For those paying attention to climate-related announcements, like The Australia Institute’s Climate & Energy Program, the Budget came early and – like Christmas-in-July – it was underwhelming and a little tacky. A lot of spin was placed on the $18 billion investment package on 17th September, but little of it was new money and that became clear in the 2020 Budget.
First the good news, the Budget ran low on gas and the much-hyped “gas-fired recovery” amounted to just $52.9 million over the next four years. Keep your eyes peeled on the National Gas Infrastructure Plan which received $10.9 million but could very well be back for more in 2021.
Coal received little attention, cementing the Coalition’s coal retreat discussed last year. The upgrade to Trevor St Baker’s Vales Point coal power station now appears to be just $8.7 million but is still highly problematic and explored in detail below.
Offshore wind power is finally moving forward, with $4.8 million to develop the regulatory framework (see the Institute’s submission on what regulation is required).
The Government’s new climate money is centred on the Australian Renewable Energy Agency (ARENA) which was facing a financial cliff when its ten years of legislated funding ended in 2022. The Government provides $1.4 billion in new core ARENA funding over ten years, somehow stretched to over 12 years in the Budget. This is becoming a habit for Minister Taylor, who also stretched the $2 billion over 10 years for the Climate Solutions Fund into 15 years in last year’s Budget.
The ARENA funding is a disappointment and represents a cut to the agency’s core funding. In January 2020, The Australia Institute called for $2.5 billion over 8 years for ARENA. Since then ARENA has received less, over a longer period of time and told to do more – including becoming ‘technology neutral’.
While $1.4 billion might sound like a lot, little of it has filtered into the next few years for ARENA. Compared to last year’s Budget (which contained $286 million for 2020–21 and 2021–22 for ARENA) it will only receive an additional $91 million over the forward estimates. There is also $193 million promised to ARENA for specific measures but it is not clear how this relates to the new ‘baseline’ funds. In addition, some of these specific measures, like regional hydrogen hubs, unfortunately support both high-polluting fossil fuel-based hydrogen as well as green hydrogen.
The Government found $5 million to fund its new ‘Technology Advisory Council’ which includes former gas executive Grant King, a go-to advisor for Angus Taylor. Grant King even had a fund named after him by Angus Taylor, the $95.4 million King Review Technology Co-Investment Fund to pay businesses to save money with energy efficiency. His experience on climate change is well documented. If you recall, Grant King chaired the Business Council of Australia when it maintained a modest 45 per cent emission reduction target (by 2030 from 2005 baseline), in line with the Climate Change Authority’s advice. He described the target as “economy-wrecking”. To borrow a line from The Juice’s Honest Government Ads, “cool and normal”.