Australia’s Kyoto Credit Loophole

In 2018, the Australia Institute belled the cat on the Morrison Government’s plan to rely on accounting tricks rather than make actual emission reductions. Our research showed these Kyoto credits are the equivalent of eight times the combined emissions of the Pacific including New Zealand, and this one accounting trick represented the single largest government policy on climate change.

Building on the Institute’s 20 year history covering Australia’s shady climate negotiations, we unpacked the legal, moral and diplomatic problems involved in use of controversial units from the previous climate agreement, the Kyoto Protocol, to avoid reducing emissions under the Paris Agreement. The Institute commissioned international advice around the status of the Kyoto units, finding them legally baseless and raised the issue through local and international media, online explainers and opinion pieces.

The Australian government became increasingly isolated and the diplomatic cost was clear as foreign governments singled out Australia as a key blocker of international progress, including by the new Biden administration in the United States. By early December 2020, the Prime Minister stepped back from his position and the accounting trick seems to have vanished from the government’s climate plans.

National Anti-Corruption Watchdog with Teeth

Australia is closer than ever to establishing a national anti-corruption watchdog, following years of Australia Institute research and engagement with the legal profession and federal MPs and Senators.

Our National Integrity Committee - made up of distinguished former judges and corruption fighters - have released a number of papers detailing the essential requirements and basic principles for the establishment of a National Anti-Corruption watchdog.

The Committee have made many submissions and appeared before various Parliamentary Committees and other consultation processes, to discuss the need for a strong integrity Commission - one with board jurisdiction; the ability to hold public hearings and produce public reports and the power to investigate and expose corruption at the highest levels.

Fair Tax Reform

Australia is one of the lowest taxing countries in the developed world and too often the term ‘tax reform’ is used to conceal demands for more tax cuts. The Australia Institute has been at the forefront of pushing the national debate beyond ‘debt and deficit’ to examine revenue and to protect Australia’s progressive tax and transfer system.

The Australia Institute had an enormous policy win when after two years of Australia Institute reports and analysis, explainers, opinion articles, podcasts, briefings and open letters to Parliament, the Government’s proposed large company tax cuts were shelved in June 2018 due to a lack of support in the Senate to pass the legislation.

In the beginning, the Australia Institute was a lone voice in the public debate arguing the economic case against company tax cuts. The whole of the business sector was in support of the tax cuts, but quality research won out over the vested interests of the big end of town and the Senate blocked the tax cuts from passing into law.

The defeat of the large company tax cuts was a good economic outcome, a good budget outcome, and it was good for Australia’s long-term revenue base and the services and infrastructure it can fund.

Coal and the Climate

The Australia Institute has been at the forefront of Australia’s coal debate for more than a decade, with our research showing that, while politically powerful, the coal industry is a small employer, a reluctant tax payer, heavily subsidised and makes Australia a world leader in exporting climate pollution. Our research has been highlighted by former Prime Minister Malcolm Turnbull and other world leaders calling for a moratorium on new coal mines.

Away from global summits, we have presented our work in town halls, RSLs and tin sheds assisting local groups opposing specific coal projects. Our experts have been involved in the major court battles against coal projects, contesting the economic modelling and jobs claims of Rio Tinto, Adani and others, while our submissions have been influential in rejections of mines and in reforming planning processes themselves. Our research has consistently shown that Australia can phase out the coal industry with minimal economic impact.

Saved by the Bench

The Australia Institute barracks for ideas, not for parties. Our engagement with the Senate crossbench between 2014 and 2016 ensured the survival of key climate policies and institutions that the government tried to abolish. Australia’s Renewable Energy Agency (ARENA), Clean Energy Finance Corporation (CEFC) and Renewable Energy Target were saved by crossbench Senators who were persuaded by research showing the case for these climate policies and vote to block Government repeal legislation. This resulted in support for $23 billion of clean energy projects during a period that saw renewable energy investment decline by around 50% due to policy uncertainty under the Abbott Government. Maintaining these policies and agencies ensured Australia’s energy industry could bounce back in following years, a resurgence that is now lauded by the Coalition Government as driving emissions reductions.

Pension Loan Scheme

Back in 2014, the Australia Institute proposed an expansion of the Pension Loans Scheme (PLS) in our report: Boosting Retirement Incomes the Easy Way.

The Australia Institute argued that the PLS, which is effectively a government run reverse mortgage, should not exclude pensioners while allowing wealthier Australians the right to use the mechanism. It took four years of advocacy, but in the 2018 Budget, then federal Treasurer Scott Morrison agreed with the Institute, expanding the PLS to include aged pensioners.

Our research recommended expanding the PLS so that aged pensioners effectively access some of the value of their home without having to sell it. Giving older Australians extra cash, at no cost to government, allows many people to live in their own home with more financial security.

"I’m a financial adviser on the south coast. Currently doing some advice for a client of ours, and the changes to the Pension Loan Scheme which recently came in will make a big difference to her quality of life in retirement. I noticed Tom Swann and Richard Denniss got the ball rolling on it back in 2014. Please pass my congratulations."

Having the Federal Government involved in such a reverse mortgage arrangement is sensible economics. The expansion of the PLS to include pensioners will keep costs down for customers and over time the scheme will be cost neutral for the government as all loans are repaid and secured against the value of the pensioner’s home.