Greens deal opens door to action on Joe Hockey’s budget savings

CLIMATE change concerns will be used to reopen talks on budget savings as Joe Hockey honours a deal with the Greens.

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CLIMATE change concerns will be used to reopen talks on at least $2.2 billion in budget savings as Joe Hockey honours a deal with the Greens to address some of their claims in a long-range review of the nation’s fortunes.

Greens leader Christine Milne has written to the Treasurer in recent days to list the climate change factors to include in the forthcoming Intergenerational Report, clearing the way for consultation on the budget outlook. Mr Hockey will link the talks to one of the key structural savings in the budget, urging the Greens to support an increase in petrol excise that will lift federal revenue while putting an impost on a fossil fuel.

The Intergenerational Report will be released early next year to show the state of the budget over the next 40 years, revealing the commonwealth’s long-term spending burdens as well as the benefit of early decisions on savings that can build over time.

Senator Milne gained an assurance from Mr Hockey last ­December to include a dedicated section about climate change in the long-range report, making this a condition of the Greens’ support for the removal of the debt cap on commonwealth bonds.

Mr Hockey told The Australian he would stick to the deal but expressed frustration that the Greens made an issue of climate change in the budget forecasts while refusing to take calls to discuss the fuel excise.

“We will honour our agreement, but there’s not a lot of goodwill towards the Greens when their starting point in the past has been not to return our phone calls in relation to matters right across government,” he said.

“The Greens’ position in relation to fuel excise is incomprehensible and it just shows that, for the Greens, politics is more important than principle. And it shows their determination to be destructive is far greater than their commitment to a better environment.”

The Australian was told in recent weeks that government ministers had tried to talk to the Greens about the fuel excise but Senator Milne was unavailable.

The restoration of the indexation of the excise would add about 1 cent this year to the existing excise of 38.1c, with similar increases in future years as the tax is kept in line with inflation. The cost of the increase would be about 40 cents a week for an average family. Labor has slammed the change as unfair to the poor while the Greens have attacked plans to put the revenue into new roads.

Mr Hockey sent a letter to Senator Milne on December 4 last year to say that climate change would be included in the next ­Intergenerational Report. The issue was not addressed in the 2007 report but was examined in the 2010 report.

“As part of all future Inter­generational Reports, the government will retain a dedicated section on the environment, including climate change and the effect of these policies and their impact on the Australian economy and commonwealth budget,” Mr Hockey wrote to Senator Milne.

“I will consult with the Australian Greens on the scope of what could be included within the section.”

The Australian has been told that the Greens have recently written to the government to spell out the climate change factors to take into account in the new report, but Mr Hockey wants to keep the report’s focus on the long-term impact of population growth, the ageing of the population and the spending pressures on the budget.