Coalition proposes to axe climate, renewable programs

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Update: Coalition proposes taking an axe to climate and renewables programs – confirming cuts to ARENA as well as canning carbon price.

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(Update: A spokeswoman for Opposition’s Greg Hunt said funding or ARENA would be cut over the forward estimates, but details of the cuts would not be released until next week).

The Coalition has confirmed that not only does it want to repeal the carbon price should it win power next week, it will also take an axe to associated energy efficiency and renewables programs to help pay for its budget promises, including the Australian Renewable Energy Agency.

A document released by Opposition Treasurer spokesman Joe Hockey on Wednesday outlined the extent of the cuts proposed to help the Coalition meet its spending commitments.

Most of the cuts will come from compensation not needed once the carbon price is withdrawn (although households keep theirs).

But other programs as the Clean Technology Program, which assisted renewable projects such as solar PV and energy efficiency programs, as well as energy efficiency information grants, will also be terminated.

A total of $1.5 billion is targeted for savings linked programs considered “wasteful or will no longer be required” – which is expected to include the Clean Energy Finance Corporation, and possibly even cuts to the Australian Renewable Energy Agency.

ARENA was mentioned by Hockey in a news conference this morning, and a spokeswoman for Greg Hunt confirmed unspecified cuts over the forward estimates. Details will be released next week, she said. The Labor government has already trimmed ARENA’s budget to $3 billion from $3.2 billion, and deferred some of the planned spending out to 2022.

The coalition says it will save $400 million from land sector initiatives and from closing institutions such as the Climate Change Authority.

Here is an excerpt from the statement:

Abolishing the remaining spending linked to the carbon tax will deliver savings of $7.5 billion.

  • • Discontinuing the business compensation measures introduced to provide partial relief to selected sectors and industries for the hit from the carbon tax ($5.1 billion) – including:

o Removal of the increase in the instant asset write-off threshold to $6,500 ($0.2 billion);

o Discontinuing the Jobs and Competitiveness Program ($4.0 billion);  Discontinuing the Steel Transformation Plan ($0.1 billion);
o Discontinuing the Clean Technology Program ($0.4 billion);
o Discontinuing the Coal Sector Jobs Package ($0.3 billion); and

o Discontinuing other small Clean Energy Future business compensation measures including the Energy Efficiency Information Grants, the Clean Energy Skills package, and the Clean Technology Focus for Supply Chain programs;

 

  • Discontinuing energy market compensation measures which will no longer be needed once the carbon tax has been scrapped ($0.5 billion);
  • Discontinuing various land sector initiatives which Labor has already slashed, as well as bureaucracies like the Climate Change Authority ($0.4 billion);
  • Abolishing other measures linked to the carbon tax that are wasteful or will no longer be required once the carbon tax is abolished ($1.5 billion).

Other Coalition Savings

Further savings totalling $0.8 billion over the forward estimates will be realised from:

  • Redirection of funding from the Carbon Capture and Storage Flagships Program (saving $0.3 billion); and
  • Reduction in funding for the Automotive Transformation Scheme (saving $0.5 billion) (announced in February 2011).
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1 Comment
  1. David Hamilton 7 years ago

    There is a real place for Government grant programs, and I worry that the Coalition’s cuts will remove activities of real value. Let me give you a real life example from Tasmania. The issue is the development of a wood pellets industry. Wood pellets are a very successful renewable fuel elsewhere in the world, and particularly in Europe. When the infrastructure to make and deliver wood pellets in bulk (as distinct from in bags) is in place, the use of wood pellets in small to medium heat delivery situations is as clean burning and as convenient as is the use of bottled gas or heating oil – but is renewable.

    In Tasmania we have very significant but currently underutilized plantation forest resources that could provide the raw materials for pellets, particularly if coupled with higher value use of the wood. However, both pellet manufacturers in the state only make bagged pellets, an approach which essentially limits their market to smaller domestic pellet heaters. I am associated with a group in the Dorset region of NE Tasmania which is trying to establish a number of renewable energy industries. In order to get a bulk pellet industry started we will need a medium sized initial customer – say a swimming pool or nursing home – who is planning new heating infrastructure and we will need a local supply of bulk pellets. The trouble is that both parties to a possible pellet supply contract need to invest in new plant and equipment. I think that there is a real role for government grants (or loans) here to help fund the initial capital investments required to get this industry off the ground.

    It concerns me considerably that the Coalition’s cuts might be so severe that the initial assistance needed to get a new industry such as the one I have described off the ground would not be available. I would not favor a new industry which required any on-going support. Once up and running a viable local wood pellet industry would provide local economic benefits, increase local resilience and reduce greenhouse gas emissions if the pellets displace bottled or pipeline gas.

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