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Environment, Oil Mining Resources

Joint statement: Labor must end the $1.5 billion handout to coal, oil and gas

Climate Media Centre 4 mins read

Today, ten organisations from across the energy, environment and social service sectors have called on the Federal Government to abolish one of Australia’s biggest fossil fuel handouts in this year’s budget: the $1.5 billion per year Fuel Tax Credit handout to coal, oil and gas. 

The joint statement was released by Climate Energy Finance, Smart Energy Council, Australian Conservation Foundation, Australia Institute, Australian Council of Social Service, Climate Action Network Australia, Climate Council, GetUp, Oxfam Australia and the Uniting Church in Australia (Vic/Tas).

The call comes during the national ‘Rise Up’ 12 days of action on climate hosted by leading environment groups, which also demands an end to the Fuel Tax Credit handout to coal, oil and gas. 

“The Australian Government must respect its climate commitments by removing incentives that make the choice to pollute more attractive than clean alternatives” – Tim Buckley, Director, Climate Energy Finance.

"It's time to electrify everything so we can power machines and vehicles with clean energy and hit our climate targets. The transition to electric vehicles and systems is already underway. The Government must stop roadblocking its own progress by continuing a policy that encourages more fossil fuel transport at a time when we need to be rapidly cutting transport pollution” - Wayne Smith, acting CEO, Smart Energy Council.

“It is extremely poor policy for the Government to continue handing out support to these polluting industries during an unprecedented climate crisis. We should be actively transitioning away from these industries, not propping them up with the assistance of billions of dollars of public money” - Meg Good, Climate Campaigner, Australian Conservation Foundation.

The joint statement calls on the Government to invest the saved $1.5 billion into transforming Australia into a renewables powerhouse, including contributions to:  

  • Providing support for people and communities experiencing financial and social disadvantage to benefit from the renewables transition

  • Helping communities to build resilience in the face of increasing climate impacts

  • Initiatives under the Future Made in Australia Act policy package.

The joint statement also calls on the Government to conduct a detailed review of all public money expenditure that contradicts Australia’s climate change goals.

ENDS

 

Joint Statement - Need for Urgent Reform to the Fuel Tax Credit Scheme: End $1.5 billion handout to coal, oil and gas

The Fuel Tax Credit Scheme (FTC) currently costs the public purse $9.6 billion per year, with $1.5 billion provided to the coal, oil and gas industries. By the end of the decade, the Government will have handed over a staggering $12.7 billion in fuel tax credits to support these polluting fossil fuel extracting businesses. 

Rather than risking our future by investing in climate destruction, the Government should be investing this public money into renewables and measures to provide a safe, reliable and economically prosperous future for all. It is bad policy to provide government support to polluting industries that Australia is committed to transition away from.

To remove one significant support mechanism for the continued extraction of fossil fuels and help level the playing field for renewable industry, we call on the Government to abolish the $1.5 billion Fuel Tax Credit benefit for the extraction of coal, oil and gas in this year’s Budget (not for other FTC beneficiaries, such as agriculture). 

The saved funds should instead be invested into transforming Australia into a renewables powerhouse, providing support for people and communities experiencing financial and social disadvantage to benefit from the renewables transition, and helping communities to build resilience in the face of increasing climate impacts.

This could include funding contributions to: 

  • A rapid, equitable and inclusive transition to a zero emissions transport system

  • Home energy upgrades for low-income housing, prioritising First Nations housing

  • Initiatives under the Future Made in Australia Act policy package

  • Support for First Nations peoples and communities to participate in the energy transition and uphold their rights to free, prior and informed consent to energy projects affecting their lands and communities

  • Assisting the agriculture sector, including support for lower emissions transport, resilience building, and adaptation to climate change 

  • Support for communities here and in our region facing climate impacts (including worse heat waves, storms, floods, fires and rising sea levels) to quickly recover from disasters, build their resilience and adapt to climate change.

As part of the Government’s sectoral decarbonisation plans under development in 2024, we call on the Government to conduct a detailed review of all public money expenditure that contradicts our climate change goals by incentivising emissions growth and disincentivising electrification, efficiency and the transition to renewables. 

Continued Government handouts to polluting fossil fuel industries is wasteful and bad policy which slows progress on climate change goals and stifles innovation. The Fuel Tax Credit for coal, oil and gas is a major disincentive to electrification of our resource sector, entrenching dependence on imported fossil fuels and in doing so, undermining Australia’s energy security. 

For Australia to respect its international climate commitments and attract investment in clean, renewable industries, it must remove incentives that make the choice to pollute more attractive than clean alternatives.

We, the undersigned, call on the Australian Government to:

  • End the $1.5 billion Fuel Tax Credit handout to coal, oil and gas and to invest the saved funds into transforming Australia into a renewables powerhouse 

  • Provide support for people and communities experiencing financial and social disadvantage to benefit from the renewables transition, and to help communities build resilience in the face of increasing climate impacts

  • Conduct a detailed review of all public money expenditure that contradicts our climate change goals by incentivising emissions growth and disincentivising electrification, efficiency and the transition to renewables.


Contact details:

Media comment available from: 

  • Economic perspective 

    • Tim Buckley Director, Climate Energy Finance (Sydney based) 0408 102 127

    • Wayne Smith External Affairs Manager, Smart Energy Council (Canberra based) 0417 141 812

  • Climate perspective 

    • Meg Good (she/her), Climate Campaigner – Exports, Australian Conservation Foundation (Sydney based) 0439 448 845.

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