Chapter 1: Budget Highlights
Tackling the challenge of climate change is one of the Australian Government's highest priorities, and we are implementing a comprehensive, whole‑of‑government response. The Government has set an ambitious emissions reduction target of as much as 25 per cent of 2000 levels by 2020 (see box 1.1). This target will be achieved through a combination of targeted and complementary programs beginning in 2009‑10, and through the introduction of the Carbon Pollution Reduction Scheme in 2011.
The Government provided over $2.3 billion for programs announced in the 2008‑09 Budget. Since the 2008‑09 Budget we have announced over $8 billion in additional funding. This 2009‑10 Budget provides another $4.8 billion, bringing the Government's total investment in climate change initiatives and programs to over $15 billion. This stands in contrast to the 2007‑08 budget delivered by the previous government, which contained only $741 million for climate change programs, bringing the previous government's total investment in fighting climate change to only $3.5 billion.
This investment will help support Australia's economy in challenging times, putting Australia on track to a low‑carbon economy where our environment is protected, our society is prosperous, and our economy is strong.
Box 1.1: Australia's New Emissions Reduction Target
In the Carbon Pollution Reduction Scheme White Paper, published in December 2008, the Government set challenging targets for reducing Australia's national emissions. The ambitious target range of 5—15 per cent on 2000 levels involves reducing the carbon emissions of every Australian by at least a third over the next decade.
The Government's assessment in the White Paper was that achieving global commitment to realise emissions reductions sufficient to stabilise at 450 ppm CO2-e (the level required to avoid dangerous climate change) appeared challenging in the near term and that the most prospective pathway to this goal would be to embark on global action that reduces the risks of dangerous climate change and builds confidence that deep cuts in emissions are compatible with continuing economic growth and improved living standards.
The Government's new commitment of 25 per cent below 2000 levels by 2020 follows extensive consultation with a broad range of stakeholders, including environment advocates and business on the best way to maximise Australia's contribution to an ambitious global outcome. It also reflects that international developments since December 2008 have improved prospects for such an agreement.
The Government will adopt a 25 per cent target in the context of an ambitious international agreement involving comprehensive global action capable of stabilising greenhouse gases in the atmosphere at 450 ppm CO2-e or lower. Achieving this will still be very tough. It will require a significant further shift in negotiating dynamics and all advanced and major developing economies to take serious action to restrain and then reduce emissions.
Full details of the new target are available at www.climatechange.gov.au.
The Government's $4.5 billion Clean Energy Initiative will provide crucial investment and the investor certainty required for the development and deployment of low-emissions technologies. The Clean Energy Initiative includes $1.5 billion in investment in large‑scale solar generation projects, $2 billion in investment in industrial-scale carbon capture and storage, and the establishment of Renewables Australia ($465 million), to support leading-edge technology research, development and demonstration projects.
The Government is also delivering on its election commitment and expanding the Renewable Energy Target scheme by over four times, to increase the use of renewable energy to 20 per cent of the electricity supply by 2020. The stationary energy sector produces about 50 per cent of Australia's greenhouse gas emissions, so this additional renewable energy will have a key role in moving Australia to the clean economy of the future.
From 2009‑10 the Government will provide funding of over $4 billion for a range of energy efficiency measures that will reduce energy use and carbon pollution in homes, communities, business and industry — the biggest single investment in energy efficiency in Australia's history.
The Carbon Pollution Reduction Scheme (CPRS) will be the major driver that guarantees emissions reductions. To give business certainty and support Australian business in challenging times, the Government will defer the introduction of mandatory obligations under the CPRS until 1 July 2011. Every cent of revenue from the Scheme will be used to transition Australian households and business to a low pollution future.
The Government's Climate Change Action Fund, announced in the CPRS White Paper, is being augmented with an additional $300 million in this Budget. The Fund will smooth the transition to a low‑pollution economy by providing $2.75 billion in support for businesses, industry, community organisations, workers and regions, beginning from 2009‑10. Households and families will also be assisted; with the Household Assistance Package providing a package of direct cash assistance and tax offsets to a range of low and middle-income households. Motorists will also benefit from cent-for-cent reductions in fuel tax for the first three years of the Carbon Pollution Reduction Scheme.
The Government recognises the important role that household action has to play in moving to a low emissions future for Australia. In this Budget, as part of the Australian Carbon Trust, $25.8 million is dedicated to establishing the Energy Efficiency Savings Pledge Fund, to support the uptake of energy efficiency measures by households and small businesses and enable individuals and businesses to achieve emissions reductions beyond Australia's emissions reduction targets. The Australian Carbon Trust will also be provided with $50 million in seed funding to promote and demonstrate innovative energy efficiency activities for commercial businesses and other organisations.
Quality scientific research is essential to underpin each pillar of the Australian Government's comprehensive policy response to climate change. The Government is continuing to build scientific understanding of climate change through an additional $31.2 million in funding over four years for the existing Australian Climate Change Science Program.
Australia has proposed a comprehensive and innovative approach to address emissions from the forest sector in developing countries. It shows our commitment to playing a leadership role in brokering solutions to stabilise greenhouse gas concentrations globally.
The Government will continue to focus its policy response on reducing emissions, adapting to unavoidable climate change, and playing our part in a global response to climate change. Together these initiatives represent an integrated and strategic response to protect our environment and support our economy.
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