First act of Coalition’s “innovation” government: strip funds from ARENA

Malcolm Turnbull’s Coalition government has taken a new line of attack against the Australian Renewable Energy Agency, and sought to wedge Labor on the issue by adopting the Opposition’s own pre-election policy platform on the future of the agency.

As part of its $6.5 billion “omnibus” budget repair package to be put to parliament in its first act of the new government, the Coalition proposes to change tack: instead of stripping all of the remaining $1.3 billion legislated funds in ARENA’s budget, it now proposes to remove $1.023 billion in funds – as proposed by Labor before the election.

Labor’s threat to strip ARENA of $1 billion in funds was made in an apparent fit of pique earlier this year over the failure of NGOs to criticise the Turnbull government when it announced the creation of the Clean Energy Innovation Fund, using monies already allocated to the Clean Energy Finance Corp.

Labor argued that instead of applauding a move by the Turnbull government to “re-brand” previously allocated monies, it should have been critical of the move to de-fund ARENA. So it decided to abandon its own support of the key agency.

While Labor later said it was prepared to review that decision, party sources admitted to the Australian Financial Review on Wednesday that it remained a “grey area for us” because of their pre-election policy. On ABC Radio, treasury spokesman Chris Bowen refused to commit Labor to protecting ARENA.

Stripping ARENA of $1 billion of funding would be a huge blow for the emerging technologies in Australia, which usually need grants to test out new business models and applications, as witnessed by ARENA’s support for two key battery storage projects in South Australia, and its support for large scale solar.

The Greens condemned the move by the Coalition, and also the equivocation from Labor.

“Labor is failing dismally to match its clean-energy rhetoric with action and instead is set to buddy up with the Coalition on clean-energy cuts as the first order of business as soon as Parliament returns,” Senator Larissa Waters, said in a statement.

“Instead of going backwards on clean-energy funding we should be investing more, and a good place to find the revenue is by cutting the tens of billions in subsidies that the fossil fuel companies receive.

“Clearly the old parties are both more concerned with keeping the fossil fuel companies’ political donations coming, instead of protecting Australians from extreme weather events and ensuring the survival of the Great Barrier Reef.”

WWF echoed the Greens’ call to attack fossil fuel subsidies instead.

“ARENA is vital for our clean energy future, providing funding to build innovate renewable energy projects that struggle to get funding from banks, like large-scale solar thermal,” said WWF National Climate Change Manager, Kellie Caught.

“An obvious solution is to scrap non-agricultural fossil fuel subsidies and use the savings to fund ARENA, bringing the budget back into the black.”

The Australian Wind Alliance described any cutting of funds for ARENA as “economic and environmental madness.”

Alliance spokesman Andrew Bray said Labor needed to stand firm against the cuts to ARENA.  “The Labor Party set up a properly funded ARENA with the Greens to provide early-stage grant funding. Now is not the time for Bill Shorten to turn his back on ARENA.”

Bray also described the Liberal government’s stance on renewables as confusing.

“The new energy and environment minister Josh Frydenberg is talking about bringing more renewables into the electricity grid, yet the Prime Minister’s first act upon returning to Parliament will be to slash funding to this sector. You can’t claim to be pro-innovation and cut funding for renewable energy at the same time.”