Written evidence submitted by the Australian
Australia welcomes this opportunity to comment on
the environmental aspects of the Air Passenger Duty (APD). Australia
is concerned that the current APD unfairly discriminates against
Australia (and other long-haul destinations). We have advocated
that the APD be fair, non-discriminatory and transparent; that
the UK travelling public, as well as family and friends in Australia,
not be disproportionally disadvantaged; and that the APD be consistent
with efficient environmental practices.
Australia considers that the following factors show
that the APD is not effective as an environmental tax:
distance-based banding of the APD is a poor proxy for environmental
impact. The bands are based on the distance between London and
the destination country's capital (with the exception of Russia,
which is split into two bands), not on the actual flight distance.
This leads to anomalies, including flights to the west coast of
the United States of America being taxed at a lower rate than
flights to many Caribbean destinations which are less distant
from London; and flights to Hawaii being taxed at a lower rate
than flights to Singapore, which is less distant from London.
APD does not take into account the differing environmental impact
of different aircraftthe duty is the same for a flight
on an aircraft with high per passenger fuel consumption as for
a flight on a fuel-efficient aircraft.
are no practical alternatives to flying for travel to long-haul
destinations, so a higher tax is less likely to change travellers'
behaviour and improve environmental outcomes. In contrast, where
there are alternative means for short distance travel (eg to continental
Europe) those choosing to fly are taxed at a lower rate.
emissions are best dealt with by a multilateral solution that
is applied universally. The proliferation of unilateral "environmental"
taxes on aviation creates inconsistencies between jurisdictions,
distorting economic and environmental outcomes.
APD should be removed once the EU's emissions trading scheme (ETS)
is applied to aviation (from 2012 onwards) to avoid double taxation
of airlines on "environmental" grounds.
Australia considers that the UK's APD, particularly
in its current form, is not an effective environmental tax. Australia
intends to make a submission to the UK Government's APD consultation
detailing its views on the proposed options for change.
20 April 2011