Budget 2014: Bad for climate, great for miners

May 30, 2014
The loss of the Renewable Energy Target would threaten the wind farm industry in Australia.

Repealing the carbon tax, abolishing the department of climate change, and getting rid of the Clean Energy Fund were the top three wishes in “75 radical ideas to transform Australia”, released by the Institute of Public Affairs (IPA) in 2012. Number six was to repeal the Renewable Energy Target (RET).

In the recent federal budget, the Coalition government is aiming to do all four.

As a problem facing Australia, climate change eclipses the issue of debt, yet it barely rated a mention in the budget. Instead, the Coalition government has proposed slashing environment programs and research into climate change.

It is not just the carbon tax; even promises that Prime Minister Tony Abbott made as part of his alternative “direct action” climate policy are facing the chop. If the proposals pass the Senate, the biggest losers will be the Australian Renewable Energy Agency (ARENA) and the RET.


ARENA gives grants to renewable energy projects to boost emerging technologies. In January, it committed $1.2 million to a feasibility study into a solar thermal power plant at Port Augusta in South Australia, a plant for which climate activists have been campaigning for years.

The government plans to abolish ARENA and return its functions to the Department of Industry. Its funding will be reduced from $436 million this year to $15 million in 2015-16.

A review of the RET has already begun, but since the government has appointed climate change denier Dick Warburton to lead it, its future seems a forgone conclusion.

Miles George, head of renewable energy provider Infigen, told the ABC: "If [they] took the RET away tomorrow ... we would lose 40% of our revenue and our Australian business would fail ... along with nearly all wind farms and wind farm businesses in Australia."

Abbott’s “million solar rooftops” program, which promised to spend $1 billion to help low-income households and renters make the switch to rooftop photovoltaic and solar hot water, has vanished. It will be replaced by $2.1 million to install solar panels on RSLs and bowling clubs in seven marginal electorates.

The $2.5 billion of funding for the government’s Emissions Reduction Fund, its alternative to the carbon tax, has been spread over 10 years instead of four.

Instead, the budget’s big winner was the mining industry. It will continue to receive generous government subsidies through the diesel fuel rebate and will no doubt benefit from the gutting of climate research.

Another big winner is roads. Abbott's so-called infrastructure package will deliver $50 billion to states to spend on new motorways, benefiting private freight companies. At the same time, funding for new train lines in Melbourne, Brisbane and Perth was cancelled, disadvantaging hundreds of thousands of people reliant on public transport.

Some infrastructure is more equal than others. As ARENA chairperson Greg Bourne said: “Infrastructure is hospitals, infrastructure is schools, but infrastructure is also the energy system that you have within a country and without the energy system, your overall system begins to grind to a halt.”

It makes perfect sense then that the government has made it clear that it is not prioritising investment in hospitals, schools or a renewable energy industry.

Part of the reason is that renewable energy is a threat to big business — particularly the coal and gas industries — and government ministers know what side they are on, as Treasurer Joe Hockey made clear when he described wind farms as “utterly offensive" and "a blight on the landscape”.

But it is also part of a broader drive by the rich to push more of the costs of looking after people — through providing housing, education and welfare — onto individuals.

A quick look at the rest of the items on the IPA wish list — which includes cutting company tax to 25%, privatising Australia Post and Medibank and slashing up to 50,000 public servants' jobs — shows it advocates the most right-wing, neoliberal ideology, which the federal government agrees with.

The budget was a big step along this path. It means the poor will foot the bill for looking after their kids who cannot find work and are not allowed to receive welfare, and students will be in debt for decades to pay for their education.

The tax rate for big business has stayed at the lowest rate it has ever been. If there was a debt crisis, the quickest way to solve it would be to lift the corporate tax rate.

But the government has protected the interests of big companies, to keep more profits to themselves instead of giving something back to society.

If the budget cuts to environmental programs get passed, it will be a huge setback to the transition to a low-carbon economy. It will lock in accelerated climate change.


The budget that we need to prevent the climate crisis from worsening have would look very different.

It would prioritise infrastructure of large-scale wind and solar energy, spend billions of dollars upgrading public transport — such as the high-speed rail system that Beyond Zero Emissions has proposed for the east coast — and implement a moratorium on new coal and gas projects.

Labor and the Liberals could not implement this green budget. The kind of government that could would need the active support of the majority of people. This would be essential if it was to rein in the power of the richest companies.

This government would be born out of a democratic movement that understood that the economic system — capitalism and its model of endless growth — was causing the climate crisis, and it would have to end if the planet is to be saved.

This kind of movement is not impossible. Examples of it can be seen in Bolivia and Venezuela, which have begun the process of putting decisions about the economy and the environment in the hands of the majority of people.

As Bolivian President Evo Morales said: “Humankind is capable of saving the Earth if we recover the principles of solidarity and harmony with nature as opposed to the reign of competition, profits and rampant consumption of natural resources.”

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