Tuesday, July 31, 2012

Other nations fudge things. The ABS won't, on carbon permits

How we're going it alone

If a government imposes a tax, but then pays a taxpayer’s bill, did it ever impose a tax in the first place? Just about every member of the European-dominated United Nations Statistical Commission says it did not. The Commission has recommended members exclude from their taxation statistics the value of carbon emission permits handed out free to large polluters.

Australia will strike out on its own, valuing at market rates emissions permits handed out free and ensuring they are added to the official tax take.

“Our senior management have agonised over this,” ABS director of macroeconomic research Derick Cullen told The Age. “We took exception to what the Commission was doing.”

The dispute came to a head at an international meeting in February in which Australia put its case for the market valuation of emissions permits and lost. The Commission recommended instead that member nations value permits at their “historic cost”, which in the case of free permits is zero...

The ABS considers the approach “will misrepresent the costs to emitters, the debt of government and the taxes received by government,” the Bureau said in an unusually impassioned account of the disagreement published yesterday.

It will enable the mostly European nations with carbon trading schemes to report a lower tax takes and lower government debt than if they had adopted the Australian approach.

In today's Sydney Morning Herald and Age

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