The 2023-2024 Federal Budget is being hailed as a win for Australia’s clean energy superpower ambitions, while addressing sharply rising cost-of-living pressure for the nation’s households, writes EcoGeneration editor Gavin Dennett.
Treasurer Jim Chalmers has handed down the 2023-2024 Federal Budget that is big on spending and sends a clear message about the role of clean energy in Australia’s economic future.
In Chalmers’s second Federal Budget, the Federal Government has delivered a $4.2 billion surplus for the financial year, the first time Australia’s budget has been in the black since 2008. But despite the surplus, the budget has splashed $21 billion across the nation, with a large chunk going towards easing cost-of-living pressure on households, as well as welfare boosts such as JobSeeker, rent assistance and social housing, plus bulk-billing relief, child care subsidies and pay rises for health care workers.
The Federal Budget also makes a clear statement about Australia’s clean energy superpower ambitions, with $4 billion in new funding commitments that will drive the electrification of Australian homes and small businesses, and deliver a shot in the arm for the nation’s green hydrogen sector.
“The Clean Energy Council has advocated for work to begin on a Clean Energy Superpower Masterplan, and the Federal Government has listened,” says Clean Energy Council chief executive Kane Thornton. “For the first time in years, we have a Federal Government that listens to industry and deeply understands what is required, taking commendable action since coming to power and in this budget.
“When clean energy wins, families, communities and businesses win. This is good news for industry, but also for all Australians.”
Part of the Federal Government’s clean energy stimulus is designed as a response to the US Government’s Inflation Reduction Act to ensure Australia remains internationally competitive in the global renewables market.
Commitment to hydrogen
The most noteworthy clean energy commitment in the Federal Budget is $2 billion in production incentives for Australian renewable hydrogen – the Hydrogen Headstart program.
“The Australian Hydrogen Council has asked the Federal Government for a strong signal that it is committed to the hydrogen industry’s development, particularly in light of fierce global market competition for investment dollars,” says Dr Fiona Simon, CEO of the Australian Hydrogen Council.
“This budget is exactly the signal the market needed to remember – and act on – the fact Australia has the potential to be a world-leading hydrogen producer. The Australian Hydrogen Council commends the Albanese Government for this demonstration of confidence in the vital role renewable hydrogen has to play in the energy transition.
“Competitive hydrogen production contracts are a much-needed market mechanism to provide revenue support for flagship projects, and will help get more large hydrogen projects off the ground so we can scale up to gigawatt-scale capacity as soon as possible.
“There is much more to do, but as the name of the Hydrogen Headstart mechanism indicates, this is an important early step.”
Electrifying Australia
In his budget speech, Chalmers announced $300 million for electrification and energy performance upgrades for social housing, on the back of $1 billion in new funding for the Clean Energy Finance Corporation to offer solar, storage and electric upgrade finance to more than 170,000 homes.
“This is Australia’s first electrification budget,” says Rewiring Australia co-founder and chief scientist Dr Saul Griffith. “It positions us to become a world leader in the efficient electric energy system of the future. It demonstrates federal ministers have worked hard to start the massive shift towards a new energy paradigm across the economy.
“The electrification budget builds on Australia’s love affair with rooftop solar. It will help households to realise cost savings from substituting expensive gas machines for clean, electric alternatives. This investment allows us to use abundant Aussie wind and sunshine to power more of our driving, cooking and heating, simultaneously slashing energy bills and carbon emissions.
“We are excited the government is making a substantial downpayment on an answer to the US Inflation Reduction Act.”
Easing cost-of-living pressure
At the centrepiece of the 2023-2024 Federal Budget is a $14.6 billion short-term, cost-of-living package. It includes the Energy Bill Relief Fund, which will provide direct assistance to eligible households and businesses to ease bill shock due to sharply rising electricity expenses.
“During the next two years, up to $500 in direct assistance will provide welcome relief for millions of Australian households and $650 for small businesses that have come under increasing financial pressure,” says Energy Consumers Australia CEO Lynne Gallagher.
“It will see more than 5.5 million households eligible for some assistance with their electricity bills, in addition to around one million small businesses.
“As well as this direct assistance, we welcome investment to support consumers to control their energy use which will help drive down bills. These include new investment in the Clean Energy Finance Corporation, social housing and small business energy incentives to support electrification and more efficient use of energy.”
Gallagher says the Energy Bill Relief Fund will help offset rising energy prices which are expected to hit 25-30 per cent during the next 12 months.
“The recent price increases come on top of double-digit increases the previous year and will certainly be felt by consumers who are already struggling with multiple cost-of-living and cost-of-business pressures,” she says. “The Federal Budget combines much needed immediate direct assistance with investments that help consumers get control of their energy costs.”
Community organisation Australian Parents for Climate Action also endorses the cost-of-living relief for Australian households and social housing.
“We welcome the increased attention on long-term energy cost solutions for Australian families who are battling rising bills,” says Nic Seton, CEO for Australian Parents for Climate Action. “Clean and efficient energy solutions are the surest path to reducing energy costs.
“However, these announcements only go part way towards upgrading Australian homes, and more is needed to ensure all homes provide affordable comfort through equitable access to cheap, clean energy solutions.”
However, not everyone is behind the “populist” cost-of-living measures announced in the budget, with critics viewing the relief package as merely a temporary band-aid solution.
“The measures in this budget for cost of living are, for the most part, temporary,” says Climate Council CEO Amanda McKenzie. “This is a missed opportunity to permanently lower people’s power bills.
“To meet the climate challenge head on, Australia needs to urgently unlock the most affordable energy source available: renewables. Sure, this Federal Budget provides renewables assistance to 170,000 households. But when you consider the critical challenge of electrifying everything with renewable power, backed with storage, for 10.8 million households, that barely gets us off the starting blocks.
“The Labor Government has demonstrated it wants to support Australians who are struggling, but climate change makes every Australian vulnerable so the scale of investment on climate action needs to match the task ahead of us.
“We can’t settle for a slow jog when the climate crisis calls for a sprint.”