Budget sense and nonsense

Wayne Swan’s Budget decision to means-test the solar panel rebate, so anyone with a household income is ineligible, makes no difference to the fight against climate change. That’s because the total pool of money available for rebates has not changed. The scheme is oversubscribed; and Swan is only shifting the benefits to less well-off households, as Labor Treasurers should.

On the other hand it does little or nothing (although Swan may also be hoping that some of those well off households no longer eligible for the rebate will install solar panels anyway) to increase uptake of solar panels – and that’s surely the key point. We need a bigger pool of money for the rebates scheme and feed-in tariffs to increase uptake.

More disappointing is the pro-clean coal bias in the Budget’s climate change measures: while clean coal and renewables both get $500 million over seven years, as per Labor’s election promise, the clean coal spending will be prioritised – over the next two years, $143 million will be spent on clean coal, while $55 million will go towards renewable energy. Most of the spending on renewables will now come after 2012.

Think about it – $55 million for renewable energy research in the next two years. That’s not much – the cost of a few dozen Sydney homes these days. 

But the big test of the Rudd Government’s climate change credentials will come later in the year with it’s response to the Garnaut Report.

That will include the formulation and details of its cap-and-trade emissions policy, whether and by how much it increases the Mandatory Renewable Energy Target, and any associated measures such as feed-in tariffs.  

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