10 May 2023

Lukewarm climate measures with too many still out in the cold: Government shows good intentions but falls short

For all the Treasurer’s talk of measuring what matters through his wellbeing budget, this budget is light on actual assistance to the areas that will make the most difference to our safety and productivity as a nation, namely addressing the threat of climate change and improving social security and health safety nets. The economic benefit and upside potential of these investments ought to be captured in a wellbeing approach.

While making welcome progress on gender equity, unfortunately the Budget further reinforces intergenerational inequity. Young Australians are being sold a dud, this is not a budget for young people. With the Government failing to capitalise on the resources boom to recoup a fair share of revenue.

Climate change is acknowledged as a significant risk and an opportunity throughout the budget but the money to match that risk pales in comparison to the Defence spend.

The environment looks like the biggest loser in this budget with little to boast about from the Government, even the implementation of the promised Environment Protection Australia body lacks fanfare.

 

 

Climate & Energy

Progress:

• $2b Hydrogen Headstart program
• $310m Small Business Electrification tax incentives 
• $22.4m to establish a Net Zero Transition Authority 
• $1.3b in low cost loans for double glazing, solar panels and other improvements to reduce household costs 

Falls Short:

• $1.3b Household electrification package 
• Increase to public money propping up fossil fuels  
• $500 for recipients of Government payments and small businesses for energy price relief
• $38m for Guarantee of Origin Scheme
• $20m for EV Strategy and Emissions Standards
• $6.5m Future Gas Strategy 

 

Commentary

Whilst climate and energy investment continues to progress in the right direction, and I  welcome the Government’s commitment to a $2b Hydrogen Headstart fund to kick-start green hydrogen production and respond to huge international investments in the US, Europe and the Middle East, there is very little detail on how the fund will deliver. The fund will be developed in consultation with industry over the next 6 months with the aim of providing a production incentive to 2-3 flagship programs over the forward estimates with the government funding the gap between production costs and revenue. 

On electrification, the Government has heard the calls from the crossbench with a $310m investment in electrification incentives for small businesses. I encourage Warringah businesses to investigate these incentives once the details are made public. Unfortunately, the Government missed the mark with household electrification delivering just $1.3b in low cost loans through the CEFC ($1b) and support for social housing upgrades ($300m) thus falling well short of the proposed $3.5b that Rewiring Australia identified as being needed. In saying that, I will be looking for ways that Warringah households can benefit from these schemes.

 

Most disappointingly, the government has increased the rate of fossil fuel subsidies in the budget to a staggering $57b from $55b in the October Budget. Further, they have continued to push a focus on gas as a transition fuel with a $6.5m commitment to a Future Gas Strategy. It’s time to phase out the diesel fuel subsidies to mining and gas companies and ensure the prompt electrification of their operations. Further, the Government must stop subsidising fossil fuel infrastructure. Sadly, the Government still lacks the political conviction to do so. 

The electric vehicle strategy received just $20m, largely for policy and strategy development and refinement and fails to meaningfully transition our fastest growing emissions sector. 

It is disappointing to see the Government continue to invest in the flawed Guarantee of Origin proposal. I have serious concerns with this approach and will work with the Government and stakeholders to ensure that if the scheme is progressed, it has integrity. 

 

 

New Economy

Progress:

• We have a budget surplus 
• 15% minimum tax for large multinational corporations 
• $392m for Industry Growth Program to support small-medium enterprises commercialise ideas and operations

Falls Short:

• R&D and Innovation funding 
• No advanced manufacturing tax credit proposed 
• Estimated only $600m per year ($2.4b over 4 years) of additional revenue from gas extraction through reform to the Petroleum Resource Rent Tax despite record profits 

 

Commentary

I welcome increased fiscal discipline and increases in tax revenue leading to the prediction of the first budget surplus since 2008-09. A necessary change to avoid further adding to inflation.  

I’m disappointed in the Government’s proposed reform to the Petroleum Resource Rent Tax as it fails to secure proportional revenue to the super profits being made. I have long been calling for reform to this tax so that Australia recovers a fair share of revenue from its resources and set Australia’s economy up for future generations.  

Welcome the commitment to address multinational tax through a minimum 15% corporate tax rate as per international agreements, similarly the commitment to address Tranche 2 of Anti-Money Laundering protections is long overdue. 

I also look forward to the detail of the Industry Growth Program which will deliver nearly $400m for SMEs to commercialise their ideas and operations, feeding into the National Reconstruction Fund priority areas and investments. Warringah has a strong SME community and I’ll be working with local businesses to identify opportunities to access this Program. 

Nevertheless, it is disappointing that the government has failed to create further tax credits for advanced manufacturing and green industry to genuinely set Australia up to be a clean energy superpower. 
In the US, the Inflation Reduction Act is delivering up to $1trillion in incentives for clean energy and electrification, largely through tax incentives. This is a huge investment by Government in the economy and is seeking to bring down inflation through reduction in reliance on fossil fuels and geopolitical shocks driving up prices. 

Europe has responded with similar investments in electrification and development of local industries to produce batteries and contracts for green hydrogen. Australia is being left behind and losing its natural advantage to nations more focussed on future opportunities. 

 

 

Environment

Progress:

• $45m Funding for Sydney Harbour Federation Trust 
• $121m to establish Environment Protection Australia and $51.5m for Environment Information Australia 

Falls Short:

• $355m for National Parks 
• No new money for recycling or addressing plastics pollution
• No significant money to achieve Nature Positive future 

 

Commentary

Despite the dire warning in the State of the Environment Report, protection and rehabilitation of the environment has missed out on any substantial investment again this budget.  

The only significant funding is for the creation of an independent cop on the beat to enforce environmental standards in the form of Environment Protection Australia, and another $51m for Environment Information Australia to better collect environmental data. 

National Parks received a $355m boost, all of which is going to existing parks with no indication of expansion or new creation of protected areas.

 
Locally, the Sydney Harbour Federation Trust was provided a surprising $45m this year mostly for maintenance works at Cockatoo Island but Warringah will benefit through restorations at North Head and Middle Head. I expect next year will be a bigger year of investment in the Trust with the completion of master plans for Middle Head and North Head which are now in consultation and under development. 

Surprisingly, plastics, recycling and waste reduction were not addressed in this budget despite calls for the Federal Government to do more to assist with the underwriting of a RedCycle replacement. Nor was there movement on broader calls for the implementation of recycling reforms and mandatory product stewardship schemes. 

Finally, the Government has made a number of significant commitments to protect 30% of land and sea, achieving a nature positive Australia and preventing any new extinctions by 2030, however, the money to support the achievement of those goals is glaringly absent. It is also hard to see how the Nature Repair Market will succeed without substantial underpinning investment. 

 

 

Integrity/Grants

Progress:

• Infrastructure reassessment 
• $14m for the Australian National Audit Office
• $7.7b for national broadcasters 

Falls Short:

• No Whistleblower commission 
• No new Warringah infrastructure
• No Electoral reform funding/stop the lies 

 

Commentary

I welcome the commitment to review the $120b infrastructure investment pipeline as we need much greater integrity and accountability in the process of infrastructure development and a cohesive national plan for development, however, I am concerned about the delay in construction that this review will drive.  

The ABC, SBS and AAP all received renewed funding commitments in this budget building on the previous budget restoration of indexation totalling $7.7b over 4 years. This is a key pillar of integrity in media.  

Disappointing that the whisleblower commission has not received any funding in this budget, nor was there any indication of electoral reform or stop the lies. While the Australian Communications and Media Authority did receive $7.9m over 4 years to combat misinformation and harmful content on digital media platforms. Similarly, a key accountability body in the Australian National Audit Office received a much needed funding boost of $14m.  

I am pleased the Manly Life Saving Club grant of $5m has now been executed and the Club is able to continue with its planning and consultation process with that funding secured.  

I put in a detailed pre-budget submission supporting requests by local councils in Warringah and not for profit groups. Unfortunately, there was no additional funding for infrastructure projects in Warringah and the $75m funding for the expansion of the Wakehurst Parkway has disappeared, similarly the HMAS Penguin upgrades have been delayed in the Defence Strategic Review process. Australians are tired of pork barreling and deserve an accountable and transparent infrastructure spend.

Nevertheless, the sporting grants are set to continue. 

 

 

Equality & Inclusion

Progress:

• 15% Increase to Commonwealth Rent Assistance - $31 extra per fortnight 
• Lowered age for older Australian Jobseeker from over 60s to over 55s 
• $1.9b Single parent payment age increase from 8 to 14years 
• Halving of the tax rate for build to rent projects
• $590m for the National Plan to end violence against women and children 

Falls Short:

• $40/fortnight raise to the rate of Jobseeker, Youth Allowance and Austudy 
• No permanent solution to Indigenous Save Sorry Business 
• No announced increase to the Refugee intake 

 

Commentary

Welcome the 15% increase to Commonwealth Rent Assistance to help the most vulnerable keep up with rapidly escalating rental costs. Housing advocates have sought a doubling of the Commonwealth Rent Assistance Scheme to promote greater incentive for investment in the construction of affordable housing and greater security for the most vulnerable but the government has only delivered this limited increase.  

I welcome the additional support for some of our most vulnerable in this budget, especially for single parents of which 90% are women and women over 55. The age at which the single parent supplement ceases has been raised for parents of children aged from 8 to 14 years, providing an additional $176/fortnight to parents in need of support. Similarly, the older persons’ supplement now kicks in at 55 years rather than 60, providing a much-needed boost to the financial security of older women who are the fastest growing group at risk of homelessness.  

Sadly, efforts to raise the rate of support for our most in need have fallen short. The Economic Inclusion Committee Report and the Women’s Economic Equality Taskforce recommended a fortnightly increase in support payments to $68 per day, which is an increase of roughly $19 per day to help those in need move beyond the poverty line but the Government has settled on a measly $2.86 increase per day! 

The childcare workforce is an unfortunate casualty of this budget as the 15% bump to aged care workforce award rates is not matched in the childcare sector. Childcare is likely to lose some of its workforce to the aged care sector and suffer further workforce shortages at a time when demand is increasing. The $72m for training and retention activities just won’t meet the needs of the sector and we need urgent action to boost this workforce now. 

It is also disappointing that we have not seen an increase to the refugee intake despite many in the sector expecting this to be announced. Similarly, we did not see an enduring solution to the Youpla Funeral Fund despite strong advocacy in support of addressing this issue, the temporary solution expires in November and I will continue to fight for those impacted by this collapse. 

 

 

Health

Progress:

• $224m vaping reform  
• $11.3b for the 15% Aged care wage boost 
• $5.7b increase to triple bulk billing incentive for services to under 16s, concession card holders and pensioners and reform Medicare service models
• $91m for the establishment of an Australian Centre for Disease Control 

Falls Short:

• 9,500 new home care packages – still a long home care waitlist 
• $1.2b pharmacy changes 

 

Commentary

Tripling the Medicare bulk-billing subsidy rate for under 16s, concession card holders and pensioners through a $3.5b investment is a welcome initiative, reducing the cost of medical care for many. Complementing this is a Medicare funding boost of $2.2b to incentivise more innovative approaches to General Practice delivery, which is good, but with bulk billing rates at record lows, more needs to be done. I appreciate that this is the start of a broader reform in how primary care is delivered but we need more detail before assessing the merits of the new proposal. 

Prescription changes allowing for 60-day dispensing of prescriptions will save the Government $1.2b but will put the viability of many pharmacies at risk. These savings represent a direct cut to the bottom line of pharmacies and it will obviously impact services. I am consulting with our local Pharmacists and seeking further clarification from the Government.

Huge changes are on the way for vaping, with the products set to be banned except for by prescription and then they will only be available in plain packaging. Taxes on tobacco products will also be increased by another 15% over the next three years. This combination of prohibition, taxation and marketing controls will likely lead to a reduction in consumption but I remain of the view that a marketing campaign to reinforce the dangers of vaping products is necessary to address drivers on the demand side.  

Aged care workers will get a much deserved 15% increase in wages in accordance with recommendations from the Fair Work Commission. While I welcome this pay rise, I remain concerned that other care workers, particularly in childcare are not getting a commensurate increase and this will lead to further staff shortages in that sector.  

Meanwhile the implementation of 24/7 registered nurses is well behind schedule and the elimination of the home care package waitlist remains an outstanding recommendation from the royal commission, 2 years after its acceptance by government. The budget only provides for a small increase of 9,500 home care packages at a time when there is still considerable delay and backlog. 

$2.2b for new pharmaceutical benefit scheme listings including Trikafta for cystic fibrosis will make a huge difference to the lives of many living with life altering conditions. 

 

 

Conclusion

On a final positive note, the Government has recognised the warnings in Kate Jenkins' Set the Standard Report, and provided all Parliamentarians with an additional electorate office staff member to serve their communities.

Whilst acknowledging climate change, biodiversity and cost of living crises, the Government fails to move the dial very far in this budget and leaves many behind. Key initiatives announced fall short of providing the scale of investment recommended by leading experts to set Australia on a strong path to Net Zero, move our most vulnerable away from the poverty line and provide safeguards for our environment. Regrettably, the Government also misses an opportunity to future proof the Australian economy by capturing a fair share of revenue for Australian resources.    

In case you haven’t read enough yet, here’s my media release. 

And if you want to really get into the weeds, the Budget Papers are here.  

 

Congratulations on making it to the end.