Federal Labor has agreed to block coal and gas projects from access to its $15 billion National Reconstruction Fund, but a stalemate over the fate of Safeguard Mechanism, and of new fossil fuel projects under that policy, continues.
Federal Parliament’s House of Representatives will pass the National Reconstruction Fund Corporation Bill 2022 following a deal with the Greens to exclude fossil fuel projects and native forest logging from the scheme. The Greens say they will support the bill in the Senate, too.
🚨*Bill Alert*🚨
The House has passed the National Reconstruction Fund Corporation Bill 2022.
The bill will be transmitted to the Senate.
For further details, see: https://t.co/n4Wxv7W0lS. pic.twitter.com/SN1vrjnEzQ
— Australian House of Representatives (@AboutTheHouse) March 9, 2023
The Albanese government’s $15 billion NRF is designed to provide finance for projects that “diversify and transform” Australia’s industry and economy and drive sustainable growth.
Labor maintains that the fund – described by federal industry minister, Ed Husic, as “one of the largest peacetime investments in manufacturing this country has ever seen” – was never intended to support coal and gas projects.
But bitter experience and the mention of “value-add in resources” on a list of priority funding areas set out by Labor has been enough to fuel concerns that the terms of the fund could be open to future government interpretation.
“The Coalition tried to use public money to fund coal and gas through the Clean Energy Finance Corporation and they were unable to do so because of the guardrails that the Greens and Labor put in place,” said industry, regional development and transition spokesperson Senator Penny Allman-Payne on Thursday.
“Now we have the same assurance that the NRF won’t be used to fund the climate crisis.”
The deal is a good move from Labor, which is under pressure to produce a policy at least somewhere in the ball-park of the US Biden Administration’s game-changing $US30 billion Inflation Reduction Act.
“After a decade of neglect from the former Liberal-National government, the Albanese government is revitalising Australian manufacturing,” said Husic on Thursday.
For the Greens, the party’s victory on the NFR Bill offers hope that progress might be made on negotiations around where new fossil fuel projects stand in Labor’s Safeguard Mechanism plans.
“Coal and gas are the biggest cause of the climate crisis, so this is a big win for the climate and a big win for jobs and the economy,” said Greens leader Adam Bandt on Thursday about the NRF.
“We thank the government for the constructive approach they have taken in the negotiations and hope this can continue in the Safeguard … discussions in the coming period.”
But there are few signs that the safeguard stalemate is anywhere close to being broken, with the latest sticking point being over access to Labor’s modelling of the mechanism.
The Greens say Labor’s modelling is “important piece of the puzzle” to determine their position on the policy. The Coalition, too, is demanding to see it.
“If the government doesn’t want to show that their scheme will reduce pollution … I don’t know how they expect the Australian people to believe them,” Greens senator Sarah Hanson-Young said.
Federal energy minister Chris Bowen has so far declined to release the modelling, arguing “cabinet in confidence” and “market sensitivities.” You can view the minister’s written response to the chair of the Environment and Communications Legislation Committee here.
Meanwhile, Labor says it will “continue to talk” with both the Greens and independent senator David Pocock to get the Safeguard reforms through the Senate.
The Albanese government needs the support of the Greens, independent senator Lidia Thorpe and either David Pocock or the Jacqui Lambie Network. And it needs this well before July, when it hopes to have the mechanism in place.
“The safeguard mechanism is … a real opportunity to make huge progress forward in reducing our emissions in a way where we can all work together,” federal finance minister Katy Gallagher told the ABC on Thursday.
“I am really hopeful that we don’t get to a situation where we have a stalemate in the Senate on this.”
