The Climate Institute welcomed the Budget’s reforms to fringe benefits tax on company cars as an important first step in paring pollution protections and noted the multi-billion dollar impacts of extreme weather events on the budget and economy, events likely to increase in severity under unmitigated climate change.     

“Building a prosperous low carbon economy requires reforms to remove subsidies that encourage carbon polluting activities such as the old fringe benefit tax benefits on company car use,” said John Connor, CEO, The Climate Institute.

“This is welcome reform.”

“Very few of the almost billion dollar saving generated by changes to the fringe benefits scheme, however, appear to have gone to clean energy or energy efficiency projects or programs.  There have been shavings, deferrals and cuts across a range of programs from the Solar and CCS Flagships to venture capital backing for renewables.”

“This puts the spotlight on how revenue to be raised from pricing carbon pollution will be directed to clean energy innovation and deployment as well as associated policies on energy efficiency.”

"The $46million to support implementation of the Carbon Farming Initiative is insufficient to comprehensively kick start this vital new industry, another area which should get renewed attention during negotiations on the Multi Party Climate Change Committee."

“The Budget papers graphically highlight the economic costs of extreme weather events with a $9 billion slug on economic growth and extra $6.6 billion Government expenditures.”

“While it is difficult to say any event is directly linked to climate change it is clear from the climate science acknowledged by the Treasurer that extreme weather events will increase in severity under unmitigated climate change.”

“This Parliament is yet to sit the biggest test on how seriously it takes climate change when it considers legislation that can make large companies finally start to pay for their carbon pollution and allow use of revenue raised to reduce pollution, grow cleaner industries and help protect those struggling with bills.”

“Australia’s economy is dangerously dependant on carbon pollution reflected in the fact that are the largest carbon polluters per person, the 15th highest polluting nation and have one of the ten most carbon polluting power sectors*.”

“With our carbon pollution levels continuing to rise, further delay or half measures in discouraging high carbon investments and encouraging low carbon investments is high economic risk in a global economy which even BHP CEO Marius Kloppers acknowledges will be carbon constrained.”  

The Climate Institute will issue a more detailed analysis of budget papers tomorrow.

*World Resources Institute, 2010, Climate Analysis and Indicator Tool  www.wri.org