Australia—$11 billion per annum from tax-based subsidies
There are a number of national tax-based subsidies that encourage fossil fuel production and consumption, adding up to a huge total of almost $11 billion each year. Using estimates from the federal government’s Tax Expenditure Statement and Treasury papers, the table below lists a range of measures within the Australian federal tax system that encourage the production and use of fossil fuels. This is Australian taxpayers’ money subsidizing fossil fuels. These figures do not include state-level subsidies, direct government handouts to coal, oil and gas projects, or public financing of international projects through export credit agencies or international financial institutions.
By far the largest contributor to the tax-based subsidies total is the Fuel Tax Credit Scheme, which provides around $6 billion worth of credits and grants to cover the tax paid on fuel to reduce its overall costs to heavy users. It is estimated that some 20% of these fuel tax credits go directly to fossil fuel producers.
Australia also pays out significant subsidies through statutory effective life caps, which allow for accelerated depreciation and a shorter write-off period for many vehicles. These tax deductions cost almost $2 billion worth of tax-payers’ money each year.
There are also a range of tax incentives for fossil fuel exploration and production, as well as measures encouraging aviation, shipping and motor vehicle use.
“How Your Taxes Subsidize Fossil Fuels,” http://www.marketforces.org.au