The silent retreat
The silence on net zero in the Budget is a sign that the government is walking away from its climate goals
History will tell if this year’s Budget is “the most important and ambitious in decades”, as Treasurer Jim Chalmers said on Budget night.
Thanks to Newspoll, we do know it was the least popular since John Dawkins’ 1993 tax-and-spend extravaganza, the budget that started Paul Keating’s rapid decline from hero to zero in the space of three years.
Yet if Chalmers’ fourth Budget merits a place in history, it won’t be because of its broken tax promises, fiscal desperation or for setting a new world record for the velocity of a falling lead balloon. It will be as the moment Australia reached peak net zero, the Budget in which the government gave up the foolish pursuit of a fossil-fuel free economy, and the long climb back to political and economic sanity began.
For those paying attention to the engineers - the people whose job is to apply science as opposed to dreaming it up - net zero was a non-starter from day one. The political class has taken longer to come to terms with the technical impossibility of ending global greenhouse gas emissions by the middle of the century. Yet to the extent that the Treasurer’s annual Budget address remains a statement of a government’s priorities - rather than half an hour of hot air - Chalmers has confirmed that the political appeal of net-zero is over, even as the spending continues on multi-billion dollar legacy projects. Institutional rigidity means a policy error of this size takes longer to reverse than we might hope.
The narrative of Australia as an emerging green energy superpower, underpinned by veiled references to catastrophic global warming, was a consistent thread in Chalmers’ first four budgets.
He embellished Labor’s green credentials by appending multi-billion-dollar price tags to every spending measure.
In 2022, he announced “a $20 billion fund for energy transmission,” $800 million to cut taxes on electric cars, a national electric vehicle charging network and hydrogen refuelling stations on major highways, and subsidies for household batteries.
By the time of his second budget in May 2023, households had received at least 3 sets of power bills under Labor and a fourth was on its way. The Treasurer’s focus shifted accordingly to provide $3 billion in direct energy bill relief for households and small businesses, and $1 billion to subsidise household double-glazing and solar panel installations.
Yet the utopian vision of a clean, green Australia exporting renewable energy to benighted continents starved of wind and sun was very much alive. Chalmers announced that $2 billion would be pumped into the Hydrogen Headstart program to make Australia a world leader in producing and exporting green hydrogen. Another $4 billion was announced to realise Australia’s future as a renewable energy superpower, bringing total investment to more than $40 billion.
A year later, in his third budget, Chalmer’s opened the coffers again, announcing $3.5 billion in energy bill relief since power prices had still not begun to come down in line with Albanese’s election promise.
That little matter out of the way, Chalmers got into the big numbers: $22.7 billion for the clean energy-focused Future Made in Australia, $13.7 billion in production tax incentives for green hydrogen and processed critical minerals, $520 million “to deepen net zero trade and engagement with our region” (whatever that might mean), $625 million to help farmers and rural communities reduce emissions and better prepare for climate change and drought, $500 million in skills training in priority industries like clean energy.
In March 2025, with an election less than two months away, the subsidy ladle was pulled out of the drawer again, this time to distribute a relatively modest $1.5 billion to ease the cost-of-living squeeze from power bills.
It brought the government’s total spending on power bill subsidies to $8 billion in its first term. Yet not even this expensive charade of showering taxpayers with their own money could stop power bills rising. Albanese’s promise that average household power bills would fall by $275 was among the more egregious unfulfilled commitments of his first term.
Even so, the Treasurer was not yet ready to walk away from the fantasy of the great energy transition from hydrocarbons to wind, solar and hydro, or abandon the economic nonsense behind it. By now, it was abundantly clear that the capital investment alone would amount to hundreds of billions, if not trillions, of dollars.
The technological path had become considerably less certain in the three years since the last election. The costs of green hydrogen and steel were commercial non-starters. Offshore wind was becoming too expensive for any corporate investor to consider. Transmission lines were rising in cost, and community opposition was growing. The boring machines for Snowy Hydro 2 had come to a stop.
Yet, with the Greens breathing down their necks, there was a strong political incentive to keep the green fantasy alive, at least until after the election.
Fast forward to this month’s Budget speech, the first for 14 months, and the first of Labor’s second term.
While attention was fixed on Labor’s audacious broken promises on Capital Gains Tax, negative gearing and trusts, the passing references to climate change and net zero were barely noticed.
In four years, action on climate change had been demoted from “the generational and economic imperative” that was the centrepiece of Chalmers’ first Budget address, to a mere footnote in his fifth.
The green boondoggles loomed large in a detailed breakdown of government spending, but most of it has been shifted off-budget.
How much? We can only guess, since the government has refused to cost the future liability of guaranteeing returns to renewable energy corporations - many, if not most, of them headquartered overseas, incidentally - that Chris Bowen has been obliged to put on the table to put projects over the line.
Chalmers’ silence in the Budget speech is further evidence that Labor is dumping, or at the very least watering down, its green energy rhetoric as quickly as it decently can. It knows that net zero has become poison among the majority of voters. At the Farrer by-election, for example, all four candidates in the Sky News pub debate - One Nation, Liberal, National and even independent Michelle Millthorpe told Paul Murray they were opposed to Net Zero. Millthorpe’s $1 million campaign was funded in part by the same renewable energy interests backing the teals.
Meanwhile, the green left movement is increasingly ignoring the green bit and concentrating on moving to the left. The new cause-”from the river to the sea”-is net zero with an anti-Semitic twist. The new goal is not the elimination of carbon emissions, but Israel, the Jewish homeland established in the wake of the Holocaust, rather than carbon emissions.
It is tempting to rejoice in the broken promises of an 82 per cent clean energy grid by 2030, and net zero emissions by 2050.
Yet celebration is a little premature. Commitments already locked in will drain countless billions from government finances for at least the next decade. Reckless government commitments to underwrite risky renewable energy investments, most of which are hidden from public scrutiny, could cost us even more.
Albanese - probably the most stubborn and disingenuous prime minister since Federation - will never admit he was wrong on anything, let alone the climate craze in which Labor has invested heavily for almost 20 years Rudd declared global warming to be the greatest moral and economic challenge of the decade.
It will take a change of government to finally put this to bed and begin the expensive and lengthy job of repairing the damage, by reversing government policy to support coal, gas and nuclear - things that actually work, rather than things that appeal to the daft ideological fantasies of the intellectual left.