International condemnation greets 'green' GST

June 23, 1999

International condemnation greets 'green' GST

By Jim Green

Diesel rebates — a fuel subsidy — in the revised GST deal negotiated between the government and the Democrats have been criticised by international climate change and environmental experts for cutting across efforts to take action against global warming and the other environmentally damaging effects of excessive fossil fuel use.

An Australian Conservation Foundation (ACF) and Greenpeace report has also helped expose just how environmentally damaging the deal may be.

The US-based Worldwatch Institute said, "Cutting fuel taxes would send a dangerous signal to the global community at a time when the nations of the world are struggling to build consensus to take action against global climate change". The institute rejected arguments that cutting prices will not increase use, pointing to trends in Europe and the US.

At a meeting in Bonn, Germany, on June 5, international climate and environment experts signed a resolution criticising the Coalition-Democrats tax package. Signatories included representatives from World Energy Modernisation Plan, UNEP Collaborating Centre, Climate Network Europe, Sierra Club of Canada, German NGO Forum on Environment and Development, Kyoto University and Euronatura, Portugal.

The resolution states: "It is our view that the proposal to provide new subsidies for fossil fuel consumption in Australia is a regressive step not only for Australia, but also international efforts to reduce climate change. Other nations will be less inclined to take steps to reduce their emissions when Australia as a signatory to the Kyoto protocol openly flouts key provisions."

According to the ACF, Canadian conservationist Dr David Suzuki wrote to Democrats leader Senator Meg Lees prior to her negotiations with the prime minister, John Howard, urging her to resist fuel price cuts. Suzuki highlighted recent scientific research which indicates that global warming is retarding the recovery of the ozone layer.

An analysis prepared for the ACF and Greenpeace has concluded that the tax deal would significantly worsen air pollution and increase greenhouse gas emissions because it will encourage fossil fuel use, not the use of more fuel-efficient vehicles, and the time lines for the implementation of the deal's emissions standards extend over more than a decade.

The report found that the deal provides $8.7 billion in fuel subsidies over three years, but only $937 million for environmental measures, which are not written into the tax laws.

The Coalition-Democrats tax deal ignored a number of the recommendations of conservation groups to the Senate inquiry into the GST, including: no reductions in fossil fuel prices; exemption from the GST for public transport fares, and this and other tax breaks for renewable energy products, environmentally sound technologies and services; legislation to enforce the introduction of ultra-clean diesel by 2002 (the revised tax package introduces appropriate standards only in 2006).

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