The federal government’s 2022 budget reveals plans to boost renewable energy sectors, strengthen the grid, invest in EV charging infrastructure and community solar banks.
Disaster resilience and preparedness are also on the table, alongside a boost to investment in protecting our natural environment.
But many have pointed out that fossil fuel subsidies have “quietly continued” and the budget was full of “missed opportunities”.
In the 2021-22 budget period, Australian federal and state governments’ total fossil fuel subsidies cost $11.6 billion – according to the Australia Institute.
Treasury predicts inflation will peak at 7.75 per cent in 2022 before flattening to 5.75 per cent in July 2023. GDP is set to stay at 3.25 per cent for the current financial year, before dropping to 1.5 per cent in 2023-24.
The injection of investment into renewables is vital to boost the economy, deliver jobs in regional areas, and ease cost of living pressures faced by fossil fuel price volatility.
While many commend the ramping up of decarbonisation efforts, others point out that we’re not there yet.
Fossil fuel subsidies a multi-billion dollar hole in the budget
Tim Buckley, green finance expert and director of independent think tank Climate Energy Finance, pointed out the multi-billion dollar hole in the budget.
“Subsidies for the fossil fuel sector is an area of major disappointment and lost opportunities given the extreme export war-profiteering by a few mostly foreign firms while most Australians are wearing the full export price parity cost of using Australian public resources.
The budget reinstates the full petrol excise on all Australians, but continues the mining industry’s $4-5 billion annual diesel fuel excise exemption, he pointed out.
The budget offers no insight on multinationals like Exxon and Chevron, BP and Shell (which, according to the ATO Tax Transparency disclosures, do not pay corporate tax in Australia).
Richard George, senior gas campaigner at Greenpeace Australia Pacific, agreed:
“Announcing spending on renewables and disaster relief while quietly continuing billions in fossil fuel subsidies is completely counterproductive. In order to tackle the floods, fires and droughts that are threatening Australians’ lives, our economy and security, we need to urgently reduce our emissions – and that means no new fossil fuels.
“This was billed as a cost of living budget, but Labor has missed a crucial opportunity to help Australians feeling the squeeze on energy bills by failing to introduce a windfall tax on gas export mega-profits.”
Mr Goerge said gas corporations like Woodside Energy were making billions from extracting “climate-wrecking gas at our expense”, while ordinary Australians face huge clean up bills for stacked climate disasters.
“A windfall tax on gas exports could provide $20 billion to turbocharge Australia’s switch to clean, reliable and cheap renewables, while ensuring that greedy gas companies start contributing their fair share.”
Skills shortages and energy transition a big step forward
However, Engineers Australia chief executive officer Romilly Madew commended the budget, particularly its long-term infrastructure planning, stating that addressing skills shortages would be vital.
The Australian Academy of Technological Sciences and Engineering (ATSE) also welcomed the investment into training in science, technology, engineering and mathematics (STEM) professions.
Professor Hugh Bradlow president of ATSE said the academy was “pleased to see funding to establish a national electric vehicle charging network, which was crucial to support the energy transition.
Planning and the grid
John Brockhoff, national policy manager for the Planning Institute of Australia said the infrastructure investment in the grid will enable households to get access to cleaner energy.
“There must be integrated planning for infrastructure proposed to firm up and interconnect the grid – that will enable housing to perform better access to and delivery of renewable energy.”
Climate Council agreed that Australia must ramp up its renewables transition to ease the cost of living.
Nicki Hutley, climate councillor and leading economist, said big investments in climate action make for a “refreshing change”.
“This really is the first budget in a decade to take climate seriously as both an opportunity and a threat.
“Reassuringly, the government is living up to its pre-election climate commitments with investment in renewable energy, the grid, electric vehicles and charging infrastructure, and a cornucopia of other measures, which all add up… Plus more much-needed measures for disaster resilience.
“This is a most welcome step forward, but far more still needs to be done. We need to land a detailed, workable Safeguard Mechanism. We need to go harder and faster on the energy transition. And, we need to stop subsidising fossil fuels and approving new developments.”