Clean Energy Future

Regional Australia

Download Regional Australia factsheet (PDF 192 KB)

The carbon pricing mechanism will unlock opportunities for regional Australia to capitalise on the development of Australia’s world-class energy reserves and share in $10 billion of new investment through the Government’s new Clean Energy Finance Corporation.

A carbon price will not apply to agricultural emissions. This means there will be no requirement for farmers to pay for emissions from livestock or fertiliser use. Farmers and land managers will have the opportunity to gain rewards through the Carbon Farming Initiative.

Over the period to 2014-15, $1 billion will be provided to landholders through the Biodiversity Fund and other land-based measures to establish new native vegetation and habitats in targeted areas of high conservation value. Funding will go towards projects which maintain or enhance existing native vegetation for its carbon and biodiversity benefits.

Jobs in industries which have a strong presence in regional Australia will be supported by a Jobs and Competitiveness Package worth $8.6 billion over the first three years of the carbon pricing mechanism. An additional $500 million in assistance will be provided to steel manufacturers, food processors and metal foundries, and the $1.3 billion Coal Sector Jobs Package—$1.257 billion over six years (five years of funding)—will provide transitional assistance to the coal industry over six years.

Regions strongly affected by the introduction of a carbon price will be supported through the $200 million Regional Structural Adjustment Assistance package.

A clean energy future for regional Australia

Regional Australia will play a vital role in Australia’s clean energy future. Over eight million Australians live outside our major capital cities and two-thirds of the nation’s export earnings are generated in our regions.

Regional Australia has some of Australia’s best renewable energy reserves including wind, solar and geothermal. Clean and renewable energy will receive a major boost through the Government’s new $10 billion Clean Energy Finance Corporation.

The Clean Energy Finance Corporation will help businesses seeking funds to get innovative clean energy proposals and technologies off the ground. A great deal of this investment will flow to regional and rural Australia.

Supporting jobs in industries with a strong regional presence

Treasury modelling demonstrates that state and regional impacts will vary depending on their emission intensity and opportunities to diversity into low-emission activities.

Some regional communities which have industries that produce considerable carbon pollution may need assistance as Australia transitions to a clean energy economy. These areas will benefit from the Government’s Jobs and Competitiveness Package—an ongoing program worth $8.6 billion over the first three years of the carbon pricing mechanism. This package will safeguard jobs in industries which face international competition and produce a lot of pollution. Regional communities will also be supported through tailored programs worth $500 million for the steel industry, food processors and metal foundries and forgers.

Treasury modelling shows that with a carbon price the mining sector will still experience strong growth and that it will increase as a proportion of the economy over the decade to 2020. Some individual coal mines, including mines in regional New South Wales and Queensland, have high levels of fugitive emissions and may face larger impacts. Workers and local communities relying on these mines will be supported through a $1.3 billion Coal Sector Jobs Package.

Benefits from increased investment in clean energy

Regional Australia will benefit from growth in the clean energy sector through increased employment and investment.

The development of clean energy projects will engage the unique attributes of regions, including those with a strong industrial and skills base, existing infrastructure and alternative industries. For example, Chinchilla in Queensland and Moree in New South Wales have been announced as sites for new large solar power stations through the Solar Flagships program.

A new, independent statutory body, the Australian Renewable Energy Agency, will be created to coordinate around $3.2 billion in existing grant funding programs supporting research, development and demonstration of new renewable energy technologies.

Remote Indigenous Energy Program

The Remote Indigenous Energy Program will help Indigenous communities access clean, affordable and reliable 24-hour power supplies. It will help communities to manage their energy efficiently and use it to contribute to improvements in health, education and long-term economic viability.

Over four years, the $40 million program will build on the success of the former Renewable Remote Power Generation Program. It will provide additional financial support to install renewable energy generation systems like solar panels and wind turbines in around 55 remote Indigenous communities. This new program will also include training in power system maintenance and information to support households and communities manage their energy.

This program ensures remote communities will also be part of the transformation to a clean energy future.

Creating opportunities on the land through the Carbon Farming Initiative

A carbon price will not apply to agricultural emissions, but farmers and land managers will have access to new economic opportunities through the Carbon Farming Initiative.

The Carbon Farming Initiative will provide new economic rewards for farmers and landholders that take steps to reduce carbon pollution. It will do this by creating credits for each tonne of carbon pollution which can be stored or reduced on the land. Farmers and land managers will be able to generate income from credits for actions, including reforestation and revegetation, reduced methane emissions from livestock digestion, reduced fertiliser emissions and native forest protection.

Through the Indigenous Carbon Farming Fund, Aboriginal and Torres Strait Islanders will receive assistance to participate in the Carbon Farming Initiative. Indigenous Australians manage around 20 per cent of Australia’s land mass, drawing on traditional knowledge of the landscape and its responses to fire, flooding and drought. Funding will also be provided for specialists to work with Indigenous communities on carbon farming projects.

Enhancing biodiversity through the Biodiversity Fund and Regional Natural Resource Management Planning

A new, ongoing Biodiversity Fund has been allocated $946 million over the first six years to support projects that establish, restore, protect or manage biodiverse carbon stores. The Biodiversity Fund will improve the resilience of Australia’s unique species to the impacts of climate change, enhance the environmental outcomes of carbon farming projects, and help landholders protect biodiversity and carbon values on their land. More details of the Biodiversity Fund can be found in a separate fact sheet.

The $44 million Regional Natural Resource Management Planning for Climate Change Fund will build on the expertise and network of regional natural resource management organisations to help plan for climate change and to maximise the social, economic and environmental benefits of carbon farming projects. Natural resource management organisations will develop plans in each region to guide where carbon farming projects should be located in the landscape.

These measures will ensure the protection of Australia’s ecosystems and increase the land sector’s resilience to the impacts of climate change.

Other investments in the land

These new investments complement the Australian Government’s existing $2 billion investment in the environmental management of our natural resources under Caring for our Country. Caring for our Country helps regional natural resource management groups, Indigenous groups, Landcare groups, industry bodies, land managers, farmers, local, state and territory governments, and communities protect Australia’s natural environment and sustainably produce food and fibre. Its goal is to achieve an environment that is healthier, better protected, well managed, resilient, and provides essential ecosystem services in a changing climate. Landcare groups will receive $188 million from the Caring for our Country program for conservation activities on private land on farms, in water catchments and at the regional level.

Australia’s Farming Future is the Australian Government’s climate change initiative for primary industries. It provides approximately $130 million over four years to help primary producers adapt and respond to climate change. Australia’s Farming Future Climate Change Research Program funds research on reducing carbon pollution, better soil management and climate change adaptation. The FarmReady program boosts training opportunities for primary producers and Indigenous land managers to enable industry, farming groups and natural resource management groups develop strategies to adapt and respond to the impacts of climate change.

Regional Structural Adjustment Assistance package

In the short term, the Government understands that some regions and communities will face more significant impacts than others from reforms like the carbon price. A central element in the Australian approach to economic reform over the past three decades has been structural adjustment assistance. The Government will maintain this approach under the clean energy plan to help to ease the transition for strongly affected regions and communities.

The $200 million Regional Structural Assistance Package will be set aside for structural adjustment assistance for regions and communities, and if required there will be other initiatives which assist strongly affected areas and sectors.

The Department of Regional Australia, Regional Development and Local Government will monitor the impacts of the carbon price on regions to determine areas where structural adjustment assistance may be required.

For identified regions, structural adjustment assistance will be delivered through arrangements that engage state, territory and local governments, community groups and unions, including through place-based investment and service delivery approaches.

Funding will support regional communities on a case-by-case basis. Examples of programs that may be supported include support for displaced workers and their families, support for affected small businesses, community development programs and economic diversification programs.

Strong investment in our regions

The Government recognises that strong, prosperous regions are essential for a strong, prosperous Australia.

The 2011-12 Budget will deliver over $4.3 billion of initiatives from 1 July 2011 to ensure households and communities in regional Australia share in the nation’s success. This investment will drive improvements in regional hospitals and health, educational facilities and community and transport infrastructure.

Strengthening regional communities through Regional Development Australia

Regional development is best advanced by empowering local communities to derive local solutions.

The national Regional Development Australia (RDA) network consists of 55 committees of local leaders who volunteer their time to work with government, business and community groups to deliver better services to their regions.

The RDA committees across the country are assisting their regions to adapt to climate change and to transition to a clean energy future by engaging communities and businesses about the likely social and economic impacts of climate change and developing local ideas and solutions.

In the high growth area of Queensland’s Sunshine Coast, the RDA committee is working with its community to identify opportunities to bring together the region’s emerging green technology sector, educational sector and expertise in environmental sustainability. The priority for RDA Sunshine Coast is to build the region’s capacity as a centre of excellence in sustainability promoting environment-oriented business development and learning.

Key elements of a carbon price

A carbon price provides incentives to reduce emissions where they are cheapest, breaking the link between economic growth and growth in pollution. Treasury modelling demonstrates that the cost to Australia of cutting pollution and transforming our economy to cleaner energy sources is very modest. The Australian economy continues to grow, jobs continue to grow and average incomes continue to grow under carbon pricing.

A carbon price is not a tax on households—Australia’s biggest polluters will be required to pay for their pollution under the carbon pricing mechanism.

The carbon price will commence on 1 July 2012, with a fixed price for the first three years. The price will start at $23 per tonne and will rise at 2.5 per cent per annum in real terms.

From 1 July 2015 onwards, the carbon price will be set by the market. This will be the flexible price stage.

Treatment of transport fuels

As people in rural and regional areas are often reliant on their cars, the Government’s decision to not cover transport fuel under the carbon pricing mechanism will help to minimise the impact on regional Australia.

Households and businesses already pay fuel excise on fuel for their passenger and light commercial vehicles, and will not face a further carbon price.

However, unlike households, some businesses get fuel tax credits which mean their excise is reduced, in many cases to zero. The Government will therefore reduce fuel tax credits for some businesses, so that they face an effective carbon price.

Businesses in the agricultural, forestry and fishery industries will be exempt from these fuel tax credit reductions and will therefore not face an effective carbon price on their off road fuel use.