Polluters get cash windfall from Howard -


ACTIVITIES that encourage increased greenhouse gas emissions will receive 28 times the amount of Federal Government funding this financial year than programs to reduce emissions.
Analysis of this year's federal budget papers reveal that programs for activities that increase greenhouse gas emissions will attract total funding of about $8 billion in the 2006-07 financial year.
Yet over the same period the Howard Government will spend only $280 million on activities to directly reduce emissions.
The Government will spend $1.2 billion on drought assistance this year, plus $250 million in aid to the victims of Cyclone Larry but, according to Australian Conservation Foundation executive director Don Henry, Prime Minister John Howard needs to have a rethink.
"Government spending reflects Government priorities," Mr Henry told The Sunday Age. "These figures show the Government has its priorities wrong," he said. "Australians increasingly want urgent action to avoid dangerous climate change. Government needs to send the right financial signals and ensure its spending has the effect of decreasing, not increasing, greenhouse gas emissions.
"We have all witnessed a big shift in rhetoric from the federal front bench in the last few weeks. We hope the talk translates into a big shift towards funding for clean, renewable energy in the very near future."
Funding for subsidies and incentives for road users adds up to about $5 billion. This includes the energy grants credits scheme, which provides subsidies for the use of diesel or alternative fuels, and the excise exemption, for fuels such as LPG and biodiesel.
Other big budget items that receive massive Government sponsorship include the "formula method" for calculating fringe benefits tax on employer-provided cars, with concessions worth nearly $1.2 billion to be claimed this year.
The formula assumes that the greater the distance travelled by a car, the lower the proportion of private use and hence the lower the fringe benefit to the employee, thus acting as a clear incentive to drive further and consume more fuel. This method for calculating FBT accounts for more than 90 per cent of total FBT paid on motor vehicles.
Direct assistance to Australia's car makers is another expensive item for taxpayers, with about $570 million going into their coffers this year.
Other funding includes electricity subsidies paid to the aluminium smelting industry — which alone accounts for 15 per cent of all electricity consumed in Australia and about 5.9 per cent of Australia's total greenhouse gas emissions. Airlines also get lower excise rates for fuel compared to motorists' fuel.

But federal Industry Minister Ian Macfarlane, who shares responsibility for managing a reduction in Australia's greenhouse gas emissions, blasted the comparison. "What are we saying, that we want to remove all of these subsidies and other industry assistance measures?" he said. "That is an outrageous suggestion that would put thousands of people out of work, would lead to dramatically increased taxes and is, quite frankly, an irrational approach."
Mr Macfarlane strongly defended the Federal Government's record on reducing emissions. "The green movement give us no credit for the fact that we are one of only three or four countries in the world — and the only non-nuclear country — that will reach its Kyoto target," Mr Macfarlane said.
"They just sit there and say we should close Australian industry send jobs offshore."
Green or greenhouse: where government subsidies go
TOTAL $7.92 billion
TOTAL $1.5 billion
$280 million including $50 million for the Low Emissions Technology
Demonstration Fund.
SOURCE: COMMONWEALTH BUDGET PAPERS 2006-07
■ SUBSIDIES THAT ENCOURAGE FOSSIL FUELSFor motorists $5 billionFor planes $790 millionFor electricity to aluminium smelters $230 millionFor Fringe Benefits Tax concessions on employer-provided cars $1.13 billionFor company tax deductions for oil exploration $200 millionFor industry assistance to car manufacturers $570 million■ FUNDING TO REDUCE THE IMPACTS OFDrought $1.2 billionCyclone Larry $250 million■ FUNDING TO REDUCE GREENHOUSE GAS EMISSIONSGovernment spending on climate change initiatives this year comes to