Good news for a just transition, but skewed priorities prop up polluters. The Albanese government handed down their second budget last night. And while there is some good news for communities closest to the energy transition, we didn't see the scale of investment we need to tackle the climate threat.
Good news for a just transition
The best news of the budget is the establishment of the new Net Zero Authority - a body put in place to support workers in emissions-intensive sectors to access new employment, skills and support as the transformation continues. Friends of the Earth have been campaigning alongside our union allies for years for an authority like this to be set up, and it's a big win for the movement.
It's also great to see $1.9bn released as part of the Powering the Regions Fund, focusing on regions that are in the middle of the energy transition such as the Latrobe Valley, the Hunter Valley, Illawarra and Gladstone. The fund is fantastic - but what is more important is how it will be spent. The $14.5 million announced for offshore renewable energy projects is welcome news. As funds continue to be released they need to be invested in real climate and ecological solutions like offshore wind, power station and mine rehabilitation projects, and climate resilience initiatives, rather than new polluting industries replacing the old.
We also welcome the new investments in home electrification and energy efficiency for households and small businesses, which will help support energy upgrades for up to 170,000 households tackle the cost of living while helping to mitigate climate change. With 10.8 million households across the country, this scheme will need to be scaled up to have a serious impact on emissions and cost of living pressures.
But the rest of the budget is a case of skewed priorities, with budget decisions that will leave Australians and the environment more vulnerable for decades to come.
The starkest of these is the previously announced (and mind-blowing) $368bn budget allocation for three Nuclear Submarines.
AUKUS nuclear propelled submarines make Australia more vulnerable to nuclear attacks. They create an opening for a nuclear industry that has radioactive risks for all Australians and beyond, but especially First Nations communities on which the uranium mines and high level nuclear waste dumps will be imposed.
This kind of spending on Nuclear Subs means we can’t spend money on people. A responsible defence policy would allow for greater spending on urgent human and environmental needs and diplomacy, not funding war.
On transport, the government announced a National Electric Vehicle Strategy to promote electric and cleaner vehicles.
Cleaning up cars is great, and long overdue. But what was completely missing was serious investment in public transport which can provide cheap, fast, efficient and low emission transport for all Australians. While pots of money have been allocated for suburban and urban infrastructure grants, there is no vision for significant federal investment in public transport, leaving most in the suburbs without any alternatives to cars and inhibiting their access to education, health services and recreation.
The Gas Industry
The government surplus announced this year is in part attributable to increased commodity prices. But this only goes to show what we are missing out on by not taxing extractors properly. The government has announced an increase in the Petroleum Resources Rent Tax particularly for gas exporters, but this is by no means the industry paying their fair share.
The gas industry alone made $92.8 billion in revenue in the last year, and when the oil and gasfields dry out, they leave the Australian taxpayer to clean up their mess.
Australia is facing a cleanup bill of between $60.5b and $73b over coming years to deal with old offshore oil and gas facilities, according to two industry-sponsored studies. That's about twice of last year’s budget deficit that will be lost in foregone tax due to the fact the industry will claim the costs as a write-off.
Oil and gas companies are asking to dump most of the steel — equivalent to 14 Sydney Harbour Bridges — into the ocean. FoE welcomes the government's commitment of $4.5m to pay for a roadmap toward establish rig decommissioning and recycling facilities in Australia. But we also note that there was no mention of extending the temporary decommissioning levy to make sure industry pays.
Labor are still prioritising polluters over people
A more appropriate but still incredibly modest windfall profit tax on gas exports could provide $68bn between 2027 and 2039. If you added that to the costs of nuclear submarines and $243bn we will lose due to the stage 3 tax cuts over the next ten years, the $75bn cost of raising the rate of job keeper in line with the Economic Inclusion Advisory Committee findings would be loose change. Instead, we got a paltry increase in welfare payments which will leave many Australians living in poverty.
It’s fantastic that the safeguard mechanism is in place, that the energy transition is underway, and that the Albanese government is ensuring that workers and communities are being looked after as we move away from coal fired power. But given what we are hearing from the International Panel on Climate Change (IPCC) about the increasingly urgent need to cut emissions this decade, we can’t be propping up the nuclear and gas industries and failing to invest in solutions at the speed and scale we need to prevent climate breakdown.
If the Albanese government can spend $368bn on nuclear propelled submarines, we know they could be investing the kinds of sums we need to meet the climate threat. This budget shows it's not about the cost, it's about priorities.