This Budget is rooted. It puts and end to the pretense that the Rudd Government is serious about tackling environmental issues. It is a Budget dominated by short-term thinking and an almost complete abandonment of climate change as an issue of national importance.
With the recent backlflip on the CPRS, many were expecting some new, serious initiatives to fill the void. Instead, funding to environmental programmes has been cut, fossil fuel subsidies remain untouched, and the only sweetener is a new $652 Million renewable energy fund- another piecemeal and inadequate response. One suspects that it was only included so that Mr Swann could say the words “renewable energy” repeatedly in his budget speech.
As if to disguise their failure, the Budget announcement was followed with rapid fire announcements that had the word “solar” in them – to try to create illusion of climate action. However, these announcements were all just about existing programmes, including the shortlist for projects under the Solar Flagships Programme.
It is clear that Rudd and Swann just don’t get it. One-off injections of funding in to renewable energy projects or R&D are useful, but the transition of renewable energy from a small market player to the ubiquitous source of energy that it needs to become is going to require long term incentives and mechanisms to drive investment. A well designed feed-in-tarrif would do the job, as would well designed tax credits, combined of course with a carbon tax or properly designed ETS.
The Budget includes a measure to help encourage superfunds to invest in infrastructure, through the introduction of a new discount on bond interest income. Why not do something similiar to encourage investment in renewable energy? Compulsory Super in Australia has created one of the biggest savings pools in the world – which is supposed to be invested for the long term benefit of members (ie the Australian public). Why not help to unleash this investment potential to drive the clean energy economy?
The Budget shows that Rudd and Swan are still more interested in soundbites than in seriously responding to climate change. Very disappointing stuff.