The Federal budget has provided a range of measures to address cost of living and also add to the energy transformation and address environmental reform. Some important initiatives include home energy efficiency upgrades, establishment of Australia’s first National Climate Risk Assessment and a National Adaptation Plan, establishment of Net Zero Authority, upgrading flood warning infrastructure, reducing transport emissions, investment in hydrogen.

But its measures don’t match the scale needed to address the climate emergency.

Some of the items of note:

• $2bn for a new hydrogen power program, so Australia can be a “world leader in producing and exporting hydrogen power”.
• $1bn in “low-cost loans for double-glazing, solar panels and other energy efficiency improvements that will make homes easier – and cheaper – to keep cool in summer and warm in winter”,
• $300 million energy efficiency social housing upgrades;
• direct energy bill relief of up to $500 for eligible households (ie, those presently receiving Government allowances) and up to $650 for small businesses.
• $28.0 million over two years from 2023–24 to develop Australia’s first National Climate Risk Assessment and a National Adaptation Plan to understand the risks to Australia from climate change, invest in a plan to adapt to those risks, and commission an independent review of the Australian Climate Service.
• $83.2 million over 4 years from 2023–24 to establish a national Net Zero Authority from 1 July to promote orderly and positive economic transformation associated with decarbonisation and energy system change in regional areas.
• $20.9 million over 5 years from 2022–23 for initiatives to decarbonise the transport and infrastructure sectors including Fuel Emission Standards
• $80.5 million over 4 years from 2023–24 to support the Australian critical minerals sector
• Reform of the Petroleum Resource Rent Tax to increase receipts by $2.4 billion over the 5 years from 2022-23.
• $236.0 million over 10 years from 2023–24 (and $13.9 million per year ongoing from 2032–33) to remediate high priority flood warning infrastructure and address critical reliability risks.
• $121m over four years to establish Environment Protection Australia as part of an upcoming reform of conservation laws, and $51.5m for establishmment of Environment Information Australia, to provide data on the threatened species and ecosystems.
• Health: $3.5bn boost to bulk billing that will help GPs provide free consultations to around 11.6 million eligible Australians.
• Welfare: $4.9bn to increase working age and student income support payments including jobseeker, youth allowance, parenting payment (partnered), Austudy, Abstudy, youth disability support pension and special benefit. This will cover 1.1 million Australians. For Jobseeker those under 55 or over 60 will get another $40 a fortnight; those aged 55-59 will get $92.10 more a fortnight.. Increase to rent assistance by15 percent. ACOSS and student organisations have blasted this increase as greatly insufficient.

Commentary

It is a measured budget returning a small $4 billion surplus mainly due to continued high prices for Australia’s mineral exports. It is measured with regard to social welfare spending. Not very much to pull people out of poverty. Stage 3 tax cuts not even mentioned, although they will exert major inflationary pressure when implemented.

The Climate items are also measured. The reform of the Petroleum Resource Rent Tax is expected to return $2.4 billion over the 5 years from 2022-23, a very small amount given the windfall profits made in recent years by the Fossil Fuel majors. But Fossil Fuel companies are happy with the changes.

There is about $10-$11 billion per annum in fossil fuel tax subsidies with no action in the budget to claw any of this back, yet subsidies in this budget to renewables and climate transformation amount to about $4 billion. ACF CEO Kelly O’Shanassy said “The really ugly part of this budget is the continuation of subsidies to big, multinational companies encouraging them to use more coal, oil and gas. The fuel tax credit scheme will cost Australians $9.6bn in the next year and $41bn over the forward estimates.”

Climate Control News (CCN) reports Rewiring Australia co-founder and chief scientist, Dr Saul Griffith, said this budget is a profound reset of climate and energy policy after a lost decade under the previous government.

“This is Australia’s first electrification budget. It positions us to become a world leader in the efficient electric energy system of the future. It demonstrates federal ministers have worked hard to start the massive shift towards a new energy paradigm across the economy,” Griffith said.

“The electrification budget builds on Australia’s love affair with rooftop solar. It will help households to realise cost savings from substituting expensive gas machines for clean, electric alternatives.”

Saul Griffith also highlighted that the US spend on renewable hydrogen technology was about 3 percent of the Inflation Reduction Act spend, while this Australian budget has allocated $2 billion, or around 50 percent, of climate transformation measures. The Corporate sector should be doing more of the heavy lifting with hydrogen, with the government focussing more on renewables, storage and electrification as best bang for buck.

The Climate Council is more direct and says the budget doesn’t meet the scale of the climate emergency Australia faces. Climate Council CEO Amanda McKenzie said:

“The Labor Government has demonstrated in this Budget that they want to support Australians who are struggling. Climate change makes every Australian vulnerable, so the scale of investment on climate action needs to match the task ahead of us.

“We can’t settle for a slow jog when the climate crisis calls for a sprint. Climate change is already reshaping our world, the government needs to fundamentally re-shape budgets to tackle it.”

The budget papers also revealed the government has an “unquantifiable” future liability due to its indemnification of Chevron for future legal action against its failed CCS project at Gorgon. Can we trus5t any Fossil Fuel project that promises CCS to meet Safeguard Mechanism restrictions?

There is some general disaster preparedness and disaster response in this budget, in particular focussing on early flood warnings. There appeared to be nothing specifically targeting heat-health response to extreme heat or bushfire preparedness. There are signs we will experience ElNino at the end of this year with record temperatures likely, extreme heat and increased risk of bushfires driven by global warming. The World Meteorological Organisation warned on 3 May: prepare for El Nino.

The Australian Conservation Foundation has done an assessment categorization of ‘The Good’, ‘the Bad’, and ‘The Timid’. Items they have labelled as bad include:

• Approximately $50bn in fossil fuel subsidies, including $41bn for the notorious Fuel Tax Credit scheme over the forward estimates
• $6.7m to deliver a Future Gas Strategy
• $4.5bn over 10 years to support acquisition of nuclear submarines
• Undisclosed funding for ANSTO to develop a business case for a new facility to support Australia’s nuclear science capability
• $162m over seven years to continue the sub-optimal Kimba radioactive waste plan

The tone of the government was contained in Treasurer Jim Chalmers Budget speech: climate change or global warming were not mentioned once, even though it is a powerful determinant of Australia’s economic outlook. ‘Renewable’ was mentioned seven times; ‘coal’ once; ‘clean energy’ twice; and ‘gas’ and ‘hydrogen’ three times.

New climate spending measures in the Budget

Table 3.7 sets out $4.6 billion in climate-related spending commitments in this Budget to climate action out to 30 June 2030. This is further to the $24.9 billion of climate-related spending committed in the October 2022–23 Budget. Classification of spending is informed by the climate reporting framework defined in Table 3.6 above. The total commitment outlines spending, balance sheet and tax expenditure measures and therefore presents a broader view than the impact on the underlying cash balance.3

Climate spending overlaps with the Government’s investment of over $40 billion in Australia’s plan to become a renewable energy superpower, outlined in Budget Statement 1: Box 1.1. However, these figures relate to a different scope of activities.

Climate related budget commitments include measures that build Australia’s economy, such as investments in renewable energy, as well as those that support adaptation, such as flood warning infrastructure. Of the four categories in Australia’s climate reporting framework, the emissions reduction category and selected items from the government capability and international categories of Table 3.7 contribute to the estimate of Australia’s investment in becoming a renewable energy superpower. Spending on adaption is not included.

In addition to these components, the Government’s investment in becoming a renewable energy superpower also includes broader investments in the net zero economic transformation, such as investments in critical minerals.

Reporting new climate spending measures supports transparency around the fiscal impacts of climate change. However, it does not provide a complete summary of climate action. Non-financial measures such as reforms to the Safeguard Mechanism are not captured. Measures that may contribute to climate action but have a different primary purpose (or indirect benefit) are not included.

Australia’s approach to reporting climate action commitments is a separate and independent framework to the established functional expense tables in Budget Statement 6: Expenses, which aligns with international standards. These cannot be combined for analysis of government spending.

This summary focuses specifically on new climate-related commitments in this Budget. The Government is developing an approach to presenting transparent spending information on existing spending commitments. This will provide a more holistic view of the total amount of Government spending, not just what is new in each budget.

From Budget Paper No. 1 |

Table 3.7: Key climate-related spending measures – 2022–23 to 2029–30

• (a) This table summarises the Government’s key climate-related spending commitments in this Budget to 30 June 2030, this presents a broader view than the impact on the underlying cash balance. Some measures extend beyond 30 June 2030 or include both initial and ongoing funding to 30 June 2030. This means the spending commitment presented in this table may differ from the measure set out in Budget. Paper No. 2, Budget Measures 2023–24. Measures may not add due to rounding.
• (b) The figure for this measure includes funding beyond 2030, this represents the total funding commitment as the time period is not for publication.
• (c) This measure contains $1.0 billion in funding for concessional loans.
• (d) This measure includes $310.0 million cost in receipts and $4.2 million in payments.
• (e) This measure is partially offset from the Strategic International Partnerships Investment Stream, costs are also expected to be partially recovered through cost recovery arrangements over time.
• (f) This includes the components – Partner with Queensland to reduce emissions, and review offshore petroleum and greenhouse gas storage activities.
• (g) This includes the components – Australian Energy Regulator: for new legislated functions that will support Australia’s energy transformation and reduce emissions.
• (h) This total will differ to the Budget Paper No. 2 measure as it nets out the funding re-purposed from the Driving the Nation Fund in the 2022–23 October Budget to avoid double reporting climate spending.
• (i) This measure allocates funding from the Powering the Regions in detail. This funding was already reported in the October 2022–23 Budget.
• (j) This measure is estimated to result in an unquantifiable decrease in receipts over 5 years from 2022–23.
• (k) Funding for this measure is drawn from the Natural Heritage Trust. This is already provisioned into the Budget bottom line and so does not impact the Underlying Cash Balance (UCB) as shown in Budget Paper No. 2, Budget Measures 2023–24. Table 3.7 captures broader government commitments than the impact on the UCB. This measure was not included in October 2022–23.
• (l) This total will differ to the Budget Paper No. 2 measure as it only includes funding to 30 June 2030; the measure commits funding over 10 years from 2023–24 (and ongoing funding from 2032–33).

It is also worth reading Staetment 4: Structural Shifts Shaping the Economy which includes 8 pages on Climate change and the net zero transformation. (PDF)

Budget Paper No 2 – Payment measures related to climate/sustainability

Climate Change, Energy, the Environment and Water

These details are excerpted from Budget Papers No 2 from Climate Change, Energy, the Environment and Water. Items of importance include establishment of the Household Energy Upgrades Fund , Hydrogen Headstart, National Climate Adaptation and Risk Program.

ACT Sustainable Household Scheme:

The Government will provide $7.5 million in 2023-24 to support the ACT Sustainable Household Scheme, which provides concessional loans to households to electrify or improve the efficiency of their homes.

Aviation Meteorological Services Charging Reform

The Government will save $43.2 million over 4 years from 2023–24 (and $11.7 million per year ongoing) by increasing the Meteorological Services Charge for international and domestic commercial aviation operators to ensure essential aviation meteorological services are appropriately funded.

This measure will deliver $50.2 million over 4 years from 2023–24 in additional revenue (and $14.4 million per year ongoing) from the aviation sector. The Government will also provide $7.1 million over 4 years from 2023–24 (and $2.8 million per year ongoing) to the Bureau of Meteorology to maintain and strengthen its capability to provide aviation meteorological services.

Capacity Investment Scheme

The Government will establish the Capacity Investment Scheme to underwrite new investment in clean energy, accelerating the development of cheap, clean renewable generation and storage and ensuring the smooth transformation of Australia’s energy market. Funding includes:

• $9.9 million over 5 years from 2022–23 (and $0.4 million per year to 2041–42) for the Australian Energy Market Operator to deliver auctions in South Australia and Victoria and undertake contract management activities for selected projects
• $6.4 million in 2023–24 for the Department of Climate Change, Energy, the Environment and Water to design the auction process in late 2023 to operate in South Australia and Victoria, and continue work on a national rollout of the scheme
• underwriting costs for clean energy projects in South Australia and Victoria selected through the auction process.

The Government will also work with New South Wales to deliver Capacity Investment Scheme auctions in 2023 in partnership with the NSW Electricity Infrastructure Roadmap.

Capturing Australia’s Emissions Reduction Data – additional funding

The Government will provide additional funding of $21.8 million over 3 years from 2023–24 to maintain and enhance the capability of Australia’s National Greenhouse Accounts to deliver high-quality emissions data and track progress against Australia’s emissions reduction targets.

Climate Change, Energy, the Environment and Water – reprioritisation

The Government will redirect $113.1 million over 8 years from 2022–23 across the Climate Change, Energy, the Environment and Water portfolio to fund portfolio policy priorities. Redirected funding includes:

• $57.2 million from uncommitted funding from the 2021–22 Budget measure titled Emissions Reduction and New Investments under the Technology Investment Roadmap to new measures supporting clean energy technology investment
• $22.2 million from the partial reversal of the 2020–21 Budget measure titled JobMaker Plan – securing Australia’s liquid fuel stocks, including reducing uncommitted funding for diesel storage projects not taken up by industry
• $10.5 million from the partial reversal of the 2020–21 Budget measure titled JobMaker Plan – investment in new energy technologies, including redirecting uncommitted research funding to delivering high-quality emissions data and reporting against Australia’s emissions reduction targets
• $10.0 million from the partial reversal of the 2022–23 March Budget measure titled Strengthening the Great Barrier Reef through Stewardship and Leadership, with uncommitted funding to be redirected towards tropical marine science activities that better align with Government priorities
• $6.5 million from the partial reversal of the 2021–22 Budget measure titled Agriculture 2030, with uncommitted funding from the Food Waste for Healthy Soils Fund to be redirected to better align with Government priorities
• $4.0 million from the partial reversal of the 2021–22 Budget measure titled Incentivising Recycling Behaviours, with uncommitted funding from the Food Waste for Healthy Soils Fund to be redirected to better align with Government priorities
• $2.0 million from the partial reversal of the 2022–23 March Budget measure titled Streamlining Environmental Protections and Modernising Indigenous Cultural Heritage Protections, with uncommitted funding to be redirected towards implementing the Government’s Nature Positive Plan: better for environment, better for business
• $0.7 million from the partial reversal of the 2019–20 Budget measure titled Climate Solutions Package to redirect uncommitted funding from the Energy Efficient Communities program to better align with Government priorities.

Ensuring the Supply of Reliable, Secure and Affordable Energy

The Government will provide $80.0 million over 4 years from 2023–24 (and $11.1 million per year ongoing) to support the supply of cheap, clean and reliable energy across Australia. Funding includes:

• $35.6 million over 4 years from 2023–24 (and $8.8 million per year ongoing) to the Australian Energy Regulator (AER) to continue compliance and enforcement activities to regulate and monitor energy markets
• $28.4 million over 4 years from 2023–24 to support the delivery of new cross-government energy market reforms and national energy projects as directed by Energy Ministers through the Energy Special Account
• $10.9 million over 4 years from 2023–24 (and $2.4 million per year ongoing) to the AER for new legislated functions that will support Australia’s energy transformation and reduce emissions.

The Government will also increase resilience in the retail electricity sector by progressing work with Snowy Hydro Limited to register in the Retailer of Last Resort scheme.

Flood Warning Infrastructure Network Remediation

The Government will provide $236.0 million over 10 years from 2023–24 (and $13.9 million per year ongoing from 2032–33) to remediate high priority flood warning infrastructure and address critical reliability risks. The Bureau of Meteorology will acquire, upgrade and integrate local and state government-owned rain and river gauges into its existing flood warning network.

Partial funding for this measure will be held in the Contingency Reserve until cost-sharing arrangements for the ongoing maintenance of these assets are agreed with states and territories.

Future-proofing the Murray-Darling Basin

The Government will provide $148.6 million over 4 years from 2023–24 towards the sustainability of the Murray-Darling Basin (Basin). Funding includes:

• $103.7 million for the Murray-Darling Basin Authority to prepare for and undertake the first statutory review of the Murray-Darling Basin Plan 2012, with updated science to enable the Basin to adapt to the impacts of climate change
• $44.9 million for the Department of Climate Change, Energy, the Environment and Water to provide advice and work with Basin states and affected communities on the Basin Plan.

Guarantee of Origin

The Government will provide $38.2 million over 4 years from 2023–24 (and $6.5 million per year ongoing) to establish a Guarantee of Origin Certificate scheme to track and verify emissions associated with hydrogen and other low emissions products, and provide an enduring mechanism to certify renewable electricity.

The cost of this measure will be partially recovered from certification fees and partially provided by redirecting funding from 2023–24 from the Strategic International Partnerships Investment Stream program.

Household Energy Upgrades Fund – establishment

The Government will provide $1.3 billion in funding to establish the Household Energy Upgrades Fund to support home upgrades that improve energy performance and save energy. Funding includes:

• $1.0 billion in funding to the Clean Energy Finance Corporation to provide low-cost finance and mortgages in partnership with private financial institutions for home upgrades that save energy
• $300.0 million over 4 years from 2023–24 held in the Contingency Reserve to support upgrades to social housing, in collaboration with states and territories, that save energy.
• $36.7 million over 4 years from 2023–24 (and $2.1 million per year ongoing) to develop further initiatives to improve energy performance, including expanding and modernising the Greenhouse and Energy Minimum Standards program and the Nationwide House Energy Rating scheme.

The cost of this measure will be partially met from savings identified in the 2023–24 Budget measure titled Climate Change, Energy, the Environment and Water – reprioritisation. This measure extends the 2022–23 October Budget measure titled Support for Energy Security and Reliability.

Hydrogen Headstart

The Government will provide $2.0 billion to accelerate development of Australia’s hydrogen industry, catalyse clean energy industries, and help Australia connect to new global hydrogen supply chains. Funding includes:

• $2.0 billion for the establishment of a new Hydrogen Headstart program, which will provide revenue support for investment in renewable hydrogen production through competitive production contracts, including funding for the Australian Renewable Energy Agency and the Department of Climate Change, Energy, the Environment and Water to support the development and operation of the program
• $5.6 million in 2023-24 to analyse the implications for Australia of intensifying global competition for clean energy industry, and to identify actions before the end of 2023 to further catalyse clean energy industries, ensure Australian manufacturing competitiveness and attract capital investment
• $2.0 million over two years from 2024–25 to establish a fund to support First Nations communities to engage with hydrogen project proponents and planning processes.

Funding for the Hydrogen Headstart program will be held in the Contingency Reserve.

Independent Review of Australian Carbon Credit Units – initial response

The Government will provide $18.1 million over two years from 2023–24 to implement priority reforms to the operation of the Australian Carbon Credit Unit (ACCU) scheme as part of the Government’s initial response to the Independent Review of Australian Carbon Credit Units. Funding includes:

• $5.9 million over two years from 2023–24 to conduct audits of human induced regeneration projects
• $4.5 million over two years from 2023–24 to upgrade the Clean Energy Regulator’s systems to publish carbon estimation area data
• $4.2 million over two years from 2023–24 to consult on the design of proposed reforms
• $3.5 million over two years from 2023–24 to establish the Carbon Abatement Integrity Committee to ensure method integrity for ACCUs.

The Government has also transferred functions relating to method development activities for ACCUs from the Clean Energy Regulator to the Department of Climate Change, Energy, the Environment and Water.

The cost of this measure will be partially met from savings identified in the 2023–24 Budget measure titled Climate Change, Energy, the Environment and Water – reprioritisation.

National Climate Adaptation and Risk Program

The Government will provide $28.0 million over two years from 2023–24 to develop Australia’s first National Climate Risk Assessment and a National Adaptation Plan to understand the risks to Australia from climate change, invest in a plan to adapt to those risks, and commission an independent review of the Australian Climate Service.

The cost of this measure will be partially met from savings identified in the 2023–24 Budget measure titled Climate Change, Energy, the Environment and Water – reprioritisation.

This measure builds on the 2022–23 October Budget measure titled Commonwealth Climate Risk and Opportunity Management Program.

The Government will consider future funding for the National Climate Adaptation and Risk Program when the National Climate Risk Assessment and a National Adaptation Plan are developed.

National Waste Education Campaign

The Government will provide $10.0 million over two years from 2023–24 towards a nationwide consumer behaviour change program for waste.

This measure will be fully offset by redirecting funding from the 2021–22 Budget measure titled Agriculture 2030.

National Water Grid Fund – addressing legacy projects

The Government will achieve savings of $872.5 million over 11 years from 2022–23 through responsible investment decisions on National Water Grid Fund projects, including not proceeding with: $595.0 million over 7 years from 2026–27 for the Dungowan Dam project; $162.5 million over 7 years from 2026–27 for the Emu Swamp Dam and Pipeline project; $39.7 million over 4 years from 2022–23 for the Southern Forests Irrigation Scheme project; $35.0 million over 3 years from 2022–23 for the Fingal Irrigation Scheme; and $40.3 million over 3 years from 2022–23 for projects that are being re-scoped, not
progressing or do not require additional Commonwealth funding. The measure also defers funding of $19.1 million from 2026–27 for the Wyangala Dam Wall Raising and the Hughenden Irrigation Scheme projects.

National Water Grid Fund – delivering commitments

The Government will provide $70.9 million over 11 years from 2023–24 to extend resourcing for the National Water Grid Authority to deliver committed water infrastructure projects and support its expanded remit.

National Water Reform – First Nations peoples’ water ownership

The Government will provide $9.2 million over 4 years from 2022–23 to consult on and design an enduring arrangement for First Nations peoples to own, access and manage water in Australia.

Natural Heritage Trust – project funding

The Government will allocate $741.3 million over 5 years from 2023–24 from the Natural Heritage Trust special account to support local and long-term environmental and agricultural outcomes. Funding includes:

• $341.2 million over 5 years from 2023–24 to protect nature, threatened species and habitats and to maintain delivery capability through activities like the BushBlitz, Natural Resource Management (NRM) partnerships and on-ground conservation and recovery activities
• $302.1 million over 5 years from 2023–24 to support a climate-smart, sustainable agricultural sector including funding for NRM organisations, on-ground projects, support for farmers to improve soil health and natural resources and funding to maintain delivery capability
• $50.0 million over 5 years from 2023–24 to conserve and restore Ramsar listed wetlands and catchments
• $48.0 million over 5 years from 2023–24 to continue management of Australia’s state-managed world heritage listed properties.

The cost of this measure will be met from within the existing resourcing of the Natural Heritage Trust special account.

Nature Positive Plan – better for the environment, better for business

The Government will provide $214.1 million over 4 years from 2023–24 (and $4.5 million per year ongoing) to deliver the Nature Positive Plan: better for the environment, better for business (Nature Positive Plan), including:

• $121.0 million over 4 years from 2023–24 to establish Environment Protection Australia to enforce environmental laws and restore confidence in Australia’s environmental protection system
• $51.5 million over 4 years from 2023–24 (and $4.5 million per year ongoing) to establish Environment Information Australia to provide an authoritative source of high-quality environmental information
• $34.0 million over two years from 2023–24 to implement the Nature Positive Plan, including legislative reforms and national environment standards
• $7.7 million in 2023–24 to continue developing the foundations of a Nature Repair Market, including detailed rules (methods) for different types of projects.

The Government will delay the start date of the biodiversity certificate component of the 2022–23 March Budget measure titled Primary Producers – increasing concessional tax treatment for carbon abatement and biodiversity stewardship income from 1 July 2022 to 1 July 2024. This delay will align the start date of this component of the measure with the commencement of the Nature Repair Market.

The Government will also expand the eligibility criteria for existing on-ground support programs that build capacity and support participation in carbon and biodiversity markets to include all landholders and, by broadening access to these funds, to more organisations beyond Natural Resource Management groups, including First Nations groups.

The Government will consider future funding for the Nature Positive Plan when initial establishment work has been completed and ongoing administrative and operational requirements are better understood.

This measure builds on the 2022–23 October Budget measure titled Response to the Samuel Review.

North Queensland Water Infrastructure Authority – efficiencies

The Government will save $9.5 million over 4 years from 2023-24 through the abolition of the North Queensland Water Infrastructure Authority.

Powering the Regions Fund – final design

The Government will allocate $1.3 billion over 5 years from 2022–23 from $1.9 billion provided in the 2022–23 October Budget to support the decarbonisation of existing industries, develop new clean energy industries and support sovereign manufacturing capacity essential to the energy transition including:

• $450.3 million over 4 years from 2023–24 (and a further $149.7 million over 3 years from 2027–28) to establish the Safeguard Transformation Stream to support decarbonisation investments at trade-exposed industrial facilities covered by the Safeguard Mechanism
• $400.0 million over 4 years from 2023–24 to establish the Industrial Transformation Stream to support reduction of direct and indirect emissions at existing industrial facilities, or clean energy development, in regional Australia
• $400.0 million over 3 years from 2023–24 to establish the Critical Inputs to Clean Energy Industries Stream to support the sovereign manufacturing capability of industries that produce inputs (primary steel production, cement and lime, alumina and aluminium) that are essential to the development of Australia’s clean energy industries
• $14.5 million over 4 years from 2023–24 to accelerate the development of the offshore renewable energy industry growth strategy and regulatory compliance activities
• $8.6 million over 4 years from 2023–24 to support implementation and review of the Safeguard Mechanism reforms
• $3.9 million over two years from 2023–24 for a review of policy options to reduce carbon leakage, including of an Australian carbon border adjustment mechanism.

Funding of $89.0 million has also been provided through the Powering the Regions Fund to support energy transition investments important to regional Australia, including the 2023–24 Budget measures titled Capacity Investment Scheme and Ensuring the Supply of Reliable, Secure and Affordable Energy.

The Powering the Regions Fund will continue to support Government purchase of Australian Carbon Credit Units.

Protecting Australia’s Iconic National Parks

The Government will provide $355.1 million over 4 years from 2023–24 (and $68.0 million per year ongoing) to protect Commonwealth National Parks and marine reserves and deliver critical infrastructure funding for the Muṯitjulu community, home to the Traditional Owners of Uluṟu‐Kata Tjuṯa National Park. Funding includes:

• $127.8 million over 4 years from 2023–24 (and $40.3 million per year ongoing) to sustain the Director of National Parks’ core business, and deliver environmental conservation, on-park research and threatened species protection
• $92.8 million over 4 years from 2023–24 (and $0.7 million per year ongoing) to provide essential water, sewerage and electrical services for the Muṯitjulu community
• $70.4 million over 4 years from 2023–24 (and $25.6 million per year ongoing) to sustain existing assets and prevent further deterioration, and address immediate safety risks by replacing assets at the end of their functional life
• $27.6 million over 4 years from 2023–24 to address critical infrastructure needs, including housing, at the Booderee, Kakadu and Uluṟu‐Kata Tjuṯa National Parks
• $25.9 million over 4 years from 2023–24 to improve visitor and tourism infrastructure at Kakadu National Park
• $10.6 million over 4 years from 2023–24 (and $1.5 million per year ongoing) for essential technology and communication upgrades.

This measure, which includes essential water services for Muṯitjulu, will be partially offset
by redirecting funding from the National Water Grid Fund.

Securing the Future of Australia’s Marine Science

The Government will provide $163.4 million over 4 years from 2023–24 (and $43.5 million per year ongoing) to secure the future of the Australian Institute of Marine Science (AIMS), addressing its ongoing financial sustainability. Funding includes:

• $88.1 million over 4 years from 2023–24 (and $29.7 million per year ongoing) for necessary increases to AIMS’ workforce to enable it to continue delivering on projects to protect and restore the Great Barrier Reef
• $40.4 million over 4 years from 2023–24 (and $11.2 million per year ongoing) for enhancement of existing science and technology capabilities to improve the scale, scope and speed of marine monitoring and data analysis
• $31.9 million over 4 years from 2023–24 (and $2.3 million per year ongoing) for critical electrical infrastructure upgrades and refurbishment of unusable and unsafe lab and office facilities
• $3.0 million over 4 years from 2023–24 (and $0.3 million per year ongoing) for the replacement of the AIMS’ small research vessel.

Sydney Harbour Federation Trust – infrastructure improvements

The Government will provide additional funding of $45.2 million over two years from 2023–24 to continue the renewal and repair of heritage-listed infrastructure and undertake public safety improvements at North Head Sanctuary and Cockatoo Island.

Urban Rivers and Catchments Program – additional funding

The Government will provide additional funding of $118.5 million over 6 years from 2023-24 for the Urban Rivers and Catchments Program to fund projects to improve local waterways, fund activities that restore the natural habitats of aquatic species and create recreational spaces for local communities. The additional funding will deliver the next phase of the program.

This measure will be partially offset by reprofiling funding from the 2022–23 October Budget measure titled Next Phase of Natural Heritage Trust Funding.

Waste Export Ban – delayed cost recovery

The Government will provide $3.9 million in 2023–24 to delay the commencement of cost recovery for the regulation of waste exports under the Recycling and Waste Reduction Act 2020 by one year to 1 July 2024 in recognition of the financial pressure on the recycling industry as it adapts to the full implementation of the waste export ban.

Cost recovery arrangements and future funding for this measure will be reviewed in the 2024–25 Budget to ensure they are fit-for-purpose, once introduced.

Water Market Reform – strengthening integrity and transparency

The Government will provide $32.7 million over 4 years from 2023–24 (and $3.4 million per year ongoing) to restore transparency, integrity and confidence to water markets including:

• a single digital platform for national water data management
• a new water market website to publish minute-by-minute updates on water market information
• water market data standards that prescribe the data that must be provided to the Bureau of Meteorology to support transparency and enforceability of the new water market regulatory regime.

Cross-Portfolio

Energy Price Relief Plan

The Government will provide $1.5 billion over 5 years from 2022–23 (and $2.7 million per year ongoing) to reduce the impact of rising energy prices on Australian households and businesses by providing targeted energy bill relief and progressing gas market reforms. Funding includes:

• $1.5 billion over two years from 2023–24 to establish the Energy Bill Relief Fund to support targeted energy bill relief to eligible households and small business customers, which includes pensioners, Commonwealth Seniors Health Card holders, Family Tax Benefit A and B recipients and small business customers of electricity retailers
• $14.7 million over 5 years from 2022–23 (and $2.7 million per year ongoing) to the Australian Competition and Consumer Commission to administer and enforce compliance with a temporary cap of $12 per gigajoule on the price of gas and to develop and implement a mandatory gas code of conduct
• $9.5 million over 3 years from 2022–23 for the Australian Energy Regulator to monitor coal and gas markets across the National Electricity Market.

The Government will also provide funding to support the New South Wales and Queensland governments to implement a cap of $125 per tonne on the price of coal used for electricity generation. This funding is not for publication (nfp) due to commercial sensitivities.

Agriculture, Fisheries and Forestry

Partnering to Implement the National Soil Action Plan

The Government will provide $20.0 million in 2023–24 to fund states and territories to deliver initiatives that contribute to priority actions of the National Soil Action Plan, tailored to regional soil needs and conditions. Funding for this measure is subject to financial contributions from the states and territories.

Strengthened and Sustainably Funded Biosecurity System

The Government will provide an additional $1.0 billion over 4 years from 2023–24 (and $268.1 million per year ongoing) to meet its election commitment to strengthen Australia’s biosecurity system.

Supporting a Stronger and More Sustainable Agriculture Sector

The Government will provide $38.3 million over 4 years from 2023–24 (and $7.6 million per year ongoing) to support agricultural statistics, climate analysis and upgrades to data and information systems for the Australian Bureau of Agricultural and Resource Economics and Sciences.

Health and Aged Care

Urgent Health Supports for Flood-affected Communities

The Government will provide $9.8 million in 2022–23 to provide urgent mental health and mosquito-borne disease supports to communities impacted by flooding in Victoria, Tasmania and New South Wales, including First Nations communities.

The cost of this measure will be met from within the existing resourcing of the Department of Health and Aged Care.

Home Affairs

Disaster Support

The Government will provide funding to improve Australia’s resilience to natural disasters
and support recovery of impacted communities including:

• $125.7 million over 5 years from 2022–23 (and $28.3 million per year ongoing) to uplift the capacity of the National Emergency Management Agency to support Australians during, and following, a disaster. Funding from 2024–25 will be held in the Contingency Reserve, pending a review of the agency’s funding requirements
• $10.1 million over two years from 2023–24 to scope the capability needs to modernise Australia’s emergency service communications to provide Commonwealth, and state and territory agencies high-speed and high-capacity mobile broadband services, to improve the operational effectiveness and safety of public safety personnel
• $8.6 million in 2023–24 to supplement and maintain a national emergency management stockpile of disaster response resources
• $8.0 million over 4 years from 2023–24 to continue to provide financial assistance to eligible New Zealanders in Australia following a disaster
• $7.4 million over 4 years from 2023–24 (and $0.6 million per year ongoing) to establish and maintain a Disaster Recovery Management System
• $7.2 million over two years from 2023–24 to extend mental health services supporting communities affected by disasters
• $2.3 million in 2022–23 to extend the Regional Small Business Support Program Pilot until 30 June 2023 to continue existing support to regional small businesses, with costs met from within existing uncommitted resources of the National Emergency Management Agency
• Funding to finalise building a new national cell broadcast messaging system to improve emergency warning communications, with the financial implications of this element not for publication (nfp) due to commercial sensitivities.

Industry, Science and Resources

Supporting Australian Critical Minerals

The Government will provide $80.5 million over 4 years from 2023–24 to support the Australian critical minerals sector to build diverse and competitive supply chains, attract international investment and transition to net zero. Funding includes:

• $57.1 million over 4 years from 2023–24 to undertake international engagement to promote Australian critical minerals projects and build diverse and resilient supply chains with key international partners
• $23.4 million over 4 years from 2023–24 for critical minerals policy development and project facilitation, including activities to showcase Australia’s environmental, social and governance credentials to international markets.

This measure will be offset by redirecting funding from within the Industry, Science and Resources portfolio.

Working with the Australian Resources Industry on the Pathway to Net Zero

The Government will provide funding over 5 years from 2022–23 to support the Australian resources industry to grow national prosperity and continue to drive the transition to net zero. Funding includes:

• $14.3 million over 3 years from 2023–24 to establish a partnership with the Queensland Government to support technology projects that reduce emissions and enhance energy security. This will be offset by redirecting funding from the Gas Well Trials program
• $12.0 million over 3 years from 2023–24 for a review of the environmental management regime for offshore petroleum and greenhouse gas storage activities to ensure it is fit-for-purpose for a decarbonising economy. This will include consultation requirements for offshore projects, including with First Nations peoples. The review will also examine opportunities to provide regulatory and administrative certainty for offshore carbon capture and storage projects to enable Australian industry to meet net zero targets whilst delivering domestic energy security and regional energy security
• $6.7 million over 4 years from 2023–24 to deliver a Future Gas Strategy to support Australia’s energy system to become cleaner, cheaper and more reliable while maintaining our international reputation as a trusted energy supplier to the region. This will be offset by ceasing the Strategic Basins Plans and achieving savings from the 2020–21 MYEFO measure titled JobMaker Plan – gas-fired recovery – delivering accelerated exploration in the Beetaloo sub-basin
• $4.5 million in 2023–24 to develop a roadmap to grow an offshore petroleum decommissioning industry in Australia. This will be offset by ceasing the Strategic Basins Plans and achieving savings from the 2020–21 MYEFO measure titled JobMaker Plan – gas-fired recovery – delivering accelerated exploration in the Beetaloo sub-basin
• $0.4 million in 2022–23 to accelerate the reforms to the Australian Domestic Gas Security Mechanism

Funding in 2023–24 to continue activities related to the decommissioning of the Northern Endeavour floating oil production storage and offtake facility which is moored between the Laminaria and Corallina oil fields in the Timor Sea. The financial implications are not for publication (nfp) due to commercial sensitivities, but will be fully recovered by the Laminaria and Corallina Decommissioning Cost Recovery Levy.

Infrastructure, Transport, Regional Development, Communications and the Arts

Heavy Vehicle Road User Charge – increase

The Government will increase the Heavy Vehicle Road User Charge rate from 27.2 cents per litre of diesel by 6 per cent per year over 3 years from 2023–24 to 32.4 cents per litre in 2025–26. This will decrease expenditure on the fuel tax credit by $1.1 billion over 4 years from 2023–24.

The change to the Road User Charge was a decision of the Infrastructure and Transport Ministers in April 2023 to contribute to road maintenance and repair.

National Approach for Sustainable Urban Development

The Government will provide $687.4 million over 6 years from 2022–23 for a national approach to sustainable urban development in Australia. Funding includes:

• $305.0 million over 5 years from 2023–24 for the Macquarie Point Precinct and University of Tasmania Stadium, to deliver urban renewal projects in Hobart and Launceston
• $211.7 million over 3 years from 2023–24 to establish the Thriving Suburbs Program to provide grants for community infrastructure in urban and suburban communities through a competitive grants program
• $159.7 million over 4 years from 2023–24 to establish the Urban Precincts and Partnerships Program to support investment in place-based priorities of local urban communities through a collaborative partnerships approach with state, territory and local governments and communities
• $11.0 million over 4 years from 2023–24 to establish the Cities and Suburbs Unit within the Department of Infrastructure, Transport, Regional Development, Communications and the Arts to deliver the National Urban Policy and the regular State of Cities report.

Reducing Transport Emissions

The Government will provide $20.9 million over 5 years from 2022–23 for initiatives to decarbonise the transport and infrastructure sectors and support achieving our net zero by 2050 target. Funding includes:

• $7.8 million over 4 years from 2022–23 to develop a Transport and Infrastructure Net Zero Roadmap and Action Plan to support the decarbonisation of the transport and infrastructure sectors
• $7.4 million over 4 years from 2023–24 to develop Fuel Efficiency Standards to encourage light vehicle manufacturers to increase the supply of fuel efficient and electric vehicles in the Australian market
• $5.2 million over 4 years from 2023–24 to support Australia’s transition to electric vehicles through the development of a national charging infrastructure mapping tool, safety guidance and training for emergency service workers. Funding will also support the evaluation of requirements for retrofitting existing multi-residential buildings with electric vehicle charging infrastructure, and a large format battery recycling, reuse and stewardship initiative in Australia
• $0.6 million in 2023–24 to develop a Maritime Emissions Reduction National Plan to facilitate the energy transition for the domestic maritime sector.

Prime Minister and Cabinet

National Net Zero Authority

The Government will provide $83.2 million over 4 years from 2023–24 to establish a national Net Zero Authority (the Authority) to promote orderly and positive economic transformation associated with decarbonisation and energy system change in regional areas, including support for impacted workers.

As an interim step, an agency will be established from 1 July 2023, initially within the Department of the Prime Minister and Cabinet, to lead the design and establishment of the Authority and to perform functions of the Authority, pending formal establishment of the Authority.

See Federal Government moves to establish National Net Zero Authority for Just Transition from 1 July

Tax reform

Clarifying the tax treatment of ‘exploration’ and ‘mining, quarrying and prospecting rights’

The Government will amend the Petroleum Resource Rent Tax (PRRT) in response to Treasury’s Review of the PRRT Gas Transfer Pricing (GTP) arrangements.

The Government will introduce a cap on the use of deductions to offset assessable PRRT income of liquefied natural gas (LNG) producers under the PRRT. The cap will bring forward PRRT receipts from LNG projects which are yet to pay PRRT and ensure a greater return to taxpayers from the offshore LNG industry.

The cap will limit deductible expenditure to the value of 90 per cent of each taxpayer’s PRRT assessable receipts in respect of each project interest in the relevant income year and apply after mandatory transfers of exploration expenditure. The amounts that are unable to be deducted because of the cap will be carried forward and uplifted at the Government long-term bond rate.

The cap will only apply to PRRT projects that produce LNG. Projects would not be subject to the cap until 7 years after the year of first production or from 1 July 2023, whichever is later. The cap will not apply to certain classes of deductible expenditure in the PRRT – closing-down expenditure, starting base expenditure and resource tax expenditure.

The Government will also make a number of supporting changes to the GTP arrangements. From 1 July 2023, the Government will update the PRRT general anti-avoidance rule and the arm’s length rule to clarify their application to the Petroleum Resource Rent Tax Assessment Regulation 2015. From 1 July 2024, the Government will modernise the PRRT for emerging developments in LNG project structures, better reflect the contributions and risks of the notional entities that comprise the LNG value chain, align the regulations with current transfer pricing practices and provide appropriate integrity rules for the regime.

This measure is estimated to increase receipts by $2.4 billion over the 5 years from 2022-23.

The Government will also provide $4.4 million in resourcing to the ATO to administer and ensure compliance with this measure.

The Government will consult on final design and implementation details for the deductions cap and on the draft PRRT regulation later this year. Consultation on the other policy changes will occur in early 2024. The Petroleum Resource Rent Tax Assessment Regulation 2015 will not be remade until the legislation implementing the deductions cap has been enacted.

Budget Papers No 2 – pp23

Greg Jericho comments: “Oh, and don’t be fooled into thinking the changes to the petroleum resource rent tax are delivering a big boom. The government expects to raise more money from the increases to tobacco excise than it does from the changes to the way gas is taxed.”

The fossil fuel companies seem quite happy with this minor adjustment, given $2.4 billion expected revenue is a pittance compared to their Windfall profits. The Tobacco tax increase will raise more revenue ($3 billion). Some perspective: multinational fossil fuel corporations reported a collective $120-140 billion gross profit in calendar year 2022 on export revenues of LNG, coking and thermal coal approaching $200 billion according to Renew Economy. Or this more recent article by Michael West Media: A tale of two fossil superpowers: what Australia can learn from Norway. This tinkering does nothing for long term budget repair. Norway is the example which Australian Labor fails to follow….

Contingent liabilities – unquantifiable

Gorgon liquefied natural gas and carbon dioxide storage project – long-term liability

The Australian and Western Australian (WA) Governments have provided an indemnity to the Gorgon Joint Venture Partners (GJV) against independent third-party claims (relating to stored carbon dioxide) under common law following closure of the carbon dioxide sequestration project. The claims are subject to conditions equivalent to those set out in the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

The WA Government has indemnified the GJV, and the Australian Government has indemnified the WA Government for 80 per cent of any amount determined to be payable under that indemnity.

Budget papers 1

Disaster Ready Fund

The Disaster Ready Fund (DRF) was initially established as the Emergency Response Fund (ERF) on 12 December 2019 and provided up to $150 million per year for emergency response and recovery, and up to $50 million per year for natural disaster resilience and risk reduction.

On 1 March 2023, legislative changes took effect that renamed the ERF as the DRF and allowed up to $200 million per annum to be drawn from the DRF to fund natural disaster resilience and risk reduction from 2023–24 onwards. The investments of the DRF are managed by the Future Fund Board. The Investment Mandate for the DRF provides broad direction to the Board in relation to its investment strategy. The DRF Investment Mandate sets a long-term benchmark return of CPI plus 2.0 to 3.0 per cent per annum, net of costs.

Since inception to 31 March 2023, DRF investments have returned 6.6 per cent per annum against a benchmark return of 6.4 per cent. For the 12-month period ending 31 March 2023, the DRF returned 0.8 per cent against the benchmark return of 9.0 per cent. The DRF was valued at $4.4 billion as at 31 March 2023.

From Budget Paper 1

References:

Details taken from 2023-24 Budget Papers No 1, 2, 3 and 4, accessed from https://budget.gov.au/content/documents.htm