Windfall for fossil fuels, slim pickings for the Reef: unpicking the 2016 budget
6 May 2016
I know this question has kept you up the last three nights and now, finally, we have the answer: $6.236. That's $6.236 billion in the 2016 federal budget for the diesel fuel rebate. Read on for what that means…
TL;DR – this budget gives billions to the mining industry, cuts environment funding, ignores the Reef and might deal with mining companies paying no tax but we’re not quite sure yet.
Just wait, I can hear you say. What about the $7.7bn number everyone’s tossing around? Well – it depends where you draw the lines. The $7.7bn takes the fuel tax credit scheme (aka diesel fuel rebate) and cuts out the amount spent on agriculture and leaves the rest in and then adds in tax write offs like accelerated depreciation (we’ll get to that in a minute). While the budget doesn’t break down where that $6.236bn will be spent, in previous years the amount claimed by the coal industry was $930million, and the mining industry claimed $2.4 billion total. So that’s a lot.
Direct funds are another one to tally up – like $30million this year in exploration incentives and $100 million over four years for a geographical modelling of resources (to make it easier to exploit them). And then there’s accelerated depreciation where companies can write off assets early for tax purposes. While I didn’t quite make it through all of the thousands of pages of this budget, I’m pretty certain there haven’t been any changes for the mining sector which means there’ll be about another $400million the country’s losing to them based on last years estimates.
Geez, surely that’s it? Not quite. There’s still the Northern Australia Infrastructure Facility, given $8.1 million this year out of $43.8million over the next five years to be set up (the idea with the fund is they’re loans that will be repaid so the $5bn they’ve promised is taken off the books). We don’t know for sure, and won’t for a while, if that’ll fund coal or mining infrastructure – but it’s totally possible.
So that’s almost $3bn straight to the mining sector this year and then there’s the spending that supports the continued use of fossil fuels including aviation, cars, the rest of the diesel fuel rebate etc. Our working estimate is $7.7bn overall to the fossil fuel industry. Wow.
The good news? The government continued last year’s funding cut to the carbon capture scheme. So that’s a cool $4 million they didn’t waste. Well done government. And two tax measures which look promising on the surface and need more investigation. A “diverted profits tax” because many multinational companies lie and don’t pay tax. And what looks to be a decently funded tax avoidance taskforce in the ATO because, well, multinational companies lie and don’t pay tax.
And then there’s the Reef, where Greg Hunt’s calculations seem to have gone something like: $2bn program minus $50 million plus 40 million minus 32 million plus 100 million minus 39 million divided by five equals… $170million! Slight exaggeration but seriously it’s confusing, and I haven’t managed to untangle that one for you. There’s an attempt here but I’m still scratching my head. Ten points and my everlasting appreciation if can figure out how much the Reef 2050 plan costs, how much reef funding has been allocated and spent, how much has been cut from GBRMPA and AIMS budgets and how many times each allocation has been separately announced. The topline is that it’s continued, piecemeal funding of the Reef 2050 plan with questionably “new” money. And even if it is new money, $170million over five years is woefully inadequate and a drop in the ocean compared to the $3bn this year that the mining industry is getting.
Last point. 15% funding cut to the environment department. Facepalm.