Labor ready to sacrifice ARENA for medal in budget Olympics

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In a decision that will rank top of the Stupid List, Labor appears to have accepted Coalition plans to strip $1bn from ARENA.

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Federal Labor appears ready to sacrifice the Australian Renewable Energy Agency it established just a few years ago as it reacts to Coalition government taunts that it is not serious about “budget repair”.

In a decision that will rank – along with the Coalition’s removal of the carbon price – at the very top of the Stupid List, Labor appears to have accepted the Coalition’s challenge to pass a $6.5 billion omnibus budget repair package that includes stripping $1 billion from ARENA’s legislated funds.

carbon repeal
The Coalition celebrates the killing of the carbon price. Will there be similar joy when ARENA is de-funded?

The move to strip funds from the agency responsible for bringing in new technologies, business models and ideas that will be critical to efforts to cut emissions appears extraordinary in a country that has possibly the strongest budget in the developed world and one of the worst records on climate and emissions policies.

The decision was all but confirmed by Labor leader Bill Shorten in his address to the National Press Club, which represents an institution so obsessed with line items in the budget and being a political insider, it has virtually abandoned its coverage of actual policy.

It was the Abbott government that first attempted to strip the remaining funds from ARENA, along with its attempts to abolish other institutions such as the Climate Change Authority and the Clean Energy Finance Corporation, and the carbon price.

ARENA’s abolition remains policy, despite the elevation of Malcolm Turnbull, who has changed little of the Abbott-era climate and clean energy policies, despite his previous vow not to lead a government that did not take climate change seriously.

But as the Climate Institute says in its new report on Wednesday, the Australian government is facing a policy train crash if it ever decides to take its commitment to the Paris climate deal seriously.

This is why support for ARENA is important. It has funded more than 200 projects, ranging from research to community projects, to funding trials and tests of new technologies, testing new business models for battery storage, and accelerating the rollout of large-scale solar PV and micro-grids.

Tomorrows-Energy

All will be critical for Australia’s attempts to reach net zero emissions and its share of the Paris climate target, and to seize on the clean energy opportunities it has in its own country and for export.

This makes Labor’s capitulation on the issue all the more remarkable and bloody minded. It was borne, as we have reported, by Labor’s angry reaction to the response by NGOs to Turnbull’s original decision to create a new “innovation fund”, borrowing money from the CEFC and de-funding ARENA.

The NGOs were full of praise for the “new” innovation fund, and the decision to retain the CEFC, but most of them overlooked the fate of ARENA.

Labor’s climate and energy spokesman Mark Butler said last year that that reaction made it difficult for him to maintain support for ARENA as Labor prepared its own pre-election budget strategy.

The ALP then made allowances to cut $1 billion in funds from ARENA – keeping $300 million for large scale solar towers with storage and community projects, and locked it into its budget repair package.

And on Wednesday, Shorten showed no inclination to backing down. “We’re serious about budget repair”, he insisted, although he did say that Labor would want to see the package in detail, but that mostly seems to be about the “clean energy supplement” and its impact on those on social security.

However, in a separate statement, shadow treasurer Chris Bowen said that while Labor would look at the omnibus package, its position “will reflect the position we took to the election.”

If the bill is passed after being introduced next week, it will leave ARENA with just $300 million of legislated funding, over and above its current budget that includes $100 million earmarked for supporting large-scale solar schemes.

Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

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20 Comments
  1. Brunel 2 years ago

    Will their independent battery testing be killed off?

    They can have a sugar tax for budget repair and also a tax on 457 visas.

    • George Michaelson 2 years ago

      You’re very single minded on this 457 question. Is there some underlying story we’re missing which tickles you? I have never met a 457 I didn’t like, they are highly skilled and highly motivated. If the issue is wage dilution there are solutions to that which are less .. well.. to be blunt racist. Because you come across as being covert for something else. A lot of the 457 people are non-white non-anglo. Does this bother you? There is a ‘f-off we’re full’ dimension which scares the bejesus out of me (anglo entryist, married an aussie in the 80s)

      I’m into growing the economy. We need a shitload more than 24m people, and I don’t see what the issue is on the macro timescale getting them in on the 457 label. If you want them born here, you have to pay taxes and social costs to make it feasible, and reduce the cost of education to make it feasible. All of which I am in favour of too, but the current mob in parliament aren’t prepared to spend the money: so if we can’t grow our own population, why not bring ’em in?

      • david H 2 years ago

        George, I agree with you but we also need governments to have an agreed long term vision and a long term plan to go with it. Unfortunately I cannot see this ever happening in Aus.

      • Brunel 2 years ago

        In 2013 Julia Gillard said too many 457 visas have been issued. But she was the one that gave them out!

        Before the 2 July election MP Terri Butler said there are too many 457 visas out there.

        The solution to the exploitation of 457 visa workers is to channel salaries owed to them via government.

        So a boss would pay $1000/week to government and government would then pass it on to the 457 visa worker.

        Not all 457 visa workers are highly skilled. A lot are brought in to cook food or install computers for illegal wages.

        It is the illegal wages that we have a problem with.

      • Robert Comerford 2 years ago

        We need about 4M less people than we have now ,not more. This isn’t North America it is a very dry continent.

  2. Eb 2 years ago

    Reducing ARENA’s uncommitted funding is short term stupidity that will cost us a lot more in the long run.

  3. Stuart Jones 2 years ago

    We sure need budget repair but this seems misguided rubbish. Carbon tax is needed. Sugar tax good idea but tax on 457 visas, isn’t such a good idea. Sorry @disqus_Brunel:disqus .

    • Brunel 2 years ago

      I guess we disagree that 457 visas are far too easy to get and that bosses use them to pay illegal wages.

      • Stuart Jones 2 years ago

        Not suggesting that use at all. I was 457 entrant now PR. I think I’m adding to the pot and seeking to do a lot more if I can get skilled expertise which doesn’t exist in any depth currently. That’s my high level point.

    • Chris Fraser 2 years ago

      A carbon price of $25/t on the top 5% of Australian emissions = budget saving of $2.5 billion and provides more global cooling.The former Environment Minister was probably not concerned with this solution … at least not until he could see calved-off icebergs floating past Sorrento.

      • Stuart Jones 2 years ago

        Yep sounds good. Do you know how much Gov is down on its assumption of rev from dumb LNG industry? It’s a really bad play to slug renewable energy investment for dire failings by the big end of town. That hurts.

        • Chris Fraser 2 years ago

          Not sure but gas investment, with Govt handouts, was decided years ago even though by today’s technology it seems quite awkward. They just have mental blockages over cutting their losses and going renewable.

  4. John Saint-Smith 2 years ago

    I guess we are experiencing the result of a complete lack of spine in our leaders from both sides. There’s never been a more embarrassing time to be an Australian.

    • neroden 2 years ago

      Vote Green. Or NXP if you think they have a better chance. ALP seems to be politically bankrupt, and the LNP are dangerous lunatics.

  5. The Lismoron 2 years ago

    This is exactly why I vote green. ALP (like most of UK labour) are typical Neocon. Strip money that will be an investment in the future instead of going after the tax dodgers of the corporate & political world.

  6. MaxG 2 years ago

    Paris? With our politicians either stupid or lying through their teeth, or both, why would anyone think that Paris matters to them? Keep on dreaming!

  7. Nicko 2 years ago

    Labor’s pique that has now wedged them (and will presumably bugger innovation in clean energy) was stupid, but not more so than *some* environment groups being conned by Turnbull’s fraudulent, cost-shifting ‘innovation fund’, when it was clear it was a con.

    That was ridiculous. I hope they have learnt their lesson.

  8. Daniel 2 years ago

    When ARENA support a large scale solar project, they overlook all the small communities and solar installers throughout the country. ARENA overlook truly investing in building a community knowledge base around renewable energy. ARENA have often placed technology development before people and communities. They need to tighten up their act on Social Justice values and encourage money to be more equitably distributed around the economy for a distributed paradigm. ARENA need to give up the centralised paradigm of electricity provision.

  9. Daniel 2 years ago

    When ARENA support a large scale solar project, they overlook all the small communities and solar installers throughout the country. ARENA overlook truly investing in building a community knowledge base around renewable energy. ARENA have often placed technology development before people and communities. They need to tighten up their act on Social Justice values and encourage money to be more equitably distributed around the economy for a distributed paradigm. ARENA need to give up a green centralised paradigm of electricity provision. If ARENA don’t clarify their values, we will merely see fossil fuel replaced by green big business and the maintenance of bullying grids. It is humanities evolution, culture and a just society that is central – not merely the evolution of technology.

  10. Daniel 2 years ago

    ARENA supporting a green economy and big business enterprise, lacking social justice values and hence losing community and political support.

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