Government raids Environmental Protection Fund to help pay salaries

A $50 million fighting fund – previously ring-fenced to buy land for conservation purposes – has been diverted to help government balance its budget.

Almost half of the fund has been allocated for a range of projects in the budget, including more than $13 million to cover the annual operating budget of the Department of Environment for 2024 and 2025.

The Environmental Protection Fund – fed by fees from travellers transiting through the air and cruise ports – was set up in 1997 to defray the costs of ‘protecting and preserving’ the environment.

The National Conservation Law further refined the purposes of the fund, indicating it was specifically for acquisition and management of protected areas. Guidance notes, issued by the National Conservation Council, indicate the cash can also be used for the protection of endangered species.

However, the relevant sections of the law which put the power to decide on disbursements in the hands of the conservation council were never enacted, and that responsibility still lies with Parliament, through its Finance Committee.

While government has previously dipped into the fund for purposes which stretch that definition – including work on the remediation of the landfill site – the 2024/25 budget represents the most radical departure from the guidelines.

Government intends to fund the entire budget of the Department of Environment, including staff salaries, from the Environmental Protection Fund.

A motion, passed in Finance Committee last week, gave government the ability to ‘unencumber’ funds that had been previously committed for other projects which are not now expected to proceed.

More controversially, a second element of the motion, approved unanimously in Finance Committee, enabled government to pull $13.1 million from the fund for line item SCR 3 – which includes the Department of Environment budget – from that fund, rather than from general revenues.

A further $1.4 million was allocated for the continued remediation of the George Town landfill site.

The move would leave the fund with around $37 million, according to Financial Secretary Kenneth Jefferson, speaking during the hearings.

Later in the debate, an additional $10 million was voted from the fund for purchasing land for conservation purposes, although this was allocated through the Ministry of Lands – rather than under the auspices of the National Conservation Council.

It is not clear if government plans to continue to use the Environmental Protection Fund, which accrues around $5 million annually, to fund the Department of Environment on an ongoing basis. If so, it would leave a gap in resources for environmental protection and deplete the fund.

Former Premier and Minister of Sustainability Wayne Panton said he believed that the decision was unnecessary and was not part of the original draft budget.

“It was certainly never the intention for the Environmental Protection Fund to be used for operational expenditure. It was created because of a realisation that, in order for us to protect land for conservation purposes, we would have to go out and buy it,” he said.

Declining cruise tourism numbers mean it is unlikely to be topped up to the same level as it has been in previous years.

“If we start to use it for operational expenditure, it will be depleted pretty quickly,” warned Panton, who was unable to attend the budget sessions because of an injury.

He acknowledged, however, that the original wording of the purpose of the fee, for ‘protecting and preserving’ the environment, was vague and open to interpretation.

Similar concerns were raised at the time.

Hansard transcripts for the 1997 parliamentary sessions shows Roy Bodden, then an MP for Bodden Town, questioned the lack of detail and management processes for the fund.

“There is no provision for where this money is going to go. There is no escrow account bearing the title of an ‘Environmental Protection Fund’. There is no designation of what aspect of the environment these fees are going to be used to protect, preserve or keep.

“You do not have to be too mischievous to wonder if this is not a glorified title for an increase in travel tax,” he said.