Dutch eco flight tax "won't lead to job losses" (News Feature)

Oct 1, 2007, 13:45 GMT

Amsterdam - The new Dutch flight tax will not lead to job losses but merely to slower employment growth, Finance Ministry spokeswoman Simone Boitelle insisted Monday.

'We have sent a report to the parliament today describing the expected consequences of the proposed flight tax,' Boitelle told Deutsche Presse-Agentur dpa.

The report was based on a study by two independent research agencies, Significance Quantitative Research and SEO Economic Research, she added.

As of July 2008, all passengers departing or arriving at Amsterdam's Schiphol Airport are to pay an 'eco tax' of 11 to 45 euros per one way flight. The longer your flight distance, the higher the tax. The tax measure is aimed at reducing CO2 emission.

In 2006 around 46 million passengers passed through Schiphol.

All transit passengers - some 80,000 in 2006 - are excluded from the tax measure, as are commercial cargo flights, that last year made up 423,000 of the total of 440,000 flights using Schiphol Airport.

On September 26, the Board of Airline Representatives in the Netherlands (BARIN) - the umbrella organization of the Schiphol Group and all airlines flying on the Netherlands - told dpa that the new eco-tax will jeopardize some 12,000 jobs in the aviation industry alone.

Referring to a study by the Central Planning Agency CPB - governmental research bureau - BARIN had said the estimated job losses were based on an anticipated decrease in passengers of 8 to 15 per cent due to the tax measure.

'I don't know where they took those numbers from,' says Boitelle, 'but we do not see any similar numbers in the study performed by Significance/SEO Economic Research.'

Significance Quantitative Research/SEO Economic Research and BARIN, all refer to statistics from the CPB.

According to the report sent to parliament Monday, the number of passengers flying on Schiphol will continue to grow, but by 2011 will 8 to 10 per cent lower than projected without eco tax.

The same is true for the total number of flights - some 7 to 8 per cent lower than projected without eco tax.

'Concerning employment, we think the number of positions in the aviation industry will be between 5,000 to 10,000 lower than it would be without eco tax,' Boitelle said.

The Finance Ministry spokeswoman stressed however that 'slower growth is not the same as job losses.'

The Significance/SEO Economic Research study says the tax measure will reduce the overall level of CO2 emissions in 2011 by 3 to 9 per cent, equalling some 1.5 megaton CO2 per year.

However, by 2020 the effect of the tax measure on the reduction of the CO2 emission will be negligible, the researchers admit.

In the interview with dpa in late September, BARIN spokesman Allard Frank criticized the new tax measure as 'unfair', because only passengers leaving from Schiphol were affected by it.

Neither transfer passengers nor cargo flights are affected by the new tax, even though the latter are responsible for most flights at Schiphol.

Significance/SEO Economic Research's data shed more light on the government's decision not to impose taxes on transfer passengers and cargo flights.

Whereas the growth of local passengers is merely expected to slow down, the number of transfer passengers and cargo would actually drop dramatically if a tax measure would be imposed.

According to the researchers, the number of cargo flights on Schiphol would go down between 23 to 31 per cent, while the number of transfer passengers would fall between 30 to 39 per cent.

Boitelle also refutes the claim by BARIN that the tax measure is merely presented as an eco tax, but in practise does not benefit the environment.

'We have never presented this measure as an eco tax. By definition, all taxes in the Netherlands benefit the national budget. Not a single tax is earmarked to benefit only once specific target,' she said.

She added that sometimes only 'excises and duties' are earmarked to benefit one particular target, such as sustainability programmes.

However in its letter to parliament accompanying the latest study on the flight tax report, the Finance ministry wrote the tax measure 'is part of a 'greening' of taxation, We are shifting from taxes on labour to taxes on consumption.'

Earlier on Monday the Union of European Airlines EAE in Brussels released a statement joining BARIN's criticism that the proposed eco tax will not directly benefit the environment.

'In recent years,' EAE said in its statement, 'investments in more efficient airplanes and capacity resulted in a more than 20 per cent reduction of CO2 emission per passenger.'

EAE added the new tax will not contribute to that development.

Like BARIN, which argues creating a single European sky will benefit the environment more than any other measure, AEA also made a plea in favour of more efficient use of the European skies.'

The Dutch parliament is due to debate the eco tax in mid-November.