Renewable energy projects a $150m budget sap

This article was last updated on April 16, 2022

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Canberra will in point of fact write off $150 million a year on renewable energy projects under its carbon package, referring to it as grants that will bring modest if any financial return.

However, it has baffled opposition assertions that its Clean Energy Finance Corporation will blow a $10 billion hole in its budget after a day of enraged arguments over the bookkeeping management of the carbon package.

Recently, opposition junior Treasury spokesman Mathias Cormann used a Senate guess hearing in Canberra to lay blame on Finance Minister Penny Wong of engaging in “fiscal gymnastics” to camouflage the impact of the flagship fund on the budget.

He said: “This would mean that there is another $10bn black hole in Labor’s budget courtesy of its carbon tax package.”

The fund, revealed to protect Greens support for the government’s carbon pricing plan, will put in $2bn a year over five years in businesses on the lookout for funds to get clean energy pitches and technologies off the ground, with half of the annual total devoted to renewable energy projects.

David Martine, deputy secretary of the Finance Department’s budget group said since renewable energy involved emerging technologies, “There may be some investments that don’t achieve a particular return. We’ve made an allowance of 15 per cent of those investments being deemed ultimately as grants which would impact on the budget bottom line.”

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