Federal budget embeds fossil fuel expenditure on gas and CCS escalating climate crisis

May 12, 2021 at 12:17 am Leave a comment

Photo: Fund our future not gas Courtesy AYCC

Federal Treasurer Josh Frydenberg delivered the 2021 Federal budget with lots of suger announcements on increased aged care spending, increased child care funding, women’s physical safety & economic security, NDIS, mental health, road infrastructure, and vaccine rollout.

But on addressing the climate and environment crisis, funding gas expansion continues and environment and conservation funding declines. This reinforces that the Federal government budget is for the short term, an election budget, failing to enact long term solutions for the climate crisis and the biodiversity crisis in Australia.

It wilfully ignores the intergenerational cost on our kids and future generations climate change impacts will incurr.

During the budget speech Josh Frydenberg said:

“In this budget, we are investing a further $1.6 billion to fund priority technologies, including clean hydrogen and energy storage…. This budget provides over $480 million in new funding for the environment, including $100 million to protect our oceans.” he also said the government is “on a pathway” to net zero “as soon as we possibly can”, which he says the government would like achieved preferably by 2050.”

Latika Bourke, Net zero ‘preferably’ by 2050, says Frydenberg, The Age

From a climate perpective the budget is deeply disappointing, as it fails to capitalise on Australia’s natural renewable energy advantages, or set Australia up as an emerging renewable energy powerhouse. It panders to vested interests in the fossil fuels industry. While it talked of wanting to reduce emissions and create jobs at the same time, it missed big, obvious, common sense opportunities to do so.

There were some minor renewables expenditure, like $30 million to support a big battery and the roll-out of microgrids in remote NT Indigenous communities, $19.3 million to support a renewable energy microgrid incorporating hydrogen in the Daintree, much of this had already been announced.

There were NO additional spending announcements for large scale renewable energy projects, or big plans to electrify industry or transport.

Instead we got initiatives that rely on fossil fuels such as ‘clean’ [read: gas-fuelled] hydrogen export hubs, and highly problematic carbon capture technology development (that has already proven to be a major black hole for money with little to show for actually effective at scale carbon sequestration). 

There was the disaster resilience package of $209.7 million over four years to help our resilience to extreme weather, with a new Australian Climate Service that will inform Emergency Management Australia and the National Resilience and Recovery Agency on how to respond and prepare for natural disasters.

Also money to help northern Australians afford cyclone insurance, funding to make regional Australia more resilient to drought, money for community and household projects that mitigate the impact of natural disasters, and improve the internet and mobile coverage in bushfire prone areas.

Part of the Environment funding expenditure was $100 million for restoring ocean ecosystems like seagrass and mangroves, expanding the marine park network, improving the health of coastal environments, protecting native species and habitat, and improving recycling. Australian Government has been working for some years towards a blue carbon accounting methodology to use for offset credits (instead of reducing fossil fuel emissions).


Tom Swann articulates on twitter that Fossil fuel subsidies in #Budget21 include:

  • money for billionaire Twiggy Forest’s gas generator
  • more for other gas generators
  • subsidies to new gas basins
  • subsidies for oil

Tom Swann: “Fossil fuel subsidies apparently the best examples of “economic resilience”, presented without irony immediately above funding for disaster response funding.”

Tom Swann: “Santos’ Barossa LNG project would be Australia’s highest CO2 LNG project and amongst the highest in the world. It would produce more CO2 than actual LNG. Commonwealth govt loves it so much it gets a shout out in the budget.”

Tom Swann: “Ongoing “contingent liabilities” so complex they can’t be quantified, – free insurance for Chevron in case its Gorgon CCS project fails again in the future, – various costs of an oil import crisis (if only there was some form of energy we could generate domestically)”

Tom Swann: “The Aust govt loan to PNG LNG that started civil conflict when the landholders weren’t paid. Good times.”

Tom Swann: “Another spray of $ for fossil gas projects and studies, including – $5.6m for another gas plan, – $3.5m “to facilitate Commonwealth investment in critical gas infrastructure projects.” There we are: govt planning to use public $ to fund gas pipelines.”

Tom Swann: “Funding to crack open two more new fracked gas fields, and $2.2m over 3 years for the Northern Land Council to “facilitate land use agreements… in the Beetaloo sub basin”. Loose change for traditional owner agreement, subtle.”

Tom Swann: “#Budget21 includes money to build roads for fracking trucks in the Beetaloo Basin. Literally called the ‘gas industry roads upgrade program’.”

Tom Swann: “Fossil gas subsidies in #Budget21 – spray of $ for projects that don’t need it, shouldn’t be funded – new funding to design a “framework” for even bigger govt funding for gas pipelines.”

Tom Swann: “Australian govt funding to fossil gas already most of a billion $. #Budget21 offers up even more, and sets up the government to ‘invest’ more public money in gas. Public money better spent on nearly anything else. #FundOurFutureNotGas

350Australia has done pre-budget estimates of expenditure on gas expansion showing almost One billion dollars of subsidies for gas and gas expansion. Based upon “the release of the interim National Gas Infrastructure Plan (NGIP) today [7 May 2021], the Morrison government’s total gas spending – both direct and indirect – totals between $509,450,000 and $903,210,000.” said a 350Australia media release.

“The emissions impact of the government’s gas-fired recovery plans will be immense. From fracking to transport, processing and burning the climate impact of the government’s five “strategic basins” identified by the NCCC and advanced by the government would cancel out the emission savings from the Government’s flagship climate policies five times over and emit over three times Australia’s annual emissions.”

– 350Australia

Matt Rose for the Australian Conservation Foundation responded to the budget:

Environment and climate spending represents less than 1% (0.8%) of the federal budget. To put it another way, out of every $100 in this budget, 80 cents went to climate, water and the environment. The Morrison government continues to shovel public money at fossil fuel projects while reducing funds for tackling climate change and the degradation of nature. The government is throwing loose change at Australia’s climate and extinction crisis.”

via Guardian Australia

Independent MP Zali Steggall says the budget is ‘short term’ relief, with inadequate environment spending.

The Treasurer talks about being the custodians of the continent but there is barely funding to protect the environment and certainly not enough to see Australia reach net zero by 2050.

Australia is facing several crises. Biodiversity loss is accelerating, the global heating is worsening, oceans are acidifying and still overflowing with plastics. Communities are being flattened with successive, unprecedented disasters that are predicted to become more frequent and more severe. Yet the scale of these challenges has not been met with any urgency in this budget,” she said.

There is some small expenditure for responding to inevitable climate fueled disasters but the several hundred million dollars over the next decade is not enough to protect or prepare Australia for the climate impacts, which are projected to cost the economy an estimated $39 billion per year by 2050.

Any positive work to reduce emissions is also being undone by the Government’s continued ‘Gas-Fired Recovery,’ detour. This budget sees several hundred million in handouts for the Gas Industry. This is not in line with the science which is calling for a phase out of fossil fuels.

Details in the budget were also fuzzy around exactly where the $1.6 billion over 10 years put aside for the emissions reduction will go. Additionally, if you compare this to infrastructure spend of over $110 billion from the last several budgets it is a drop in the bucket.”

Via The Guadian Australia

Ketan Joshi highlights on twitter that the Labor response on climate change and environment was severely lacking: “Not a single mention of climate change in Labor’s response, beyond some reference to a vague “energy crisis”.”

Climate Council economist @nickihutley responded to #Budget21. “What I can’t forgive is the failure to address our most urgent challenge: climate change. Hydrogen hubs and carbon capture and storage just don’t cut it. To add insult to injury, there are handouts for gas projects.” she said.

“What we needed was sustainable funding in renewables, clean transport, regenerative farming and so on. Instead of funnelling all the infrastructure budget into more roads, we should have been ensuring the nation’s electric vehicle infrastructure.”

In a pre-budget media release the Climate Council highlighted that “that Australia has spent US$130 billion on COVID recovery efforts but less than two percent of that money has been spent on solutions to reduce emissions.” This is in stark contrast to Germany and France which allocated 47% and 50% of their respective recovery spending to clean solutions.

“Among major economies and our strategic allies, Australia is right at the bottom of the pack when it comes to spending on solutions that reduce emissions, create jobs and strengthen our economy,” said Climate Council spokesperson and economist Nicki Hutley.

“The Federal Government continues to throw taxpayers’ money at polluting industries of the past like gas which provides very few jobs. It should be focused on creating good, clean jobs in renewables,” she said.

“The consequences of Australia’s climate inaction are catching up with us, as the EU and USA contemplate carbon border adjustment taxes that could see expensive tariffs slapped on many Australian exports,” said Ms Hutley.

Climate Council media release 10 May 2021

Michael Mazengard highlights that “The federal government will be spending the same amount on climate change in 2024-25 as it did in 2020-21.” He couldn’t findanything in the Budget for electric vehicles. His budget analysis related to climate is published at Renew Economy as: Cash for gas and big emitters in another miserly budget for clean energy and EVs.

So the budget appears to get a big thumbs down by the kids:

See some mainstream media coverage on the paucity of climate and environment expenditure in the budget:

Entry filed under: climate change info, Coalition Climate Policies, gas transition, news. Tags: , , , .

New Victorian interim climate targets welcome but underwhelming Moreland Council endorses Fossil Fuel Treaty

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