by Lynne Blundell

12 May 2010 – The federal budget delivered last night by Treasurer Wayne Swan has been described by some commentators as frugal and restrained. The focus was on reining in debt, with the government forecasting a return to budget surplus by 2012-13. To do this it is relying on the controversial resources tax and a healthy level of growth in the Australian economy over the next few years.

For the built environment key features include a Renewable Energy Fund, tax cuts, infrastructure funding, some expenditure on planning and regulatory reform, the development of a population policy and a fund for building skills in the construction sector.

Some highlights include:

  • $652.5m over four years for a Renewable Energy Future Fund, which will encompass building energy efficiency and small-scale renewable energy projects, such as co/tri-gen
  • $5.6b infrastructure fund to invest in nation building spending over the coming decade
  • $109m redesigned Green Loans Program for sustainability audits and energy efficiency improvements in homes
  • more than $1b for the Australian Rail Track Corporation to enhance freight rail services
  • funding for a review of capital city strategic planning systems and a national population strategy
  • discounts on bond interest income aimed at encouraging Private infrastructure investment
  • changes to the First Home Saver Accounts
  • $145m over four years in zero interest loans to improve retirement accommodation opportunities
  • $661m Skills for Sustainable Growth Strategy to increase training places, including $200m for a critical skills investment fund focusing on the construction sector

You can view more details of the federal budget here

The response

The Green Building Council

The Green Building Council of Australia has welcomed the new $652 billion Renewable Energy Future Fund announced in the budget, which will promote commercialisation of renewable technologies.

“With the Carbon Pollution Reduction Scheme on hold until at least 2013, other measures are vital to ensure Australia reduces its greenhouse gas emissions,” said chief executive of the Green Building Council of Australia (GBCA), Romilly Madew.

“It’s time Australia capitalised on potential of renewable energy sources such as geo-thermal, wind, wave and solar power.

Ms Madew said the fund would also be used to drive Australia’s take-up of energy efficiency and will support households and businesses reduce their energy consumption.

“We welcome the Australian Government’s new measures, which will help to address the 23 per cent contribution that residential and commercial buildings make to the nation’s greenhouse gas emissions profile,” Ms Madew said.

The Greens

Australian Greens Leader Bob Brown said that the Rudd Government’s budget makes major cuts to key environmental programs and has failed to deliver a carbon tax to tackle climate change. While Senator Brown welcomed the government’s commitment to implement a resource rent tax on mining profits he said Rudd had failed to use this last budget before the election to take effective action on climate change.

“The budget announcement of $652 million for renewable energy is welcome but it is a piecemeal approach to the problem when what we need is a price on greenhouse pollution.

“The $81.3 million cut to the Caring For Country program which is about conserving Australia’s biodiversity and natural heritage is particularly short sighted given news from a UN report today which found that wildlife has decreased by nearly a third since 1970.”

Mr Brown said that cuts to urban water conservation programs and a $179 million cut from rainwater tank and grey water recycling initiatives were another step backwards.

The Property Council of Australia

The budget focuses on a smooth transition from GFC stimulus spending to a smooth transition to private investment, according to the Property Council of Australia’s chief executive Peter Verwer.

“While the budget lacks the infrastructure spending fireworks of previous years, it commits to a $5.6 billion State Infrastructure Fund and fast tracks several existing projects,” said Mr Verwer.

The increase in the superannuation charge to 12 per cent, along with cuts in company tax, should lift business investment over the medium term.

“The budget also redirects funds from the stalled CPRS to a bigger focus on renewables and energy efficiency,” said Mr Verwer.

“The Government has announced a $652 million Renewable Energy Fund, which will also encourage greater energy efficiency and the use of renewable technologies in buildings.”

The Property Council also welcomed measures to improve savings and banking competition, with a 50 per cent discount to interest on deposit accounts and a reduction in withholding taxes for financial institutions.

“We applaud the Government’s move to reduce withholding tax on interest, as this will strengthen our banking sector and reduce the cost of borrowing,” Mr Verwer said.

The Property Council also welcomed the establishment of a Critical Skills Investment Fund, which is part of a broader Skills for Sustainable Growth Strategy.

The Urban Taskforce

According to property development industry group, The Urban Taskforce, the budget completely overlooks the National Infrastructure Priority List, released with much fanfare last year

The Taskforce’s chief executive, Aaron Gadiel, said the federal budget takes no new action to advance $32 billion in urban infrastructure projects identified as part of Infrastructure Australia’s ‘priority pipeline’.

“In last year’s budget, the federal government allocated funding to $4.5 billion of urban transport projects on the recommendation of Infrastructure Australia,” Mr Gadiel said.

“This included $3.2 billion for the Regional Rail Express in Melbourne, $365 million for Gold Coast rapid transit, $293 million for South Australia’s Gawler Rail Line upgrade and $291 million for the Seaford Rail Extension, as well as $300 million for the Northbridge Rail Link in Perth.

“This was a good start, but it left eight key urban transport projects unfunded, each identified by Infrastructure Australia as part of a ‘priority pipeline’ of projects.”

The projects, costed at $32 billion, included:

• $14.8 billion for Brisbane’s public transport system;

• $13.1 billion for Sydney’s public transport system;

• $2.6 billion in Queensland motorway improvements; and

• $700 million for the Mornington Peninsula Connector Road. in Victoria.

“We’re disappointed that nothing in this year’s budget advances any of these projects,” Mr Gadiel said.

“This means that Sydney and Brisbane’s public transport remain completely unaddressed by the federal government, despite the generous assistance extended to other state capitals.

The federal government needed to urgently commit to an annual rolling program of funding cities infrastructure, including expanded public transport and motorways.

“The National Infrastructure Priority List was never supposed to be a one-off funding exercise. It was historic, last year, to see the federal government funding public transport projects for the first time – it would be a tragedy if it was also the last time.”

Mr Gadiel said the creation of a new Infrastructure Fund, with an initial $700 million deposit by the federal government was welcome.

“However, the federal government is saying that it will be biased to the infrastructure demands of resource-rich states. This won’t be any comfort the commuters of Sydney or Melbourne.

“In any event, its modest size means it can’t adequately address the infrastructure needs of either Brisbane or Perth.”

Mr Gadiel said federal government involvement in the strategic planning of major cities was only of value if it was accompanied by significant urban infrastructure funding.

The Australian Conservation Foundation

The Australian Conservation Foundation welcomed the Renewable Energy Future Fund and money for water buy back but said the budget did not deliver the scale of action needed on climate and the environment.

“The $652 million Renewable Energy Future Fund is welcome and will support investment in the clean energy economy, but doesn’t deliver at anywhere near the scale that a price on pollution would,” said ACF executive director Don Henry.

The budget still gave away billions of taxpayers’ dollars to promote pollution said Mr Henry.

“This budget has not changed the fact that Australia’s big miners and big polluters are not paying for their pollution – which is destroying our climate – and they are not paying a fair price for fuel.

“Cutting back the major national environmental protection program, Caring for our Country, by $80 million over four year is the wrong way to go, particularly when the UN’s Global Biodiversity Outlook has warned of ‘rapid degradation and collapse’.

“We welcome the $100 million brought forward to purchase water entitlement for the Murray-Darling, but cutting $250 million from urban water initiatives undermines efforts to make our cities and towns more water efficient.”

Mr Henry said the government had failed to act on the recommendation of the Henry Review to restructure Fringe Benefits Tax concessions for company cars so they no longer encouraged excessive driving.

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