Scrap oil, gas tax breaks: ACF

SCRAPPING tax breaks for the oil and gas sector could raise $2.3 billion in next year's budget to protect the environment, the ACF says.

SCRAPPING generous tax breaks for the oil and gas industry could raise $2.3 billion in next year's budget to help protect the environment, the Australian Conservation Foundation has told the federal government in its annual budget submission.

Targeting fossil fuels would complement Labor's carbon-tax strategy and deliver on its pledge to the G20 to phase out and rationalise inefficient fossil-fuel subsidies, the ACF said.

Top of its list was an end to generous accelerated depreciation rules for the oil and gas industry that it said would cost between $1.65bn and $2.05bn a year by 2018.

Reform of the fuel tax-credits program could save an extra $2.2bn next year, rising to $4.2bn in 2016-17, the ACF said.

ACF chief executive Don Henry said funds should be redirected to expand the National Reserve System and fund protection of oceans.

"If the government redirected just 15 per cent, or $500 million, of the direct tax breaks set to flow to big oil and gas companies over the next five years, it would be enough to complete the establishment of a world-class network of marine reserves and good management for healthier oceans," Mr Henry said.