This Budget was an incremental step towards a safe climate future - but unfortunately, we don't have the luxury of time to get us there incrementally. We need to go much further, and we need to do it much much faster. This should have been the world’s first climate change budget, following on from the world’s first “climate change election”. In a democracy, the people’s priorities, rather than the fossil fuel lobby, should direct budgets.
With forty times as much being spent on defence as climate change, it seems that Kevin Rudd still hasn’t grasped the enormity of the problem we’re facing. The Stern Review on the economic costs of climate change found that not taking action to combat climate change could result in an economic crash as big as both World Wars and the Great Depression combined. This is about sound economic management.
The climate did receive one victory – the removal of one of Howard’s many fossil fuel subsidies – for condensate fuels. Condensate is a crude oil extracted from natural gas. Up until now, oil companies could reduce the excise they paid by subtracting the condensate used in their own crude oil. GetUp and other environmental orgainsations campaigned to remove this subsidy, and the fact it will no longer apply is a long-overdue testament to the power of people’s movements in creating change. But billions more remain - including the $1.1bn Fringe Benefits Tax concession for company cars. We will need to see much more of this in the next year if we are to defeat the powerful vested interests of the pollution lobby – coal, aluminium, cement, electricity generators, as well as their lobby groups like the Australian Industry Greenhouse Network.
Removing the condensate fuel subsidy will provide the Commonwealth Government with a windfall gain of $2.5bn over 4 years. But how much of this windfall found its way into the climate change budget?
The answer is very little. Overall, only $1856.3 million was allocated to climate change initiatives over the next 4 years, and $365.7 million of this will go to so-called “clean coal” (including carbon capture and storage). Only $ 227.5 million over the next 4 years was allocated to the Renewable Energy Fund, and funding for this program will not even kick in until next year.
The climate cannot afford to wait another year for significant funding for renewable energy. And the fact that in the forward estimates period (the next 4 years of the budget) there is more funding to the coal industry for its unproven CCS technology, than for renewable energy, is disappointing.
In the budget press release, Martin Ferguson, Minister for Resources and Energy, stated, “coal is vital to the Australian economy and the developing world as it lifts people out of poverty”. For a politician to be making statements like this when they know full well the extent of the climate emergency we are facing is surprising and short-sighted. Coal causes climate change. Climate change increases poverty. Climate change threatens to undo all of the development gains of the last hundreds years for the Global South.
There was some funding to support developing countries to adapt to the impacts of climate change, with the government delivering on its pre-election commitment of $150 million over three years. This level of funding hardly scratches the surface of what will be needed, as climate impacts begin to hit the Global South harder and more often. Oxfam Australia estimates that at least $300 million is needed in the current Budget for adaptation, building to $1.75 billion over the next five years. Adaptation spending should be prioritised in the areas of capacity building, disaster preparedness, livelihoods programming and migration.
If you’re one of the many Australians wanting to green your home, there are some positive signs but nothing groundbreaking, and very few announcements of new funding. Of the $500 million to help households become more energy efficient, the only new announcements were $14 million to change from a 6 star to a 10 star energy rating system for appliances, and $150 million to help landlords install insulation in rental properties.
The solar hot water rebate will almost double the number of Australian homes with solar from 4.4 per cent to 7.4 per cent. But this is still not enough, in one of the sunniest countries on Earth. Now the rebate is means tested also - inevitably discouraging wealthier households (who consume enormous amounts of energy) from making the change. Similarly, the green loans scheme is a positive step that will eventually make 200,000 homes more energy efficient, but it needs to be scaled up to address the scale of the problem - with the money spread over six years, only about 11,600 homes will benefit this financial year. We need dramatically accelerated expenditure on a major energy efficiency program to cut greenhouse pollution and help households and businesses reduce their electricity bills. The Australian Conservation Foundation argue at least $200 million is needed for this program, this year; and a total of $5 billion over 10 years.
The funding for water solutions is certainly a huge improvement on previous budgets. The ‘Water for the Future’ initiative implements the government’s election promise of returning water to the Murray-Darling, including $177 million for buying back water. However, much more is needed – probably at least $1.5 billion over the next three years to purchase water to put back into the Basin’s waterways.
Kevin Rudd and Wayne Swan had an opportunity to begin an historic shift in the nature of Australia’s economy last night. They missed that opportunity by not investing enough in climate solutions, by being distracted by the false solution of so-called “clean coal”, and by continuing to subsidise the fossil fuel industry to the tune of billions of dollars.
Of course, we’re expecting an announcement of greater funding for climate later this year, after the release of new research such as the Garnuat Review and the Wilkins Review. Last night’s budget has a surplus of $21.7 billion for 2008-2009. There’s still time for the government’s spending priorities to reflect the reality of our climate emergency, but we certainly can’t afford to wait until next year’s budget. The clock is ticking, and we are running out of time. This budget did not grasp the reality of the emergency we face. It also failed to understand the opportunities we could create in moving to a renewable energy economy – creating hundreds of thousands of new green-collar jobs and stimulating new, clean tech industries.
I know that I'll be directing my tax cut to invest in something that might help steer this ship to a safe climate future, as I wanted my Government to do on my behalf this Budget – the grassroots climate movement. I invite you to join me.
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