In addressing climate change spending and regulatory costs, the government has made some impressive first steps. Few of these are in the wrong direction.
Labor went to last year's election with more than $5 billion a year in budget outlays for its climate change programs. This included more than $2bn a year to be spent by the Clean Energy Corporation.
In addition, Labor's carbon tax would be raising $13bn by next year (though Kevin Rudd had foreshadowed reducing this) and its renewable energy target would be raising electricity bills — by $5bn a year by 2020.
In all, Labor's planned spending on reducing greenhouse gas emissions was ramping up to $23bn a year, similar to the entire defence budget or twice the annual spending planned by the present government on transport and communications, which house its signature infrastructure areas.
In its first move to cut back the climate change impositions, the Coalition put beyond doubt any question of keeping the carbon tax.
The budget reinforces this by curtailing many other programs, though painfully slowly in some cases.
There have been backward steps. Among these is the creation of the Green Army, a sort of "young pioneer" corps of the unemployed doing landcare repair to prepare themselves for future taxpayer-funded environmental jobs. The program's objectives avoid mentioning climate change but, starting at $48 million this year, spending is ostensibly hurtling towards $230m annually. This is an expensive attempt to deflect green dudgeon.
We have also seen the first spending step of the Direct Action program. Limited to $75m in the current year, this is planned to increase but remains a far cry from the $1bn-a-year spending the Coalition once proposed. "One million roofs", once flaunted as a $100m program, has been dropped.
Outweighing these new spending measures are many program cuts within the environment and industry departments.
These include savage cuts to the adaptation and international negotiation spend — no more of those 114-delegation team visits such as the one that accompanied Rudd to Copenhagen in 2009.
The budget abolishes the Australian Renewable Energy Agency (ARENA), saving $1.3bn. However, ARENA's chairman, the World Wildlife Fund's Greg Bourne, like his counterpart at the Clean Energy Finance Corp, said he would continue "delivering funding to worthy projects" until the agency's bank account was closed.
Also to be terminated, with a saving of $460m, is the scandalously wasteful carbon capture and storage program, though its commitments might mean it soldiers on to 2017.
Similarly, the government has closed the $17m "clean coal" initiative and axed the $20m a year Clean Technology Innovation program. Also gone is the Green Car Innovation Fund, which became redundant as a result of labour laws and regulatory-induced increases in energy prices that made motor vehicle manufacturing unprofitable in Australia.
Ever so gingerly, Joe Hockey has begun paring back the profligate scam that is ethanol subsidies, grabbing back $120m a year.
The government's own published estimate of aggregate climate change expenditure is that it falls from $5.75bn this year to $500m two years hence. This includes spending by the Clean Energy Finance Corp.
But it excludes some spending, such as that of the CSIRO, which, when it saw its interest was in being active on climate matters, claimed that about 50 per cent of its budget was being spent in these directions. CSIRO can count itself lucky to have escaped with a mere $33m haircut, less than 5 per cent of its direct budget.
Outside the budget is the renewable energy target, presently under review by a panel headed by Dick Warburton.
Renewable energy from wind and solar, the two major subsidised supply types, remains non-commercial. It is three times the cost of electricity sourced from coal.
Renewable energy lobbyists have done wonders in getting governments to force consumers and other producers to pay $18.5bn on worthless assets.
Even with the carbon tax repealed, according to the electricity market regulator, next year will have renewable subsidies and associated schemes bringing about a 75 per cent increase in the wholesale electricity price.
Those arguing for the retention of the subsidies on renewables nonsensically claim that they reduce overall electricity prices.
In fact, the privileged position of renewables, if left untouched, would entail bankrupting the commercial providers, leaving a legacy of much higher prices and less reliable supply.
It is also claimed that early termination of the renewables program would introduce an element of sovereign risk into Australia's investment environment.
This is untrue. The withdrawal of a privilege does not constitute a government seizure of property which would undermine investor confidence.
Nobody suggested compensating the motor-vehicle assemblers for the billion or so dollars they have written down as a result of losing government supports.
Nor has Spain suffered from reputational loss since it wound down its previously agreed wind and solar subsidies.
Wind and other renewables should be left to stand on their own feet commercially. Their ongoing subsidisation severely weakens the national economy and should be terminated immediately.
The cuts to Australia's energy subsidies will force the entrepreneurs who have been so successful in grabbing government favours to make their fortunes elsewhere.
This is a gain to Australia and ways should be explored to allow earlier terminations of wasteful schemes that have been put in place.
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