Budgets are about choices | Between the Lines

Treasurer Jim Chalmers at a press conference at Parliament House in Canberra, Tuesday, May 7, 2024
AAP Image/Mick Tsikas


This edition: government locks in fossil fuel expansion, an honest government ad and our budget preview

The Wrap with Ebony Bennett

It’s just five sleeps until federal budget night, but today’s big story is the government’s announcement that it will be doubling down on fossil fuel production and exports.

On the same day that scientists declared the world has just experienced the hottest April on record, the Australian Government released its Future Gas Strategy, setting the scene for new gas developments to 2050 and beyond.

The entire premise of the strategy is that gas is ‘critical’ to the Australian economy and we need MORE. A myth the Australia Institute has debunked again, and again, and again, and again.

Let’s be clear: more fossil fuels make climate change worse. It doesn’t matter how many times industry and government tell us we need more fossil fuels before we can transition away from fossil fuels, the physics don’t change.

Let’s also be clear: Australia is still expecting to host a UN climate conference in 2026 in partnership with Pacific Island countries, despite the contribution our fossil fuel exports make to climate change. In fact, while Madeleine King is throwing all her support behind the gas industry, Foreign Minister Penny Wong is in Tuvalu witnessing the impact climate change is having on small island developing nations.

Back to the budget – more than anything else, budgets allow you to peel back the layers of rhetoric and spin and reveal what a government really cares about.

Despite claims that the country can’t afford X or Y, the reality is that governments find the money if something is a priority. Or as former Treasurer Josh Frydenberg put it when talking about AUKUS, “everything is affordable if it’s a priority”.

For example, consider the $50 billion the government recently announced for defence over the next decade, on top of the estimated $360 billion going to AUKUS. Clearly, that’s a priority.

On the other hand, JobSeeker unemployment payments are dragging people who can’t find a job well below the poverty line. It wasn’t always this way, but in 1997 the Howard government chose to benchmark the pension to average fulltime earnings, but not unemployment payments. Pensioners were a priority; unemployed people weren’t.

Jericho column image

Next week, the government will share its priorities for the nation, and we’ll bring you our budget analysis at Politics in the Pub in Canberra and on online through our Unparliamentary series – I hope you can all join us.

Ultimately, budgets reveal what a government’s priorities really are – and what issues Australians want their federal government to prioritise is fundamentally a democratic question, more than an economic one.

— Ebony Bennett, Deputy Director of the Australia Institute

The Big Stories

Future Gas Strategy locks in fossil fuel expansion

The Australian Government has released its Future Gas Strategy, claiming that gas expansion is critical to the Australian economy and Australia needs more gas to support its manufacturing industry.

Gas does not play a critical role in the Australian economy. Jobs in oil and gas extraction make up 0.1% of Australian employment. Beer drinkers pay more in beer excise than the major gas companies pay in tax and motorists pay more in vehicle registration fees than the gas industry pays in royalties. The gas industry is almost entirely foreign owned, so the profits go overseas.

Not only is gas expansion not critical to the Australian economy, most of Australia’s gas is exported and most of Australia’s domestic gas is used by the gas industry itself. Liquefying gas for export (7.3%) uses more gas than Australia’s entire manufacturing industry (6.4%), gas power plants (6.2%) and residential use (2.6%).

If we actually wanted more gas (and more affordable gas) for the manufacturing industry, we should stop exporting gas. The very thing the government absolutely won’t do.

The entire premise of the Future Gas Strategy is that gas plays a “critical role in Australia’s economy”. The only source cited in the “contribution of gas sector to the Australian Economy” section of the analytical report (page 14) is an ACIL Allen Report for a gas lobby group.

“It is a flawed argument to say that Australia needs more fossil fuels to become a renewable energy superpower. First, we had the ‘gas-fired recovery’, and now we have ‘gas-fired renewables’. It’s as if the Coalition government never left,” said Polly Hemming, Director of Climate & Energy at the Australia Institute.


Previewing the budget

In the lead-up to the federal budget, much discussion has focused on inflation. Indeed, looking at the latest media reports, you would be forgiven for thinking that inflation had started to increase rapidly.

Ahead of budget week, Matt Grudnoff and Greg Jericho are publishing a series of articles on inflation, interest rates and the cost of living for our News & Analysis page, including a special feature highlighting six ways the government can reduce inflation in next week’s budget.


An honest government ad

Last edition, we updated you on the government’s delays to the Environmental Protection and Biodiversity Conservation Act (which will likely mean the current pipeline of at least 30 fossil fuel projects – including 25 coal mines and massive gas projects – are approved under existing laws).

Now, our broken environmental laws are the subject of the latest ‘Honest Government Ad’ from the team at Juice Media.

This video is an important reminder that we don’t need to wait for improved laws to take action. The government could decide today to end native forest logging, abolish fossil fuel subsidies and stop all new coal and gas projects.

Watch >>

Buildings as batteries

New research from the Australia Institute and Buildings Alive has found that Australia’s energy security can be supported – and annual emissions reduced – by harnessing the power of buildings to act as ‘thermal batteries’.

As Richard Denniss writes in the New Daily, buildings are major uses of electricity in Australia. Through small changes to when they use electricity, we can move large amounts of energy from the afternoon peak demand period and towards the middle of the day, when the glut in solar supply is so significant that solar farms are being turned off.


Motorists driving WA government revenues, not gas

It’s budget season around the country – including Western Australia. Ahead of the state budget, the Australia Institute released new analysis from Mark Ogge and Rod Campbell that shows WA’s gas industry pays few royalties or taxes and provides little benefit to the state’s economy.

WA gas billboard

The research report was accompanied by a prominent billboard in central Perth overlooking Woodside’s offices, Parliament House and seen by tens of thousands of motorists daily (our second billboard in two weeks). The billboard highlighted that WA’s motorists pay more in vehicle registration than the gas industry pays in royalties.

The WA Treasurer was asked about our research on ABC Radio Perth, and Mark spoke to 6PR Perth and took a deep dive into the issue for WA Today.

Read now >>

A bleak vision for America’s future

Since April 2022, a coalition of conservative American organisations has been working on Project 2025 – a plan for the next conservative president of the United States.

Project 2025 outlines in plain language what a second Trump administration could look like, including steps that would significantly worsen the climate crisis and deepen tensions between the US and China.

Dr Emma Shortis explores the implications for Australia and our region in this detailed – and disturbing – journey through the looking glass.

Read now >>


The budget vs inflation | Follow the Money

Next week, Treasurer Jim Chalmers will announce what the government has chosen to prioritise in this federal budget. So, will the government address some of the big issues facing social security, the climate, HECS, housing and more, or will it be a budget of band aid solutions?

Senior Economist at the Australia Institute, Matt Grudnoff, joins Ebony Bennett on this episode of Follow the Money to discuss what to look out for in next week’s budget.

Listen now:

JobSeeker drags people into poverty, but the government could fix this today | Dollars & Sense

JobSeeker unemployment payments are “seriously inadequate”, according to the government’s Economic Inclusion Advisory Committee. But why has their value fallen so far behind the aged pension?

With budget night fast approaching, Chief Economist Greg Jericho asks whether the government will choose to fix a broken system – or if its priorities lie elsewhere.

Listen now:

The Quote

“This is not the time for scorched-earth austerity.”

— Treasurer Jim Chalmers ahead of this year’s federal budget.

The Win

Offshore wind zone a step closer to becoming a reality

Six bidders have received feasibility licenses in Australia’s first offshore wind zone off Victoria’s Gippsland coast, reports the ABC.

The project received massive interest, according to Minister for Climate Change Chris Bowen.

“We wanted 600 megawatts of new dispatchable capacity. We received bids for 19,000 megawatts — 32 times more than what we asked for,” he said.

The Bin

Giant WA gas project will release three billion tonnes of emissions

The Australian Government has approved key infrastructure for Chevron’s Gorgon LNG Stage 2 expansion that will produce three billion tonnes of CO2 equivalent emissions over the next 50 years.

The approval was granted by the Commonwealth Government’s offshore oil and gas regulator NOPSEMA and will enable LNG production at Chevron’s Gorgon project. This will result in 62 million tonnes of emissions annually, which is 16 times greater than the emissions of WA’s largest coal power station, Muja.

“This approval highlights the determination of the Australian Government to prioritise the interests of foreign owned gas exporters over our climate and communities,” said Mark Ogge, Principal Advisor at the Australia Institute.

What’s On

Politics in the Pub: Budget Wrap 2024 | 6.30pm Wednesday 15 May

Join the Australia Institute’s team of economists for their analysis of the 2024-25 Federal Budget. Who wins? Who loses out? What’s hiding in the budget papers and what do you need to know?

At this Politics in the Pub, Richard Denniss and Greg Jericho will in conversation with Ebony Bennett to unpack the budget.


Unparliamentary: Unpacking the Budget | 11am Thursday 16 May

Unparliamentary: Unpacking the Budget

Want to get the scoop on the federal budget?

In this special episode of Unparliamentary, journalist Rachel Withers and Australia Institute economists Greg Jericho and Matt Grudnoff dive into this year’s forecasts.


Work with Us

Are you curious about how to undertake research that changes minds? Do you want to learn how to address complex problems with people who know how to make a real difference?

We’re looking for the next generation of change-makers to join the Anne Kantor Fellowship, a unique 12-month paid training opportunity at the Australia Institute that nurtures new voices in Australia’s policy and democratic debates.

Applications close Sunday 2 June.

Learn more >

Call for Information

Almost half of Australia’s public universities have a centre or program funded by a fossil fuel company.

Do donations from fossil fuel companies influence the research conducted at Australian universities? Do they result in the publication of favourable research? Are fossil fuel companies buying the reputation of Australian universities? Are researchers pressured to produce results that make corporate donors look good?

The Australia Institute is looking to answer these questions and we want your help. If you have any information, data or experience that can contribute to our understanding, please contact us at australiainstitute@proton.me.

Thank you for supporting the Australia Institute. We’re ready to tackle some massive issues this year and we couldn’t do it without supporters like you.

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