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‘Community Transitions Appropriations and Reserve Bill 2021’. CTAR. A reserve for transition funding. Government backs business for transition and the National Energy Market. Point of extraction funding.
Transitions Funding
Community Transitions Appropriations and Reserve Bill 2021 (CTAR21)
The program I have developed has a working title of:
Community Transitions Appropriations and Reserve Bill 2021’ (CTAR21):
And…in unprecedented times, and moving forward there is potential to develop strategies and funding models these programs which can be locked in for the future. If the Commonwealth wishes to “go-it-alone” to develops these programs in tandem or invites business to work alongside can increase the opportunities and maximise the range of programs that can be developed.
After the COVid 19 events in early 2020 there is huge potential to explore and develop these programs if the government is prepared to fund into the future and “lock-in” funding so they can roll on. There have been different environment concepts and funding models proposed but none, in my opinion, have focussed on the individual sectors so as is presented in this space.
If we can fund Defence spending at $27 Billion per annum surely it is possible to develop practical ways of funding a comprehensive transition program. The limit of the programs that can be implemented is only limited to the fiscal amount of real funding the government is willing to commit for the next 20 to 30 years. The numbers and results will be limited or increased by the annual on-going reserve of funding which can be allocated to this ‘Enviro’ tax program.
This is indeed an opportunity. An initial “start-up” dollar commitment is rational as you can future plan and allow for contingencies. In a CO-Vid19 situation you have to build flexibility to allow some drop in revenue or “pull-Back” but also to hold a reserve which will provide continuation of the programs once commenced.
Once a Commitment has been given to a Multi-Tiered programme like this it must be “Set and Cast in Stone” to take it forward in a rational way and to take it to the future. Though some aspects could be “pulled back” or reduced in tight fiscal times the inherent core of the program would need on-going funding.
To justify these taxes that are included in this program we need to develop and know the business model and the spending model for these amounts to take into the future. Once cast, I believe, this legislation provides the flexible framework to transition this country into the future. This legislation and the linked programs are designed to create jobs and to provide some certainty and some sustainability for the future.
In this current fiscal circumstances, this on-going commitment needs to include real “checks and balances”. I believe the science is good and opens the door for industry to participate fully and play their role and can build on and include good links to other programs that are in place. The government can take the lead and business will follow. I envisage the first 5-10 years to be critical in initiating and expanding these programs.
Even if calculated it as a rough 60-40 split ie. As in Government 60: Ratio to 40: Business developed in co-operation builds for the future. And perhaps later that ratio can evolve further. It is a starting point to commit to a transitional future. The real calculation and delivery arrives when Industry, community and the government are on board together to work through the transition issues so as to be in a place that is…. “As Good as it Gets” in this current fiscal circumstances with a fair eye to what can be delivered.
And it is important to realise these programs runs on taxes. Though it could be relatively painless. I have given these taxes a working title of an ‘Enviro Tax’. These would be structured under the CTAR21 Reserve.
The concept for this Program and package has been lifted and includes the ‘Point of Extraction’ (POE) tax developed by the Citizens Climate Lobby (CCL). CCL is climate group from the US. Some of you here may know of their work. They developed the ‘Point of Extraction’ concept from the work of James Hansen. He wrote the book called the “Storms of My Grandchildren’ first published in 2009. Point of Extraction (POE) is a Direct tax focussed on the Mining and Fossil Fuels industry and takes a tax from point of extraction when mined. It is based on a Per Tonne formula. I have evolved this concept to suit what I consider the “best fit” for Australia’s needs. The ‘Point of Extraction’ I have developed has a floating “tax” based on the daily Ore or Fossil Fuel “spot” rate.
To really “turn It On” the CTAR21 Reserve Package works as an overarching system (which grows legs). It needs Direct taxes and that it is why I’ve moved away from a Carbon Tax . The CTAR Reserve is held specifically outside of general tax revenue and allocates funds directly to the package. It is secured as part of legislation is a practical measure to reserve funds specifically for these programs. I have not set it up “to punish” any sectors but is driven to fund this transition in a rational way. The POE extraction tax is a primary driver though, and requires the motivation and the legislation to make it happen. Possibly, if the Commonwealth government made changes to the ‘Fuel Tax Credit Scheme’ which provides rebates up to $7 Billion annually this may also fund a reserve. My conservative estimates are that it is possible to net $5-7 Billion alone and with “tweeks” of other industries or taxes it could kick over to $8-9 Billion per annum. Or perhaps more. And rationally, we can make gains from other taxes.
A range of programs contained within the CTAR21 working as “overarching” legislation would work in tandem as a comprehensive strategy incorporating the important sectors aimed at securing Australia’s quality of life and securing its agriculture and industry.
Tax Concepts to consider:
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Point of Extraction (POE) tax as developed though Citizens Climate Lobby(CCL). This is developed on a floating “tax” based on the daily ore or fossil fuel “spot”rate.
- Based on varied rate depending on the ore or product extracted.
- 4-6% rate per tonne across all mining and extraction could return up to
- $4-7 Billion per annum depending on daily spot prices.
- *Estimated Iron Ore@$80Au P/t@800 Million Tonnes PA@4% POE= $2.56Billion
- *Estimated Metallurgical Coal@ $178AuP/t@180 MTonnesPA@4% POE= $1.28 Billion
- *Estimated Thermal Coal@$96Au P/t@200MTonnesPA@4% POE= $0.768 Billion
- *Estimated Alumina@368Au P/t@20MTonnesPA@4%POE= $0.294 Billion
- *Further estimates of other Ore output production not included- though may be up to 100 Million Tonnes Estimated calculation at 4% POE= $4.902 BillionAu
1. https://www.argusmedia.com/en/news/2126574-australia-sees-end2020-iron-ore-prices-at-55t
2. https://publications.industry.gov.au/publications/resourcesandenergyquarterlyjune2019/index.html
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Increase the rate of Goods and Services Tax to 11% and allocate 0.33 to 0.50 cents/$1 to the CTAR reserve. This could raise from $1.5 to $2.5 Billion based on approximately $50 Billion in GST revenue. (GST revenue 2018/19 was $68 Billion). This can be increased if GST is fine-tuned and the government modified the exemption categories.
Some modifications to other taxes include, as an example, a 3-4c petrol Enviro tax(as part of fuel excise and adjustments in fuel subsidies and also GST if necessary. If we are switching vehicles to LPG raising the excise by $0.20 per litre will also bring in further revenue. If the Commonwealth sourced oil itself from cheaper oil supply countries (some are currently at about $10 a barrel) and also set a minimum Bowser price and in the meantime raised the fuel excise to about $0.05 per litre we can pull in more tax revenue in an economy that will be moving into renewables and battery vehicles. Holding 50% of funds in escrow for countries in a lower ‘Corruptions Perception Index’ rating or supplying assistance to them in exchange may be a reasonable concept to move and evolve their economies also. An escrow concept may be quite useful. At some point it needs the super-computer “work” in Treasury in Canberra.
"The ‘Clean Energy Finance Fund’ (CEFC) commenced operating in 2012 and was funded with $10 Billion to fund clean energy and renewable projects in Australia. I see the potential to build the CEFC to be a primary driving agency to manage a clean transition with a complete solar grid program, and vehicle transition programs. If funded through the CTAR reserve they would gain an additional $4-5 Billion per year to complete a transition. This also assists business to build the transition."
I estimate even at 2050 we can still chug along at 125-166 Million Tonnes with no probs at all. Currently it is “Go with the flow” at this stage! If major GWP gases such as Nitrous and Methane are strictly limited and monitored, then we can concentrate on Carbon Dioxide. A full international and worldwide effort to create more innovative ways to manage Carbon Dioxide and to reduce it back to a solid compound is truly the way of the future in terms of future Coal use. If we spent $25Billion USD or AU dollars internationally over the next 7 years we may be able to innovate on Coal power.
The world is science to a greater degree and in many respects can be reduced to pure “formula”.
I truly believe and looking to the future…you”ll get nothing better in this country. And this program is designed to be world class and hopefully work on transitions and save a bit of the future of for all Australians and move the economy forward in a smooth transition.