentives, rebates and grants to assist the implementation of "world best practices and technologies" in agriculture and industry. These include tax concessions to private developers seeking to invest in high-density housing redevelopment, enhanced tax deductibility at a rate of 110% for investment in accredited imported best available technologies and 120% where Australian-made products are purchased, and tax concessions for companies and industries which meet the requirements of an environmental audit.

As the recently released report Subsidies to the Use of Natural Resources reveals, Australian taxpayers are already subsidising environmentally damaging industries by almost $6 billion a year. To recommend, as ACF does, that working people should subsidise the profitability of the private sector even more as a means of "encouraging" it to forsake its reason for existence (making profits) and be environmentally responsible is to capitulate totally to the Howard government's anti-people, anti-environment agenda.

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