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

I move Australian Greens amendment (11) on sheet 5862:

(11)  Schedule 2, page 76 (after line 17), after item 9A, insert:

9B  Subdivision 40-J

Repeal the Subdivision.

This amendment pertains to the removal of tax deductions for the establishment of carbon sink forests. Again, this has been an issue we have canvassed in here on many, many occasions. The issue is that there is a 100 per cent tax deduction provided for the establishment of a carbon sink forest. This is precisely the same argument as in relation to managed investment schemes. The consequences of the managed investment schemes will be exactly the same consequences in terms of the carbon sink forests.

It may surprise people because they would assume that a carbon sink forest is actually going to be a biodiverse planting because they would assume for it to be a carbon sink forest it would be in the ground for a hundred years at least and that it would be biodiverse and the rest. In fact, it is exactly the same rort as the managed investment schemes dressed up in another guise, and issues pertaining to water and planning apply. I know the minister will argue—and we had this debate earlier on another bill—but the fact of the matter is that the best land with the highest rainfall will grow the best trees. Once you put in a scheme which rewards people for the volume of carbon in a stand, you are going to get them putting this in on the best land with the best water. I have absolutely no doubt that we are going to see a test case in the courts. As I have presented to this parliament many times I have legal advice from a very experienced tax barrister who has given advice to say that the upfront capital cost of land and the packaging of the carbon sink forest product will all be part of the tax deduction, just like the managed investment schemes have been.

I am surprised there is no-one from the National Party here in the chamber now because I know they have a longstanding objection to the carbon sink forest legislation, which is the same objection the Australian Greens have. They have put that on the record in the past, although it is up to them to speak for themselves and they are not here. The Australian Greens do not believe it is appropriate to give a 100 per cent tax deduction for carbon sink forests because it will lead to perverse outcomes and distortion of land and water prices in rural Australia. It will lead to the same kinds of outcomes as for the managed investment schemes in effectively driving people genuinely interested in food production off the land in favour of the speculators and the Collins Street investors who have so rorted the managed investment schemes.

I do not intend to speak further on this but water is a critical issue, as is biodiversity, and we do need to rehabilitate degraded forests in Australia. We do need biodiverse planting, we do need to integrate trees in the landscape and on land, but we do not need 100 per cent tax deduction for carbon sink forests, which will distort the whole process. Now we are going to a situation where you get 100 per cent tax deduction for the establishment of a carbon sink forest and then you get the carbon offsets the government is prepared to grant under its national offset scheme. We are going to have exactly the same result as occurred with the managed investment schemes in that there will be a bunch of middle people who will get amazing commissions and we will have a whole financial market exploiting this. I would strongly advise that we remove this from the law as it currently stands.