BUDGET 2013: key players’ reactions

The clean energy sector has been left largely disappointed with last night’s budget as the government wielded the axe on several programs.

The budget is over for another year, with several cuts to clean energy programs on the back of a major reduction in expectations for carbon market revenue from 2015.

In reality, Labor is using the lower carbon price expectations as an excuse to cut funding to the Australian Renewable Energy Agency (ARENA), solar flagships and clean coal. But arguing the linkage to lower carbon market revenue just shatters confidence and offers nothing in the way of certainty to investors. If this is any guide then surely we can expect changes to ARENA’s funding profile every year of its existence.

Needless to say, the clean energy sector and environmental groups were disappointed with what was served up last night. Reactions from some of the key players are set out below:

Greens

The leader of the Australian Greens, Christine Milne, found a climate policy positive in the form of a reduction in clean coal funding, but was largely critical.

“Labor has made deep cuts of $685 million to renewable energy and energy efficiency, reneging on its commitment to the Greens in the Clean Energy agreement,” Ms Milne said.

“This comes on top of $257 million in cuts to the Biodiversity Fund, further evidence that Labor cannot be trusted on the environment and climate change. Adding insult to injury, $32 million of this is being re-directed to the Tasmanian Forestry Agreement.

“This budget shows you can’t trust Labor to look after people or the environment.”

Clean Energy Council

The lead representative of the clean energy industry acknowledged the challenges faced in this year’s budget, but nonetheless was disappointed with the outcomes, particularly with the changes to funding of ARENA.

“ARENA was set up with support from all major political parties to be at arm’s length from government, to provide much-needed investment confidence in home-grown technology development right here in Australia,” Clean Energy Council Deputy Chief Executive Kane Thornton said.

“Funding for ARENA to the tune of $370 million has been postponed until 2020, and the process to put that money back on the table is unclear. This doesn’t send a good message to those companies wanting to develop cutting-edge renewable energy technologies in Australia, and could see those companies take their business elsewhere.

“It was also disappointing to see almost $260 million in funding scrapped for large-scale solar research and the Low Carbon Communities grants that were designed to improve energy efficiency for communities and vulnerable consumers and help them save on their power bills."

The Clean Energy Council did, however, welcome the move to leave the $1.2 billion in funding for the Clean Technology Program intact; including $160 million in funding brought forward to help companies become more energy efficient.

Australian Solar Council

The Australian Solar Council called on the Greens, Coalition and Independents to stand firm in the face of planned cuts to ARENA.

“The move to substantially defer ARENA’s funding is a direct attack on its independence, and threatens investor confidence in this critical program,” John Grimes, chief executive of the Australian Solar Council, said.

“ARENA’s funding can only be deferred by changing ARENA’s legislation and the Australian Solar Council calls on the Coalition and the crossbenchers to prevent this from happening.”

The Council provided backing, however, for the government’s move to bring forward $160 million in funding for the Clean Technology programs.

WWF Australia

The Australian branch of WWF was supportive of the continued commitment of $200 million in the budget for the Reef Rescue program, but joined the chorus of discontent with the reduction in clean energy funding.

 “While this government had made significant progress towards cutting Australia’s carbon emissions through implementing the carbon price and the Renewable Energy Target, this budget has seen a step backwards with cuts to investment in renewable  energy innovation  and failure to phase out between $5-8 billion worth of fossil fuel subsidies” Conservation Director of WWF-Australia, Dr Gilly Llewellyn, said.

 “Rather than cutting perverse fossil fuel subsidies, this government has cut renewable energy innovation support.”

Environment Victoria

Environment Victoria Campaigns Director, Mark Wakeham, agreed with the sentiments of WWF Australia in saying that fossil fuel subsidies should have been the focus of cuts rather than clean energy programs.

"With the government recording a massive deficit it's deeply disappointing that the government didn't take the opportunity to protect taxpayers' money and withdraw the annual $10 billion polluter handout,” he said.

"Only one of the five major fossil fuel subsidies has been cut – with taxpayers to save $1.1 billion over the next four years from the government's decision to reduce depreciation for mining exploration and prospecting. That decision is welcome, however other wasteful and polluting programs like the $5.9 billion Fuel Tax Credits program which subsidies the diesel costs of wealthy mining companies were left untouched.

"Astonishingly our most polluting power stations will continue to receive billions of dollars in carbon price compensation despite the fact that the carbon price impact will be much lower than anticipated.

"Of great concern however are cuts to important elements of the Clean Energy Future Package, including delaying renewable energy funding for ARENA and cutting $98 million from the Low Carbon Communities program."

Environment Victoria was supportive of ‘clean coal’ funding cuts, but largely saw the budget as a “missed opportunity”.