According to the United Nations (UN) System of Environmental-Economic Accounting (SEEA), environmental taxes are those taxes which have a tax base with a proven negative impact on the environment (SEEA 2012 paragraph 4.150), thereby increasing the price on activities and products that are harmful to the environment. They encourage consumers and producers to adjust their consumption and production patterns to achieve cost reductions and better environmental outcomes. Monitoring these taxes can provide useful information for assessing how economic instruments can achieve these changes.
As environmental taxes are only one type of environmental economic instrument it is important to take note of other measures that can be used alternatively or in combination with the taxes. Other such instruments are e.g. subsidies, grants or tax expenditures. However, these instruments are not covered in this discussion paper.
Environmental taxes in Australia consist of taxes on transport and energy. Taxes on energy include, for example, taxes on fossil fuels for transport and emission trading schemes. Taxes on transport include, for example, stamp duties and registration taxes. No taxes falling under the category of resources or pollution are levied in Australia.
At present there is no statistical information available which identifies and quantifies environmental taxes in Australia. This paper addresses this gap, and outlines in general how environmental taxes, in the first instance, are levied through the population, economic activities and its link to the environment. Estimating the effect of a tax, e.g. how much of the tax is passed on to the buyers is not part of this discussion paper.
These experimental results show that in 2010-11 Australia's environmental taxes amounted to approximately $26 billion, and accounted for around 2% of Gross Domestic Product (GDP) and 7% of total tax revenues. The environmental tax share of total tax revenues has increased over the past 10 years. Industry pays 67% of total environmental taxes, while households account for the remainder (33%). With regard to energy taxes paid by industry, Manufacturing (ANZISC Division C) accounted for the highest percentage (39% of total energy taxes paid by industry), while Services (ANZSIC Divisions F-H, J-S) accounted for the highest percentage for transport taxes (62% of total transport taxes paid by the industry).
The main data source for the calculation of environmental taxes is the Australian Bureau of Statistics (ABS) publication Government Finance Statistics (GFS) (cat. no. 5506.0), complemented by data from the Australian Taxation Office, the Department of Sustainability, Environment, Water, Population and Communities, and other sources. The methodology traces tax revenue to the taxpayer, by using industry and household specific information. Reassigning energy taxes to the taxpayer requires information from the ABS Energy Account, Australia (cat. no. 4604.0). For the reassignment of transport taxes back to taxpayers, statistics on gross fixed capital formation and household final consumption expenditure on vehicles was sourced from the ABS Australian System of National Accounts (cat. no. 5204.0). Tax credits have been taken into consideration in the methodology based on the amount of tax credit and fuel prices.
The ABS welcomes any feedback on the usefulness of presenting environmental taxes by industry and households in the context of policy formation, evaluation and informing the community.
For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070.