Aug 15, 2013

The Coalition’s $4 billion climate budget blow-out

New research suggests a $4 billion cost blow-out is on the cards for Direct Action -- and that's being conservative. So why is the Coalition so confident the experts are wrong?

Analysis by Sinclair Knight Merz finds that the Coalition faces at least a $4 billion budget blow-out if it is to deliver on its 5% emissions reduction target by 2020. What’s more, this is based on some very favourable assumptions.


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18 thoughts on “The Coalition’s $4 billion climate budget blow-out

  1. beachcomber

    Abbott’s plan was never going to work. It was always going to be a bottomless pit, requiring more and more money to achieve less and less.
    He’s fond of these extravagant schemes. His paid parental leave scheme is also far more expensive than what the Government has legislated, and will also mean cuts to services and broken promises if he ever wants to introduce it.
    Peter Costello warned us he was hopeless at economic management.
    Sadly Hockey and Robb are no better.

  2. cnewt27

    I’ve been stunned how for 3 years Abbott has talked so much about “THE CARBON TAX” and so little about his alternative. I waited and waited for the drones on the ABC (think Fran (the “narrative”)Kelly to actually explore his plan in some detail. Nothing. Today i heard an interview on the ABC in which Shadow Hunt bagged the critique of his plan but was not asked how the Liberals are sure their $5billion of tree plantings will produce a 5% drop in emissions. I guess I’m just not a trained journalist, something I’m grateful for when i hear fran and her buddy Michelle Grattan drone on and on. Letting Abbott slide for 3 years on this utterly unexplained nonsense is a disgrace.

  3. Michael

    I think we are ignoring the obvious answer. The LNP will not go over budget for the Direct Action plan because they won’t care if it does not achieve its targets. They will spend the forecast amount and not a penny more. At best they will just change the target or the way it is measured. Remember, Tony sincerely does not believe there is a climate change problem (or a problem that he can do anything about), so why would he run up a larger deficit (or cut tax breaks or raise taxes) to fix a non-existent problem?

  4. K.D. Afford

    We are on the right path with the tax, shelving it merely frees us as individuals to have a part in the responsibility as to curb emissions which we must do drastically and urgently!
    The Liberals are lead by deniers! Try getting any of them to even mention”Climate change!”

  5. Observation

    Just another area where we get no detailed information or strategy. Just the party approved one liners. As it has been said in a previous post, Abbott does not believe in climate change and therefore will not pursuit a viable process to reduce carbon.

    The devil is in the detail, and the Libs are trying not to let out any of the many devils onto the public domain until the very last minute.

    Abbott is being so rigid and firm with not allowing any room for changes to his one liners that if and when he is in office it will be his undoing. But dont worry, he will be that unpopular with everyone that even his own party will oust him and Malcom will be left to clean up the mess.

  6. Honest Johnny

    Apart from the hole in the budget (another one), I think some work should be done by Crikey on the likely impact on electricity prices when Abbott abolishes the Carbon Tax as he says he will.

    When renewable energy is installed in a residential or small commercial property it qualifies for the creation of Small Scale Technology Certificates – previously called RECS and now referred to as STCs (subject to the Clean Energy Regulator Guidelines). STCs are created at the time of installation and are traded with large energy generators so they can meet their Renewable Energy Targets. The value and price of STCs varies due to a number of factors but mainly demand. If and when the Clean Energy Finance Corp is abolished by an Abbott Government the market will disappear, large energy generators will have no means of offsetting their Renewable Energy Targets. The price of Solar installations and the price of electricity from the power generators will climb up to a new equilibrium.

    It seems that the Opposition has built up a lot of political capital over the past few years by saying that abolishing the carbon tax will reduce electricity prices. In fact as I have explained, it will probably do the opposite, it will push them up higher. The Australian electorate is blissfully unaware of this consequence.

  7. Steve777

    ‘Direct Action’ was thrown together in the wake of the collapse of the bipartisan agreement on the ETS to give an illusion that the Coalition is going to do something to address carbon emissions that will be cheap and painless. In fact, Tony Abbott was installed as leader of the Liberals to appease the climate change deniers in the Liberal party and its supporters and bank rollers. I expect to see ‘Direct Inaction’ and the 5% emission reduction target quietly dropped should the Liberals win the election. After all, why have a plan that won’t work to limit the emission of an invisible (and so harmless?) gas to address a problem that most Liberals and most of their supporters don’t believe exists.

  8. Saugoof

    Michael #3 – Exactly. The whole Direct Action scheme was always just a smoke screen, never something that was going to be implemented as anything other than a facade.

    My guess is that if the LNP win the election, within a couple of weeks they will “discover a massive budget black hole that Labor was hiding” and use this as an excuse to dump the whole thing.

  9. Honest Johnny

    I hugely doubt Abbott will get the repeal of the Carbon Tax through the Senate. This would become a Double Dissolution trigger but as Antony Green has explained, a Double Dissoulution is now not possible until early 2015. By then, the electorate will be a little wiser and the whole election would be fought on climate change and what Abbott has done to budget revenue.

  10. MJPC

    Steve777, I am with you. The only environment the LNP knows is that created so theat their mates amongst the big polluters and others can continue buisness as usual.
    Many a true word is said in jest and Mr Abbott’s off hand comments on “invisible gas” portrays his true beliefs on climate change, and it is do nothing.
    In NSW his solution to gridlock and pollution is fund more roads, not public transport. If the libs get in, the blue rinse set can look forward to more winters without heaters after the electricity providors are looked after by the LNP.

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