In contrast to last year’s budget in October 2022 which forecasted a deficit $36.9bn for this financial year Hon Dr Jim Chalmers MP announced a surplus of $4bn in the 2023 Federal Budget, which is the first in 15 years.
Under a tightly controlled budget, the industry could be forgiven for worrying that there may have been unexpected shocks. Especially with the closure of Liddell, Baywater trip and extended outages. However, it was good news! But is everything that glimmers actually gold?
Little was mentioned in the 2023 budget regarding the huge windfalls the treasury gained from the commodity industry and that fact that 20 per cent of the surplus came from increased commodity prices.
Overall, the budget was scarce on Energy for large business, with it mainly focusing on infrastructure for Electric Cars, cost of living relief for residential and small businesses and the creation of a National Net Zero Authority.
There was a mention of the new Hydrogen head start program, giving $2bn to the scheme and more investment in green industry, which was expected. And interestingly a mention of the Capacity Investment Scheme “unlocking over $10 billion of investment in firmed-up renewable energy projects up and down the east coast” which we hope to hear more about.
The Gas and Coal caps were mentioned but there has been no talk of the Coal Cap either being extended or removed when it expires in December 2024.
Undoubtably in the commodity space the biggest losers yesterday were the Gas companies, due to the extension of the Gas cap at $12/GJ into 2025, increased taxes due to the extraordinary market conditions, and the Petroleum Rent Resource Tax.
The budget is expected to be picked apart, but overall, there are no major changes to the status quo, and the government is cautious about throwing around too much cash in the face of slowing economic growth.
This is a summary article from Edge2020 – read the original article.