Isra-Mart srl : Carbon tax missing in action from budget

www.isra-mart.com

Isra-Mart news:

WHEN it comes to climate change the big talking point in the federal budget is what won't be included rather than what will be unveiled on Tuesday night.

The Gillard government wants to hit big polluters with a carbon tax from mid-2012 but because the scheme is far from finalised there'll be no detail in the budget papers.

The tax is expected to raise around $11.5 billion in 2012/13 alone.

All the revenue will be spent compensating less well-off households and trade-exposed industry, as well as funding clean energy initiatives.

Prime Minister Julia Gillard says the fact the tax will be revenue neutral means it's OK for the tens of billions of dollars not to be accounted for.

But the coalition begs to differ.

Opposition Leader Tony Abbott has repeatedly said if the tax isn't in the budget "it will not be worth the paper it's printed on".
Environmental groups are much more understanding.

The Climate Institute isn't expecting a lot of new announcements on Tuesday night.

"We understand the big debate is what's the pollution price, what's the revenue, what's the supporting policies that come with that as a broad and coherent package," institute chief executive John Connor said this week.

"So it's appropriate there will be a bundle of policies and revenue allocation decisions that needs to to be made down the track."

The Australian Greens argue one thing that should be in the budget is a crackdown on tax breaks for company cars.

It's been reported the government hopes to save close to $1 billion over four years by changing the fringe benefits tax to a flat rate of 20 per cent.

At the moment there's a perverse incentive for employees to drive their cars further in order to get bigger subsidies.

"Overhauling the concession would be a $1 billion victory for common sense and a big first step in removing the perverse fossil fuel subsidies that see billions of taxpayers dollars actually encouraging pollution," Greens climate change spokeswoman Christine Milne says.

The Australian Conservation Foundation is hoping Labor will move on fuel tax credits for businesses too.

It says they cost taxpayers $5 billion a year including $1.7 billion to mining companies which don't pay tax on their diesel.

The government may also cough up some extra cash for its carbon farming initiative.

Mr Connor argues Labor needs to invest $50 million a year in the scheme that will pay farmers for storing carbon in trees and soil or reducing emissions.

It will also be looking to consolidate the $5 billion clean energy initiative which includes $1.5 billion for large-scale solar power plants.

And there might be a further $200 million in 2014/15 to continue a program to help poor countries reduce the reliance on fossil fuels and protect forests.

Labor announced this week it's reducing the solar panel subsidy for householders.

But the government say it won't actually help the budget bottom line.