Imposing a carbon tax through fuel excise legislation removes the incentive for the freight industry to reduce emissions ALC says
By <a href="mailto:agamelopata@acpmagazines.com.au“>Anna Game-Lopata | September 23, 2011
The Australian Logistics Council (ALC) says imposing a carbon tax through fuel excise legislation excludes the freight industry from Emissions Trading Scheme advantages expected down the track, and removes the incentive to reduce emissions.
In its submission to the Joint Select Committee on Australia’s Clean Energy Future Legislation, the peak Logistics body takes issue with the concept of using the fuel excise system for extracting a carbon tax from freight transport companies.
Rather than individual companies having to pay a carbon ‘price’ based on their emissions, as in the mining and steel industries, freight companies will be forced to pay the so-called ‘proxy carbon price’.
It will be derived from alterations to existing taxation laws made by the Fuel Tax Legislation Amendment (Clean Energy) Bill 2011 and subsequent amendments to customs tariff and excise legislation.
ALC asserts without
the greenhouse reporting obligation, operators are excluded from any scale and scope advantages offered through Emissions Trading Scheme trading and permit mechanisms designed to reduce carbon emissions.
This will effectively remove any incentive the industry might otherwise have had to reduce carbon emissions.
The government’s carbon tax is expected to transition into an Emissions Trading Scheme by 2015.
“ALC also questions the average cost to smaller operators that proxy carbon pricing will impose and the capacity such operators have to pass on additional costs to consumers in a highly competitive environment,” the submission says.
“Best Practice requires the quantification of compliance costs for proposals imposing medium or significant compliance costs on business.”
The submission also notes an estimation of the level of freight tonnage moving from rail to road transport during the staggered introduction of a carbon price is missing.
“ALC requests the government provides these assessments,” the document says.
ALC also calls on government to apply the 2014 carbon price exemption for heavy vehicles consistently across intermodal, rail, aviation and maritime transport, arguing the inconsistent start-up date is uncompetitive.
Imposing increased operating costs on some, but not all of the transport modes from 2012 will result in a distortion in the freight transport market, the ALC submission asserts.
It will cause an unfair influence on the way customers choose the modes required for freight transport of goods.
“ALC has a policy of taxation neutrality between different modes of transport so such distortions in the market place are minimised,” the document says.
“While ALC supports the decision to exempt heavy vehicles from a carbon price until 2014, it believes this measure should be applied across the other transport modes.”
Finally, ALC recommends amending the Clean Energy Bill to ensure the exemption of off-road product movements derived from ‘core agricultural activity’, ‘fishing’
or ‘forestry’ from the carbon tax.
“This will remove ambiguity and reduce the administrative costs involved in determining whether a particular use of fuel is eligible for concessional treatment,” the submission says.
“It is imperative the Government engage all interested stakeholders to ensure that the legislation is sufficiently clear such that small businesses do not suffer the administration and compliance costs inherent in negotiating with the Australian Taxation Office as to whether or not a particular activity should or should not be eligible for a full tax credit.”