Fossil fuel subsidies hit $14.5 billion in 2023-24, up 31%
New research from the Australia Institute has found that state and federal governments provided $14.5 billion in subsidies to fossil fuel producers and major consumers in 2023-24 – the equivalent of $27,581 for every minute of every day, or $540 for every person in Australia.
The analysis finds that over the forward estimates the Federal Government has budgeted $54 billion for fossil fuel subsidies, five times the amount it has committed to its key housing policy, the $10 billion Housing Australia Future Fund.
Key findings:
Australia’s subsidies to fossil fuel producers and major users from all governments totalled $14.5 billion in 2023-24, the equivalent of $27,581 for every minute of every day, or $540 for every person in Australia.
2023-24 saw a 31% increase in fossil fuel subsidies to $14.5 billion, from the $11.1 billion recorded in 2022-23, driven by large increases to diesel and aviation fuel tax breaks.
Total fossil fuel subsidies over the forward estimates from all governments has reached $65 billion, or 16 times the balance of Australia’s Disaster Ready Fund (as of December 2023).
The OECD has recommended that Australia cut or reduce the largest subsidy, the Fuel Tax Credit Scheme, which alone cost the Federal Government $9.6 billion in 2023-24, more than Australia spends on the Royal Australian Air Force.
“Budgets are about choices. This research reveals Australian state and federal governments are budgeting for more fossil fuel use and more fossil fuel production, not less,” said Rod Campbell, Research Director at the Australia Institute.
“The magnitude of these fossil fuel subsidies overshadows government claims about climate action. Our state and federal governments are failing to implement even the most basic climate policy – cutting fossil fuel subsidies.
“Eliminating these subsidies would significantly increase government revenue to address climate issues while also reducing emissions. If governments collected this foregone revenue, it could instead look to address housing affordability and other cost of living pressures.
“With federal and state elections just around the corner, policymakers have a golden opportunity to realise the benefits of phasing out fossil fuel subsidies.”
Federal and state fossil fuel highlights for the 2023-24 financial year:
Federal – increase in the cost of the Fuel Tax Credit to $9.6 billion, more than the expenses of the Royal Australian Air Force. This comes as the OECD recommends Australia remove fuel tax exemptions.
Federal – $1.6 billion in aviation fuel concessions, up 36%, as Australians expect to fly more.
Federal – $113 million on upgrading coal railways to help “coal producers to…capitalise on global demand and high prices for thermal coal”.
Queensland – a $520 million, six year program to “drive emissions reductions, with a focus on the state’s highest emitting metallurgical coal mines.”
NT – $2.6 billion worth of gas purchase commitments and $674 million in pipeline commitments, this does not include recent announcement to buy fracked Beetaloo gas.
WA – $141 million Investment Attraction Fund that assists “identified projects and sectors for strategic development including energy primary industries…”
SA – Budgeting for “increased petroleum production”, with subsidies to the Santos-operated Port Bonython of $21 million this year, with the estimated total cost of $64 million.
NSW – Recently announced Eraring coal-fired power subsidy will come on top of the NSW Coal Innovation Fund’s $45 million balance.
Full article :
https://australiainstitute.org.au/post/ ... -24-up-31/
