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Sink the carbon forest tax dodge

Posted on December 3, 2008, 6:06pm

One of the more interesting parliamentary debates in Canberra this week surrounded the future of “carbon sink forests”.

Most readers will be unfamiliar with this term, but policy decisions on the matter have significant implications for the South East.

Carbon sink forests are grown for the dedicated purpose of removing carbon dioxide from the atmosphere.

According to the Department of Climate Change, they are important tools in reducing Australia’s greenhouse gas emissions.

“Dedicated carbon sink forests are generally established as small plantings integrated within existing agricultural land uses in less productive regions, and offer multiple benefits such as enhancing biodiversity, managing salinity and improving farm productivity through land diversification,” the department says.

The former Coalition Government introduced legislation providing a tax deduction for costs associated with establishing a carbon sink forest if the primary purpose of the forest was for carbon sequestration by the trees.

The Rudd Labor Government has maintained support for the tax deduction.

An interesting alliance between the Greens and the Nationals this week failed in a bid to overturn the policy.

The Nationals believe it will distort land prices, reduce the availability of prime agricultural land and push up food prices.

They are probably right.

The forests themselves offer no economic benefit because their reason for existing is carbon sequestration by the trees.

With the South East already facing land use pressure and competing interests for water allocations, it doesn’t seem a productive use of our land to pay businesses to lock it away for any reason.

MICHAEL GOREY

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