You have probably heard or read news headlines that the federal budget will build “a stronger economy and a fairer society” featuring a “bold $14.6 billion cost-of-living package”, “$4.5 billion over 10 years to support the delivery of the nuclear-powered submarine program”, and an “historic $5.7 billion … being invested into Medicare”. But what does the “$4.6 billion in climate-related expenditure” look like in detail?
The response by the climate movement is that we are well past the time when “a slow jog” or being “better than the other guys” is enough. The budget also falls short of the $2 billion per year that experts say is needed to protect and restore natural ecosystems. The renewable energy industry, on the other hand, is calling this “the electrification budget”. With statements such as “electrification is critical to achieving emissions reductions and lowering energy costs for households and businesses” (Budget 2023-24, p31), there is a definite shift in the narrative towards electrification of buildings and transport, and redirecting of previous funding “to better align with Government priorities”, generally-speaking for greater sustainability. So, here are some highlights.
The Clean Energy Finance Corporation will have a $1 billion fund to to offer solar, storage and electric upgrade finance for around 110,000 low-income households and small businesses, plus $300 million will go to energy-efficiency upgrades for around 60,000 social housing homes, and $310m in tax deductions for small businesses that invest in renewable energy and energy efficiency measures known as the Small Business Energy Incentive. The $1.5 billion for energy rebates will bring a one-off relief on power bills for households but it would be better also spent on systematic electrification for long-term reductions on bills. There is also $7.5 million allocated for the ACT’s Sustainable Household Scheme.
The budget allocates $2 billion to develop capacity in the hydrogen industry, with a commitment to renewable or “green” hydrogen, not “blue” from gas. There is also $600 million for regional industries associated with the Safeguard Mechanism and $400 million for critical inputs to clean energy industries, plus shifting the capacity investment scheme formerly referred to as “coal keeper” towards renewable energy. Read more about renewable energy measures.
The National Reconstruction Fund will have $15 billion for helping establish smart energy and smart transport manufacturing. The National Electric Vehicle Strategy includes $7.4 million to support the introduction of a Fuel Efficiency Standard, and funding is allocated to develop a net-zero roadmap for transport, broadening that agenda from the previous focus on EVs, although hybrid vehicle tax exemptions will phase out. Will there be any investment in active travel?
There is funding for climate science and governance, collection of emissions data plus implementing recommendations of the Chubb review of the Australian Carbon Credit Units market – we need to see minimising the use of ACCUs as well as improving their quality. There is also $28 million to develop a National Climate Adaptation and Risk Program, with the hope of future funding for action, plus $302 million over five years for sustainable agriculture, and $150 million to improve water quality flowing to the Great Barrier Reef.
Although the commitment to a national net-zero emissions target acknowledges that Australia has to move beyond coal, the reform of the Petroleum Resource Rent Tax is mere tinkering around the edges and there is little else in the way of cleaning up finance. And the Government clearly still has conflicts around gas, with $6.7 million for a Future Gas Strategy, and the ongoing fuel tax credit scheme continues to subsidise the fossil fuel industry $9.6bn in the next year and $41bn over the forward estimates. Read more.
The Government is developing the Nature Positive Plan response to the Samuel review of the EPBC Act, with $34 million to reform the legislative framework, and $8 million to establish a biodiversity trading scheme. The budget includes $121 million over four years to establish Environment Protection Australia, an indepdenent national watchdog to enforce a new suite of laws to protect nature, plus $51.5 million over four years for the Environment Information Australia agency to guide the nature repair task. The Natural Heritage Trust gets $1.1 billion, and $341 million is allocated to protecting threatened species and habitats, plus $50 million for wetlands. Is it enough to “turn the tide of nature destruction”? Read more about environment funding.
Despite last year’s collapse of REDcycle, there is no new funding for solving the recycling crisis at a national level – the only new items are $10 million over 2 years for a National Waste Education campaign to change consumer behaviour, and $3.9 million to delay the commencement of cost recovery for the regulation of waste exports, ie a 12-month reprieve for waste exporters to adapt to the implementation of the ban on exporting waste. Existing funding to “accelerate the transition to a circular economy” and for the Recycling Modernisation Fund ($20.8 million for Plastics technology stream plus $69.6 million for recycling infrastructure) will run out within the next 3 years (DCCEEW Portfolio budget statement Table 2.2.2 and Budget paper 3, Table 2.9). Meanwhile, there’s $476.4 million new funding over 7 years to manage radioactive waste, but no mention of extended producer responsibility other than a small increase in the Oil stewardship scheme levy.
So, let’s applaud the steps towards electrification, and continue to provide the Government with our ideas and research, and urge the rapid scaling up of action needed to address the accelerating pace of climate change and environmental decline.
Dig into the Budget documents at budget.gov.au.
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