27 January 2023
About Better Futures Australia
We are Australian leaders from every sector of the economy and society – including First Nations, finance and faith, cities, states and territories, business big and small, agriculture, resources and energy, health and social service, unions, think tanks, and higher education. Together, we represent over seven million Australians united in our determination to act on climate change, and are rising to the challenges and opportunities it presents.
We are encouraged by the Government’s commitments to decarbonise the economy and make Australia a renewable energy superpower. The Minister for Climate Change and Energy, Chris Bowen, told attendees at our September 2022 Better Futures Forum that it is “in our nation’s interests to become a clean energy superpower. It is good for our country, good for our economy, good for our national security.’’ The October 2022 Budget was the first in a decade to take climate change seriously, and the steps taken to Measure What Matters promise to correct Australia’s path towards a climate resilient, healthy and prosperous future. As the Government embarks on this momentous task, we believe it is essential that it works alongside and in partnership with all sectors of society and the economy.
We welcome the opportunity to share our views on how the 2023-24 Budget can continue to build on the Government’s work to create a better, zero-emissions future for Australia. In this submission, we outline priority areas for the 2023-24 Budget and offer recommendations for how the Government can build on positive developments in these areas. The recommendations include: developing a national renewable exports strategy; partnering with local governments to integrate their climate commitments and action towards Australia’s Nationally Determined Contribution (NDC); increasing funding for active and public transport; implementing a national health and climate strategy; increasing investment in and setting a target for renewable energy storage; embedding land and ecosystems management as a core component of national climate strategy; strengthening collaboration, transparency and accountability across supply chains; and creating an independent statutory just transition authority.
These priority areas were the outcomes of sector-focused Workshops and Roundtable discussions at the September 2022 Better Futures Forum. Sector-focused working groups have further developed ideas and suggestions for how addressing these areas will play a critical role in Australia’s decarbonisation journey. Note that some participating organisations have submitted separate pre-budget submissions with additional information on the key points outlined below.
We have set out a summary of the sector working groups’ suggested ideas that the 2023-24 Budget can address in alignment with a selection of relevant policies of the October 2022 budget, listed below.
1. A national renewable energy exports strategy. To develop a national Renewable Export Strategy in consultation with environment and climate organisations, unions, business and industry groups, First Nations people and communities affected by the energy transition.
Issue: National and state coordination is needed to unlock billions in investments to build a thriving renewable export sector.
Why it matters: Australia has the key ingredients to build a thriving renewable export sector. We have abundant sunshine and wind, high-quality expertise, education and research systems, critical minerals and metal resources, strong trade relationships and a proximity to growing Asian markets. The lack of policy coordination at the Federal level and across departments is holding Australia back from realising the full potential of the renewable export opportunity.
Portfolio areas of responsibility and policy alignment: Climate & Energy, Environment & Water, Trade, Infrastructure, Regional Development, Indigenous Australians, Skills and Training, Resources, Industry, Resources.
2. Enhanced partnership and support for local governments and integration of local government climate commitments and action towards Australia’s NDC. Establish a vertically integrated climate policy framework and recognise local government emissions reduction contributions in the Australian Nationally Determined Contributions (NDC). This will require the delivery of an Accord that defines common (mitigation and adaptation) objectives between the three tiers of government as well as the allocation of funding required to help local governments protect their communities, decarbonise and build back better.
Issue: Local government is critically under-resourced and large funding gaps exist. Despite the costs of climate change increasing, the value of Financial Assistance Grants provided to local government has declined over the past three decades from approximately 1% of Commonwealth taxation revenue to around 0.55%.
Why it matters: Collaboration, communication, engagement and reporting, among and across all levels of government is key to achieving Australia’s commitments under the Paris Agreement and advancing the resilience of communities. Councils are well positioned to drive the implementation of national climate policies and ensure that meaningful results are delivered at the local scale. However, their ambitious targets and actions need to be integrated and acknowledged within Australia’s NDC.
Portfolio areas of responsibility and policy alignment: Climate & Energy, National Construction Code, Environment & Water, Infrastructure, Local Government, Disaster Preparedness & Recovery
3. Increased funding for active and public transport. Significantly increased funding for active and public transport as a proportion of the Federal Transport Budget. For example, 50% for public transport and 20% for walking and cycling.
Issue: The Australian Government has historically committed the vast majority of the transport budget to infrastructure and programs targeting road-based transport. This hierarchy prevents walking, cycling and public transport from realising their potential in emission reduction.
To rapidly reduce greenhouse gas emissions from the transport sector, it is essential to commit a much larger proportion of transport budgets to public and active transport.
Why it matters: Transport is the third largest contributor to Australia’s greenhouse gas emissions, accounting for more than 18% of the national emission profile. The current transport system also has very significant impacts on health and wellbeing, and the climate and health benefits of alternative approaches are significant.
Portfolio areas of responsibility and policy alignment: This commitment requires far stronger integration between the transport and climate/energy portfolios.
Other budget priorities include electrifying government and public transport fleets, rapidly expanding EV charging infrastructure, and major public transport infrastructure including high speed rail between Sydney and Newcastle, the Melbourne suburban rail loop and Canberra tram.
4. Implement Australia's first National Health and Climate Strategy, build an effective National Health Sustainability and Climate Unit and decarbonise Health. Invest in implementing the National Health and Climate Strategy (currently under development) and adequately resource the National Health Sustainability and Climate Unit to fulfil its leadership and coordination role. Invest in measures to reduce healthcare emissions and improve resilience, including a decarbonisation plan for the Health sector in partnership with the sector and state and territory governments.
Issue: The National Health and Climate Strategy is the means to deliver a coordinated and cohesive government response to the rapidly expanding range of climate and health issues ranging from emissions through to resilience and climate justice.
Why it matters: Climate change affects human health, the demand for health services and the ability of the health sector to respond. The Health Sector accounts for 7% of Australia’s emissions. Climate and health issues are increasingly central to climate discussions. The Government has a manifesto commitment to a Health and Climate Strategy. We need to ensure this work is funded to deliver the scale and urgency of response that Australia needs.
Portfolio areas of responsibility/ policy alignment: Health, Climate Change and Energy, Environment and Water, Social Services, Emergency Management, Foreign Affairs and Trade, Infrastructure and Transport, plus a wide range of portfolios associated with climate and health impacts (e.g. air quality, adaptation and resilience).
5. A national renewable energy storage target to accelerate the roll out of batteries and pumped hydro projects. A financial commitment on budget to deliver the Capacity Investment Scheme in collaboration with key industry stakeholders. Support for renewable energy storage needs to extend to a small scale renewable energy storage certificate scheme, to drive storage capacity in our homes.
Issue: The world's fastest energy transition is occurring right here in Australia, we need renewable energy to double by 2030. Australians are suffering from rising energy costs as a result of nine years of inaction. In order to make energy affordable again, and meet 82% renewables by 2030, massive deployment of renewable energy storage at all scales is required now. This includes investing in:
- a Small Scale Renewable Energy Storage Scheme (SRES);
the commitment to Capacity Investment Scheme;
- support for the Clean Energy Regulator to deliver renewable energy storage in the SRES;
- a dedicated ‘Consumer Energy Resources’ division within the Department of Climate Change, Energy, the Environment and Water to lead Australia’s buildout of the Distributed Energy Resource boom, expected to deliver 31GW of energy capacity by 2050.
Why it matters: Australia cannot add more cheap renewable energy, whether that's large wind farms to rooftop solar, if we do not store this energy at all scales.
Portfolio areas of responsibility and policy alignment: Manufacturing, Climate, Energy, Public Health, Transport, First Nations energy security, Agricultural/ cost of operations relief, economic stability.
6. Embedding land and ecosystems management as a core component of national climate strategy. Alignment of climate and biodiversity policy and inclusion within a broader assessment of budget decisions, in particular of government investments. In addition, support to clarify the role of nature-based solutions in climate and biodiversity strategy and required changes in land use, and support for the rights, interests and knowledges of indigenous peoples in land and ecosystem management.
Issue: Climate and nature are interdependent, and pathways to net zero require sequestration from nature-based solutions. Australia needs to take steps to realise the co-benefits of aligned climate and nature policy and to leverage the potential of nature-based solutions, including by amplifying the role of traditional custodians in caring for Country.
Why it matters: Investment now is important to get the scale of change needed to meet Australia’s climate and biodiversity targets and to avoid investment in activities that could undermine these goals. For example, through expansion of agriculture or into important areas for species habitat in the future or continued investment in coal and gas which will lock in future emissions.
Portfolio areas of responsibility and policy alignment: Environment, planning, agriculture, trade and climate change.
7. Enhanced collaboration among large enterprises and small and medium-sized enterprises (SMEs) to build capacity for greater transparency and accountability across supply chains. Favourable tax incentives could be considered to allow greater support and collaboration between SMEs and large enterprises to build the capability of SMEs to measure and evaluate their emissions and impact, and make meaningful climate change mitigation contributions. Also to implement national standards in line with the WTO to improve transparency and accountability of emissions across supply chains.
Issue: SMEs are responsible for around 40% of carbon emissions in Australia and have limited capability to take steps to decarbonise their operations, or to disclose their emissions.
Why it matters: All actors across the supply chain can play a role in delivering emissions reductions and integrating national climate mitigation policy and solutions.
8. An independent statutory Just Transition Authority and delivery of a Powering Australia Skills Plan. In order to minimise the risks and maximise the enormous potential benefits of the energy transition, Australia must establish an independent federal Just Transition Authority in law. The Authority should have a clear long-term mandate and tripartite governance, with worker and union voices centrally incorporated into every stage and scale of the transition process. It must also be endowed with the power to administer funds, enter into commercial agreements, and engage in regulatory activities. It should be financed through a combination of funding from all levels of government as well as industry, with a federal budget investment of $5 billion.
Issue: Australia’s economy is undergoing a fundamental transformation and the transition to a low-carbon economy is slated to accelerate across all sectors in the coming years. A Just Transition Authority would be responsible for supporting workers at retiring fossil fuel facilities and taking necessary steps to ensure no worker is left behind. The Authority would simultaneously support the development of iterative, local-stakeholder-driven economic diversification plans for Australia’s energy regions, prioritising new clean energy industries located near the site of previous energy facilities, as well as rehabilitation of previous sites. Finally, the Authority would collaborate with Jobs and Skills Australia to develop new education and training packages and, where necessary, expand or establish regional universities and vocational training centres that meet the workforce demands of the new clean energy economy.
Why it matters: A poorly-managed transition risks deepening inequality, provoking political backlash, and sacrificing those workers and regions that have kept the lights on in Australia for generations. A well-managed transition has the potential to generate thousands of new clean energy jobs while strengthening and diversifying the economies of regional energy communities.
We believe that addressing these priority areas will play a critical role in Australia's decarbonisation journey and will help to create sustainable jobs, attract investment, and regenerate industries and communities. We look forward to working with the government to achieve a better, zero-emissions future for Australia. Thank you for considering our recommendations to the 2023-24 Budget.
Better Futures Australia