Abbott Government's Plans to Scrap ARENA Raises Fears of Australia Being Left Behind in Renewable Energy

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By Reissa Su | May 13, 2014 4:49 PM EST

Prime Minister Tony Abbott may be abandoning his support for clean and renewable energy in Australia if the government is planning to cut the Australian Renewable Energy Agency (ARENA) in the budget.

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A man works on a roof covered with solar panels at the Centre for Alternative Technology in Machynlleth, Wales March 25, 2010.

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ARENA chairman Greg Bourne has warned the Abbott government will be out "cleaning the decks" if the agency's remaining unallocated funds worth $1 billion were returned to consolidated government revenue. Senior officials and industry groups speculate that the Abbott government is moving to scrap the $10-billion Clean Energy Finance Corporation to weaken or delay Australia's Renewable Energy Target.

Australian Solar Council Chief Executive John Grimes said the clean energy industry has expressed "outrage" with the likely axing of ARENA. Grimes added that the plan was an ideological agenda on the part of government to shut down any support for renewable energy.

The Australia Solar Council has spent over $350,000 during the Senate re-election in Western Australia. According to Grimes, the council now plans to target a number of Coalition members in the next elections. He said Australians "love solar" and the issue was going in a political direction to address the problem.

Grimes has predicted the Abbott government will be cutting the Million Solar Roofs Programme which has been the government's substantive policy in supporting renewable energy. If the government cuts the program, it will only add to Mr Abbott's growing list of broken election promises.

According to reports, scrapping ARENA along with its funding will be going beyond the National Commission of Audit's recommendation to consolidate the agency into the Department of Industry.

University of NSW renewable energy expert Mark Diesendorf said Australia will be left behind if the Abbott government will axe the country's clean energy industry.  Many Australians stand to lose their jobs if support will be withdrawn.

Meanwhile, Australia's healthcare industry is expected to take a hit when the budget is revealed as investors await the impact on healthcare stocks.

The Abbott government is expected to reduce healthcare costs after an audit in May has recommended sweeping changes to prevent what the government has described as a "fiscal crisis." In Australia, the federal government spends 16 per cent on healthcare. Many healthcare companies depend on government spending in growing their business.

Mr Abbott has been criticised for telling Australians that they will "thank the Coalition" once cuts are made in the country's annual budget next week. He has to convince the people who are used to the government's generous welfare benefits that Australia's debt has worsened, justifying the need for reductions on spending, including welfare.

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(Photo: REUTERS / Stefan Wermuth)
A man works on a roof covered with solar panels at the Centre for Alternative Technology in Machynlleth, Wales March 25, 2010.
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