Environmental offsetting has been broken in Queensland for some time. The money being collected from developers is currently not nearly enough to compensate for the environmental damage being done.
Background
The Queensland Government is reviewing its Environmental Offsets Framework, including the operation of its Offsets Account. Environmental offsets are intended to compensate for the environmental damage being done by development. Where proponents do not deliver an offset themselves, they can instead make a payment into the Offsets Account, where the funds are intended to be used to deliver equivalent environmental outcomes.
There are a range of problems with the Framework, but the biggest is that the offset formula significantly underestimates the real cost of delivering environmental offsets. As a result, payments made into the Offsets Account are often insufficient to compensate for the damage. And because the government can’t spend down the money in Account unless it does compensate for the damage, the money just sits there.
On current estimates, there is over $100m in the Offset Account (see: A fresh start for Queensland's Environmental Offsets Framework Discussion paper - ~$129m accumulated, ~$24m spent).
ALCA's recommendations
The Queensland Government should urgently undertake an independent review of the offset formula and adjust offset payments to reflect the actual cost of delivering offsets. This is the only practical way to unlock the growing balance of the Offsets Account.
We also recommend retaining strong "like-for-like" requirements, limiting financial settlement offsets to situations where they can realistically be delivered by government, making financial settlement offsets a last resort, securing offsets through long-term or perpetual protection arrangements, and making sure developers first avoid and minimise environmental damage before relying on offsets.
For more detail, download our full submission.
