What Labor’s First Budget Means for Climate Change

federal budget climate change labour 2023 2022

Labor’s first federal budget in nearly a decade has a huge number of policies designed to boost Australia’s response to climate change and ecological breakdown. Indeed, some 25 pages of the nearly 200-page document deal explicitly with climate change, while many of the other policy announcements take it into account.

With climate policy being a key driver in election wins for the Greens and the teal independent candidates, it’s clear that Labor is keen to own the space and prove to voters they are the right party to lead on the issue.

“After nearly 10 frustrating years, and more than 20 failed energy policies, Australia now has a government that understands the generational and economic imperative of acting on climate change,” Chalmers said.

A large part of that will have to include shoring up Australia against future climate disasters. As large parts of NSW and VIC are still underwater after the latest drenching, it’s becoming harder to separate fossil fuel usage from economic consequences.

Chalmers’ acknowledged the recent disasters by saying: “Once again we are reminded of the solidarity that living on this harsh land demands of our people and our communities”.

The Labor government has recently passed the Climate Change Bill in which they legislated a national reduction in carbon emissions of 43% by 2030 and net zero emissions by 2050.

Climate Council Economist Nicki Hutley has described the budget as “the first in a decade to take climate seriously as both an opportunity and a threat”.

“Climate change was mentioned 220 times — it’s not front and centre — but it’s a vast improvement on recent years,” she said.

Here’s what Labor is offering on climate change.

Climate Change to Actually Be Measured

Chalmers has previously announced that he will reinstate the modelling of the impact of climate change on the economy, something that was scrapped by Tony Abbott.

The modelling, which was abandoned nearly a decade ago, seeks to factor in the effect that climate change is having and will continue to have on the economy and the national budget.

$42.6 million will be spent over four years to restore the Climate Change Authority, with an additional $13.6 million per year so that they can provide the government with independent climate change advice.

$20 Billion for Energy Transition

“Our government will establish a $20 billion fund for energy transmission,” Chalmers said. “And we’ve already started — by backing projects including investments connecting offshore windfarms in Victoria, and Tasmania’s Marinus Link project.”

This money is earmarked to basically prop up the crumbling national electricity grid, blamed for the recent threat of blackouts.

The project, known as ‘Rewiring the Nation’, aims to “expand and modernise Australia’s electricity grids,” increase new renewable energy sources and storage capacity and, ultimately, drive down power prices.

Electric Vehicle Subsidies

Labor has ruled out a return of the tax cut on fuel prices, introduced as a temporary measure under the Coalition. Instead, they’ve decided to focus on electric vehicles.

This is a previously announced policy, with Labor already having introduced a bill to make EVs cheaper in July. The policy will cut fringe benefits tax on EVs, meaning employers buying them for their workforce could save $9,000 a year while individuals could save $4,700 per year.

The policy has however caused a bit of a stir after the Greens and Independent candidates raised the issue that it includes hybrid vehicles, which still rely somewhat on fossil fuels. They have threatened to block the legislation in the Senate if it isn’t changed.

In addition to the subsidies, Labor has announced they will spend $39.8 million over five years to establish a National EV charging Network. This will consist of 117 fast-charging stations on highways across the country.

Shots Fired

While much of the budget speech took digs at the previous administration, inaction on climate change became a routine target.

In budget documents, the government announced they would spend $45.8 million over six years to “restore Australia’s reputation and increase international engagement on climate change and energy transformation issues.” If that’s not taking a swing, we don’t know what is.

This is a commitment to take an active role in the global effort to tackle climate change, including funding for a bid to host the Conference of the Parties (COP) in partnership with Pacific Island nations.

In addition, the Labor government has said that they will reverse $746 million spent by the previous administration on climate policies that may not be effective. These include things like cancelling new gas pipelines and other yet-to-be announced projects.

Carbon Capture

$141.1 million has been set aside over 10 years for investment in carbon capture technology. The money will be targeted at “hard-to-abate” industrial sectors like cement manufacturing as well as fund research into how we can pull carbon out of the atmosphere.

While the technology is controversial, as it has yet been proven to work effectively and at scale, many believe we’re now at a point in which we’re going to need all the help we can get to lower emissions. Carbon capture is likely going to have to make up at least part of our efforts.

Funding for the Department of Climate Change

In the last budget under the Morrison government, delivered way back in March of this year, the Department for Climate Change, Energy, the Environment and Water received an effective 35% cut.

This time around, the Labor government is providing $275.7 million over four years to the department. It’s not quite going to make up for the $700 million cut last time, but it’s something.

400 Community Batteries

$224.3 million will be spent over four years to provide 400 Australian communities with batteries that are designed to reduce pressure on the electricity grid.

These batteries allow households using rooftop solar to store excess power they may be capturing for use at a later date. If implemented, it would help cut both power bills and emissions.

Free Solar Power

A Community Solar Banks programme is being established that will give regional communities, people in social housing, apartments, and renters access to solar power.

These are typically demographics who are unable to get access to personal renewable power sources.

The project will cost $102 million over four years.

Powering the Regions

A massive ‘Powering the Regions’ fund is also being established to help regional and rural communities transition to net zero. At least $1.9 billion is being spent on the plans which are currently being worked out.

Helping to Protect the Great Barrier Reef

Chalmers noted in his speech that he wanted to “safeguard for future generations the unique and precious natural wonders of our continent.”

To that end, $1.8 billion is being spent on environmental and heritage protection, a large chunk of which is going to “accelerate the defence and restoration of our Great Barrier Reef.”

Labor has said that they will work with commercial fisheries to minimise impacts on protected species, strengthen water monitoring, and continue to engage with local authorities and Traditional Owners on how best to protect this world heritage site.

Click here for our full coverage of what Labor’s budget means for mental health, parenting, and the cost of living.

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