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Key departmental publications, e.g. annual reports, budget papers and program guidelines are available in our online archive.

Much of the material listed on these archived web pages has been superseded, or served a particular purpose at a particular time. It may contain references to activities or policies that have no current application. Many archived documents may link to web pages that have moved or no longer exist, or may refer to other documents that are no longer available.

Subsidies to the Use of Natural Resources

Environmental Economics Research Paper No.2
This report was prepared by a consultant,
the National Institute of Economic an Industry Research (NIEIR),
for the Department of the Environment, Sport and Territories.
Commonwealth of Australia, 1996
ISBN 0 642 24864 8

Chapter 2. Table 8: Summary of financial and environmental subsidies, 1994, energy sector


Activity element Financial subsidies
($ millions,1994)
Environmental subsidies
($million,1994)
Subsidy removal
instruments
Fiscal implications
($ millions,1994)
Energy R&D 1 153 Partial removal of tax allowance. Greater private sector contributions.
Public agency costs 2 267 Partial removal of tax allowance. Greater private sector contributions.
Direct subsidies 3 331.9 Removal of subsidies; if necessary replace with general social assistance payments.
Rate of return 4 subsidies electricity Increase rates of return in smaller utilities, e.g. ACTEW.
Electricity production 5 (coal and natural gas) 2 505 Include externalities in electricity prices.
Energy related (non-electricity) environ-mental externalities:
– greenhouse
– road transport




1 371
200–1 320
Roads 6 1 200 Raise road user charges; road pricing with externalities included.
Renewables and energy efficiency 7 43.1
TOTALS $1.995 billion $4.076–$5.196 billion $6.071–$7.191 billion

Notes

1. Estimate of total government direct expenditure on energy R&D plus value of tax deductions in 1994. Estimates derived from Energy R&D, NIEIR Energy Working Party Report, June 1994,p.8.26 and Energy Research and Technology in Australia, Australian Science and Technology Council (ASTEC),Occasional Paper No. 28, 1994; excludes renewable energy and energy efficiencies R&D, (approximately 15 per cent of total) 96 see note below.

2. Public agency costs not recovered; estimated from budget papers, agency reports (e.g. AGSO).
Estimates of public energy agency costs not recovered*

$ million

Commonwealth
Budget statements,1994–95
AGSO— operating and capital costs
DPIE — advice, administration


$68
$30



$98
New South Wales
Budget estimates,1994–95

$30
Victoria
Budget estimates,1994–95

$30
Queensland
Budget program statements,1994–95

$75.8
Western Australia
1994–95 program statements

$15
South Australia
Estimates of receipts and payments 1994–95, Financial Paper No. 2

$10
Tasmania
The 1993–94 Budget

$5
Northern Territory
The 1993–94 Budget

$3.2

$169
TOTAL $267

* Where definite items by function were not specified in budget papers and agency reports, estimates were made on the basis of budget and report texts and discussions with officials.

3. Direct subsidies to energy industries and users, e.g. rural users,ethanol bounty, low income groups; does not include diesel fuel rebate scheme (DFRS) payments as this rebate is a proxy for non-use of roads.
Estimates of direct subsidies to energy industries and users

$ million
Commonwealth (see Note 7)
States
New South Wales
Budget estimates,1994–95

Energy management and utilisation; pensioner electricity subsidy

36
Victoria
Budget estimates, 1994–95

Concessions to pensioners and beneficiaries

214.6
Queensland
State budget,1994–95 Program

Pensioner concessions statements

78.0
South Australia
Estimates of receipts and payments, 1994–95 Financial Paper No. 2

Subsidies in country areas

3.3
Western Australia
1994–95 Program

None identified

Tasmania
The 1993–94 Budget

None identified

Northern Territory
The 1993–94 Budget

None identified

TOTAL $331.9

4. See text for basis of estimate, pp.43–45.

5. Estimate of all externalities associated with coal and natural gas used for electricity generation. See text for basis of estimate; pp.28–32 (coal) and pp.34–35 (natural gas).

6. See text for basis of estimate; pp.52–54.

7. Estimate of $27 million (15 per cent of total) for R&D, see ASTEC report, op. cit., p.72; plus subsidies to renewable energy industries and users as set out below.

 

$ million
Ethanol bounty program (text,p.44) 8.1
Other renewables mainly solar (text,p.45) 2.4
National Energy Management program (text,p.51) 5.6
16.1

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