14 May 2012 – Following are early reactions to the Federal Budget 2013
From the Property Council of Australia
National Insurance Affordability Initiative
The Government will invest $100 million over two years to reduce flood risk. The National Insurance Affordability Initiative will invest $50 million a year in targeted flood and other natural disaster mitigation measures, as well as establish a National Insurance Affordability Council (NIAC).
While this objective is laudable, it is funded by money laundered from the terrorism re-insurance pool scheme – this is bad policy.
Low Carbon Communities
The Government has announced that it will not proceed with further funding of the Community Energy Efficiency and Low Income Energy Efficiency programs.
The scrapping of these measures will claw back $98.2 million.
Environmental Protection and Biodiversity Conservation Act (EPBC)
The Government has reneged on its commitment to reform the EPBC legislation, which causes needless red tape headaches.
Adding insult to injury, they’ve taken back the $9.7 million allocated to removing the double handling of development assessments caused by the EPBC.
The Government will also defer the introduction of enhanced cost recovery arrangements.
Office of the Fair Work Building Industry Inspectorate – Funding Cut
The Government will cut $24 million over four years from its already orthodontically challenged building industry watchdog.
Industry funds pilfered from terrorism re-insurance pool
The budget extends the Federal Government’s raid on the Australian Reinsurance Pool Corporation (ARPC).
Industry has contributed heavily to this fund since its establishment through levies on insurance premiums, particularly on assets in capital city CBDs.
The Government’s additional ‘dividend’ of $300 million over four years will be used to fund the National Insurance Affordability Council by slashing the ARPC’s own retrocession purchases, which currently deliver an additional $3 billion worth of coverage.
Of the close to $1 billion dollars paid into the scheme since 2002, there is less than $360 million left in the terrorism recovery kitty.
The decision is negligent at best.
The Government will provide $238.4 million over five years to establish five Industry Innovation Precincts, including the built environment, that aim to champion industry led R&D.
The $24 billion allocated to an extensive pipeline of infrastructure projects will boost productivity in cities and regions. In particular, we commend the investment in community level infrastructure.
- the budget offers no programs to improve housing affordability, despite the fact that housing construction is at a two decade low
- plans to tinker with Australia’s thin capitalisation rules are misconceived
- the proposal to help seniors move from their existing homes to more appropriate housing without jeopardising their pension entitlements is very narrowly defined
A true nation building strategy would link higher housing supply with stronger infrastructure spending.
The budget shows Australians can’t trust Labor to look after the environment.
“The big mining companies that are destroying the Great Barrier Reef and jeopardising our water supplies with fracking are the big winners from Labor’s budget, with fossil fuel subsidies kept in place and the mining tax left virtually worthless,” Senator Larissa Waters, Australian Greens environment spokesperson, said.
“Labor’s response to the environmental havoc mining companies are inflicting across Australia is to sack more than 100 staff from the federal environment department, many from the teams that assess mining proposals, so there will be less scrutiny of the industry’s impacts.
“The budget is devoid of a proactive national solution to address the biodiversity crisis we currently face.
“Our iconic wildlife is too precious to lose but Labor is cutting hundreds of millions of dollars from the Biodiversity Fund and that means less grants for grass-roots conservation groups to deliver on-the-ground outcomes.
“That hard work by community groups at a local scale makes all the difference to our environment nationally and chipping away at support for those projects will have a devastating collective effect,” Senator Waters said.
The budget confirms the successful Reef Rescue program, which improves the water quality of agricultural runoff to the Great Barrier Reef, will be continued.
“The government says it wants to expand the Reef Rescue program to include wetland and river management but we haven’t seen an increase in funding to actually achieve those outcomes.
“This means the same amount of Reef Rescue funding will have to stretch further, risking the effectiveness of the program.
“What’s more, Labor continues to ignore the biggest threat to the Great Barrier Reef – the overindustrialisation of this World Heritage Area for big mining companies, which the UN is warning Labor against.
From the Climate Institute
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 tonight.
“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 underinvest in global solutions,” said John Connor, chief executive officer of The Climate Institute.
“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 pollution reduction targets of 5 to 25 per cent below 2000 levels by 2020 and continue the transformation of our energy sector with an extra 41 000Gw hours of renewable energy by 2020.”
“Public funding is important, however, and can help frustrate or boost investment in low carbon alternatives and engagement in global solutions.”
“The deferral of $370 million investment in the Australian Renewable Energy Agency and almost $600 million cuts to Low Carbon Communities and carbon capture and storage initiatives are regrettable.”
“There is also a huge missed opportunity for taxpayers to stop subsidising fossil fuels by failing to cut back the over $5 billion per annum diesel fuel rebate scheme.”
“The drop in the 2015/16 estimated carbon price to around $12 and the estimate of around $40 in 2020 is broadly in line with current market expectations but should be understood as carbon markets emerge in China, South Korea, California and elsewhere over that time.”
“The resulting deferred tax reduction highlights the importance of an independent review mechanism to ensure support for low income families remains appropriate, as it has been through the first year of the carbon laws.”
“The budget has deferred overseas aid increases and signalled a decline in funding for the program area from which support for neighbouring developing countries to prepare for climate impacts comes.”
“This would be against our economic interest not only because these countries are key emerging trading partners but also because such support is crucial to helping reach a global agreement with all major emitters. We have committed to scale up such commitments and should be investing around $350 million per year.”
“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.
GetUP! See this website for the GetUp! reaction
Australian Local Government Association
The Australian Government’s 2013-14 Budget has delivered several new funding initiatives for local government.
President of the Australian Local Government Association, Mayor Felicity-ann Lewis has welcomed the plan outlined by Treasurer Wayne Swan tonight to return Australia to a Budget surplus over the coming years.
“This plan offers opportunities over the coming years to invest in areas vital for our future growth and to build stronger communities,” Mayor Lewis said.
“Funding such as $40 million in additional assistance to rebuild flood-damaged communities and $12.9 million in support to enable councils to connect to the NBN have been positively received.
“Local government especially welcomes the Budget’s allocation of $44.1 million for municipal and essential services in Indigenous communities.
“We also welcome funding of $9.1 million over four years to create a ‘one-stop shop’ for grants advertising and reporting and $9.9 million over two years to upgrade remote community landing strips.”
ALGA’s Budget Submission noted that this was always going to be a difficult Budget. In order to address the continued revenue write-downs generated from weaker resource prices and the continued high value of the Australian dollar, there has been the need for some difficult choices.
Local government understands better than most the pressures of delivering services with tight resources. However, as our Submission stressed, times of financial restraint do not negate the need to invest in vital services, programs and infrastructure. Nor do the circumstances that call for that investment change to suit the financial situation.
Mayor Lewis welcomed the Government’s decision to again bring forward the first two quarterly payments of the Financial Assistance Grants (FAGs) of the 2013-14 financial year, worth $1.3 billion into 2012-13.
FAGs funding assists councils to deliver vital local services and infrastructure and councils are receiving a total of $2.2 billion under this program in 2012-13.
Australian Conservation Foundation
The Australian Conservation Foundation acknowledges solid delivery on nature conservation, is concerned with cuts to spending on renewable energy, and is disappointed with the continued spending of billions of taxpayers’ dollars on subsidies to the mining sector that promote pollution and are economically wasteful.
“The budget delivers on the Government’s core nature conservation commitments to the Great Barrier Reef, marine reserves, Tasmania’s forests, the Murray-Darling and Caring for our Country, but fails to cut the big taxpayer assistance for fossil fuel use that promotes pollution,” said ACF CEO Don Henry.
Fossil fuel subsidies
- Modification of accelerated depreciation rules to require exploration rights to be depreciated over 15 years, which saves the Budget $1.1 billion over four years. However, some of this is returned to industry via an additional $140 million for pre-commercial exploration research by Geoscience Australia.
- No reform of the Fuel Tax Credit subsidy which will cost taxpayers $5.9 billion in 2013-14.
- No reform of accelerated depreciation for most fossil fuel intensive assets, including mining exploration equipment, oil and gas assets, and aircraft.
“The Government has missed its best opportunity in years to do away with the billions of dollars in wasteful tax breaks that encourage fossil fuel use. These tax breaks are bad economic management, they are unfair, they encourage pollution and they should be scrapped.”
Clean Energy Future programs
- A total of $225 million of spending is deferred from the Biodiversity Fund over the next 4 years.
- $370 million is deferred from the Australian Renewable Energy Agency (ARENA) over the next 4 years.
- Global environment programs under AusAID cut from $74 million to just $1.5 million.
“Action towards a clean energy future has suffered some cuts, including to renewable energy investment and assistance to poorer countries as part of Australia’s fair share of international action.
“Australians are getting on with the job, putting solar panels on roofs in record numbers, business are investing in energy efficiency and farmers are increasingly using the carbon farming initiative – we need both sides of politics doing everything they can to build a clean economy.
“ACF is concerned about the deferral of spending for the Biodiversity Fund, which has given a much-needed boost to biodiversity conservation in Australia through its focus on increasing ecosystem resilience and storing carbon in the natural environment.”
Protecting and restoring Australia’s natural environment
- $200 million confirmed to continue the Reef Rescue program
- $95 million for implementation of the Tasmanian Forests Agreement (some of which is redirected from existing biodiversity programs)
- $3.5 billion confirmed to implement the Murray-Darling Basin Plan over 12 years
- $320 million confirmed for Working on Country Indigenous rangers
“ACF commends the Government for its ongoing commitment to effective nature protection programs, including for marine reserves, the Murray-Darling, protection of Tasmania’s forests, and the Indigenous Rangers program,” Don Henry said.
“We welcome the commitment to the largest national network of marine reserves in the world and for continuing the important Reef Rescue program for the Great Barrier Reef.
“Working on Country is a successful program that gives Indigenous Australians the opportunity to do meaningful work and maintain connection with country, while doing needed environmental protection work; the funding of this program is most welcome.”
ACF also notes:
- Funding to continue for site selection for a nuclear waste dump, which should be scrapped.
- Welcome commitments to major public transport infrastructure, including Melbourne Metro and Brisbane Cross-River Rail.
- The removal of the Baby Bonus and better targeting of family support through paid parental leave and the Family Tax Benefit.
The National Climate Change Adaptation Research Facility
The National Climate Change Adaptation Research Facility expressed alarm at the Government’s decision to cease its funding for developing knowledge and capability in Australia to manage the future risks from climate change.
“This Facility was created five years ago (at Griffith University) by joint agreement of the Commonwealth and State Governments, with a longer term mission to equip Australia with the skills and strategies that will be needed to cope with the impacts of inevitable climate change”, said its director Professor Jean Palutikof.
“Remarkably good progress has been made so far in bringing together research institutions, businesses, and governments Australia-wide to agree on priority challenges and to marshal efforts to create the knowledge and products needed by decision-makers and communities to work out how best to begin dealing with this climate challenge”.
“The report last month of the Government’s Climate Commission spells out the impacts and associated damages from more intense or frequent droughts, flooding, heatwaves and bushfires, which are a likely future outcome of climate change.
“The portfolio of reports and findings from over 140 collaborative projects conducted by the Research Facility will be launched at Parliament House later this month”, said Professor Palutikof. ” But much more needs to be done to capitalise on the work already done to equip governments, businesses and communities with the knowhow to best manage future climate risks.”
The Prime Minister said on 29 April ‘we won’t … fail the future by not making the wise investments that will make us a stronger and smarter nation’. And in that light the Government has invested heavily in the future education of Australia’s children.
“But the future of those same children will be put at risk if we fail today to invest in understanding how to cope with the huge challenges that climate change carries for Australia”, said the Facility’s Board Chairman, Ian Carruthers.
“Commendably, the Government is investing hundreds of millions of dollars in building the capability of developing countries to cope with extreme weather events from climate change”, he said. “The same level of priority needs to be put on protecting Australia, given the magnitude of the potential climate damages to Australia’s economy, communities and environment”.
“It is vital for Australia that the Government finds a way to fund the $3 million needed annually over the next two years to build the next stage of work of the National Climate Change Research Facility”, Mr Carruthers said.
Energy Efficiency Council
The Energy Efficiency Council has slammed the Gillard Government’s decision to cut funding for the Community Energy Efficiency Program.
“The Community Energy Efficiency Program was vital to help community organisations and local governments cope with rising energy bills. The Government’s decision to cut around $90 million from this program to shore up their budget is another backflip that hurts the vulnerable,” said Rob Murray-Leach, CEO of the Energy Efficiency Council.
Energy prices have risen rapidly in the past five years, largely due to poorly regulated network companies and rising peak demand. Energy efficiency programs are critical to help households, businesses and community organisations cope with rising energy prices. Boosting energy efficiency would:
- Save households and businesses over $5 billion a year on energy costs
- Help keep energy bills affordable by reducing peak demand, which reduces wholesale energy prices and reduces the need for expensive infrastructure. Currently, 25 per cent of total energy bills are driven by peak demand periods that last less than 40 hours a year
Rising energy prices in California lead the government to introduce strong energy efficiency programs. As a result, although Californians face high energy prices they have the lowest energy bills in the US.
The Gillard Government introduced a number of programs in 2011 to help homes, businesses and community organisations save money. While the highly-effective business program is still running, the Government clawed back money from the Community Energy Efficiency Program, which supports the most vulnerable parts of our community.
“There has been a strong consensus between Labor and the Coalition that energy efficiency helps households with cost-of-living pressures and makes businesses more competitive. This baffling decision is a disaster for community organisations,” said Rob Murray-Leach.
The Energy Efficiency Council is the peak body for energy efficiency, energy management and distributed generation.