Date issued: 15 July 2008

The Federal Government's response to climate change must include other complementary policy initiatives over and above the proposed emissions trading scheme (ETS) to ensure Australia remains economically competitive as it works through the issues of carbon emission reduction, CPA Australia President Alex Malley said today.

Speaking on the eve of the government's release of its green paper on the proposed ETS, Mr Malley — who heads up 117,000 accountants — flagged the need for a multi-faceted approach.

'An ETS is central to the government's policy response to carbon emission reduction. While the ETS is expected to only apply to about 1000 businesses, the supply chain effect as these businesses seek to pass on their increased costs of production to consumers will bring about changes in business and consumer behaviour.

'However, if we are to bring about the behavioural change required to reduce carbon emissions, within the proposed timeframe,  other measures are also required to encourage some 2 million Australian businesses to seek out both technological and behavioural solutions to reduce their carbon emissions,' Mr Malley said.

These include policy initiatives such as:

• an upfront investment allowance of up to 20 per cent for capital expenditure on new low emissions technology
• accelerated depreciation for certain capital expenditure, including expenditure on upgrading existing plant and equipment to lower energy and low emissions technology
• a higher R&D tax concession of up to 200 per cent for R&D into low emissions technology (reflecting the commercial risks associated with this technology)
• allowing companies, particularly electricity generators, in a loss situation to possibly exchange their tax losses for emissions permits
• the removal of disincentives that the GST or state taxes may currently impose on the introduction / deployment of 'green' technologies
• iniform reporting methodologies for greenhouse gas reporting

Financial relief will also be required for those least able to afford the inevitable increase in their cost of living brought about by the ETS.

'These issues, which we raised in our submission before the most recent federal budget, remain key in the overall response to climate change, Mr Malley said.

Media enquiries