2024-25 Pre-Budget Submission

Members engaged in the Treasury's consultation to share perspectives on priorities for the 2024-25 Federal Budget. 

We invite you to read our submission and consider how we can shape Australia's climate ambition through ongoing dialogue and collaboration.

25 January 2024

To the Secretary to the Australian Treasury Dr Steven Kennedy,

About Better Futures Australia

At Better Futures Australia, we unite leaders from diverse sectors - businesses of all sizes, agriculture, energy, First Nations, finance, faith, urban and rural communities, health, social services, unions, think tanks, and academia. Representing over seven million Australians, we are committed to addressing climate change, embracing both its challenges and opportunities.

Introduction

As we move into 2024, Better Futures Australia acknowledges the Australian Government’s progress toward a zero-emissions future. However, the challenges posed by climate change are rapidly evolving, with the impacts becoming more pronounced across the Australian landscape. The Climate Change Authority's (CCA) advice, the government's 2023 Climate Change Statement, and commitments alongside the federal Climate and Energy Minister’s statement made in Dubai call for an accelerated approach. Australia’s pledge at COP28, alongside 119 other countries, to triple renewable energy capacity and double energy efficiency in five years underscores the pressing need for intensified climate action. We are at a pivotal moment to leverage Australia's unique resources and capabilities in leading a global shift to a clean energy economy. This demands a comprehensive and proactive response across all sectors. We applaud the government's steps towards sectoral decarbonisation plans based on the CCA's review and stress the importance of these plans in setting clear, credible and actionable paths to not only meet Australia’s emissions targets but also deliver our fair share to limit global warming to 1.5°C. 

Recommendations

This submission presents the collective perspectives of the Better Futures Australia community for the 2024-25 Budget. It underscores strategies and policies aimed at creating a climate-resilient and prosperous zero emissions Australia. The following recommendations stem from the collaborative efforts of our sector-focused working groups in nature and land-use, local government, corporates and finance, and health, supported by diverse partner organisations including unions, industry associations, think tanks, and academia. These suggestions aim to catalyse significant investment for a just energy transition, promote equitable financial flows, ensure nature's integration in climate solutions, and bolster adaptation and resilience. Contributions from our diverse network of partners augment this submission with specialised insights, which are elaborated in separate submissions.

Just Energy and Industry Transition

• Investment in Renewable Energy Infrastructure and Efficiency: We support Climate Energy Finance and others in calling for a strategic investment of $100 billion in the Australian Renewables Industry Package, aimed at catalysing an additional $200-300 billion in private capital. This pivotal investment will leverage Australia’s comparative advantage in resources, stepping up the value chain and enhancing renewable energy infrastructure and efficiency. Such an investment is crucial for meeting the COP28 commitments, reducing household energy costs, protecting human health, and generating employment. It includes enhancing Australia’s electricity grid, implementing energy efficiency measures in the building and construction sectors, and facilitating the rapid rollout of large-scale renewables via participatory processes. Central to this is the National Energy Transformation Partnership, including the First Nations Clean Energy Network, local government, and other key stakeholders, to drive a cohesive transition to a renewable-powered society and economy, including a renewable export sector. The implementation of new strategies like the National Battery Strategy should also be supported. Competitive tenders for subsidies, as seen in Australia's “Hydrogen Headstart” program, and targeted support through entities like the Clean Energy Finance Corporation's (CEFC) and Australian Renewable Energy Agency (ARENA) are supported for their cost-effectiveness.

• Issue: Challenges in doubling renewable energy by 2030, rising energy costs partially due to historical inaction, and effectively transitioning to a value-added resource processing economy. 

• Why it matters: Australia can become a global leader in renewable energy exports and green manufacturing with strategic investments and policy shifts. Improved public engagement, particularly in offshore wind resource regions, is vital for community buy-in.

• Portfolio areas of responsibility and policy alignment: Climate Change, Energy, Environment & Water, Trade, Infrastructure, Regional Development, Indigenous Affairs, Skills and Training, Resources, Industry, Health, National Energy Transformation Partnership, Australian Renewable Energy Agency (ARENA), Clean Energy Finance Corporation (CEFC), National Battery Strategy, Hydrogen Headstart Program. 

• Enhancing Energy Efficiency and Consumer Benefits: We propose significant funding for energy efficiency, electrification initiatives, and fuel switching to provide immediate relief from high living costs. Support for programs like the the Small Business Energy Incentive, the Nationwide House Energy Rating Scheme (NatHERS), and the expansion of the CEFC’s $1.3 billion Household Energy Upgrades Fund (HEUF) is essential. A focus on prioritising social housing and tailored assistance to vulnerable households is crucial for equitable access to energy savings and electrification. 

• Echoing Beyond Zero Emissions (BZE) recommendations, we call for the development of a National Energy Equity Strategy, informed by extensive work undertaken by the Australian Council of Social Service (ACOSS), the First Nations Clean Energy Network (FNCEN), Farmers for Climate Action and others. This strategy will ensure a fair and transparent energy transition framework to direct investments, and monitor impacts across all levels of government, ensuring the energy transition is fair and fast. This will be particularly important for regional and remote communities currently reliant on diesel, with potential funding sourced from the current diesel fuel rebate. BZE’s National Supergrid report offers guidance on targeted funding to address barriers in the electricity network, particularly for rural, First Nations, and remote communities, and community benefit facilities like schools, healthcare clinics, and community centres.

• In line with ACOSS's insights, we also recommend:

• Establishing a First Nations Communities Clean Energy Fund for remote communities; 

• Removing Small-SRES costs from energy bills, targeting a 4-6% reduction; and 

• Providing emergency energy debt relief for households in hardship, with a focus on energy security and affordability.

• Issue: Persistent energy inefficiency and unequal access to clean energy solutions significantly impede Australia's climate commitments.

• Why it matters: Enhancing energy efficiency and equitable access are key to reducing living costs, improving energy security, opening up economic opportunities and fulfilling climate goals.

• Portfolio areas of responsibility and policy alignment: Climate Change, Energy, Environment & Water, Health, Transport, First Nations Clean Energy Network, Social Housing, Urban and Regional Planning, Industry.

• Decarbonising Heavy Industry & Energy Sectors: The upcoming establishment of the Net Zero Authority (NZA) in 2024 represents a significant step in transitioning Australia’s economy. To maximise its impact, the NZA's mandate should extend beyond coal-fired power and worker transitions. It must involve unions, environment and community groups in shaping broader strategies for regional resilience and diversification. This includes enhancing access to essential services, economic diversification, and establishing community funds. Currently, the NZA's focus is primarily on worker transitions in the coal-fired power sector. BZE advocates for the establishment of a Clean Industry Infrastructure Authority alongside the NZA. This body would focus on large-scale clean industry investment and develop a national clean industry master plan. It would coordinate investments in energy infrastructure, supply chain, advanced manufacturing, and innovation. The Authority, working in coordination with the NZA, would ensure that physical infrastructure and assets are developed in parallel with the NZA policy framework to optimise resource allocation, minimise redundancies and maximise the effectiveness of both Authorities.

• Issue: Robust investments and legislative support are crucial steps for decarbonising Australia’s economy. However, addressing the complex challenges of transitioning heavy industry and the energy sector requires more than just workforce transition strategies. A broader, more inclusive approach is needed to foster long-term economic resilience and diversification.

• Why it matters: A well-structured NZA, equipped with clear functions, the authority to direct change, and a focus on collaborative, sector-wide planning, coupled with a Clean Industry Infrastructure Authority, is vital to mitigate inequality and social unrest linked to the energy transition and ensure a national approach to infrastructure funding focused on economic development and diversification. This dual approach will support workers and communities and accelerate infrastructure deployment while avoiding unnecessary duplication of critical infrastructure to ensure a just and inclusive transition.

• Portfolio areas of responsibility and policy alignment: Net Zero Economy Agency, Net Zero Authority, Australian Energy Market Commission (AEMC), Australian Energy Market Operator (AEMO), Regional Development, Climate Change, Energy, Environment & Water, Industry, Indigenous Affairs, Employment, Education, Social Services, Infrastructure.

Nature and Inclusion

• Biodiversity and Ecosystem Management: We emphasise the need for coherent alignment of national climate, energy, and biodiversity policies, critical to achieving Australia’s commitments under both global climate and biodiversity conservation agreements. The Australian Government’s approach should aim for nature-positive renewables, safeguarding both climate and biodiversity conservation goals through stronger regulatory frameworks, investment and policies. Essential actions include protecting high-value ecosystems, promoting effective land use for ecosystem enhancement, and avoiding renewable energy infrastructure that impacts threatened species habitats or carbon-rich forests. These should occur in tandem with supporting the rights, interests and knowledge of traditional custodians. 

An ‘Environmental Protection and Biodiversity Conservation (EPBC) prioritisation pathway’ is recommended to expedite environmental assessments for renewables and transmission infrastructure while ensuring biodiversity protection. This pathway  should prioritise projects for environmental review, reducing timelines and clearly identify no-go zones with high conservation values.

Substantial public investment is required to assist farmers and regional communities to increase landscape resilience to climate change. Land sector carbon sequestration through nature-based solutions (NbS) should not be on a business-as-usual approach that tacitly permits fossil fuel production and use to continue.

To harness NbS effectively, current policies and budgetary considerations must be integrated more cohesively. This will lead to strategies for land and ecosystems management that will strengthen climate resilience, biodiversity conservation, social justice, and community well-being, embodying a comprehensive approach to environmental stewardship.

• Issue: Climate and nature are interdependent. Achieving net zero emissions requires sequestration from NbS. This requires careful balancing of climate goals with biodiversity conservation across public investments and the application of shared principles via regulatory reforms. Australia needs to take steps to realise the co-benefits of aligned climate and nature policy and to leverage the potential of NbS, including by amplifying the role of traditional custodians in caring for Country.

• Why it matters:  Immediate investment is crucial to meet climate and biodiversity targets without compromising either. For instance, avoiding the expansion of agriculture into key habitats is critical. Recognising and empowering Indigenous leadership in environmental stewardship is essential for sustainable outcomes.

• Portfolio areas of responsibility and policy alignment: Climate Change, Energy, Environment & Water, Planning, Agriculture, Trade and Health. Environment Protection and Biodiversity Conservation (EPBC) Act, National Landcare Program, Australian Farm Biodiversity Certification Scheme. 

Support for Indigenous Leadership

• Indigenous Involvement: The recognition and support for Indigenous knowledge and rights are integral to effective climate solutions. Specific funds should be allocated to develop policies that not only acknowledge but actively involve Indigenous communities in climate action planning and implementation. This could involve co-developing climate adaptation and resilience strategies, supporting Indigenous-led conservation projects, and ensuring Indigenous voices are central in policymaking processes.

• Issue: Despite possessing deep-rooted knowledge and a unique understanding of their lands, Indigenous communities often face a lack of formal recognition and support in climate change solutions. This gap hinders the effectiveness of broader climate action efforts. Similarly, failing to ensure Indigenous participation, ownership and partnership in the clean energy transition will impact on Australia’s ability to transition its energy system in the time and at the pace required. 

• Why it Matters: Embracing Indigenous leadership in climate solutions is a matter of protecting rights and harnessing invaluable knowledge for environmental and societal benefits. Inclusive, Indigenous-led climate strategies are essential for a holistic approach to environmental challenges, respecting both cultural heritage and biodiversity. Indigenous leadership, and ownership, is also essential for Australia to realise its clean energy ambitions. The development of the First Nations Clean Energy Strategy is a positive first step, and it is critical that substantial investment through the Budget is directed towards actions identified in this Strategy. 

• Policy Areas: Indigenous Affairs, First Nations Clean Energy Strategy (in development), Climate Change, Energy, Environment & Water, Health. 

Adaptation and Resilience

• Climate Resilient Infrastructure: Development of resilient infrastructure is a priority, particularly in communities prone to climate risks. This will require strategic planning and investment, informed by the National Climate Risk Assessment, to ensure the long-term sustainability and safety of all Australians.

• Funding for Adaptation & Resilience Projects: Enhancing the $28 million allocation over two years from the previous federal budget, we propose significant additional funding to implement a suite of community-led projects under the National Adaptation Plan. This will particularly focus on areas most vulnerable to climate impacts. We emphasise the importance of local governments in the effective allocation of these funds to enhance community resilience and adaptation strategies. We recommend that funding allocation be informed by a strong evidence base, such as the findings from DELWP’s Environmental-Economic Account for Greater Melbourne, which quantifies the economic benefits, ranging between approximately $530 million to $1.1 billion annually for Melbourne by 2051, of addressing urban heat islands via enhancing green infrastructure and similar measures.

• Issue: The current pace and scale of adaptation efforts are inadequate to address the increasing climate risks.

• Why It Matters: Substantial investment in adaptation and resilient infrastructure is crucial not only to protect communities but also to provide long-term economic benefits. This is a critical component of a holistic climate strategy.

• Portfolio Areas of Responsibility and Policy Alignment: Infrastructure, Local Government, Climate Change, Energy, Environment and Water, National Adaptation Policy Office, Australian Climate Service, Bureau of Meteorology, National Emergency Management Agency, Australian Institute for Disaster Resilience, Australian Health Protection Principal Committee

Local Government Collaboration and Support 

• Local governments are key players in climate action. Recognising the Federal Government's commitment at COP28 to the Coalition for High Ambition Multi-Level Partnerships (CHAMP) there's a pressing need to empower local and regional climate leadership. We recognise the need for effective collaboration, communication, and engagement across governmental levels to address implementation gaps, improve accountability and transparency, enhance community resilience and fulfil Australia’s Paris Agreement commitments. This involves providing essential funding and technical support for a coordinated climate action approach across all government levels. We suggest federal budget support of the following measures to strengthen this role:

• Vertically Integrated Climate Policy Framework: Implement an Accord to align objectives for mitigation and adaptation across government tiers. This Accord should outline appropriate funding allocation for local governments to protect communities, promote decarbonisation, and build back better. This approach can be modelled on initiatives like the NSW Environment Protection Authority's Climate Change Policy and Action Plan (2023-26) that set a precedent for comprehensive and multi-level governance emissions reduction pathways. The Energy Consumers Australia 'Stepping Up' report and the Energy Efficiency Council’s pre-budget submission propose funding pilot programs to upgrade energy performance in vulnerable households. This could serve as an ideal model for multi-level government collaboration, supported by an expanded CEFC Household Energy Upgrade Fund. Without a formal Accord to coordinate action across all levels of government, the Federal Government must recognise voluntary actions by state, territory, and local governments as additional to Australia’s Nationally Determined Contributions (NDC) to support robust national climate policy architecture and commitments.

• Annual Local Government Climate Reviews provide a solid evidence-base and comprehensive analysis of successful emissions reduction activities and the barriers and opportunities facing councils and communities. As outlined in the 2021 Local Government Climate Review, many councils have ambitious corporate emissions reduction targets and activities. Councils can play a crucial role in facilitating community-wide approaches to reduce emissions and identify policies to support local industry and business. Findings from the Local Government Climate Review can be utilised to replicate climate actions at state or national scale. Targets set by Australian local governments in 2021 supported around 88,200 kt CO2e emissions reduction, bringing Australia 96% of the way to meet its current target of 28% reduction by 2030.

• Accessible Emissions, Policies & Programs Data. To support local government climate action, there's a critical need for transparent and accessible emissions and climate action data. We recommend federal investment in tools like Snapshot Climate, which offers local community emissions profiles for improved decision-making. This tool is invaluable for tracking emissions, understanding trends, and aligning local actions with broader climate goals. Investing in Snapshot Climate will enable local governments to contribute effectively to Australia's climate commitments and make informed decisions. We propose dedicated budget allocation for enhancing Snapshot Climate, allowing for:

• Alignment with Nationally Determined Contributions, ensuring local actions complement national commitments;

• Integration with ISSB standard reporting, enabling standardised emissions reporting for supply chain transparency;

• Collaboration with the Climate Disclosure Project, aligning with international standards;

• Detailed analysis of key emitters and geographical or sector-specific data for targeted climate action; 

• Development of Science Derived Targets and carbon budgets tailored to specific warming scenarios; and

• Advanced projections and trends analysis to guide future climate strategies.

• Issue: Despite local governments' critical role in climate action, they face significant resourcing and funding shortages. The decline in Financial Assistance Grants from approximately 1% of Commonwealth taxation revenue three decades ago to around 0.55% today exacerbates these challenges.

• Why it matters: Collaboration, communication, engagement, and reporting across governmental levels are critical for fulfilling Australia’s Paris Agreement commitments and enhancing community resilience. Local councils, with their unique position and capabilities, play a vital role in implementing national climate policies at the local scale. However, to maximise their impact, their ambitious targets and actions must be integrated into Australia’s NDC and strategy.

• Portfolio alignment: Climate Change, Energy, Environment & Water, National Construction Code, Infrastructure, Local Government, Disaster Preparedness & Recovery

Transport and Mobility

• Active and Public Transport Funding: Significantly increase spending allocated to active and public transport within the federal transport budget. This aims to boost uptake and patronage while cutting household transportation costs. In line with United Nations Environment Program recommendations, we propose allocating at least 20% of the transport budget to walking and cycling infrastructure and 50% to public transport to reduce emissions and improve public health. We would like to see the federal budget support the delivery of an ambitious national plan for a fossil-fuel-free, fully electric, equitable, accessible, safe, and convenient transport system. The plan makes specific commitments to increase public transport, walking and bike riding; with funding to move us towards a zero-pollution transportation system with proven, cost-effective solutions, benchmarked to the highest global standards. Other budget priorities include electrifying government and public transport fleets, rapidly expanding accessible EV charging infrastructure, and investing in major public transport infrastructure projects including high-speed rail between Sydney and Newcastle, the Melbourne suburban rail loop and Canberra light rail.

• Issue: Current transport funding and assessment models are heavily skewed towards traditional car and truck-based infrastructure, limiting the potential of sustainable transport modes to decarbonise Australia’s economy. 

• Why it matters: Addressing transport, the third-largest contributor to national emissions, through a shift to public and active transport, can significantly lower greenhouse gas emissions and foster healthier, more livable communities.

• Portfolio areas of responsibility and policy alignment: Transport, Infrastructure, Climate Change, Energy, Environment & Water, Urban Planning, Public Health. 

• Fuel Tax Credit Phase-out: Echoing ACOSS's recommendation, we propose the abolition of fuel tax credits for off-road non-agricultural uses from 1 July 2024, and a review of credits for agricultural use. This should be part of a detailed review towards the removal of all fossil fuel subsidies within the Commonwealth Budget. This initiative will potentially redirect funds towards supporting sectors in transitioning to more energy-efficient operations and assisting low-income households in the energy transition.

National Health and Climate Strategy

• Implementation and Funding: Rapid and substantial investment in the implementation of the National Health and Climate Strategy (NHCS) to achieve its objectives, which include developing a climate-resilient health system and transitioning to a sustainable, high-quality net-zero health system. The strategy's implementation will also benefit from cross-sector collaboration and international cooperation, as outlined in its framework. Critical funding areas include strengthening the National Health Sustainability and Climate Unit, integrating climate and health considerations in government policies, and enhancing preventive health strategies can also help to reduce public healthcare costs and enhance community wellbeing. 

Doctors for the Environment Australia (DEA) highlights the NHCS's importance in addressing climate impacts on health and the overburdened health system. They recommend funding allocations to strengthen the NHCS, including:

• $30 million over three years to enhance the National Health Sustainability and Climate Unit's capacity;

• $8 million over four years for establishing an Aboriginal and Torres Strait Islander Coalition on Climate and Health;

• A $500 million fund focused on retrofitting existing health facilities;

• Supporting primary care to decarbonise and bolster the primary healthcare sector's role in climate resilience and emergency disaster response; and

• $5 million towards a unit within the Department of Climate Change, Energy, and Water to address health risks associated with energy production from fossil fuels.

To complement these initiatives, a $500 million contingency fund is proposed for the NHCS's broader implementation, focusing on health system decarbonisation and enhancing primary care resilience, particularly in disaster responses.

• Issue: While the NHCS presents a comprehensive approach to address climate-related health issues, it requires substantial support for its implementation across various sectors.

• Why it matters: The healthcare sector, contributing significantly to Australia’s emissions, is integral in both mitigation and adaptation strategies. Proper funding and support for NHCS are crucial to reduce emissions, improve health sector resilience, and establish Australia as a leader in integrating health considerations into climate policies.

• Portfolio areas of responsibility/ policy alignment: Health & Aged Care, Climate Change, Energy, Environment & Water, Social Services, Emergency Management, Infrastructure and Transport.

Financial System Architecture

• Sustainable Finance Strategy: Transition of the global private finance sector is under way, underpinned by assets worth more than US$100tn pledged to the Global Financial Alliance for Net Zero (GFANZ) and in acknowledgement of the manifold and compounding climate risks and opportunities. 

We applaud the Australian Government’s efforts to establish a Sustainable Finance Strategy (SFS), which will help mobilise the investment needed in coming decades, enable Australian firms to access the capital needed to finance their transitions, and ensure climate-related financial opportunities and risks are identified and well managed. 

The 2024-25 federal budget must prioritise further development and implementation of the SFS. Specific recommendations to strengthen the SFS’s effectiveness include: 

• Embedding climate financial risk governance and capability within the Council of Financial Regulators, supported by APRA levies, for prudential regulation of climate risks including through a sustainable finance taxonomy, as suggested by the Institute for Sustainable Futures (ISF) SFS submission.

• Improving sustainable finance competency across the financial system to address the lack of depth and quality of sustainable finance skills to facilitate Australia’s transition to net zero, as highlighted in the ISF Submission above.

• Investing in building out the Australian Sustainable Finance Institute’s (ASFI) roadmap to improve impartiality and drive capital towards science-aligned outcomes through public financing. 

• Broadening the Financial Taxonomy coverage to encompass the full financial system per the ASFI roadmap, along with regulatory and prudential guidance should be prioritised.

• Extending climate-related financial disclosures to include disclosure of a company’s impact on the environment. This will create more complete market information and improve the integrity and effectiveness of green and transition capital allocation.

• Extending sector pathways to include Scope 3 exported emissions, addressing Australia’s massive trade exposure and transition risk as the global economy progressively shifts to align with the climate science.

• Reforming Your Future Your Super performance tests to unlock the potential of the projected 2041 A$9Trn in superannuation capital critical to enabling the build out of clean energy infrastructure at scale.

• Incorporating an improved and science-aligned version of Climate Active within transition plan requirements, as recommended by Climate Wise Associations, Climate Integrity and others. This includes a funded capacity building program for associations to enable them to embed climate impacts and emissions reduction across strategies, plans and services. 

Insurance Sector Challenges

• The budget should address the dual insurance crises of over 500,000 homes at risk of becoming uninsurable by 2030, while at the same time insurance becoming increasingly unaffordable, especially impacting low-income households. Measures to mitigate these risks could include extending the CEFC’s remit to finance climate proofing for homes.

Mobilising Capital for Non-Commercial Investments

• The budget needs to allocate resources for capital mobilisation at scale towards activities with unclear commercial viability, such as:

• Adaptation and resilience in response to the intensifying physical risks of climate change as detailed in the Investors Group on Climate Change’s (IGCC) Road to Resilience report. 

• Retrofitting low income household energy systems and getting the incentives right to prevent an “energy poverty premium” as discussed by the Institute for Sustainable Futures in ‘Transforming Australian Homes’.

• Supporting decarbonisation and development in emerging economies that face the dual challenge of decarbonising their electricity, transport and industrial systems while continuing to drive social and economic development, as outlined in IGCC’s ‘Mobilising Climate Investment in Emerging Economies’. This includes a more substantial Australian contribution to the global climate funds, particularly the Loss and Damage Fund established at COP28. A pledge of $100 million to this Fund would reflect Australia’s commitment to support nations grappling with the most severe impacts of climate change. Such contributions are vital for enabling these countries to effectively and equitably manage climate change impacts.

Enhanced Collaboration in Supply Chain Management

• Incentives for Supply Chain Collaboration: The budget needs to introduce mechanisms, such as grants, to encourage collaboration between SMEs and larger enterprises for supply chain management, focusing on data collection, transparency and accountability. The budget should also support shared resource platforms and technologies for emissions measurement and climate transition planning, including backing for Climate Wise Associations as an independent, not-for-profit platform, and Australian Race to Zero partners and service providers actively encouraging businesses to align with national climate commitments and global standards.

• Issue: SMEs, responsible for around 40% of Australia's carbon emissions, often struggle with effective decarbonisation and accurate emissions disclosure. A unified approach in supply chain management, integrating environmental responsibilities across all levels, is critical.

• Why It Matters: Strengthening supply chain collaboration is crucial for achieving Australia's climate goals and adhering to global standards like those set by the World Trade Organization (WTO).

• Policy Alignment: Treasury, Finance, Climate Change, Energy, Environment & Water, Industry, Science, Energy and Resources, Trade and Investment, Circular Economy Ministerial Advisory Group

Intergenerational Budget Statement

• Wellbeing Framework: The Federal Treasury should integrate the ‘Measuring What Matters framework’ into budget analysis to comprehensively assess the health and wellbeing impacts on both current and future generations. This approach will address gaps in the 2023 Intergenerational Report, which predominantly focused on healthcare service needs of an ageing population. While ageing populations will undoubtedly require additional services due to the development of chronic and acute co-morbidities, in our view the 2023 Intergenerational Report underestimates health-related costs for younger and future generations, especially related to the substantial physical and mental health impacts associated with a changing climate and its consequences. Integrating a wellbeing framework into budget analysis will assist in addressing this oversight.

We propose that the Federal Treasury consider publishing an annual Budget Improvement Plan, reflecting progress and outlining short to medium-term ambitions over a five-year period. This plan should leverage insights from both the ‘Measuring What Matters’ framework and the Intergenerational Report to enhance budget and tax processes. To improve public understanding of the Budget, we suggest an accompanying statement that explains: 

• The influence of future trends and scenarios on long-term investment decisions;

• The necessity of preventive investments across government; and

• Strategies to facilitate system-wide, integrated approaches through budget allocations.

• Portfolio and Policy Alignment: Federal Treasury, Intergenerational Report, Measuring What Matters framework.

• Future-Ready Budgeting: We also encourage the adoption of extended-term modelling and forecasting in budget planning. This will ensure better preparedness for impending challenges and opportunities, paving the way for more resilient and forward-thinking fiscal strategies.

Conclusion

The record temperatures of 2023 serve as a stark reminder of the escalating consequences of climate change and the critical need for rapid emissions reduction across all sectors​. Our proposals for the 2024-25 Budget aim to address these challenges and enhance alignment with policy developments across all levels of government. ​

Central to our recommendations is the need for inclusive community participation in climate-related decision-making, ensuring that those most impacted, especially the disadvantaged, are involved in shaping a path towards a zero-emissions future. We advocate building upon the groundwork laid by last year's budget, and call for increased investments in renewable energy, enhanced energy efficiency, just transitions for the workforce, and the integration of nature-based solutions. Crucially, we suggest applying a wellbeing framework in government decision-making processes to safeguard the health and wellbeing of both present and future generations.

These measures are critical in Australia's journey towards decarbonisation. They not only create sustainable employment opportunities and attract investment in a renewable powered economy, but also play a significant role in alleviating the cost of living pressures and rejuvenating industries and communities. We are committed to engaging in detailed discussions and collaborating with the government to realise a climate-resilient, zero-emissions and prosperous future for Australia. 

Sincerely,

Better Futures Australia

Thank you to our Partners