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Federal Budget: Winners & Losers and key reactions

The 2012-13 Federal Budget fallout for the industry, carbon, and environmental sectors.

There were some notable winners and one biggest loser in this year's 2012-2013 Federal Budget when it came to green tax breaks and funding. The Budget announced last night includes measures to drive energy efficiency and assist in the transition to a low carbon economy.

Announcing the Budget, Federal Treasurer Wayne Swan said in his budget speech "the government has always been committed to sharing fairly the benefits of the resources boom".

The Winners and Losers
One major winner is the Energy Efficiency sector which will receive $2.8 million in additional funding for a range of building energy efficiency activities, including maintenance and improvement of current building rating tools, information programs and regulatory schemes.

This funding supports a package of programs to deliver cost-effective abatement in the building sector, including administering the Nationwide House Energy Rating Scheme (NatHERS), monitoring compliance with the Building Energy Efficiency Disclosure (BEED) Act and contributing to measures in the National Strategy on Energy Efficiency.

Another winner is the Greenhouse and Energy Minimum Standards, which will receive $37.1 million in funding over four years to introduce a national legislative framework to regulate the energy efficiency of equipment and appliances.

This framework will replace an inefficient patchwork of state and territory schemes. This measure addresses two important policy objectives of improving energy efficiency and reducing greenhouse emissions.

The Climate Adaptation sector will also be welcoming the budget with $3 million in funding to support the development of climate change adaptation policy and risk analysis. Further funding will be determined based on the recommendations of the Productivity Commission's report on adaptation due later this year.

This funding will support analysis of how well placed Australia is to deal with the unavoidable impacts of climate change and develop policy to enable business and communities to build resilience and adapt to a changing climate.

The Government will also invest $350 million to support Water Reform in the Murray Darling Basin, continuing its commitment to irrigation infrastructure in this year's Budget.

"The Government has made clear that we are committed to delivering a plan for the MDB that restores our rivers to health, ensures strong regional communities and sustainable food production," Environment Minister Tony Burke said.

The additional funds will support modernisation of irrigation infrastructure. But some funds previously reserved for buybacks have been pushed back for future years because of the government's decision not to engage in general rounds of tenders prior to the conclusion of 2012. An additional $150 million is being provided to the On-Farm Irrigation Efficiency Program from 2012-13 to support individual farm infrastructure improvement projects.

The Government will also continue its commitment to the flagship Caring for our Country program for another five years, providing $2.2 billion from 2013-14 to 2017-18. The Budget will provide additional funding of $4.8 million in 2012-13 to increase the Bureau of Meteorology's  frontline capabilities. This will involve the employment of up to 20 expert meteorologists, recruitment and training of up to 10 new local meteorologists and recruitment and training of up to 10 additional flood forecasters.

The big loser to come out of the Budget is the Green Buildings sector which will see the Tax Breaks for Green Buildings Program scrapped and will no longer proceed with a saving of $405.2 million over the forward estimates.

Although there was much speculation pre-budget that $2 billion could be raised by cracking down on the diesel fuel rebate claimed by miners it has been left untouched. It will be cut by six cents a litre in July as part of the carbon tax. The government has, however, decided to include non-transport compressed natural gas in the carbon price regime from July this year and non-transport LPG and LNG from mid 2013 "in response to consultation with industry", the budget papers state.

GBCA, Industry and climate sector reaction
The Australian Conservation Foundation (ACF) said the Budget's failure to tackle wasteful, inefficient tax breaks that promote fossil fuel use and emissions was a blow to Australia's environment. On the other hand ACF welcomed the budget's full funding of the government's Clean Energy Future commitments, including the assistance for nine out of ten households to cover the introduction of the carbon price.

ACF CEO Don Henry said, "we are disappointed accelerated depreciation for green buildings is to be axed. Australia should not be axing tax breaks for green buildings and slashing the aid budget, while leaving untouched billions of dollars of tax breaks for mining and resource industries to pollute our environment."

ACF also criticised the increase in the skilled migration program, resulting in an unsustainably large total migration program of 190,000. "Australia could easily reduce the total migration program without damaging our economy which would put us on track to stabilise our population, protect our quality of life and ease the pressure on our natural environment," Henry concluded.

As expected the Green Building Council of Australia (GBCA) slammed the Budget. CEO of the GBCA, Romilly Madew said, "the Government is backing away from a 2010 election promise and abandoning its commitment to provide incentives for green buildings."

The $1 billion retrofitting program was expected to provide an incentive for businesses that invest in eligible assets or capital works to improve the energy efficiency of their existing buildings. "Buildings represent the fastest, most cost-effective opportunity to reduce our greenhouse emissions.

"The decision to scrap the Tax Breaks program is particularly bewildering, coming as it does at a time when Australia's future green economy is a high priority. The scheme would have delivered triple bottom line advantages and helped the retail, hotel and commercial office sectors when confidence is low. It would have delivered jobs, green buildings and a sustainable future," Madew added.

Australian Industry Group
(Ai Group) CEO, Innes Willox said, "while the budgeted surplus for 2012-13 is welcome and will have important national benefits, there are considerable risks in the way it has been achieved. In particular, the additional taxes and costs imposed on industry will undermine the ability of business to make the critical longer-term investments needed to boost productivity, improve our global competitiveness and lift employment."

"The scrapping of the company tax cut that was to be financed from the Minerals Resource Rent Tax is a major blow to business. It will reduce incentives to invest and innovate and is a particular set-back for businesses in non-mining, trade exposed industries such as manufacturing that need to invest to lift productivity to overcome the impacts of the strong Australian dollar, weaker global demand and the impending carbon tax."

Finally, Clean Energy Council acting CEO Kane Thornton said the Budget locked in Australia's commitment to clean energy. "In this budget the Federal Government has recognised the importance of the programs that are in place to accelerate renewable energy and energy efficiency, and the industry welcomes that," Thornton said.

"The Australian Renewable Energy Agency and the $10 billion Clean Energy Finance Corporation are important commitments made as part of the carbon price package that will help to turbo-charge the domestic clean energy sector.

"Together with the national 20% Renewable Energy Target, we now have a suite of programs that support home-grown clean energy innovation from early research and development right through to full-scale commercial roll-out.

"The industry is ready to deliver on the promise of tens of thousands of jobs and tens of billions of dollars in investment that can be unlocked by these policies."

Click here to read the rest of today's news stories.


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