Budget 2026: Clean energy spending grows but gas giants still avoid reform |
The federal budget increases investment in emissions reduction, batteries and clean energy infrastructure, but leaves major fossil fuel tax concessions and gas industry profits largely untouched.
The Federal Budget looks to be a well-crafted effort at trying to balance multiple competing challenges.
It provides some serious momentum on tax reform, by reducing capital gains tax concessions and introducing a new 30 per cent tax on discretionary trusts, closing a massive loophole at the top end of Australia’s wealth scale. The budget restrains spending growth (particularly the NDIS), whilst funding more military, First Nations ($1.2 billion) and health system spending. It is also investing to build new housing supply to reduce the massive intergenerational inequity of the housing crisis. All of this while trying to prevent a systemic increase in public indebtedness over the longer term. Additionally, there was a fair investment in measures to reduce the immediate costs relating to Trump’s war on Iran and the resulting threat of Australia’s exposure to now hyperinflationary and scarce fossil fuel imports.
On the face of it, there was little excitement for those of us focused on the growing climate crisis and need for greater investment in speed and scale of climate solutions – principal among these an acceleration of our transition to clean, low-cost renewable energy. There was a key theme: lots of budget allocations to sustain our addiction to imported fossil fuels, no big measures to better tax the war-profiteers in the gas industry or pivot to permanent, domestic zero-emissions solutions.
Unfortunately, a new 25 per cent levy on LNG exports was ruled out pre-budget, as was long overdue reform of the $11 billion annual imported diesel fuel rebate – jettisoned to appease fossil fuel and mining vested interests.
Meanwhile, the Petroleum Resource Rent Tax (PRRT) continues to fail to deliver, despite global LNG........