The Liberal Party's decision to oppose the Greens disallowance motion on the carbon sink forests tax scheme is based on an incorrect understanding of the law, according to legal advice released by the Australian Greens today.
Advice from Michael Bearman, a leading Australian tax lawyer, is that, contrary to what the Government has been telling stakeholders, the full cost of land on which carbon sink forests are to be planted will be tax deductible under the legislation. This will dramatically increase the financial incentives for the scheme, increasing its impact tremendously.
"This legislation is Liberal legislation with Labor Party guidelines. It is poorly drafted and will cause enormous damage to the environment and social fabric of rural and regional Australia," said Australian Greens Deputy Leader, Senator Christine Milne.
"The Liberal Party has accepted the Government's assurances that this scheme will have a minimal impact, but those assurances are wrong.
"If my advice is right, these so-called 'carbon sink forests' will roll out across rural and regional Australia, giving no guarantee of a positive climate impact while relieving polluters of significant carbon costs and diverting valuable agricultural land and water from food production.
"The question of whether the cost of land will be tax deductible has a huge impact on how profitable these schemes will be, since land purchase is the largest single cost in establishing these plantations.
"The guidelines as they currently stand do not prohibit land clearance for the establishment of a carbon sink forest - land clearance is left to the States.
"On water issues, once again, in most States, there is still no requirement for forest owners to pay for the water that they intercept and the impacts on ground water are still not assessed.
"Malcolm Turnbull must think again before he condemns rural Australia to the consequences of this flawed and damaging legislation."