FEDERAL BUDGET: Deep spending cuts have been announced across the Clean Energy Finance Corporation, Australian Renewable Energy Agency and Clean Energy Regulator.

The Morrison government this week inflicted a massive 35 per cent funding cut over the next three years to emissions reduction programs in the federal budget.

So far we don’t know what specific programs will be affected by the cuts, but it’s clear they fall across key climate agencies such as ARENA, the CEFC and the Clean Energy Regulator.

The news will again cause uncertainty for businesses in the sustainable building and clean energy sectors. It also comes at a time when the federal government needs to drastically increase its spending on renewables to reach net zero emissions by 2050.

The cuts, which were first reported by The Guardian, were cynically buried away in a small table of figures on page 198 of the 365-page long Budget Strategy and Outlook document. 

The figures show the Morrison government provided just $2 billion, representing just 0.3 per cent of the federal budget, in additional funding for climate change programs during 2022/23. 

That amount is set to be slashed by $100 million in 2023/24, then a further $400 million and $200 million in the following years. That will leave just $1.3 billion in new investments towards reducing emissions.

Not-so-new announcements

Nicki Hutley, an independent economist and councillor at the Climate Council, told The Fifth Estate the budget deserved “a big fat F for fail on the climate front”.

“Climate expenditure—which is currently at 0.3 per cent of total budget expenditure through previously announced initiatives like ARENA and the CEFC—actually falls to 0.2 per cent of total expenditure over the two years of the forward estimate.

“There’s really nothing positive that you can say, and worse than doing nothing, there are missed opportunities.”

In his budget speech, Treasurer Josh Frydenberg claimed that the government would provide “further investments” in a number of emissions reduction programs, such as “microgrids to support regional and remote communities”. 

However, in many cases, that’s misleading the public because these are previously announced programs.

“I’ve never seen a budget paper that is so full of holes and repetitions”

Nicki Hutley, an independent economist and councillor at the Climate Council

“Things that they talk about, like the micro grids, is coming out of existing funding in ARENA. It’s not new spending at all. It’s very deliberately misleading, and they’ve done this on a number of fronts,” Ms Hutley said.

“What they are doing, and they have done this right across the spending portfolio, is to re-announce things, to put them in multiple different packages and make it look like there’s three programmes when in fact there’s one that’s already funded from existing funding.”

Likewise, in the “climate spending” section of the budget papers, the government highlighted investments being made through the Emissions Reduction Fund and the Climate Solutions Fund. This funding had been previously announced and set aside in past budgets. 

“This is something they’ve done throughout the budget. I’ve never seen a budget paper that is so full of holes and repetitions,” Ms Hutley said.

Labor is slightly less awful

In comparison to the Coalition, Ms Hutley said that Labor has at this stage announced higher emissions reductions spending and commitments than the Coalition. “Obviously its net zero target isn’t at 50, but at least at 45, it’s higher than the Coalition’s 26 to 28 for 2030.”

“You’ve also got commitments to do things with perhaps the safeguard mechanisms, greater expenditure on EV networks, and rolling out the infrastructure and incentives for the actual cars as well. Potentially, more money for renewable energy zones and some funding for technologies that are proven,” she said.

“I noticed that they still have gas in their equation as well, but there’s potentially less support for fossil fuels and far more for transition activities.”

Spending on natural disasters set to rise

The low levels of new investment in emissions reduction is likely to lead to more money needing to be spent in a different part of the budget—namely, disaster recovery.

“I estimate that we’re getting close to $7 billion in expenditure on flood relief from just the past two months. And obviously with Lismore going under again, those numbers are only going to rise,” Ms Hutley said.

“Any cost benefit analysis, any sensible economic analysis, tells you that you must be spending on emissions reduction and not just sitting waiting and paying out these huge amounts. 

“The Productivity Commission has said the same, the Insurance Council is saying the same. When will the government get behind emissions reduction instead of just coming in at the last minute when people’s lives have been destroyed?”

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