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Cut fossil fuel subsidies to pay for flood recovery

The federal government should fund flood recovery by cutting subsidies and tax breaks that promote fossil fuel use and greenhouse pollution, not by slashing funding to climate action programs, the Australian Conservation Foundation said today.

Prime Minister Julia Gillard yesterday announced cuts to the Green Car Innovation Fund, the Cleaner Car Rebate scheme, the Solar Flagships program, the Solar Hot Water Rebate scheme and the Green Start program to help pay for flood reconstruction.

“It’s right for the government to help people rebuild after these devastating floods, but it should use fossil fuel subsidies to fund the work,” said ACF’s executive director Don Henry.

“There are a number of tax breaks and concessions that drain the Federal Budget, while promoting fossil fuel use and greenhouse pollution.

“The largest of these fossil fuel subsidies is the Fuel Tax Credits program, which costs taxpayers more than $5 billion a year, the vast majority of which goes to mining companies as credits for use of diesel fuel.

“Another is the Fringe Benefits Tax concession for personal use of company cars, which is set up so that if you drive a company car, the benefits increase the more you drive it and the more you pollute the atmosphere.

“US President Barack Obama, in his State of the Union address this week, made a commitment to fund the development of clean technology by ending $4 billion a year of tax subsidies to oil, gas and other fossil fuel producers.

“Australia should take a leaf out of Obama’s book.

“While no single extreme weather event can be directly attributed to climate change, this summer’s floods are entirely consistent with what climate scientists have been warning for decades.

“By cutting greenhouse pollution we can reduce the severity of extreme weather events and help protect our people and our economy.”