The Federal Government handed down its 2022-2023 Budget last night (29 March), and while it was big on short-term relief for Australians in the form of a temporary cut in the fuel excise and other fiscal measures, it fell short on addressing long-term issues such as Australia’s transition to renewable energy and achieving net-zero emissions, writes Gavin Dennett.
The Federal Budget has been widely viewed as abandoning long-term vision in favour of popular measures designed to win the Coalition government a fourth term in office. When it came to firming Australia’s position as a renewable energy superpower through spending on essential infrastructure to enable a fast transition from fossil fuels, the Budget severely missed the mark.
“The Federal Budget fails to look to the medium-to-long-term future through an all-important lens of reducing the emissions that are having a devastating impact on the climate, the environment and on the lives of everyday Australians,” said Clean Energy Council chief executive Kane Thornton.
“Significant investment is required in the National Electricity Market and network to make this transition happen safely and smoothly. A 21st-century economy needs a modern electricity network that supports reliability, security and low-emissions technologies, and delivers low-cost energy to consumers.
“The lack of transmission investment is now one of the most critical challenges facing Australia’s energy industry. Instead, yet another Federal Budget has prioritised the fossil fuel industry when Australia’s bottom line should be focused on providing a better future for communities through clean, low-cost renewable energy and storage.”
Instead of the temporary measure of cutting the fuel excise – that offers no guarantee of costs being passed on to consumers – Thornton said there should be a greater focus on the electrification of transport to reduce Australia’s reliance on fuel, of which costs fluctuate as a result of events overseas, including the current war in Ukraine.
“The transport sector accounts for nearly 20 per cent of Australia’s emissions,” he said. “The Federal Government’s own target is for 30 per cent of all new car sales being electric by 2030, and the Federal Budget doesn’t get us any closer to that target.”
The Climate Council described the Federal Budget as a “missed opportunity” for Australia to invest in renewables, with just 0.3 per cent of total government expenditure for 2021 to 2024 committed to climate change expenditure.
“Rather than investing in a green economic future, the Federal Government has used the Budget to toss mere pennies at genuine emissions reduction initiatives, such as regional renewable microgrids,” said the Climate Council’s leading economist, Nicki Hutley.
“At the same time, significant funds are being spent on so-called ‘low emissions hydrogen’ and costly and unproven carbon capture and storage. And a further $50 million dollars is being directed to accelerate polluting gas projects.
“Similarly, the temporary reduction in fuel excise – while welcome for many households – could perhaps have been better spent on supporting electric vehicles and EV infrastructure investment as well as public and active transport initiatives.”
Bruce Macfarlane, CEO and director of energy procurement company Energy Action, said the Federal Budget falls well short when it comes to Australia’s goal of achieving net-zero emissions.
“The Federal Government is playing an important role in providing a policy framework and industry guidance around emissions reduction, both of which will be key drivers for companies striving to achieve net zero, and tonight’s announcement that Australia is on track to exceed our 2030 target reiterates this progress and commitment,” he said.
“However, it’s not enough. Energy Action’s research shows that only 20 per cent of businesses have set a net-zero goal. Of those businesses that have set a goal, only 20 per cent have actually started taking steps to achieve it.
“Ultimately, businesses incur a cost to achieve net zero, and they need a way to recover this cost without passing it onto their customers. Unless the government incentivises or mandates businesses on the path to net zero – similar to the incentives and standards announced by the UK Government in April 2021 – the status quo will continue.”
The Clean Energy Council acknowledges the Federal Government’s three-month extension of the apprentice wage subsidy is a small step towards alleviating the skills crisis the clean energy industry is currently facing, but Thornton said more long-term thinking is required to support career pathways in renewables.
“A long-term vision for Australia’s workforce requires targeted funding in the renewable energy labour market that supports a growing and diverse regional workforce,” he said.
“Supporting career pathways for the renewable energy workforce will be critical as our country undertakes what the Australian Energy Market Operator (AEMO) calls a ‘once-in-a-century transformation in the way society considers and consumes energy.’
“That means resourcing and funding proper planning for communities to offer pathways to help transition many coal workers into careers in clean energy, noting that AEMO assumes a 79 per cent share for renewables by 2030 in its latest Draft Integrated System Plan. These urgent needs should have been taken into account in this Federal Budget.”
Federal Opposition Leader Anthony Albanese described the Federal Budget as “a cynical exercise by a cynical government that doesn’t have a plan for Australia’s future”.
“They just have a plan for themselves,” he said. “It has all the sincerity of a fake tan. This is a plan for an election, not a plan for Australia’s future, and I think people will see it for what it is.”
Albanese will deliver his Budget Reply on Thursday, 31 March.