The Guardian reported the coalition is using the Labour Party’s $10B financing scheme as an election slush fund after trying in vain to break up the Clean Energy Finance Corporation. Some people say that the party threw money at the Great Barrier Reef, the steel industry in South Australia and to smart cities.
These announcements left some clean energy sector expert crying foul, saying that the government was trying to bleed them dry silently. This may be the case, but the truth could be more normal. The announcements probably amount to little and leave the spending pledges deprived of substance, but equally doing little to harm the CEFC. By anyone’s estimation, the CEFC has been a success. According to their 2015 yearly report, it invested $1.4B financing projects worth a total of $3.5B. This would reduce 4.2M tonnes of CO2-equivalent emissions every year and it did all that while making a profit.
Under the Tony Abbott government, the Coalition tried unsuccessfully to abolish it, they tried to unlawfully to stop it from operating and tried to stop it from investing in wind farms and small scale solar. When the Turnbull government came into power, it accepted the government had failed to eradicate the CEFC but stopped short of giving their support and backing. Turnbull said last October that they don’t support government banks doing roles that can be executed by the private sector. It has done some good, but the question is if it’s an appropriate use of government money.
So far, more than $2B of the CEFCs money has been made as election commitments. Turnbull suggested that up to $100M form EFIC and CEFC could be used to provide loans for South Australia’s steel industry. Then, last week, $1B was taken off for the “reef fund”. Last Monday, another $1B was used to fund Turnbull’s smart cities policy. With these fund cuts and diversions, John Grimes of the Solar Council is convinced that this is all part of a hidden plan to abolish the CEFC.
Ariane Wilkinson form the Environment Justice Australia said that reducing the capacity of what the CEFC could invest in by too much could fall foul of the law just like it was suggested could have been the case when the Coalition tried to block the CEFC from investing in wind farms.
Australia stands to gain about $800B of the global renewable energy investment boom and the country will miss out on the jobs, investment and growth if the country doesn’t get on with it now and this is what the CEFC is for. The robbing of the CEFC funds and use it as an election slush fund will not likely hurt the clean energy that much, but it is also unlikely to do any good either.