With its renewable policy sinking without a trace and Arthur Sinodinos again in trouble, Turnbull’s extended election campaign has got off to a bad start, writes Ben Eltham.
If you accept – and it’s hard to deny – that Prime Minister Malcolm Turnbull’s decision to recall Parliament signals the start of a 14-week election campaign, then that campaign has not got off to a great start.
Policy is being announced. Yesterday, for instance, the government announced a new $1 billion Clean Energy Innovation Fund, “to support emerging technologies make the leap from demonstration to commercial deployment.”
Superficially, the fund looks like a good idea. Australia is well behind the rest of the developed world when it comes to clean tech industries. A fund to support capital investment in “emerging clean energy technologies” will no doubt be welcomed by a struggling sector.
Of course, a big reason for these struggles is the Coalition itself. The Rudd and Gillard governments put in place a comprehensive suite of policies designed to drive investment in the clean tech and renewables sectors. The Abbott government abolished nearly all of them.
Amidst the smoking ruins of the Abbott government’s climate policies, investment and jobs in the renewables sector cratered. Meanwhile, our competitors in America, Europe and China forged ahead.
At least the Coalition has finally decided that it will keep the Clean Energy Finance Corporation, a government finance corporation for the clean tech sector. Once derided as “Bob Brown’s bank”, apparently someone has at last noticed that he CEFC actually makes money for the government by lending at commercial rates of interest.
That’s about as much as you could say for yesterday’s announcement, which has already been derided by experts and analysts as little more than a “shell game.” This is not a billion new dollars for clean tech: it is instead simply a repurposing of money already budgeted to the CEFC, which the government has bee trying to abolish for years now, but wasn’t able to as a result of opposition from the Senate crossbenchers.
Nor is the supposedly innovative nature of the policy al that innovative. The Australian Renewable Energy Agency (ARENA) looks to be a big loser, with most of its functions merged with the CEFC and its role in handing out grants to promising early-stage start-ups abandoned in return for a more traditional program of providing loans.
According to Giles Parkinson, the veteran editor of RenewEconomy, “staff within ARENA are believed to be horrified by the changes, particularly the decision to bring a halt to funding to start-up technologies and research.” Parkinson reports that insiders fear that the new rules “will effectively rule out a whole category of funding requirements.”
The Grattan Institute’s Tony Wood points out that “it would be ironic if the new fund retains the mandate of the CEFC that the government had targeted for termination, while weakening ARENA which enjoyed consistent bipartisan support.”
The broader point, of course, is whether any of this matters in the scheme of things. With no carbon price and no cap on Australia’s total emissions, energy policy in this country is effectively “burn, baby, burn.”
The real driver of more investment in renewable energy will ultimately be the lure of making money. But while cheap, dirty coal retains significant market share in addition to massive subsidies from the taxpayer, renewables are not yet the cheapest source of energy.
The government could save money and improve the competitiveness of renewables very simply, just by removing fossil fuel subsidies like the diesel fuel rebate. Of course, doing that would enrage special interests in the mining sector. So the government won’t do it.
In summary, this new clean innovation fund is too little, and very late. It’s a policy that merely rebuilds a little of the devastating damage done by Tony Abbott. The parallels with Turnbull’s “ideas boom” are all too clear.
In a quiet news week, the announcement of a big new innovation fund might have been expected to go well for the government, at least generating some positive coverage in friendly media outlets.
But it hasn’t worked out like that, because the New South Wales Liberal Party now finds itself at the centre of a probity scandal. And that matters, because it will touch senior members of the Turnbull faction.
As a result, the new clean tech fund will most likely sink without trace.
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