News | 24th Jan, 2013

$10bn fossil fuel subsidies gets ‘no’ vote

24 Jan 2013
Peter Roberts, AFR


Green groups released a new estimate of more than $10 billion in federal fossil fuel subsidies and called for their abolition.

Green group Market Forces released the estimates with an opinion poll by Essential Research showing 64 per cent of 1005 people surveyed disapproved of government spending $2 billion to subsidise diesel and petrol for mining companies. Only 18 per cent approved.

“This makes cutting the subsidy not only fiscally and environmentally desirable but popular,” campaigner Julien Vincent said. “We are looking to the government to live up to its commitment to the G20 to phase out fossil fuel subsidies. This is a good place to start.”

Disapproval was strongest among older Australians and green and Labor voters, but 57 per cent of Coalition voters also disapproved of the payments.

“This is the most ridiculous subsidy,” Mr Vincent said. “It is about giving away $2 billion of public money to highly profitable companies when it could be put to so many other uses.”

Market Forces estimates $10 billion is spread over 10 major policy areas and is in line with the Grattan Institute’s 2012 estimate of $9.3 billion. Fuel tax credits schemes are the biggest expenditure, costing $5.7 billion, then fringe benefits tax support for vehicle ownership.

The study also showed that the subsidies were expected to rise in cost by more than 20.5 per cent in the next three years and would reach $12.9 billion in 2014-15.

The Essential Research survey, made online between 16 and 20 January, found that 38 per cent of people thought the $10 billion cost of fossil fuel subsidies was too much. Eleven per cent though it was too little and 19 per cent though it ‘about right’.

Mr Vincent said the $10 billion in subsidies were contradictory to the federal government’s carbon tax which aimed to reduce carbon pollution associated with burning fossil fuels.

“This undermines the government’s sincerity in passing the carbon tax. They have done something which is genuinely positive (for the environment) but at the same time they are spending billions of dollars a year in a way which drives carbon pollution up.”

Market Forces is a group affiliated with Friends of the Earth.

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