Contributed by Adam Carlton
A new report reveals that Australian federal and state government combined spending on subsidies to fossil fuel companies is more than what is spent on the military.
The report released by the Australia Institute says that combing through federal and state budgets shows $10.3 billion has been spent on these companies during this financial year. Most of it on the fuel tax credit scheme. This provides a refund to industries that consume diesel on non-public roads, and the fossil fuel companies are easily the biggest beneficiaries, taking $7.84 billion.
They are also beneficiaries of a tax that subsidises large scale use of fossil fuels by other companies.
The Australia Institute’s Rod Campbell says, “Coal, oil and gas companies in Australia give the impression they are major contributors to the Australian economy. But our research shows they are major recipients of government funds”.
The argument for the subsidy is that it helps to keep the companies competitive. This is an admission that they depend on a public money. This is an industry that underperforms and is not a stable pillar of the economy.
The reality is that fossil fuel is becoming increasingly expensive in comparison to renewable alternatives. This means that government subsidies will continue to increase to keep it afloat. It is money that denied to other purposes.
Doing this is irresponsible. Resources are misallocated, and this is not good for the overall economy. Even worse, it denies Australia’s responsibility to meaningfully cut carbon emissions to tackle the threat of a climate emergency.
Leaders met in a global climate summit last week and Australia performed abysmally, compared to just about every other nation. The world, spurred on by the Secretary-General of the United Nations, called for an end to subsidies to fossil fuel companies, and the message is being ignored.
The world moves towards a zero emissions future and Australia is out of step. Prime Minister Scott Morrison’s speech at the online event was an embarrassment, inviting attacks from all quarters. He said that the future will be taken care of by new technologies, implying that little needed to be done to change anything.
This puts Australia under a threat of tariffs being placed on carbon intensive exports and the economic harm that this will bring.
The money used to subsidise the fossil fuel companies would be much better being allocated to the growth of renewable energy and generating new clean industries.