Federal Budget 2022-23: what it means for the environment and climate change

The Federal Treasurer’s Budget speech opened with emotion. He referenced the recent devastating floods as third to the Russian war and the pandemic; however, the budget allocation to dealing with the root cause of the floods, climate change, did not equate to the third place priority. Notably, while $6 billion was allocated for disaster relief and rebuilding in flood-affected areas, little has been allocated for investment in longer term climate resilience and adaptation.

In acknowledging Australia is on the pathway to Net Zero by 2050, the Treasurer reiterated the Prime Minister’s rhetoric – ‘Technology, not taxes, will get us there’. The focus of the technological solutions includes a $20 billion allocation to low-emission technologies, including a focus on investment in renewable projects and microgrids to support regional and remote communities. The funded energy projects include:

  • $565.8 million to establish international partnerships on practical low emissions projects;
  • $275.5 million to support up to four additional hydrogen hubs;
  • $263.7 million to accelerate the development of Carbon Capture Use and Storage;
  • $59.6 million to support a National Soil Carbon Innovation Challenge and trial new agricultural feed technologies that reduce emissions from livestock; and
  • $316.7 million to help businesses and industry lower their emissions by supporting more voluntary action and helping businesses reduce their energy use.

The Budget Speech also included promotion of the Recycling Modernisation Fund designed to save 10 million tonnes of recyclable material from landfill every year by 2030 by improving recycling in Australia, rather than exporting our waste. This includes:

  • $30 million in funding to extend the Recycling Modernisation Fund in regional areas;
  • an additional $4.4 million to support the rollout of Australia's waste export ban; and
  • over $8 million to support the remanufacturing sector through the 'ReMade in Australia' brand.

An allocation of $29.3 million has been made to the strengthening of the Federal Environment Protection and Biodiversity Conservation Act 1999, which is largely around streamlining of approvals for major projects (and has been criticised as being a green light for development rather than an improvement in protection of biodiversity or other matters of national environmental significance).

In addition, a further:

  • $22.3 million has been allocated in the budget to provide funding to farmers to protect and restore native habitat. It is unclear whether this will be part of the recently criticised carbon offset program and whether any of this budget allocation will go towards improving the carbon accounting and regulation of this important industry is unclear;
  • $9.1 million is allocated to a focus on valuation of natural assets; and
  • $100 million towards projects to provide grants to marine parks and investments in blue carbon projects.

While the Australian Council of Recycling has welcomed the big spend in the waste sector, the ACF has described the Budget priorities for the environment as 'out of whack with the massive challenges of the real world'.

The raw number allocation to climate change initiatives is perhaps better expressed as a percentage of the overall spend. The Climate Council has calculated that just 0.3% of total expenditure for 2021-2024 and 0.2% in 2024-2026 has been committed to climate change initiatives. With adverse weather impacts escalating in Australia and the public commitment made at the Glasgow COP, it is disappointing that there were not more meaningful Budget commitments made to provide confidence that there is a plan to achieve Net Zero by 2050.


Meg Lee

Partner & ESG Co-Lead

Natalie Bannister

Partner & Commercial National Practice Leader

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