freediver
You do make a good point about luxury taxes and the effect on workers in those industries. The more I think about taxation and possible alternatives there is always a stumbling block of some sort - perhaps perfection is not possible. :)

Col and Usual Suspect

I do take your points about using taxation to, in effect "socially engineer" a particular outcome but governments do it all the time for less worthy reasons. Raising interest rates to fight inflation or making pensions unbearably low to encourage self funded retirement and the economic engineering that crept up on us to facilitate free trade and globalisation (such as WorkChoices to reduce real wages) and the engineering it took to reduce real living standards by forcing us into the 'working families' dual income scenario and fooling us into thinking we are better off while facing the largest ever debt crisis in our history.

If we are to be successful in the great task ahead of us to achieve sustainability and to put the brakes on the depletion of our natural resources, maybe this is the only option. [Population is another big issue but it does not look like getting a gong anytime soon in the debate, although there was a whisper of it during the 2020 Summit.]

Once peak oil is apon us you can guarantee there will be much greater social engineering than we have ever seen before and it will be by necessity but the human species will adapt - we are good at that.

Usual suspect thank you for your comments

Re “allowing NG to owner-occupiers rather than getting rid of it for all.”

Something like that was used in UK until the 1980s.

Personally if you make “self occupancy” a tax deductible you are opening the gate to suggesting food etc. should be deductible.The present method clearly distinguishes between “investment” and “self use”.

I believe it is better not to “blur” that clear distinction.

Pelican “but governments do it all the time for less worthy reasons.”

It is not good practice to perpetuate bad practice and you were asking for suggestions to “improve” current practices.

“maybe this is the only option.”

No all the options available are most commonly those which governments do not touch, like reducing the bureaucracy and simplifying processes. Withdrawing from areas where government is at a disadvantage. Like speculative banking (Victoria’s Tri-Continental multi-billion dollar fiasco).

People know best what is best for themselves, not government.

One option is for government to run on a balanced budget, with no massive surplus leave the money in the pockets of individuals who are best suited to exercise all the discretion possible.

“Once peak oil is upon us you can guarantee there will be much greater social engineering than we have ever seen before”

Not that it will do any good, it will simply increase the pain of shortages and push a struggling economy into stagnation. Leaving the market to respond is a better and more realistic solution than pretending a government managed fuel industry which always has the option of going “off shore”, beyond the reach of draconian government legislation.

The other thing is you will see an migration of “expertise” to other places in the world which do not adopt the social-engineering solutions of Australia.

We are all free, unless your “social engineering” intends to follow the communist model of iron curtains and Berlin walls.

“it will be by necessity but the human species will adapt - we are good at that.”

Yes it will adapt, with or without the pain of social engineering

Pelican,
” why taxes are expended on what are essentially 'interests' and 'hobbies' ….”
Agreed and I would like to add religion as well. Tax exemption for churches and their ability to claim govt subsidies. I really don’t mind tax exemption for not-for-profit charities (religious or not) if they can prove that their income REALLY goes to charity.
The non-charity part of religious organisations should not have exempt status.
When churches run businesses they have an unfair advantage over small businesses that are not exempted from paying tax. I’m not sure how much tax is spent annually on religion but I think it’s a fair amount. - just the school Chaplains cost millions.

AFFA and EHA are good examples, and there are other, smaller incentives as well; last year I claimed a $150 rebate for a front-loader. Water tanks and solar panels are partly refundable, too.

CR
You do have reasonable objections and I actually would not be that enthusiastic about govt. engineering under normal circumstances. But in the face of environmental threats and our (near) future sustainability we have to come up with the quickest way to achieve results while also trying to minimise economical damage.

” You do not need to mess with the tax system to achieve it.”
It would be great if there were an alternative way to achieve similar results. I’d have no objection to any other solution if there is a better one.
Other ways of stimulating manufacturers, companies and citizens to use cleaner energy has been tried for decades, but the results have been disappointing.
I guess it’s human nature to be reluctant to change and to want to remain in our comfort zones.

The experience with tax incentives has been that it works- money seems to speak louder than anything else that has been tried.
We need to act fast and apply the most effective way of reducing greenhouse gases and ATM ‘messing with the tax system’ seems to be the most effective way.

Continued

CR
“People know best what is best for themselves, not government.”
True, in ordinairy circumstances, but this global threat is not an ordinary circumstance and we don’t have the time to wait until every individual finally decides to take the right action that will benefit our sustainability. I see this more as a communal achievement than as an individual one because working towards a more sustainable future benefits everyone, not just some individuals. All people have a responsibility, also to future generations.
Don’t forget that the govt has the support of the majority on this separate issue, so doesn't that make it a democratic decision?

About affordability, don’t new technologies become more affordable when they can be mass-produced? If there is a generous rebate for energy efficient cars the demand will increase.
I don’t know any of my friends and family in Holland who still drives a non-hybrid car; the tax incentives have made a real difference in people's choices.
Cars have been placed into seven categories according to their pollution levels and each category is taxed accordingly. People then can make their own decisions when purchasing a car.

There’s also a very popular alternative to owning a car. Since the last 12 years, “Cardate” in Holland has been popular and very affordable. These Cardate companies e.g. “Greenwheels” receive tax incentives from the govt so that the price of Cardating can be kept to a minimum. These cars are parked on reserved Cardate spaces throughout the city, much like the ‘wheelchair’ spaces. One is charged by the hour. It’s a great system for people who can’t or don’t want to pay rego or insurance for a whole year if they only need a car for 1 or 2 days a week. My brother is a member of Greenwheels and loves the flexible system. It is so popular that other countries like Germany and Belgium have adopted this system as well.

Freediver,
thanks for that link.

There are some great suggestions coming from all the contributors to this thread.

The Commonwealth Treasury definition of effective government taxation :

"Taxation measures should meet revenue objectives (or other public policy objectives) and have regard to the principles of economic efficiency, horizontal and vertical equity, certainty and transparency whilst minimising compliance and administrative costs. By meeting these aims, taxation measures contribute to the wellbeing of Australians, either directly or by providing the revenue base to finance government ".

I wish to repeat a line from the above definition (no facility on OLO for bold italics).

“....taxation... contributes to the wellbeing of Australians…..”

Our wellbeing is under threat from a polluted environment and from mismanagement of finite natural resources.

A healthy, diverse natural environment is valuable in itself; it is also essential to human wellbeing.

Taxation is simply a part of the overall means we use to maintain ourselves and our communities. We can make individual choices that either deplete the environment (non recyclable goods; built-in obsolescence, high polluting manufacture) or we can choose to purchase consumer goods that are recyclable, long-lasting and minimise environmental impact.

The role of the government is to facilitate what is best for the community. It is not about controlling the individual, but it is about providing the incentives for responsible behaviour. Only the government is in a position to do this. After all who would want a private corporation to decide what is in the interests of us all?

Increasing taxes on damaging environmental activities such as burning fossil fuels and reducing taxes on socially beneficial activities such as development of renewable fuels, should be a no-brainer.

Instead of a narrow focus on GDP growth, objectives should include investment in sustainable public infrastructure as well as reducing social and regional inequalities.

To determine accountability, a set of national accounts could monitor our progress. These could report on the state of our communities, our health and the state of the environment. Governments should be judged by how much our wellbeing/environment improves, not by how much the economy expands.

Without a liveable environment we have nothing.

Celevia, thanks for your comments

“But in the face of environmental threats and our (near) future sustainability we have to come up with the quickest way to achieve results while also trying to minimise economical damage.”

“True, in ordinairy circumstances,”

I seem to get the feeling that you believe the “environment” and “climate-change” is a “special case”, distinct and separate to all of the other blights and maladies which detract from a quality life.

I would far sooner see you qualify/quantify real reasons and tangible, specific objectives to be achieved, rather than treat the environment and climate change as a “special case”

Experience has shown me, time and time again, there are only two cases, good cases and bad cases. A “special case” is merely a bad case being dressed up, for whatever reason to appeal, emotionally to people, regardless of its lack of merit.

Again, please present quantifiable and concrete objectives, rather than presuming that additional taxation is some universal panacea capable of healing the pain of “sustainability”.

Fractelle “The Commonwealth Treasury definition of effective government taxation”

Whilst you might choose to believe the government treasury, I would suggest their position and authority is not one of political indifference or objectivity.

The Government Treasury has a vested interest in presenting their role in managing the economy, for the greater glorification of the Government Treasury.

“Taxation is simply a part of the overall means we use to maintain ourselves and our communities.”

Agreed. Taxation is “part of”.

Taxation is not the exclusive option available to maintain ourselves or our communities. I suggest emphasis be based on the other options whilst working on simplifying the tax system, for the benefit of all, especially tax payers.

“Without a liveable environment we have nothing.”

A livable environment purchased at the price of individual discretion is not necessarily a good contract.

We are all endowed with "Freedom of Choice", eliminating it for want of a "livable environment" questions what we need a "livable environment" for; if not to give us opportunity to develop and grow through the deployment of our "freedom of choice".