Leading clean energy loby group the Clean Energy Council (CEC) has heavily criticised the government’s move to put more than $600 million of funding for clean energy projects in jeopardy.
A total of $370 million for the Australian Renewable Energy Agency (ARENA) is now in jeopardy, after it was established less than a year ago as an independent body to provide long-term stability to investors, and avoid this exact problem of annual budget cuts. The budget also put a further $260 million of funding for energy efficiency programs and large-scale solar on the chopping block.
CEC deputy CEO Kane Thornton acknowledged that this was a tough budget, with an $18 billion deficit and an ambitious suite of new projects to fund, but said that investment uncertainty generated by the constant chopping and changing to funding for clean energy programs, including ARENA, was a concern.
“Funding for ARENA has been postponed until 2020, and the process to put that money back on the table is unclear. This doesn’t send a good message to those companies wanting to develop cutting-edge renewable energy technologies in Australia, and could see those companies take their business elsewhere.
“It was also disappointing to see almost $260 million in funding scrapped for large-scale solar research and the Low Carbon Communities grants that were designed to improve energy efficiency for communities and vulnerable consumers and help them save on their power bills.
Thornton did welcome the move to leave the $1.2 billion in funding for the CTIP intact; including $160 million in funding that has been brought forward to help companies become more energy efficient.
A patchwork, band-aid budget: Industry groups
The federal budget has missed the opportunity to take the pressure off business, the Australian Chamber of Commerce and Industry (ACCI) says.
"It's a budget of band-aids when the patient required targeted surgery to spending and the oxygen of cost relief to boost confidence," ACCI CEO Peter Anderson said.
"It is a missed opportunity because it keeps the nation shackled to more years of deficits and a high cost structure that erodes business competitiveness and innovation."
The head of accountancy group CPA Australia Alex Malley said the budget wouldn't make Australia more competitive. "There's not one small business initiative worth speaking about tonight," he said.
"We need to ask what the vision for Australia is, because at the moment the budget is not giving us that."
He described the budget as a "patchwork".
The Business Council of Australia (BCA) said there was no reason to believe the government's projected surplus in 2015/16 was any more deliverable than last year's promise of a surplus this year.
"We are being asked to believe that muddling through with the budget approach that hasn't worked so far is going to work now," BCA CEO Jennifer Westacott said.
She noted the budget hasn't addressed a lack of confidence in the economy.
Finally, AI Group CEO Innes Willox noted, “the budget confirms industry concerns about a slowing economy but risks being too optimistic about Australia's growth prospects, our terms of trade, corporate tax receipts and the recovery of housing construction.”
“The Budget fails to introduce much-needed new measures to boost investment, innovation, competitiveness and productivity.
"The extent of the anticipated cumulative deficits over the next three years, amounting to $48 billion, is sobering news. This is a turnaround, in only six months, of close to $55 billion in forecast budget bottom lines. Even more sobering is the prospect that further revisions are in store. Economic reality has bitten.”
The AI Group did welcome the government move to bring forward expenditure under the CTIP to help businesses invest in energy efficiency and low-emissions processes.
Climate Institute: short term gain, long term pain
For those serious about long term outcomes in carbon and clean energy, the Budget’s cuts and deferrals show the importance of target driven markets for more certain outcomes, said The Climate Institute (TCI).
“This Budget makes cuts or deferrals to renewable energy and low carbon solutions, misses a key opportunity to wind back fossil fuel subsidies and appears to under-invest in global solutions,” said John Connor, CEO of TCI.
“Such hits and misses are a stark reminder that target driven carbon and clean energy markets take us outside these budget shenanigans. An over reliance on the purse strings does not provide policy stability.
“The government is better placed defining clear rules for the private sector to follow and invest in low carbon solutions towards absolute emission, renewable and energy efficiency targets.
“These are the principal policies that can help either the Government or Opposition meet the full range of their bipartisan carbon reduction targets of 5 to 25% below 2000 levels by 2020 and continue the transformation of our energy sector with an extra 41,000 Gw hours of renewable energy by 2020.
“We look forward to the Coalition’s budget in reply to confirm whether they are still committed to the $3.2 billion of public funding over the forward estimates for their Emissions Reduction Fund and the levels of carbon penalties they will apply to business,” concluded Connor.
GBCA: Budget fails urban green infrastructure
The funds earmarked for the next wave of ‘nation building’ projects in the 2013 Budget may begin to address the $500 billion backlog of infrastructure projects, but will not provide for better learning environments or support a more resilient Australia, said the Green Building Council of Australia (GBCA).
“While we are pleased to see $24 billion funding for urban infrastructure projects, it's only the start and substantial reinvestment is needed,” said the GBCA’s executive director of advocacy, Robin Mellon.
“Just last week, the Urban Coalition, of which the GBCA is a member, called for A New Deal for Urban Australia and investment in infrastructure that contributes to more productive, liveable and sustainable communities and cities.
“The absence of significant infrastructure spending in this Budget highlights the need for strategic investment that provides opportunities for more Australians, contributes to better functioning cities and boosts national productivity.”
Weaker, dumber, meaner, Budget: Greens
Greens Leader Christine Milne labelled the Budget "a disappointing Budget that will make Australia weaker, dumber and meaner."
Milne said this was demonstrated by slashing funding to the tune of $685 million to renewable energy and energy efficiency, reneging on its commitment to the Greens in the Clean Energy agreement.
"This comes on top of $257 million in cuts to the Biodiversity Fund, further evidence that Labor cannot be trusted on the environment and climate change. Adding insult to injury, $32 million of this is being re-directed to the Tasmanian Forestry Agreement," Milne said.
"All of this could have been avoided if Labor had the backbone to stand up to the big mining companies and abolish fossil fuel subsidies and fix the mining tax. This year the mining tax collected a shocking $200 million, down from the promised $3 billion.
"This begs the question whether it costs more to administer the mining tax than it raises. It's time for the Prime Minister to explain how this complete and utter policy failure makes Australia 'stronger, smarter, fairer'."