Australia’s fossil fuel subsidies dwarf coronavirus relief

Climate Economy

Australia’s fossil fuel subsidies dwarf coronavirus relief

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Australia spends $470,000 per fossil-fuel job, but eight out of ten of its largest fuel producers pay no taxes

As emergency stimulus packages are being developed around the world to address the coronavirus economic crisis, Australia’s Climate Justice Project at the University of New South Wales decided to take a look at the amount the Australian government regularly pays in subsidies to the fossil fuel industry.

Based on information from the International Monetary Fund (IMF) the Project found that the government provides an eye-popping $30 billion in subsidies per year to the coal, oil and gas industry. That is far more than the Australian government has spent to support Australians affected by the coronavirus recession or the catastrophic wildfires earlier this year.

Australia is not alone in its lavish fossil fuel subsidies. Governments last year spent more than $5 trillion in direct and indirect financial support of an industry that is the primary cause of carbon pollution.

“Shockingly, every Australian taxpayer is paying A$1,832 per year to prop up the fossil fuel industry, compared to around A$78 in the one-off government A$ 50 million dollar payment for bushfire relief or the first and second A$750 coronavirus support payment that went to around half of the country’s population,” says Jeremy Moss who runs the Climate Justice Project.

“As we rethink our current spending commitments during the coronavirus, it’s definitely time to rethink this one,” he continues. “Now’s the time to ensure not only that money isn’t wasted trying to save the unsavable, but that we remember we are also in a climate crisis that will still be very much with us when the coronavirus threat passes.”

If the goal of these subsidies is to create or protect jobs, as is the coronavirus stimulus, the subsidies have failed. Climate Justice Project research shows that these subsidies produced only 64,300 direct jobs in coal, oil and gas extraction, according to the Australian Bureau of Statistics. Moss says that means that the Australia government spends $470,000 for every direct fossil fuel job.

The subsidy comes on top of the fact that eight out of ten of the largest fossil fuel producers in Australia paid no taxes despite nine of these companies drawing revenue of almost $28 billion in 2016 and 20017, according to the Climate Justice Project’s research. Glencore, Australia’s largest coal producer and the and second-largest energy company, paid just $640. “That’s insane,” says Moss.

“When resources are so desperately needed for health and the broader economy, subsidies that create few direct jobs in dying industries are unconscionable,” says Moss. “Directing funds to companies that have had 30 years to prepare for the demise of their industry in the face of efforts to address climate change is simply throwing money away when it could be put to so much better use elsewhere.”

Editor’s note: There’s no time like a global pandemic as we rethink what’s working and what’s not to cut subsidies to polluting fossil fuel companies globally. After all, when the coronavirus is long behind us, the climate change threat will still be waiting. Click here for more information.

Written by

Blair Palese

Blair Palese is co-founder and managing editor at Climate & Capital Media. She is also director of philanthropy at Australia's oldest ethical financial adviser. Previously she co-founded Australia and was CEO for ten years. She was head of PR for The Body Shop and communications director at Greenpeace internationally and in the US. Blair has worked for media outlets including Greenpages Magazine, the Washington Monthly and ABC in the U.S.