New research shows fossil fuel subsidies over the forward estimates have increased to a record breaking $57.1b, up from the $55.3b forecast in 2022.
As the federal budget approaches, future fossil fuel subsidies will cost 14 times the amount invested in the Australian Disaster Ready Fund, and more than the amount spent on the Australian Army.
Key Points:
- Fossil fuel subsidies over the forward estimates have increased to a record breaking $57.1b, up $1.8b from the $55.3b slated in 2022 budgets.
- The cost of the Fuel Tax Credit is expected to increase 33% in the next three years, driving future fossil fuel subsidy costs to a record $57.1 billion, 14 times the balance of the Australian Disaster Ready Fund.
- The Fuel Tax Credit Scheme is forecast to cost $7.8 billion in 2022-23, more than the $7.6 billion spent on the Australian Army.
- Fossil fuel subsidies cost $11.1 billion in 2022-23 across all state, territory and federal governments, equivalent to $21,143 per minute.
- Assistance to the coal sector has declined by $270 million, while measures that support the oil and gas industry have increased by $350 million.
"A year on from the 'climate election' and we have fossil fuel subsidies breaking records in tandem with the rising global temperatures that put our economy at risk," said Rod Campbell, Research Director at the Australia Institute.
"Australian governments are now planning to spend more on exacerbating climate change through these subsidies than they are on getting ready for climate disasters.
"Some of the most egregious fossil fuel subsidies of the Morrison Government have been stopped, but the Albanese Government has kept key subsidies that are likely to see new fossil fuel projects proceed.
"Putting billions into petrochemical hubs to assist fracking in the NT, building roads specifically for gas companies, building new gas-fired power stations. All these Morrison Government programs are still on the books, are still costing billions and still cooking the climate.
"Exemptions from the Petroleum Resource Rent Tax (PRRT) outlined in the budget benefit oil and gas companies by an estimated $165 million per year, money that could be put to many better uses.
"Major gas projects like Middle Arm Sustainable Development Precinct and Kurri Kurri Power Station are receiving huge handouts from the Commonwealth Government.
"These subsidies provide a huge opportunity for governments that are looking to cut costs and take climate action.
"It is time to stop funding climate change and start funding the response to it."
Examples of fossil fuel subsidies in federal, state and territory budgets:
Federal:
- $1.9 billion to assist the Middle Arm petrochemical hub in Darwin.
- $141.1 million over 10 years to assist carbon capture and storage (CCS) projects.
- $129 million on upgrading Hunter Valley coal railways to "secure their long-term reliability and productivity."
Queensland
- $13.6 million to develop the Kogan North Gas Fields in the Darling Downs.
- $45 million to the incident-prone Callide coal-fired power station.
- $21 million to the Meandu Mine.
Western Australia
- $250 million in capital spending planned for Collie and Muja coal-fired power stations.
- $195 million to the Dampier Cargo Wharf Extension project, which will accommodate vessels supporting the offshore oil and gas industry.
- $35 million per year spent on project facilitation, including projects for gas companies Woodside and APA Group.
Northern Territory
- $12 million on business case development for the Middle Arm petrochemical precinct, which will also receive $1.9 billion from the Federal Government.
- Power and Water Corporation's $2.76 billion in purchase commitments and $680 million in gas transport commitments relating to the Blacktip Gas Project.
- $5 million per year for a Gas Taskforce to make the NT "a world class hub for gas production".
Victoria
- $69 million for the program that oversees the CarbonNet CCS project, still not operational 12 years after its establishment.
- Land tax exemptions for coal mining cost $1 million per year.
South Australia
- $30 million for a hydrogen hub in collaboration with gas companies Santos and Origin.
- $60 million to upgrade port facilities used by Santos.
New South Wales
- A $65 million Coal Innovation Fund.
- $200 million per year on a program titled "Mineral and petroleum industries generating prosperity, safely"
