Tax breaks for polluting activities should be slashed
Date: 30-Jan-2008
Federal Treasury’s just-released estimates on the cost of fringe benefits tax concessions for company cars have gone through the roof.
The tax concession for the private use of company cars involves billions of taxpayers’ dollars every year and the rate of the concession actually increases the more kilometres drivers clock up. The concessions contribute to increased greenhouse gas pollution and urban traffic congestion.
New estimates released by Treasury late last week show that in the past five years, the fringe benefits tax concessions have actually been costing us between $410 and $750 million dollars more per year than was previously thought – an increase of more than 70 per cent in some years.
Treasury now estimates that, by 2009-10, we will be spending over $2 billion per year subsidising the use of company cars – nearly twice as much as was previously predicted. Other tax estimates have also increased. For the 2008-09 year, the estimated value of tax incentives for use of aviation fuel has gone up from $830 million to $900 million and for the same year the value of tax incentives for the production of condensate by petroleum and gas companies has gone from $250 million to $320 million.
ACF’s strategies director Charles Berger said:
“These tax breaks are economically senseless, reward environmentally destructive behaviour and increase taxes that the rest of us have to pay. There are much better uses for $2 billion than to hand it out to affluent corporate executives as an incentive to buy cars and drive them as much as possible to get the maximum tax benefit.
“Dismantling this fiscally irresponsibly, environmentally destructive fringe benefits tax break for company cars is a job for the new Government in its first Budget.
“It is astonishing that even estimates of past tax breaks for polluting activities have increased so dramatically. The revised estimates call into question the reliability and usefulness of public and government information about tax policy.”