Budgeting for the climate change challenge

Labor's federal budget fails to tell a consistent story, leaving heavy roadblocks on the road to a clean economy.

This is an edited version of The Greens' response to the federal budget.

I rise to respond to the federal budget 2012-13 and, in so doing, I pose the question: what is the role of a federal budget?

Is the budget just a spreadsheet of numbers, dollar figures, where some allocations go up and down? Have we come to the view that the federal budget is only an event where we gather to find out who are the winners and who are the losers, who will receive the cheques in the mail?

Is it now a reflection of the massive ideological shift described by Eva Cox as a shift 'from the politics of social change to the veneration of the market that focused on an economy of individuals', rather than a society working together for better outcomes for all of us collectively? Is it an occasion for a managerial report on our economic credit card and its status on the debt-to-surplus trajectory, reporting that it is in the black while hiding behind our backs the ecological and social credit cards that we have put into debt to achieve that black line?

The federal budget is the most value laden document a government produces. It is the economic tool that underpins and enables the government's hopes, aspirations and priorities for the nation. Through the numbers, we should be able to see what the government thinks about our place in the world; about the global and national challenges facing our people, our society and our environment now and into the future; and about how to respond to those challenges immediately, over the forward estimates and beyond. Unless the numbers tell a strong, clear, consistent story, people are left wondering what the government stands for: where is the nation heading?

In Tuesday's budget, we saw from the government a fundamentally confused and internally conflicted picture. Having said that, what we just saw from the Leader of the Opposition's reply to the budget was a picture of irritating static and no ideas for the future. On Tuesday night, we saw a government that wants to make Australia the country of the fair go by handing out cost-of-living payments while at the same time cutting benefits to single parents and saying it cannot afford to increase support to our poorest, most vulnerable people to help lift them out of the cycle of debt and unemployment.

We see a government that wants Australians to be healthier, working with the Greens-at the Greens' instigation-to get a serious downpayment towards a national universal dental care scheme. But, at the same time, the government could not find $340,000 to support the successful Bsafe domestic violence program to assist women and children who are at risk of domestic violence to remain safely living in their communities.

We see a government moving to tackle accelerating global warming-that huge, overarching challenge that confronts us this century-by introducing, as a result of the agreement with the Greens, a legislative package that will for the first time ever see polluters paying for the damage they do and investing revenue in clean renewable energy, helping householders and businesses to cut wasteful energy use, and supporting Australians to meet rising costs.

It is the first time we are seeing a shift in the taxation system to shift responsibility for pollution and inefficient resource use and take it off personal income. That is the 21st century way in which we are going to address the sustainability crisis. At the same time, however, this budget allocates yet more billions to the fossil fuel companies, causing the problem in handouts to make diesel cheaper, to make mining cheaper and to help them export more and more polluting coal, every tonne of which comes back to us in the form of worse floods, more intense fires, cyclones and drought. We are on track for an increase of at least four degrees of global warming because of what we are doing.

We see a government that wants to invest in building a better future for us all; but, in the middle of a boom, holding the purse strings of the most robust economy in the world, it is saying, 'Sorry, we can't afford long-term investment in nation-building right now.' That long-term investment is needed to prepare the nation and get it moving away from the resource based economy it is dependent on and towards a creative, brain based, service and information based economy.

There is a better way, and it is about understanding that we live in a society, not an economy. It is about appreciating that the economy is a tool for the benefit of our society, for the health of our community and for guiding our relationship with the environment that sustains us. If we sacrifice our welfare, our health and our future on the altar of one economic measure, we have fundamentally misunderstood why we humans created this idea that we call 'the economy' in the first place.

This is especially so if the economic tools actually measure the wrong thing. For instance, this budget contains forecasts for gross domestic product; that is the metric by which the government's success in managing the economy is currently judged. But the GDP is quite inadequate for this task. It covers only market activities, excluding work done in the home and by community volunteer groups. GDP makes no allowance for how income is distributed across society. It does not capture the health or happiness of our people or the quality of our environment. As Robert Kennedy put it:

“... it measures everything in short, except that which makes life worthwhile.”

What we need are genuine progress indicators. We need a significant shift in how we measure and report to the nation. The Treasury actually has a wellbeing framework-not that anyone in Australia would know that- which looks not just at consumption possibilities but also at the distribution of opportunities. It looks at sustainability, it looks at the risks being borne by the community and also it looks at the complexity of life. The government should put more resources into constructing broader measures of economic wellbeing which capture these measures.

A summary measure of social progress that tells us whether quality of life is improving would be very welcome in the Australian community. We already have a national balance sheet, but it should publish an adjusted GDP, for example, which allows for a reduction in the value of our natural resources from mining as well as counting the value of our mining exports. Environmental degradation should also be brought into account. European Commission President José Manuel Barroso expressed the problem when he was calling for relevant measures and said:

We cannot face the challenges of the future with the tools of the past.

There are many paths to a budget surplus, but the Gillard government has no straight path. Its budget is a contradiction that is great for teeth but bad for brains. It sets up some big reforms and ignores others in its drive for the surplus. The surplus is not a vision for the nation; it is not an end in itself.

Having said that, the Leader of the Opposition, Tony Abbott, has suggested his path this evening, and it would be a disaster for Australia. It is a straight path to environmental degradation and wreckage of the economy, since he intends to keep all of the benefits but has not said how he would raise the revenue or the extent to which he would cut the Public Service.

The Greens have a vision for Australia. Ours is a vision for a fairer, cleverer society, a society which understands itself and its place in the world, a society that is truly living within its means. We have a vision of a budget that can make this a reality, paying for vital investment in our future by making our tax base fairer, healthier and more sustainable in all senses of the word.

What are the challenges in this century? The overwhelming one, as I mentioned before, is climate change and the fact that the planet is reaching its ecological limits in terms of being able to provide natural resources or absorb wastes. The Treasurer referred in his budget speech to Australia needing to live within its means. We agree, but this means living within our ecological means as well. Our fate as a society is intrinsically linked to the health of our environment, including our productive land and biodiversity. I am very pleased that this budget delivers on the Biodiversity Fund and the Carbon Farming Initiative that the Greens negotiated as part of the Clean Energy Package. Last Friday $271 million was announced as being dispersed across the country from the Biodiversity Fund, much of that money going to NRM groups, other community groups and landholders to steward the country. I am also pleased that the second phase of Caring for our Country has been funded, but I am very disappointed that there has been an effective cut to the program by the inclusion of the Tasmanian Forests Intergovernmental Agreement, which ought to have been a one-off on top of that money, and there are other cuts through biosecurity and other measures that have been left in to come out of the Caring for our Country funds.

If we accept that climate change is the major issue that it is, then the budget must demonstrate consistency in addressing the challenges alongside the implementation of the carbon price, and that is missing. There is more than 12 times more spending on roads than rail in this budget. If you are serious about climate change, you have to act on it and you have to take into account peak oil. This is a ridiculous figure. While we welcome the funding for a national transport planning and high speed rail unit-for which the Greens have achieved a $20 million investment-where is the plan for funding the implementation of high-speed rail? You can keep on planning things for years, but where is the money going to come from to deliver it?

There has also been a deferral of funding to upgrade the grid for renewables, and that is out on the never-never. You cannot roll out renewables and energy efficiency if you do not have the money. There has also been the scrapping of the green buildings program. It is quite wrong of the government to think that the carbon price will be enough to drive the greening of commercial buildings, when evidence around the world highlights the array of non-price barriers to this action. We need to provide better incentives. It is also bad faith when an industry which agreed to defer this measure because they wanted to get it right are now being punished for due diligence. This is one aspect of the budget that we are very unhappy with and that we will continue to press the government to address.

In thinking about where our nation will be in another 10 years, consideration of our water resources is essential. Protecting and preserving our precious water is another long-term challenge that we have little faith this government is committed to addressing in a sustainable way. The Greens will continue to ensure that at least 4,000 gigalitres is returned to the Murray-Darling system. This leads me to mention rural and regional Australia.

The greatest challenge for rural and regional Australia is to lift productivity without access to more land and without access to more water. That means massive investment in research and development. I am pleased there is money for the Beale review but disappointed there is not more R&D money, particularly for the apple and pear industries, which are now having to respond to competition from New Zealand apples. More generally, people in rural and regional Australia need money spent on R&D to lift productivity. They also need an investment in mental health services, because there are huge consequences for individuals and communities in rural and regional Australia, who have very limited access to mental health services, and they are entitled to their fair share.

On Tuesday night, Treasurer Swan told Australians: A surplus provides our best defence against dramatic changes in the global economy.

But my question is: is it a defence against changes in the global environment from which you cannot hide? With respect, this statement is one of the greatest and clearest demonstrations that the Labor Party has its priorities wrong. At the beginning of this century we are in the critical decade for addressing the biggest challenge facing us-that is, how we are going to address climate change in the timeframe.

The Greens believe that our best defence against, our best preparation for, dramatic changes in the global environment as well as the global economy is to invest in a healthy, well-educated, fair society. We envisage a society trained and working in a clean economy, transitioned out of fossil fuels to zero net carbon, understanding and valuing our place in the world and accelerating our transition away from a dig-it-up, cut-it-down economy to one which aspires to be a highly productive nation and a socially just, compassionate nation driving substantial social change in the region, assisting with capacity building in the region and driving peace and cooperation in the region-instead of driving climate change, which will lead to so much conflict and movement of people.

I conclude by saying that the economy is a tool for the benefit of our society. Only when we embrace that fact will we begin to build the kind of country that we want to live in. The Greens have a very clear vision for that country that we want to live in. We are prepared to work for it, we are prepared to raise the money to deliver it and we are prepared to make long-term investments in nation building as well as long-term investments in moving away, as I said in my opening remarks, from the politics of the veneration of the market that focuses on an economy of individuals, and moving to a society that works together for better outcomes for all of us collectively.