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Media Release

May 16 2008

Budget misses sustainability

For Australia’s economy to be sustainable, nation-building investment is critical, but the Rudd/Swan budget didn’t deliver on sustainability, according to UniSA academic, Dr Geoffrey Wells.

The academic director of the Graduate Certificate in Sustainable Business, Dr Wells said that to establish sustainability for the long-term, there has to be a mechanism for investing in the future. The future funds recognise this, yet sustainability missed out.

“Funding was announced for relatively small scale-projects such as solar panels, low emissions cars, support for the emissions trading scheme, and for schools to install solar panels. Only $150 million was allocated for research and development of clean energy technology. This is a very small amount of money, particularly when you put it against $500 million for a national clean coal fund in an area where there is some doubt about the progress that could be made,” Dr Wells said.

“These are all ‘business as usual’ strategies, not the investment strategies that governments would be looking at if they were serious about climate change,” he said.

The recent Stern Review estimated that over the next 200 years, the damage costs of climate change worldwide, if not mitigated, could be between five and 20 per cent of global Gross Domestic Product (GDP) – a very substantial amount. Stern calculated that if one per cent of GDP was spent now, governments could mitigate damage significantly.

“One per cent of GDP is substantially more than is being invested here,” Dr Wells said.

“The government should have set up a $5–8 Billion future fund for climate change this year with funds available, but it wasn’t done. Instead we have low level, fairly small-scale approaches, which don’t represent the investment that is needed to compensate for the damage that’s occurring and to mitigate the effects of what we know are coming with climate change.

“It was disappointing and puzzling, given that the government had the investment mechanism right,” Dr Wells said.

“If we talk about nation-building, which is what this budget was supposed to be all about; climate change is an essential element of it.

“Education, infrastructure and health are all at the centre of sustainability and they are very important, but to leave out future fund investments in the environment and climate change is to risk pulling the rug out from under all of those areas.”

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