Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

by leave—I wish to speak for a couple of moments on the Standing Committee on Rural and Regional Affairs and Transport report Implementation, operation and administration of the legislation underpinning carbon sink forests and the government’s response to it, and I move:

That the Senate take note of the document.

I have to say that the government’s response does not satisfy the concerns that I raised in the dissenting report from the majority report. In view of the collapse of managed investment schemes in recent times, I think the concerns that were put on the table by the Greens when this legislation was being debated are now more relevant than ever. At the time, the majority committee report said:

The committee notes that other forms of greenhouse gas emissions reduction activities … are tax deductible. The change in the tax treatment of carbon sink forests addresses this anomaly …

The committee believes that the tax deductions will provide incentives for corporate investment into greenhouse gas abatement activities which represents an ideal opportunity to direct necessary capital to achieve positive environmental outcomes.

That is exactly what they said about the managed investment schemes for forests. This was a fabulous idea to drive investment into rural Australia; what a good thing to do. It was all set up as a tax minimisation scheme, and look what an utter and complete mess and collapse has occurred because of that.

At the time, I said we should be repealing the managed investment schemes, not bringing in another managed investment scheme by way of carbon sink forests. Yet the government and the coalition overruled that and went ahead. Now we have got two Senate inquiries into the managed investment schemes whilst continuing with this absolutely flawed proposal for carbon sink forests. I said at the time that these forests will not be biodiverse plantings, and the government said, ‘Oh yes, they will.’ But now in the government’s own response it says:

The Government notes that it is not the primary objective of the legislation to promote biodiversity.

Exactly. The trees they put in they will put on the best land to grow the best trees with the most water because the idea is to bulk up the trees, bulk up the carbon as quickly as possible, and it is not its primary objective to achieve biodiversity and improvements in the long term in rural and regional Australia.

The other major concern I had was in relation to land clearance. I said that this will lead to land clearance for people to plant these forests. The government have said, ‘Oh no, that’s not the case because it can’t have been forested in 1990.’ But the point is when you are talking about native vegetation you are not necessarily talking about land which conforms to the definition of a forest. There is a specific definition of a forest and quite a lot of areas of native vegetation across Australia do not conform to that, and there will be land clearance because of this. I urge the government to recognise that it is all waffle in the government’s response here about the wonderful strategies that are in place nationally to look at the clearance of native vegetation. We do not even have a trigger under the EPBC Act on land clearance, let alone anything else in terms of greenhouse. In the Tasmanian context I can tell you now there is no enforcement and compliance in relation to land clearance, there is no enforcement and compliance in relation to groundwater.

The express concerns of National Party senators and the Greens in relation to this particular legislation were specifically in terms of four particular areas. One was that carbon sinks be registered on the property title, and I am glad the government has taken that up. The second one was no native vegetation to be cleared or converted for carbon sink forests. That has not been dealt with. Carbon sink forests should be biodiverse and cannot be harvested or cleared. That has not been dealt with. As I said, the definitions are such that native vegetation will be able to be cleared. The third thing we said was no carbon sink forests could be established in the absence of hydrological analysis in terms of groundwater and groundwater interception in the proposed areas. That has not been dealt with. In fact, the government has made a statement there saying that requiring hydrological analysis would be cost prohibitive. So in my view we have got MI schemes on steroids. That has always been my view.

The MI schemes have now fallen over big time. The investors in them have had their fingers burnt very badly. The people who made the money out of them were the accountants and the middlemen, the financial arrangers. They were the ones who walked off with the cash with these MI schemes. Now a lot of rural communities are stranded, and the communities I feel particularly sorry for are those where the MI schemes went in and bought up the water rights. Now those water rights will be the first things sold off as the MI schemes are wound up, and whole rural communities are going to be left without water because the water rights will be sold somewhere else, further down the catchment, most likely, and that will mean the big corporate buyers will buy the water and the family farms will be left in communities without water. So this is a living disaster, the MI schemes, and nobody in this place can say that they were not warned. They were warned. They were warned by the Greens and warned by the Nationals about what the impact would be in rural and regional Australia, and everybody took no notice, went ahead and said, ‘Let’s do it again with the carbon sink forests. Let’s get out there and give 100 per cent tax deductions for carbon sink forests.’ And now we have had proof from the government that their primary objective is not biodiversity: ‘It’s too expensive to require hydrological analysis; we’ll rely on the states to oversee land clearance.’ But we know that, in a case like Tasmania, that is a joke because there is no enforcement or compliance with regard to vegetation clearance.

I hope when this parliament starts looking at the mess of the MI schemes we will rapidly think again about this carbon sink forests legislation and get rid of it, because its primary objective is a tax deduction. When you introduce a financial mechanism the primary objective of which is tax minimisation and not the outcome—whether it was almonds, whether it was trees in the case of the forestry ones or whether it is now in terms of carbon sink forests—you always get rorting. That is what has happened. To the detriment of regional and rural Australia, that is what happened. The Collins Street investors moved in, the accountants got their 30 per cent commissions and the communities are going to end up with a mess. They are now surrounded by plantations that are going to be fire hazards this summer, that are going to be full of weeds and feral animals. There is no money to manage those MIS forests sitting out there now and there will not be any money to manage these so-called carbon sink forests either once this scheme gets underway.

We are still at a matter of debate in this parliament as to whether the tax deduction includes the cost of land. I believe it does and I have advice to say that it does which I provided to the parliament, and it is now only going to be a matter of someone taking this the court. We are going to have huge areas left with these MI schemes and what we have to make sure is that the government does not now enable forests that were planted as a result of tax deductions for wood production to end up able to be suddenly converted into carbon sink forests in order to realise some value for the investors that were in it to reduce their tax in the first place and not actually to get outcomes. That would make an even worse situation because you would then take out those plantations that were wood production and put them in as carbon sink forests and drive the logging further and further into native forests. That would be a disaster in biodiversity terms, a disaster in terms of the timber industry and the downstreaming that was meant to come from those plantations. It would be an Australian rural community horror show, in fact.

So I would like to see the government rethink what it is doing and help to resolve the mess that was created because the Liberal and Labor parties supported this tax minimisation in the first place, clean up the mess of the MI schemes and repeal this legislation before we end up with exactly the same mess very shortly down the track.