Dr Jonathon Deans and Dr Hunter Laidlaw
Australian Government expenditure on fuel, energy and
industry (mining, manufacturing and construction) in 2019–20 is estimated to be
$11.6 billion, representing 2.3 per cent of the Australian Government’s total
expenditure.
This administrative category consists of:
Table 1: Total fuel, energy and industry
| ($ million) |
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Fuel and energy |
7
956 |
8
171 |
8
515 |
8
865 |
9
285 |
| Industry |
2
592 |
3
422 |
3
730 |
3
408 |
2
926 |
| Total |
10
548 |
11
593 |
12
245 |
12
273 |
12
211 |
Source: Australian Government, Budget
strategy and outlook: budget paper no. 1: 2019–20, 2019, p. 5–31. Note:
Figures may not add due to rounding.
Table 2: Proportion of total budget expenditure
| Proportion of expenditure (%) |
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Fuel and energy |
1.6 |
1.6 |
1.6 |
1.7 |
1.7 |
| Industry |
0.5 |
0.7 |
0.7 |
0.6 |
0.5 |
| Total |
2.2 |
2.3 |
2.4 |
2.3 |
2.2 |
Source: Parliamentary Library calculations. Note: Figures
may not add due to rounding.
Table 3: Fuel and energy expenditure
| ($ million) |
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Fuel Tax Credits Scheme |
7
168 |
7
504 |
7
937 |
8
424 |
8
966 |
| Resources and Energy |
141 |
126 |
83 |
71 |
70 |
| Renewable Energy |
405 |
352 |
284 |
207 |
102 |
| Other - fuel and energy |
242 |
189 |
211 |
163 |
147 |
| Total fuel and energy |
7
956 |
8
171 |
8
515 |
8
865 |
9
285 |
Source: Australian Government, Budget
strategy and outlook: budget paper no. 1: 2019–20, 2019, p. 5–31. Note:
Figures may not add due to rounding.
Table 4: Industry expenditure
| ($ million) |
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Research and Development Tax
Incentive |
1
967 |
2
237 |
2
249 |
2
292 |
2
410 |
| Growing Business Investment |
317 |
279 |
219 |
194 |
172 |
| Northern Australia Infrastructure
Facility |
45 |
639 |
1
001 |
687 |
116 |
| Other mining, manufacturing and
construction |
262 |
267 |
261 |
235 |
227 |
| Total industry |
2
592 |
3
422 |
3
730 |
3
408 |
2
926 |
Source: Australian Government, Budget
strategy and outlook: budget paper no. 1: 2019–20, 2019, p. 5–35. Note:
Figures may not add due to rounding.
Significant policy announcements
There are two significant expense
measures announced for these functions:
- Climate Solutions Package, which includes a Climate
Solutions Fund that is effectively an expansion of the existing Emissions Reduction Fund
(with $189 million over four years to 2022-23 and a total of
$2 billion over 15 years from 2019-20); an equity investment of up to $1.4
billion for the Snowy 2.0
pumped hydro electricity project; the Energy
Efficient Communities Programme; and
funding for a feasibility study into a second Tasmanian interconnector (known
as Project Marinus) and
the Battery
of the Nation initiative in Tasmania. The measure provides $317.3 million
over the Budget period and a total of $3.5 billion over 15 years from 2018–19
(see pp. 73–74 of Budget
Paper No. 2).
- Supporting Reliable Energy Infrastructure program, which supports
feasibility studies into micro-grids (local electricity grids for communities
which are outside the established electricity networks).
The measure includes funding for feasibility studies to accelerate gas
development in the Beetaloo
sub-basin of the Northern Territory and support the Underwriting
New Generation Investment initiative. It also provides $10 million to
develop business cases for energy supply in North and Central Queensland. The
measure provides $75.5 million over seven years from 2018–19 (see p. 78 of
Budget
Paper No. 2).
This builds on the
Action Plan to Reduce Power Prices. That initiative was incorporated into the Mid-Year
Economic and Fiscal Outlook 2018-19 (p. 174) and provides $131 million
over seven years from 2018–19 for the Underwriting New Generation Investment
initiative, price monitoring of the electricity market by the ACCC, and other
initiatives.
The spending profile for a number
of initiatives across the fuel, energy, and industry functions has also changed,
as discussed below.
Fuel and energy
An anticipated increase
in the use of eligible fuels is forecast to drive an 11.4 per cent increase in
the use of fuel tax credits between 2019–20 and 2022–23. Petrol and diesel
excise is forecast to rise from $18.7 billion to $21.3 billion over the same
period.
Expenditure for the renewable energy component is
anticipated to decline across the budget period. Most of this reduction is due
to a decrease in grant expenses for the Australian
Renewable Energy Agency (ARENA). This decrease is stated to be partially
offset by increased expenses for the Clean
Energy Finance Corporation (CEFC). There are no 2019–20 Budget measures
that relate directly to ARENA or the CEFC.
These figures do not represent the Government’s only support
for renewables. The Government’s
broader suite of programs includes other support for renewables, such as
through the Renewable
Energy Target (RET). However, as programs such as the RET are not funded by
the Commonwealth, they are not budget items.
Industry
The temporary increase
in receipts for the Research
and Development Tax Incentive in 2018–19 to 2019–20 is due to a one-off
adjustment recognising the small number of claims made in past years. Expenses
then return to a path of gradual growth between 2019–20 and 2022–23.
Changes in expenditure
for the Northern Australia Infrastructure
Facility reflect an accounting change for the treatment of concessional
loans. The Facility’s total possible investment has not been changed from $5 billion.
According to the NAIF
website, final investment decisions worth $537.8 million have been
agreed by the NAIF Board but much of this funding has not yet been delivered to
projects.
[1].
In the Budget papers industry is referred to as mining, manufacturing
and construction.
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