Archive for December, 2008
The government has commissioned a broad-ranging review of the Tax system by Treasury Secretary Ken Henry. There is already speculation regarding the range of options Henry is considering.
The Henry Review released its consultation papers today. The review will consider the effect of taxation on the environment. About 25 submissions already [search] have made reference to the Carbon Pollution Reduction Scheme. A number of these have argued that tax concessions should be introduced to further reduce carbon emissions.
The consultation paper also noted that “[of] the submissions concerned about the environment, around a third are primarily concerned with the fringe benefits tax arrangements for motor vehicles”, the concern being that these arrangements encourage people to drive more.
There are three specific questions the consultation paper asks in relation to the environment:
“Q13.1 Bearing in mind that tax is one of several possible instruments that can address environmental externalities, what opportunities exist to use specific environmental taxes to address Australia’s environmental challenges?
Q13.2 Noting that many submissions raise concerns over unintended environmental consequences of taxes and transfers, such as the fringe benefits tax concession for cars, are there features of the tax‑transfer system which encourage poor environmental outcomes and how might such outcomes be addressed?
Q13.3 Given the environmental challenges confronting Australian society, are there opportunities to shape tax‑transfer policies which do not currently affect the environment in ways which could deliver better environmental outcomes?”
You can make submissions to the review anytime until 1 May 2009.
The ABC has posted an interview with Penny Wong [video] on the Insiders current affairs show ahead of the upcoming climate change conference in Poland.
Many people are critical that Australia isn’t announcing binding targets ahead of this conference. As we’ve suggested before, Australia is unlikely to commit to targets until Copenhagen next year. It is in Australia’s interests to work towards a sustainable international agreement and to set targets in line with other developed countries.
However the White Paper due to be released on Monday the 15th of December should indicate Australia’s medium term targets and confirm the design of Australia’s reduction scheme.
With the anticipated release of the Department of Climate Change’s white paper on the Carbon Pollution Reduction Scheme (CPRS) (due Dec 15), many questions remain around the role and characteristics that the regulator will play, both in carbon trading and also in the implementation of NGERS. It’s a shift the industry will need to make quickly — from design to implementation. Here are some of the signifincat questions that need to be asked:
Big stick or enabler?
Will the regulator be solely responsible for monitoring compliance against the legislation and look for those who are not meeting their obligation, or will they look to become a source of information that supports the process?
Cost recovery
A report completed by the CSIRO entitled “Growing the Green Collar Economy” in June 2008 has estimated that over 3 million green collared workers will be required to help reduce our national carbon footprint. This is across all industry but what about in the case of the regulator? New roles will need to be created to administer the implementation of NGERS. These do not exist today and therefore will be an additional cost to government — which poses the question — how will this cost be recovered?
Size of the regulator
NGERS estimates the threshold coverage is 700 companies. How many staff will it take to regulate the industry?
Audit framework
Work is currently underway to define the auditing framework and guidelines required for NGERS and the CPRS so while legislation has already been implemented the actual regulation is now playing catch up — what is the role of the regulator versus the external auditor?
Workflow
What system will be implemented to support the workflow of submission, follow up, compliance, tracking, reviewing and monitoring? The implementation of the regulatory process needs to be defined in detail and then supported with appropriate tools to ensue the long term efficiency of the system.
Training
The guidelines have been produced and they are predominately based on the GHG Protocol and ISO 14064. The GHG Institute provides training for organisation and project level carbon accounting under this protocol within an online environment. The questions remains though — how do both industry representatives and, more important to this discussion, the regulators, get the required training within the right time frames?