Christine Ahern
Friday, 27 June 2008

The Nationals won the support of the Senate yesterday to move ahead with an inquiry into legislation that Liberal Senator Bill Heffernan described earlier in the week as "absolutely and fundamentally flawed". The legislation allows for a full tax deduction for the cost of planting trees as carbon sinks.

The Bill was originally drafted by the previous Federal Government last year and was passed in the Senate on June 17.

Then in the Senate on Tuesday, Greens Senators Christine Milne and Bob Brown put forward amendments to the Bill that would require plantations to remain in the ground for at least 100 years. The Bill as it stands allows investors an upfront 100% tax deduction on the costs of establishing a plantation.
"I would like to know....what the justification is for there being no timeframe in this legislation requiring the length of time for these so-called forests to be in the ground," Milne asked.

"What is the justification for them not being mixed species - local native mixed species? What is the justification for no hydrological assessment and no assessment of the impacts on existing industries in that area - whether it is dairies, cane or whatever else?"

Brown added: "We are dealing with a piece of legislation which says, ‘You'll get a tax reward if you plant trees, and you'll be able to hang on to that even if they're burnt to the ground 15 years later and all that greenhouse gas goes into the atmosphere'."

The Senators said the scheme would encourage industry to offset greenhouse emissions rather than reducing emissions at the source.

"It is going to, and it will obviously go to, big corporations, coal corporations, aluminium corporations - polluters - because they are the people with the money to buy up vast amounts of land, including food-producing land, and get a huge windfall through this scheme to put in plantations for which they have no responsibility 15 years down the line," Brown said.

But Labor spokesperson Stephen Conroy said the government would not support the amendments put forward by the Greens, which he described as "unworkable".

He said it is impractical to guarantee the carbon sink forests will remain for 100 years considering there could be multiple changes in ownership over time.

Enforcement would place "an unrealistic burden on the Tax Office" and it also adds a further compliance burden for the businesses who seek to claim a deduction.

Debate continued in the Senate last night, with Nationals Senator Barnaby Joyce adding his voice.

"Why on earth are we going to give a tax deduction to coal companies, who are receiving record prices and record returns, to go out there, buy agricultural land that is currently supplying the Australian supermarkets with cheap product, so that they can get a tax deduction and the Australian consumer can pay more for food?" he asked.

An unusual collaboration involving Brown, Milne, Heffernan and Joyce was formed, with Joyce summing up the mood of the partnership: "It is very rare that, to be honest, I would agree with the Greens. But tonight is going to be one of those nights."

Joyce proposed the Greens' amendment was withdrawn in order to move forward with an inquiry. He said an amendment was unlikely to gain the full support of the Senate.

The inquiry will be undertaken by the Rural and Regional Affairs and Transport Committee and will report back to the Senate by August 22.