2023-2024 Federal Budget - Energy & Resources

Hydrogen Headstart

The Government will provide $2.0 billion to accelerate the development of Australia's hydrogen industry, catalyse clean energy industries, and help Australia connect to new global hydrogen supply chains.  Funding includes:

• $2.0 billion for the establishment of a new Hydrogen Headstart program, which will provide revenue support for investment in renewable hydrogen production through competitive production contracts, including funding for the Australian Renewable Energy Agency and the Department of Climate Change, Energy, the Environment and Water to support the development and operation of the program
• $5.6 million in 2023-24 to analyse the implications for Australia of intensifying global competition for the clean energy industry, and to identify actions before the end of 2023 to further catalyse clean energy industries, ensure Australian manufacturing competitiveness and attract capital investment
• $2.0 million over two years from 2024-25 to establish a fund to support First Nations communities to engage with hydrogen project proponents and planning processes.

Funding for the Hydrogen Headstart program will be held in the Contingency Reserve.

Budget Speech p 9
Budget Overview p 32
Budget Paper No 2 p 71
Regional Ministerial Budget Statement p 24
Building a clean energy future Fact Sheet
Media Release

Energy Price Relief Plan

The Government will provide $1.5 billion over 5 years from 2022-23 (and $2.7 million per year ongoing) to reduce the impact of rising energy prices on Australian households and businesses by providing targeted energy bill relief and progressing gas market reforms. Funding includes:

• $1.5 billion over two years from 2023-24 to establish the Energy Bill Relief Fund to support targeted energy bill relief to eligible households and small business customers, which includes pensioners, Commonwealth Seniors Health Card holders, Family Tax Benefit A and B, recipients and small business customers of electricity retailers
• $14.7 million over 5 years from 2022-23 (and $2.7 million per year ongoing) to the Australian Competition and Consumer Commission to administer and enforce compliance with a temporary cap of $12 per gigajoule on the price of gas and to develop and implement a mandatory gas code of conduct
• $9.5 million over 3 years from 2022-23 for the Australian Energy Regulator to monitor coal and gas markets across the National Electricity Market.

The Government will also provide funding to support the New South Wales and Queensland governments to implement a cap of $125 per tonne on the price of coal used for electricity generation. This funding is not for publication (nfp) due to commercial sensitivities.

Budget Speech p 4
Budget Overview p 12
Budget Paper No 2 p 86
Cost-of-Living Relief Fact Sheet
Media Release

Household Energy Upgrades Fund - establishment

The Government will provide $1.3 billion in funding to establish the Household Energy Upgrades Fund to support home upgrades that improve energy performance and save energy. Funding includes:

• $1.0 billion in funding to the Clean Energy Finance Corporation to provide low-cost finance and mortgages in partnership with private financial institutions for home upgrades that save energy
• $300.0 million over 4 years from 2023-24 held in the Contingency Reserve to support upgrades to social housing, in collaboration with states and territories, that save energy
• $36.7 million over 4 years from 2023-24 (and $2.1 million per year ongoing) to develop further initiatives to improve energy performance, including expanding and modernising the Greenhouse and Energy Minimum Standards program and the Nationwide House Energy Rating scheme.

The cost of this measure will be partially met from savings identified in the 2023-24 Budget measure titled Climate Change, Energy, the Environment and Water - reprioritisation. This measure extends the 2022-23 October Budget measure titled Support for Energy Security and Reliability.

Budget Speech p 4
Budget Overview p 13
Budget Paper No 2 p 70
Cost-of-Living Relief Fact Sheet
Media Release

Powering the Regions Fund - final design

The Government will allocate $1.3 billion over 5 years from 2022-23 from $1.9 billion provided in the 2022-23 October Budget to support the decarbonisation of existing industries, develop new clean energy industries and support sovereign manufacturing capacity essential to the energy transition including:

• $450.3 million over 4 years from 2023-24 (and a further $149.7 million over 3 years from 2027-28) to establish the Safeguard Transformation Stream to support decarbonisation investments at trade-exposed industrial facilities covered by the Safeguard Mechanism
• $400.0 million over 4 years from 2023-24 to establish the Industrial Transformation Stream to support the reduction of direct and indirect emissions at existing industrial facilities, or clean energy development, in regional Australia
• $400.0 million over 3 years from 2023-24 to establish the Critical Inputs to Clean Energy Industries Stream to support the sovereign manufacturing capability of industries that produce inputs (primary steel production, cement and lime, alumina and aluminium) that are essential to the development of Australia's clean energy industries
• $14.5 million over 4 years from 2023-24 to accelerate the development of the offshore renewable energy industry growth strategy and regulatory compliance activities
• $8.6 million over 4 years from 2023-24 to support implementation and review of the Safeguard Mechanism reforms
• $3.9 million over two years from 2023-24 for a review of policy options to reduce carbon leakage, including an Australian carbon border adjustment mechanism.

Funding of $89.0 million has also been provided through the Powering the Regions Fund to support energy transition investments important to regional Australia, including the 2023-24 Budget measures titled Capacity Investment Scheme and Ensuring the Supply of Reliable, Secure, and Affordable Energy.

Budget Overview p 33
Budget Paper No 2 p 78
Regional Ministerial Budget Statement p 23
Building a clean energy future Fact Sheet
Media Release

Clarifying the tax treatment of 'exploration' and 'mining, quarrying, and prospecting rights'

The Government will amend the Petroleum Resource Rent Tax (PRRT) legislation to clarify that 'exploration for petroleum' is limited to the 'discovery and identification of the existence, extent, and nature of the petroleum resource' and does not extend to 'activities and feasibility studies directed at evaluating whether the resource is commercially recoverable'. This measure is consistent with the Government's policy intent and the Commissioner of Taxation's administrative treatment and written binding advice as set out in TR 2014/9, which applies from 21 August 2013. The amendments will apply to all expenditure incurred from 21 August 2013.
Budget Overview p 63
Budget Paper No 2 p 16

Petroleum Resource Rent Tax - Government Response to the Review of the PRRT Gas Transfer Pricing arrangements

The Government will amend the Petroleum Resource Rent Tax (PRRT) in response to the Treasury's Review of the PRRT Gas Transfer Pricing (GTP) arrangements. The Government will introduce a cap on the use of deductions to offset assessable PRRT income of liquefied natural gas (LNG) producers under the PRRT. The cap will bring forward PRRT receipts from LNG projects which are yet to pay PRRT and ensure a greater return to taxpayers from the offshore LNG industry. The cap will limit deductible expenditure to the value of 90 per cent of each taxpayer's PRRT assessable receipts in respect of each project interest in the relevant income year and apply after mandatory transfers of exploration expenditure.

Budget Overview p 63
Budget Paper No 2 p 23

Climate Change, Energy, the Environment and Water - reprioritisation

The Government will redirect $113.1 million over 8 years from 2022-23 across the Climate Change, Energy, the Environment and Water, portfolio to fund portfolio policy priorities. Redirected funding includes:

• $57.2 million from uncommitted funding from the 2021-22 Budget measure titled Emissions Reduction and New Investments under the Technology Investment Roadmap to new measures supporting clean energy technology investment
• $22.2 million from the partial reversal of the 2020-21 Budget measure titled JobMaker Plan - securing Australia's liquid fuel stocks, including reducing uncommitted funding for diesel storage projects not taken up by industry
• $10.5 million from the partial reversal of the 2020-21 Budget measure titled JobMaker Plan - investment in new energy technologies, including redirecting uncommitted research funding to delivering high-quality emissions data and reporting against Australia's emissions reduction targets
• $10.0 million from the partial reversal of the 2022-23 March Budget measure titled Strengthening the Great Barrier Reef through Stewardship and Leadership, with uncommitted funding to be redirected towards tropical marine science activities that better align with Government priorities
• $6.5 million from the partial reversal of the 2021-22 Budget measure titled Agriculture 2030, with uncommitted funding from the Food Waste for Healthy Soils Fund to be redirected to better align with Government priorities
• $4.0 million from the partial reversal of the 2021-22 Budget measure titled Incentivising Recycling Behaviours, with uncommitted funding from the Food Waste for Healthy Soils Fund to be redirected to better align with Government priorities
• $2.0 million from the partial reversal of the 2022-23 March Budget measure titled Streamlining Environmental Protections and Modernising Indigenous Cultural Heritage Protections, with uncommitted funding to be redirected towards implementing the Government's Nature Positive Plan: better for environment, better for business
• $0.7 million from the partial reversal of the 2019-20 Budget measure titled Climate Solutions Package to redirect uncommitted funding from the Energy Efficient Communities program to better align with Government priorities.

Budget Paper No 2 p 67
Media Release

Supporting Australian Critical Minerals

The Government will provide $80.5 million over 4 years from 2023-24 to support the Australian critical minerals sector to build diverse and competitive supply chains, attract international investment, and transition to net zero. Funding includes:

• $57.1 million over 4 years from 2023-24 to undertake international engagement to promote Australian critical minerals projects and build diverse and resilient supply chains with key international partners
• $23.4 million over 4 years from 2023-24 for critical minerals policy development and project facilitation, including activities to showcase Australia's environmental, social, and governance credentials to international markets.

This measure will be offset by redirecting funding from within the Industry, Science, and Resources portfolio.

Budget Overview p 32
Budget Paper No 2 p 169
Regional Ministerial Budget Statement p 58
Building a clean energy future Fact Sheet
Media Release

Ensuring the Supply of Reliable, Secure and Affordable Energy

The Government will provide $80.0 million over 4 years from 2023-24 (and $11.1 million per year ongoing) to support the supply of cheap, clean, and reliable energy across Australia. Funding includes:

• $35.6 million over 4 years from 2023-24 (and $8.8 million per year ongoing) to the Australian Energy Regulator (AER) to continue compliance and enforcement activities to regulate and monitor energy markets
• $28.4 million over 4 years from 2023-24 to support the delivery of new cross-government energy market reforms and national energy projects as directed by Energy Ministers through the Energy Special Account
• $10.9 million over 4 years from 2023-24 (and $2.4 million per year ongoing) to the AER for new legislated functions that will support Australia's energy transformation and reduce emissions.

The Government will also increase resilience in the retail electricity sector by progressing work with Snowy Hydro Limited to register in the Retailer of Last Resort scheme.

Budget Speech p 4
Budget Overview p 13
Budget Paper No 2 p 68
Building a clean energy future Fact Sheet
Media Release

Extending the clean building managed investment trust withholding tax concession

The Government will extend the clean building managed investment trust (MIT) withholding tax concession to data centres and warehouses.

Budget Paper No 2 p 18