3 February 2011 – The fossil fuel industry receives a whacking huge $10 billion a year or more in subsidies. And these subsidies are firm and solid – built into the tax system as automatic deductions or rebates or exemptions for taxpayers, corporate or individual, says BERNARD KEANE in Crikey.

From Crikey: Earlier this week, the Australian Conservation Foundation released an analysis comparing how much the Federal Government spent encouraging fossil fuel usage compared to how much it spent on climate change programs in recent years.

We asked the ACF for their data and then supplemented it with our own research to try to provide a longer-term take on the comparison. The ACF has compiled data on climate change programs announced in budgets going back to 1997, so we tried to collate data on all the rebates, tax expenditures and other types of spending that encourage fossil fuel use back to 1997 as well.

Some caveats are in order. The chief source for the data is Treasury’s annual Tax Expenditures statement, which tries to nail down how much revenue is lost through tax concessions, exemptions and deductions. The quality of Treasury’s Tax Expenditures work has improved each year, but that means the further you go back, the less data there is. Where necessary, we’ve used a deflator to simply reduce the value of a fossil fuel subsidy by inflation, and tried to err on the conservative side in doing so. We’ve also used the biggest figures we could find for climate change programs.

In some years, the forecast expenditure on climate change programs hasn’t eventuated, but rather than use the real figure, we’ve given government the benefit of the doubt and used the higher forecast figure, not the actual spending. On the other hand, we calculated the increase in the lost revenue from the 2001 ending of fuel excise indexation differently to the ACF to provide what we think is higher, more realistic figure.

The first blush result confirms that the enormous disparity identified by the ACF from 2007-10 is only the worsening of an existing problem from the 1990s. This is the comparison of the ACF’s identified fossil fuel subsidies versus climate change programs, in millions of dollars. Read the whole story https://www.crikey.com.au/2011/03/03/our-carbon-addict-tax-system-is-stronger-than-a-carbon-price/

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