Taxpayers subsidise corporate polluters $2billion


Recently released estimates from Federal Treasury reveal a spike in the cost of fringe benefits tax concessions for company cars – costing the taxpayer billions of dollars annually. More alarmingly, the concession rate per vehicle actually increases the more kilometres logged.

These concessions contribute unnecessarily and unacceptably to increased greenhouse gas pollution and urban traffic congestion.

According to the Treasury estimates, in the past five years the concessions have been costing us between $410 and $750 million dollars more per year than was previously thought – an increase of more than 70 per cent for some years.

Treasury predicts that by 2009-10 we will be spending over $2 billion per year subsidising the use of company cars. That’s nearly twice the original estimate.

Other tax estimates have also increased. For the 2008-09 year, the estimated value of aviation fuel tax incentives has increased $70 million to $900 million, and for the same period the value of tax incentives for the production of condensate by petroleum and gas companies has leaped from $250 million to $320 million.

“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,” says ACF’s strategies director Charles Berger.

“Dismantling this fiscally irresponsible, environmentally destructive fringe benefits tax-break for company cars should be tackled by 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.”

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