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

I move Australian Greens amendment (1) on sheet 6089:

(1)

Page 34 (after line 6), after Schedule 4, insert:

Schedule 4A—Carbon sink forests

Income Tax Assessment Act 1997

1  Subdivision 40-J

Repeal the Subdivision.

As I have indicated previously, every time there is a tax law amendment brought into the Senate, I will be moving for the removal of the tax deduction for the establishment of carbon sink forests. We have had a long debate on this matter previously and my concerns remain. In fact, they are now heightened by the complete mess that is the forest products industry around Australia. As a result of very poor government policy with managed investment schemes, we now have a glut of plantation timber from one side of the country to the other. There is no market for this timber. And the global projections of that market show that the glut is there to stay. China is not going to rescue anybody in this particular field.

There is a wall of wood that has come on stream from around the world. And the best thing the government could do right now is to get rid of managed investment schemes for forestry and protect Australia’s native forests. That would improve our biodiversity outcomes. It would protect our standing carbon stores and it would increase the likelihood of a sale and a decent price for the plantation timber which has now come on stream for which there is no market. Subsidising the logging of native forests and subsidising the planting of plantations for which there is no market is a ludicrous economic policy. Whichever way you want to look at the mess in the forest industry around Australia, throwing government money at subsidies to make the matter worse is ridiculous. And, in difficult economic times, and climate change very much in our face, there is now I think a once-in-a-lifetime opportunity, actually, to sort out, once and for all, the protection of native forests, the protection of those carbon stores, the removal of these subsidies which lead to competition for land for food production and for water, and to actually increase the price for those people who have put in place these forests.

The next concern I have is that the $652 million that the government has put aside for renewable energy, that it has saved from the Carbon Pollution Reduction Scheme, it has included in its renewable energy remit—biomass. Does this mean that we are now going to be in a situation where we have subsidised the establishment of these managed investment schemes and are about to subsidise more of them with the carbon sink forests? Are we now going to say, with the managed investment schemes: ‘We’ve already given you the money upfront to plant them; now there is no market for them, we’re going to subsidise you to cut them down and burn them in forest furnaces. That’d be a good idea; let’s give the money to do that’? When are we going to stop this sacred cow mentality? When are we going to adopt a rational and efficient forest industry in this country instead of pork-barrelling an industry which is now in a mess, largely as a result of government policy? So I am now concerned that we give it on the one hand by encouraging people to go and plant these plantations—taking that land out of food production and undermining the viability of many food processing areas. We have had Senator Boswell in here many times before, talking about the impacts on sugar in Queensland, for example, where you have had land taken out into managed investment schemes.

I want to put the government on notice yet again. You now have a golden opportunity. This is first time in the whole 20 years that I have been campaigning on native forests that there has been such a logical and overwhelming imperative and opportunity to fix up this mess around logging and wood products once and for all. You have got all the ducks lined up, for once, and yet I do not see any serious whole-of-government analysis of how the tax breaks are impacting on land use, on carbon and on ecological integrity.

If you want to have a vote winner at this federal election then get rid of managed investment scheme subsidies and carbon sink forest subsidies, and go and protect the native forests for the biodiversity outcomes and the carbon stores—therefore, getting yourself a big tick on the climate front and the biodiversity front—and look at what to do with this massive wall of wood for which there is no market. But do not come back into this chamber and make a big announcement prior to the election that we are going to spend more taxpayers’ money—in the $652 million over the next four years for renewable energy. Do not come back in here and tell me that we are going to have taxpayer funded forest furnaces to burn down the trees that we have subsidised people to put in in the first place. That is where I fear we are about to go next.

But there is not only what we will find with the forest furnaces; there is also the issue that, under the renewable energy target, they will get counted as green energy—and that is a third subsidy. Now wouldn’t that be a fabulous outcome—the taxpayer gives you a tax break to put them in, gives you a furnace so you can cut them down and burn them up and gives you a fund to count it as green energy! What is more, the beautiful thing in terms of the ridiculous rules we have got for accounting on carbon is that, because you would have put these forests in post 1990, they would not be counted as a carbon loss when you cut them down. So, under the accounting rules, you would not have to count them as a loss. So you get your green energy; you get your government subsidy for your furnace and you get another government subsidy. Meanwhile, the poor, old farmers out there are struggling and are paying higher costs for their land use, having lost their water into their catchments. They are now struggling in those communities as the managed investment schemes go broke and are not being properly managed. There are feral animals, fire risks and all sorts of things because of this complete and utter disaster.

Instead of maintaining it, why not face up to it and recognise that you have got an opportunity to fix things? It is a once-in-a lifetime opportunity. We have never had a situation where the native forest logging industry is in complete chaos and collapse, where the plantation industry is in complete chaos and collapse, and where the ecological imperatives are so great. At the same time, this is an opportunity to save money, by removing those subsidies which nobody in their right mind would support if they went out and saw what is actually happening on the land.

I want to see the end of managed investment schemes for forestry. I want to see the end of a tax deduction for carbon sink forests. The only tax deduction for carbon sink forests that should be allowed is for the forests which are biodiverse and which are planted for permanency—for 100 years. Increase your biodiversity, by all means. But, by including a provision that you can plant plantations as carbon sink forests and continue to manage them as plantations for wood production at the same time—which you can do under this legislation—is a ludicrous proposition. I will be moving an amendment to get rid of this and I will continue to do so until the government sees sense with regard to getting rid of these subsidies that distort land prices, water issues and food production—distort everything.

We have seen just how distortionary this has been with the rip-offs that have gone on with the commissions being paid right throughout rural and regional Australia. A lot of people have already lost money with the managed investment schemes for forestry. If you live in Tasmania you have seen the collapse of forest enterprises. You have seen Great Southern go down. You have seen Timbercorp go down. When you set up your carbon sink forests, you are going to see exactly the same mess with the middlemen making an awful lot of money ripping off the system. The people who lose are the people who live in those areas and have to put up with the consequences. So I now move Australian Greens amendment (1) on sheet 6089, to remove this tax deduction for carbon sink forests:

(1)

Page 34 (after line 6), after Schedule 4, insert:

Schedule 4A—Carbon sink forests

Income Tax Assessment Act 1997

1  Subdivision 40-J

Repeal the Subdivision.