Acf Chief Outlines $19 Billion Spending Hit-list

The Age

Thursday April 10, 2008

Chris Hammer

AUSTRALIA'S leading environment organisation has seized on Government plans to cut spending in the May budget and has suggested some cuts of its own - including fringe benefit concessions on company cars.

Breaking with the tradition of pre-budget spending wish-lists, Australian Conservation Foundation executive director Don Henry has instead outlined net savings of more than $19 billion over five years.

He said the FBT concession on company cars rewarded motorists the more kilometres they drove. He said company cars were responsible for 7.9 million tonnes of pollution a year. "It's just a dead weight on the economy, the budget and the environment," he told the National Press Club in Canberra.

Also on the ACF hit-list is the fuel tax credits scheme, which cost $4.9 billion last financial year.

Mr Henry said much of the scheme subsidised diesel fuel for large mining, logging and transport companies, with less than 15% going to farmers. "The truth is, the incredibly profitable mining sector does not need your or my taxpayers' dollars to continue to thrive," he said.

But the Australian Industry Group was critical of the proposal. "We're very hesitant about increasing taxes on fuels for business at a time when we're about to embark on an emissions trading scheme, which will increase the costs of fuel," chief executive Heather Ridout said.

Stuart St Clair, from the Australian Trucking Association, said the ACF proposal was inflationary.

"The ACF's plan would increase a typical urban family's grocery bills by about $86 per year and a typical rural family's grocery bills by about $103 per year," he said.

But Mr Henry said the subsidies he wanted cut were themselves inflationary. "They're all promoting expenditure and activities that are encouraging pollution," he said.

The Government has promised cuts of up to $4 billion in the budget to reduce inflationary pressures.

The ACF also wants the tax on aviation fuel increased. Mr Henry said airlines paid 3? a litre tax on jet fuel compared with the 38? a litre motorists paid on petrol.

The environmentalist nominated $3 billion in new spending over the next five years, including money for energy efficiency and more environmentally friendly cars.

© 2008 The Age

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