WWF-Australia
Suites 14-15/Baileys Cnr
143 London Circuit
Canberra City ACT 2600
GPO Box 408
Canberra City ACT 2601
Tel: +61 2 6120 0100
[email protected]
@ WWF_Australia
wwf.org.au
BudgetPolicyDivision
DepartmentoftheTreasury
LangtonCrescent
PARKESACT2600
20January2017
ABN 57 001 594 074
2017–2018Pre-BudgetSubmission
Revenuemeasureswhichpromotethehealthofthenaturalenvironment
2017-18
2018-19
2019-20
Period
$m
$m
$m
$m
3,233
3,336
7,070
13,639
655
695
1,460
2,810
3,888
4,031
8,530
16,449
Phaseoutoffueltaxcreditsscheme
Phaseoutofconcessionalrateonaviationfuel
Savings
TheGrattanInstituteandTheAustraliaInstitutehaveidentifiedasignificantnumberofother
opportunitiestoimprovetheequityandsustainabilityoftheFederalBudget.
A.Expenditure(additionaltotheresourcesavailablewithintheEnvironment
Portfolio)whichpromotesthehealthofthenaturalenvironment
AdditionalmeasurestoimproveGreatBarrier
Reefwaterqualityandcatchmenthealth,and
improveReefgovernance
405
405
420
1,230
Asia-PacificRainforestRecoveryFund
50
50
50
150
Acomprehensive,adequateandrepresentative
marinereservesystem
50
50
50
150
Acomprehensive,adequateandrepresentative
terrestrialreservesystem
170
170
170
510
ThreatenedSpeciesRecoveryFund
250
250
250
750
25
25
25
75
PromotingAustralianleadershipinsustainable
production
2017-18
2018-19
2019-20
Period
$m
$m
$m
$m
2,865
Totalexpenditure
Note:forGreatBarrierReeffunding,thereareseveralkeyannualactionsandinvestmentneededto
deliverspecifiedpollutionreductiontargetsandimplementthemostcost-effectiveactionstocleanup
waterpollutionoverthenextfiveyears.Theseinclude:
•
•
•
Theactionsandinvestmentneededtodeliverthefullnitrogenreductiontargetofupto80%
(estimatedtobearound$400million),asthisisthemostcosteffectiveareatocutReef
pollution.
Theactionsandinvestmentneededtodeliver75%ofthe2025targettohalvesediment
pollution(estimatedtobe$3.6billion)by2021.
Innovationsprogramstoproveupmorecosteffectiveactionstofullyachievethe2025clean
watertargetsbytheduedate.
Inaddition,furtherfundingforReefgovernanceisrequired–initially$5m/year,increasingto$20min
2019-20.TheprimaryobjectiveoftheCommonwealthGreatBarrierReefMarineParkActistoensure
the“long-termprotectionandconservationoftheenvironment,biodiversityandheritagevaluesofthe
GreatBarrierReefRegion”.SadlythescaleoftheproblemsfacingtheGreatBarrierReefhasoutgrown
theabilityofthecurrentgovernmentagenciesandstructurestoachievethisobjective.TheAustralian
GovernmenthascommittedtotheReef2050Plantoaddressthesethreats,butwithoutabetter
resourcedGreatBarrierReefMarineParkAuthoritytoleadimplementation,itsobjectiveswon’tbemet.
B.Expenditure(additionaltotheresourcespresentlyavailablewithintheDepartment
ofForeignAffairsandTrade)contributingtosustainabledevelopmentandstabilityin
theIndo-PacificRegion
Australia’saidprogramandclimatefinancecontributionsarecrucialinsupportingthesustainable
developmentandresilienceofourwiderregionwhich,inturn,promotesAustralia’sprosperityand
stability.
1.WWFrecommendsrestoringtheaidbudgettoatleast$5.5billionwithinthecurrenttermof
Parliament,withaviewtosettingAustraliaonatrajectorytoreach0.7percentofGNIby2030.
2.WWFfurtherrecommendsincreasingAustralia’sclimatefinancecontributionsbyestablishinga
clearpathwaytogovernmentfundingofatleast$1.6billion/yearby2020,inlinewith
commitmentstoprovideafairshareoftheglobalUS$100bn/yearntargetby2020.
a.Thisshouldincludeafocusonleveragingprivatesectorfundingforbothclimatechange
mitigationandresilienceactivities,recognisingthatbothGovernmentandprivatesector
financewillbefundamentaltoreachingtheUS$100bn/yeartarget.
3.AttheDepartmentallevel,WWFencouragesinvestmentsaimedatincreasingDFAT’sinternal
capacitytoimplementclimatechangemitigationandadaptationprogramsandeffectively
integrateactiononclimatechangethroughouttheaidprogramandacrossAustralia’sbroader
foreignpolicyandtradeagendas.
2
Benefits
TheInternationalEnergyAgencyestimatesthateliminatingsubsidieswouldcutglobalgreenhousegas
emissionsby10%,saveaboutUS$550billionandprovideanimmediateboosttoglobalgrowth,create
jobs,buildresilienceandimprovegovernmentbudgets.1TheInternationalMonetaryFundbelievesthat
eliminatingfossilfuelsubsidieswouldsaveUS$2trillionandcutgreenhousegasemissionsbyasimilar
amount.2
TherecentfallinoilpricesprovidestheAustralianGovernmentwithanopportunitytophaseoutthefuel
taxcreditsscheme,withminimalimpactonindustry(astheIndonesianandMalaysianGovernmentsdid
recently).
Environmentalprotectionconserveswaterandsoilqualityandquantity,moderatesregionalclimate,
protectsbeneficialspecieswhichcontrolagriculturalpestsandconservesthreatenedspecies.Numerous
economicreportshavequantifiedthesebenefits.3
Theproposedexpenditureinthissubmissionwouldhaveverysignificantfinancial,socialand
environmentalbenefits.Totakeoneexample,theexistingterrestrialnationalreservesystem(‘national
parks’)secures‘ecosystemservices’(orbenefitsofnature)valuedataboutAU$38billionperyearand
themarinereservesystemsecuresevenlargerbenefits.Visitorstonationalparks,forexample,spend
overAU$23.6billionayearinAustralia,generatingtaxrevenueforstateandterritorygovernmentsof
overAU$2.36billion.4
TheGreatBarrierReefalonecontributedAU$6billiontotheAustralianeconomy,withemployment(FTE)
of70,000andacalculatedconservativeassetvalueof$21billion.5Therecommendedinvestmentfor
basicoperationsandmaintenanceoftheGreatBarrierReef(whentreatedasanasset)is$547million
perannum,increasingto$830millionwhendepreciationisincluded.6Asaresult,governmentfunding
fortheReefiscurrentlyfallingshortby$600millionperannum.7
Environmentbudgetcuts
Since2013,Governmentfundingforbiodiversityhasexperiencedanongoingdecline,includingthe
recentcutof$224.7millionannouncedintheMid-YearEconomicandFiscalOutlook.8
By2018,publicmoneyavailableforbiodiversityconservationprojectswillhititslowestlevelinmore
thanadecade,decliningby37percenton2013levels(outlinedinchartbelow).9Asaresult,fundingfor
biodiversitywillrepresentonlyfivecentsinevery$100theAustralianGovernmentspends(0.05percent
1
InternationalEnergyAgency(2013).RedrawingtheEnergy-ClimateMap.
InternationalMonetaryFund(2013).EnergySubsidyReform:LessonsandImplications.
2
2
InternationalMonetaryFund(2013).EnergySubsidyReform:LessonsandImplications.
Seeforexample,MallawaarachchiT,SzakielS(2007).Non-broadscalelandclearinginSouthernAustralia:Economicissuesin
managingnativevegetationonfarmland.ABAREResearchreport07.1.PreparedfortheNaturalResourcemanagement
division,AustralianGovernmentDepartmentofAgriculture,FisheriesandForestry,Canberra;CampbellR,ScarletA(2014)
Economics,agricultureandnativevegetationinNSW.
4
TaylorMFJ,FitzsimmonsJA,SattlerPS(2014).BuildingNature’sSafetyNet2014:Adecadeofprotectedareaachievementsin
Australia.WWF-Australia,Sydney,pages40-43.
5
JacobsReport(2016).InvestingintheGreatBarrierReefaseconomicinfrastructure.
6
JacobsReport(2016).InvestingintheGreatBarrierReefaseconomicinfrastructure.
7
JacobsReport(2016).InvestingintheGreatBarrierReefaseconomicinfrastructure.
8
AustralianConservationFoundationMediaBrief(2016)‘Fundingforenvironmentindrasticdecline–MYEFOsettomake
thingsworse’,availableat:
https://d3n8a8pro7vhmx.cloudfront.net/auscon/pages/1526/attachments/original/1481681664/Federal_enviro_spending_brie
f_14-12-16.pdf?1481681664
9
AustralianConservationFoundationMediaBrief(2016)‘Fundingforenvironmentindrasticdecline–MYEFOsettomake
thingsworse’,availableat:
https://d3n8a8pro7vhmx.cloudfront.net/auscon/pages/1526/attachments/original/1481681664/Federal_enviro_spending_brie
f_14-12-16.pdf?1481681664
3
3
oftotalgovernmentexpenditure).10Thisisasignificantandworryingdownturn.
Atthesametime,since2013whenfundingforbiodiversitybegantodecline,Australia’sclimatepollution
hascontinuedtogrowandspecieshavecontinuedtobelost.Threeknownvertebrates(2mammals,1
reptile)havebecomeextinctsince2009.11
AhealthyAustralianeconomyisnotpossiblewithoutahealthyenvironment.Ifbiodiversityandhabitat
lossistobehalted,orreversed,andAustraliaistotransformitseconomyandenergysystemsinline
withtheParisClimateAgreementcommitments,thentheFederalGovernmentmustinvest.Forthat
reason,restoringtheenvironmentbudgettopre-2013levelsimmediately,andinthenearterm
increasingthebudgettoanamountthatwillfundtheeffectiverestorationofourwater,soils,seasand
biodiversity,andreduceAustraliangreenhousegasemissions,shouldbegiventhesamepriorityasother
keyeconomicissues.
Revenuemeasureswhichpromotethehealthofthenaturalenvironment
Phaseoutoffueltaxcreditsscheme
Thefueltaxcreditsschemeprovideseligiblebusinesseswithacreditfortheexciseorcustomsduty
includedinthepriceoffuelusedintheirbusinessactivities.Fueltaxcreditsareonlyavailableto
certainindustries.Thisprovidesafinancialadvantagetothosebusinessesoverotherbusinesses,and
overhouseholds.
Thegovernment’sdecisiontoreintroducefuelexciseindexation(whichWWFwelcomes)willleadto
increasesinclaimsunderthefueltaxcreditsschemebyeligiblebusinesses.
WWFproposesthattheschemebephasedoutbyreducingthecreditavailabletoeligiblebusinesses
by50%fortheperiod2017-2019andthen100%from2019-2020onwards.Thephaseoutoffueltax
10
AustralianConservationFoundationMediaBrief(2016)‘Fundingforenvironmentindrasticdecline–MYEFOsettomake
thingsworse’,availableat:
https://d3n8a8pro7vhmx.cloudfront.net/auscon/pages/1526/attachments/original/1481681664/Federal_enviro_spending_brie
f_14-12-16.pdf?1481681664
11
https://www.environment.gov.au/system/files/resources/7c0b18b4-f230-444a-8ccd-162c8545daa6/files/nggi-
quarterly-update-dec-2015.pdf,http://www.abc.net.au/news/2015-08-19/fact-check-does-australia-have-one-of-
the-highest-extinction/6691026
4
creditswouldpromoteeconomicgrowth,byallowingresourcestoflowtothemosteconomically
efficientbusinessesandsectorsoftheeconomy,beequitableandreducegreenhousegasemissions.
2016-17
2017-18
2018-19
2019-20
Period
$m
$m
$m
$m
$m
6,236
6,466
6,672
7,070
26,444
3,233
3,336
7,070
13,639
Budgetexpenditure:fueltax
creditsscheme12
Savings
Phaseoutofconcessionalrateofexciseleviedonaviationgasolineandaviation
turbinefuel
Aviationgasolineandaviationturbinefuelaresubjecttoalowerrateofexcisethanthebenchmark
rateidentifiedbytheTaxationCommissioner.13Thisprovideseligiblebusinesseswithafinancial
advantageoverotherbusinesses,andoverhouseholds.
WWFproposesthattheconcessionalrateofexcisebephasedoutuntilitreducesthebenchmarkrate
identifiedbytheTaxationCommissioner,byreducingtheconcessionalrateby50%fortheperiod
2017-2019andthen100%from2019-2020onwards.Thephaseoutoftheconcessionalratewould
promoteeconomicgrowth,byallowingresourcestoflowtothemosteconomicallyefficientbusinesses
andsectorsoftheeconomy,beequitableandreducegreenhousegasemissions.
2016-17
2017-18
2018-19
2019-20
Period
$m
$m
$m
$m
$m
1,240
1,310
1,390
1,460
5,400
655
695
1,460
2,810
Taxexpenditure:concessionalrate
ofexcise14
Savings
OtheropportunitiestoimprovethesustainabilityoftheFederalBudget
TheGrattanInstitute’sBalancingbudgets-toughchoicesweneedreport(November2013)andits
subsequentmoredetailedbudgetpolicywork,andthesimilarworkundertakenbyTheAustralia
Institute,identifyasignificantnumberofopportunitiestoimprovetheequityandsustainabilityofthe
Commonwealthbudget.
(A) Expenditurecontributingtothehealthofthenaturalenvironment
MeasurestoimproveGreatBarrierReefwaterquality:GreatBarrierReefWaterScienceTaskforce
(2016).FinalReport–CleanWaterforaHealthyReef,May2016:
http://www.gbr.qld.gov.au/documents/gbrwst-finalreport-2016.pdf;Alluvium(2016).Costsofachieving
12
AustralianGovernment2016,BudgetPaper1,Statement5:Expensesandnetcapitalinvestment,Fuelandenergy,
http://www.budget.gov.au/2016-17/content/bp1/download/bp1.pdf.
13
AustralianGovernment–Treasury2016,TaxExpendituresStatement2015,
http://www.treasury.gov.au/~/media/Treasury/Publications%20and%20Media/Publications/2016/Tax%20Expenditures%20Stat
ement%202015/Downloads/PDF/2015_TES.ashx.
14
AustralianGovernment2016,BudgetPaper1,Statement4:Revenue,AppendixA:TaxExpenditures,F7Concessionalrateof
exciseleviedonaviationgasolineandaviationturbinefuel,http://www.budget.gov.au/201617/content/bp1/download/bp1.pdf.
5
thewaterqualitytargetsfortheGreatBarrierReefbyAlluviumConsultingAustraliaforDepartmentof
EnvironmentandHeritageProtection,Brisbane:http://www.gbr.qld.gov.au/documents/costingsreport.pdf
Asia-PacificRainforestRecoveryFund(projectplanavailableonrequest).
ThreatenedSpeciesRecoveryFund(projectplanavailableonrequest).
‘Acomprehensiveandrepresentativeterrestrialnationalreservesystemandacomprehensive,
adequateandrepresentativemarinereservesystem’:TaylorMFJ,FitzsimmonsJA,SattlerPS,2014.
BuildingNature’sSafetyNet2014:AdecadeofprotectedareaachievementsinAustralia.WWF-Australia,
Sydney,pages40-43,
http://awsassets.wwf.org.au/downloads/bi038_building_natures_safety_net_2014_24nov14.pdf.
(B) ExpenditurecontributingtosustainabledevelopmentintheRegion
AnenhancedAustralianAidprogramtopromoteprosperity,reducepovertyandenhancestabilityinthe
Region:ACFIDSubmissiontothe2017-18FederalBudget.
Pleasedonothesitatetocontactme([email protected])ifyouhaveanyqueries.
PaulToni
ConservationDirector–SustainableFutures
6