Treasurer Jim Charles delivered the federal budget on Tuesday 25 October 2022. While some have said the federal budget delivered “socks, jocks and chocolates” to the Australian tech sector, others have supported the government’s investments in clean energy, renewables, local manufacturing and climate change preparedness.
Here are the big-ticket items impacting climate and technology in this year’s federal budget.
Similar to the United States’ (US) Inflation Reduction Act, the Powering Australia plan makes huge investments in renewable energy, reducing emissions and cutting power bills. This includes:
- Rewiring the Nation: $20 billion will be invested into renewable power sources to modernise Australia’s outdated electricity grid, lower power costs and provide energy security to the country. This will be done through granting concessional loans and equity to energy transmission infrastructure projects.
- Establishment of the Powering the Regions Fund: $1.9 billion will be allocated to assist industry, communities and regional Australia with transitioning to net zero.
- Establishment of the Driving the Nation Fund: $275.4 million to establish the fund, split three ways:
- $146.1 million for co-investment in projects that will reduce emissions from Australia’s road transport sector.
- $89.5 million for the Hydrogen Highways initiative. In partnership with state governments, the funding will be used to install hydrogen refuelling stations across Australia’s busiest freight routes.
- $39.8 million to establish a National Electric Vehicle Charging Network and deploy 117 fast charging stations across Australia’s highways.
- Electric car discount: introduced in July of this year, the government introduced tax cuts for newly purchased electric cars so more Australians could afford them. Battery, hydrogen fuel cell and plug-in hybrid electric cars are exempt from fringe benefits tax and import tariffs — so long as the car has a retail price below the luxury car tax threshold.
- Australian seaweed farming development: a cash injection of $8.1 million to aid in the commercialisation of seaweed as a low emissions feed. The funding will also support research and development activities and projects that lower barriers to market entry.
- Community batteries for household solar: $224.3 million to deploy 400 community batteries across Australia that will enable households to store and use excess power. This will cut emissions, reduce the load on the electricity grid and lower bills.
- Community solar banks: $102.2 million will be allocated to deploying solar and clean energy through community-scale infrastructure. This aims to remove barriers to access and improve the uptake of clean technologies in regional communities, social housing, apartments, rental properties and households that are traditionally unable to access rooftop solar.
“This is the medium-to-long-term Federal Government expenditure that our industry has long called for,” said Clean Energy Council Chief Executive, Kane Thornton.
“Tonight’s announcements reveal a breadth and depth of commitment not seen before when it comes to successfully managing a fast and fair transition to renewable energy.”
National Reconstruction Fund
Another big-ticket item in this year’s federal budget is the $15 billion investment in the National Reconstruction Fund (NRF). The fund aims to diversify and strengthen the Australian economy by providing loans, guarantees and equity to seven priority sectors. This includes:
- Agriculture, forestry and fisheries sectors
- Medical science
- Renewables and low emission technologies
- Defense capability
- Enabling capabilities
The government has committed NRF funding to a range of climate and clean technology initiatives, including:
- $3 billion to the Powering Australia plan that will invest in “green metals” (i.e., steel, alumina and aluminium), clean energy component manufacturing, hydrogen electrolysers and fuel switching, agricultural methane reduction and waste reduction.
- $1 billion through the Value-Adding in Resources Fund to expand mining science technology and local processing capabilities.
- $1 billion to establish the Critical Technologies Fund that will invest in quantum computing, artificial intelligence, robotics and software development.
- $1 billion for the Advanced Manufacturing Fund, which aims to rebuild Australia’s local industrial base in a range of sectors including renewables and low emission technologies.
Ed Husic, Minister for Industry and Science, spoke about the NRF: “The Albanese Government wants our investments to maximise Australia’s natural and competitive strengths and this budget demonstrates our strong commitment to do that.”
Other climate and clean tech investments in the federal budget
Elsewhere in the budget are a multitude of investments spread out across clean technology, water management and environmental protection and conservation. These initiatives will be overseen by the Department of Climate Change, Energy, the Environment and Water which received $275.7 million in funding to establish itself.
- An investment of $141.1 million will go towards accelerating the development of carbon capture and negative emissions technologies for intensive industrial sectors such as cement manufacturing. It will also support research opportunities for institutions and industry.
- An additional $20.3 million will be earmarked for a carbon farming outreach program designed to help Australian farmers, First Nations peoples and land managers participate in carbon markets and integrate low emission technologies and practices.
- $83.8 million to deploy microgrid technology across First Nations communities, improving access to cheaper, cleaner and more reliable energy.
- $62.6 million in energy efficiency grants for small and medium-sized enterprises. The funding will support facility upgrades that improve energy, reduce emissions and improve the management of power demand.
Sally-Ann Williams, CEO of Cicada Innovations, commented that the federal budget was designed to address systemic problems across issues like wages, cost of living, health and education.
“Yet despite this, the government may have simultaneously managed to allocate more investment into critical growth sectors than Australia has seen for multiple terms of federal government.
It’s extremely pleasing to see that climate change and decarbonisation have permeated throughout a great number of the budget decisions. From deep tech, to manufacturing, regional growth, national reconstruction, jobs, skills, and all the way to indigenous led support. The climate change bill and targets are visibly influencing this Government’s first federal budget.”
“Committing to ambitious goals in energy transition can help to spur growth in local SMEs that will be in a prime position to scale impactful solutions.”
Water management and reform
The government will be investing over $2 billion in water management and infrastructure. This includes:
- More than $1.1 billion in water infrastructure projects, including $600 million towards the Paradise Dam Improvement project, $300.6 million towards the Darwin Region Water Supply and $100 million towards the Pipeline to Prosperity Tranche 3 projects.
- $278.1 million allocated to the National Water Grid to expand investment in transformational water infrastructure projects designed to secure supply.
- $51.9 million towards updating the Murray-Darling Basin Plan. This consists of $22.9 million to update scientific research to account for climate change and $29 million for improvements in water use monitoring and increasing regulatory compliance.
- $20.8 million to support Australia’s drought readiness and resilience.
Environmental protection and conservation
- $1.1 billion towards the Natural Heritage Trust. This will be used to protect and conserve Australia’s species and landscapes, expand the Indigenous Protected Areas program, employ and upskill 1000 landcare rangers, enhance koala conservation and support the agriculture sector’s transition towards sustainable farming.
- $224.5 million to slow native species and environmental decline and support their recovery.
- $188.7 million towards protecting and restoring the Great Barrier Reef. The government will provide $96.9 million to address gaps in the implementation of the Reef 2050 Long-term Sustainability Plan and $91.8 million towards reef protection and restoration projects.
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