Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

Surprise, surprise! One of the measures which the government has just introduced to this parliament is a very practical measure to respond to the challenge of climate change and to ensure that we have appropriate incentives, particularly through our tax system, to respond to those issues which will reduce carbon emissions and also contribute to the greening of our country and improve our environment. Australia has a wonderful but fragile environment. We are one of the hottest and driest continents on earth. As a result of that we all have an interest in forestation. We all have an interest in encouraging the plantation industry in a way which will deal with those issues and deal with carbon emissions.

This morning the government introduced legislation into parliament which will allow a full tax deduction to carbon sink forest operators for the cost of establishing trees in a qualifying carbon sink forest. This is full deductability. Those people who are planting in a recognised qualifying carbon sink forest will be able to deduct the full cost of that and expense it in full. As a consequence of that, we believe that there will be many operators who will take the opportunity to plant trees, including planting trees in agricultural areas, where farmers will be able to make land available, maybe even in between crops, and get a payment for their land, which will be matched by the tax deduction of those that are planting the qualifying trees.

This is a kick-start for carbon sink forests. It is intended by the government that this will apply until 2012-13, when the immediate deduction will be replaced with a write-off under the general horticultural plant provisions. To qualify for this tax deductability, operators will have to comply with environmental and natural resource management guidelines.

This is a practical response to the issue of climate change. This is an important measure which will be consistent with a growing economy. This will put in place an opportunity for investors to do their bit. These are the kinds of initiatives which are important to front up to the future challenges of climate change and the environment, and this is the government that is putting them into place.

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