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May 21 2014

Bust the budget 2: Fossil fuel profits over fixing climate reality

This is the second part of a series arguing against the Abbott government’s first budget. Part 1 summarizes the overall unfairness and debunks the justification offered for this agenda. This part examines how the budget affects climate, environment, fossil fuel subsidies, business, and science.

Unless otherwise hyperlinked, budget facts are sourced from either Joe Hockey’s budget speech or Sally McManus’s “Tracking Abbott’s Wreckage”.

Cooking the climate, exterminating the environment

There weren’t many climate and environment policies left to cut, but Hockey managed to find some anyway. Together with cuts already announced, climate spending will fall from $5.27 billion in FY2013-14 to $1.25 billion in FY2014-15. Everybody loses from the cuts to climate policies, because a stable climate sustains our economy and society.

We already knew about Abbott’s crusade to abolish the carbon and mining taxes, Clean Energy Finance Corporation, and Climate Change Authority. Now the Australian Renewable Energy Agency has been abolished, a broken promise which will kill $7.7 billion of investment; even existing projects could have their funding cut off. Similar to CEFC, ARENA says it will continue to operate until the Senate passes repeal legislation.

Other axed renewable energy and energy efficiency programs include the National Solar Schools Plan, Energy Efficiency Programmes, Energy Efficiency Information Grants, Low Carbon Communities, Ethanol Production Grants Program, and Cleaner Fuels Grants Scheme. $125 million has been cut from the Clean Technology (Investment and Innovation) programs. Even the Clean Energy Supplement, a carbon tax compensation payment, has been renamed the Energy Supplement, and will no longer be indexed.

129 jobs are gone from the Environment Department, which already had too few compliance officers to verify businesses’ claims. The budget abolishes the National Water Commission, and reduces funding to the Murray-Darling Basin Authority. Almost all funding for international forest protection programs has been redirected to fund a global conference on rainforests. Landcare’s funding has been cut by nearly 30% (yet another broken promise) to pay for the Green Army. But surely the whole point of a Green Army is to take actions that wouldn’t have happened anyway?

Not only does the budget cut some of Labor’s last remaining climate policies, it also cuts some of the government’s own election proposals. The promised $1 billion Million Solar Roofs program has been completely scrapped, and the promised $100 million Solar Towns scheme slashed to a mere $2 million for a few marginal electorates. A promise to re-establish Low Carbon Australia has been abandoned. Even the government’s central climate policy, the Emissions Reduction Fund, had its first four years of funding more than halved from $2.55 billion (a level that was already universally considered insufficient) to $1.15 billion – though Environment Minister Greg Hunt claims the total amount will still be spent.

They’ve even cut or deferred funding from the Carbon Capture and Storage Flagships Program, National Low Emissions Coal Initiative, and Low Emissions Technology Demonstration Fund. This is unsurprising as “clean coal” funding has been perpetually delayed for a decade now; it transparently serves no other function than to greenwash the coal industry.

After all this, the only major climate policy left standing is the Renewable Energy Target, and that is currently being reviewed by a climate denier. However, the budget reinstates the National Climate Change Adaptation Research Facility – we’ll need it with climate policies like Abbott’s.

Hockey, who earlier this month described wind farms as “utterly offensive” and lamented that existing ones were a “contractual obligation”, made no mention of climate or environment in his budget speech. Labor leader Bill Shorten only mentioned it in passing in his reply speech, with only Greens leader Christine Milne’s speech acknowledging climate change as the pressing issue that it is.

Feeding fossil fuels

While Abbott isn’t interested in building 21st-century renewable energy infrastructure, he does want to build 20th-century fossil fuel infrastructure. The budget includes $11 billion of new investment in roads, rail, ports, and airports, including federal funding for Melbourne’s controversial East-West Link.

In a somewhat positive move, the budget brings back the inflation-linked indexation of fuel tax, frozen by the Howard government in 2001. However, I think it should be associated with household compensation like the carbon tax, and I see the Greens’ point that the money could be better spent than on roads. But the most scandalous aspect is that while ordinary motorists pay ever higher fuel tax, the rebate for heavy vehicle users will rise in tandem so miners, farmers, and truckers will pay ever less for fuel.

The total level of fossil fuel subsidies goes up in this budget, from $13 billion last year to $14 billion this year. There’s even a new fossil fuel subsidy, $100 million in Exploration Development Incentives.

Unsurprisingly, the mining lobby is happy with the budget (except for the cuts to “clean coal”).

Bolstering big business

Big business is not being made to do any of the “heavy lifting”. Abbott is cutting company tax by 1.5%, and abolishing the carbon and mining taxes. The supposed levy on business to fund paid parental leave is designed in such a way that businesses can pass on the cost.

There are some cuts to corporate subsidies (eg. combining 8 industry assistance programs into one, and abolishing various small business concessions associated with the mining tax), but these cuts only affect struggling industries, new businesses, and R&D, another manifestation of Abbott’s instinct to back the establishment.

Taxpayers Australia argues the net effect of this budget’s various tax changes is to transfer wealth from individuals and small businesses to multinational corporations.

Silencing science

Hockey has cut funding from the Bureau of Meteorology, CSIRO, Australian Research Council, Australian Institute of Marine Science, and Australian Nuclear Science and Technology Organisation. He is also combining a climate science program with a broader environmental science one, and abolishing a collaboration with ANU designed to connect government with academia. It’s not hard to guess why – fewer scientists means less evidence against government and corporate plans to expand destructive industries such as fossil fuels.

In Part 3, I will examine how the budget affects the federation, education, and health.

1 comment

  1. Amar

    Amar on May 21, 2014 at 8:41 pm
    Idiot tony Abbott
    He is totally gone mad
    Stop boats
    But call them by airways f….idiot
    Tony Abbott should be kicked out of
    Australia

    Come Australia election should be held again
    Join your hand and kick idiot out

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