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 Nationals to rebel on carbon tax breaks 

Nationals to rebel on carbon tax breaks

26/11/2008 6:07:00 AM
Four Nationals and possibly a Liberal will cross the floor of the Senate next week to back a Greens-sponsored disallowance motion over tax breaks for carbon sinks.

The move will defy Opposition Leader Malcolm Turnbull who spoke strongly in support of the tax break at a joint party meeting of all Coalition MPs yesterday.

Most Coalition members fell in behind Mr Turnbull at the meeting, but the five senators spoke actively against the tax credit.

Senator Barnaby Joyce yesterday confirmed the willingness of himself and fellow National senators Fiona Nash, John Williams and Ron Boswell to cross the floor on the issue.

Liberal senator Bill Heffernan also spoke against the tax break during the meeting, but last night he did not indicate whether he would be prepared to cross the floor.

Greens senator Christine Milne will move the motion to repeal the carbon sink tax legislation, which provides an up-front tax break to companies that grow large plantations to offset carbon emissions.

Senator Milne was to put the bill to the Senate today, but said she had delayed the motion until next week at the request of Senator Heffernan to allow him time to persuade the Coalition to change its position.

Senator Milne said the tax break for carbon sinks was "buried" in taxation legislation passed through the Senate in June, and was missed by the Greens and Nationals.

A disallowance bill can remove the tax deduction as it is based on guidelines that can be overturned by a majority of the Senate or House or Representatives.

But that is unlikely unless Mr Heffernan can persuade the party room to change its stance, and independent senator Nick Xenophon and Family First's Steve Fielding vote for the motion.

That means the renegade Nationals' threat to cross the floor is largely symbolic.

Tax breaks for carbon sinks were first mooted under the Howard government by treasurer Peter Costello, with the strong support of then environment minister Turnbull.

But that legislation was never implemented after complaints by the Nationals last year.

Senator Milne said she opposed the tax break because the carbon sinks were missing a number of ecological conditions wanted by the Greens.

"I'm very disappointed that Peter Costello's legislation has been adapted by the (Rudd) Government," she said.

Senator Joyce said the four Nationals opposed carbon sinks because they could financially assist big companies to squeeze small farmers off arable land.

"Essentially they (carbon sinks) will become managed investment schemes on steroids."

Senator Milne said she had been in discussions with Climate Change Minister Penny Wong's office until last Friday, and some concessions had been offered, including monitoring sinks' groundwater use, but that had not satisfied the Greens.

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The plantation timber industry is already heavily subsidised by the tax payer, to the point where the actual cost-to-revenue, let alone the all-up-cost, is more than five times the cost of regenerating a native forest on cleared land.

So instead of getting our future wood supplies from additional areas of new, multi species native habitat that will be selectively (partially) harvested in perpetuity, these urban tax-benefit receivers get their snouts in the trough, again, by producing second-rate "battery forest" of marginal habitat, which is clear felled on completion.

And they want even more subsidy?

Good work Barnaby, Ron et al (in opposing the subsidy in parliament). This rort needs to be stopped. You can have good country schools and hospitals with that sort of money, or you can have a tax rort for absentee punters.

You can't have both.

Posted by Ian Mott on 27/11/2008 10:21:50 AM
I've watched this farce progress for a few months now. The so-called 'debate' in the Senate was a joke. Almost every statement by these misguided Senators was factually wrong, or at best misleading, and carefully crafted to press lots of emotional buttons and create an utterly unwarranted mortal fear about loss of prime agricultural land to plantations of any sort.

The Senate Inquiry was conducted in a similar vein. Nothing that was said by the witnesses made the slightest difference to these Senators, whose minority report said all the same things they'd said in the Senate 'debate'.

Senator Boswell in particular, however well-meaning he may be, has made some breathtakingly inaccurate public statements, no doubt playing to his sugar industry constituents, who clearly feed him the misinformed lines.

The simple reality is that 'carbon sink forests' are most likely to be grown on relatively marginal land in need of revegetation, not on prime agricultural land in high rainfall regions.

Individual landholders seeking some way to offset the costs of this revegetation will be able to access the tax deduction, which is very similar to the long-established landcare capital deduction. (At least until 2012, after which the carbon sink forests concession will revert to the rules for horticultural trees - straight line depreciation over 14 years.)

If the price of carbon under an emissions trading scheme ever rose high enough to justify buying very expensive prime land solely to grow trees that can never be harvested for any commercial return, then the nation would be confronting far far bigger problems in other sectors of the economy that would completely swamp this particular issue.

These Senators have been seriously misled, and - sadly - have stirred up a lot of unnecessary emotion and fear in rural communities by their public statements.

There are far more important issues on which these Senators should cross the floor and thereby put their Coalition colleagues on the mat.

Posted by Disappointed Nats supporter on 27/11/2008 11:18:30 AM
In Africa, they are using good agricultural land to grow trees for carbon offsets where it should be used to grown food for the poor and hungry. Agricultural land should be used to grow crops to feed the world's population.
Posted by Len on 27/11/2008 2:39:27 PM
Ian Mott, sadly, perpetuates the utterly incorrect idea that the plantation timber industry is 'heavily subidised'.

Any tax deductions ('cost to revenue') available for plantation establishment and management are more than matched (in multiples) by the tax paid ('revenue') on profits from harvest.

Further, Ian perpetuates the misinformation spread by the Senators that the timber industry is somehow engaged by the carbon sink forests legislation. It is not. Carbon sink forests cannot be harvested, and MIS plantations are specifically excluded.

Furthermore, the carbon sink forests legislation also allows assisted natural regeneration, not just physical planting of trees.

The carbon sink forests legislation is not a threat to anyone or any land use or any other sector of the economy.

What a shame it is being so misrepresented.

Posted by disappointed Nats supporter on 28/11/2008 8:06:30 AM

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