Federal Budget 2023-24: Initiatives for climate and energy efficiency

These sustainability related initiatives are listed below and follow similar measures announced by the Albanese Government in the budget released last November.

Energy efficiency upgrades fund

A new $1.3 billion fund will be established and offer low-interest loans for homeowners wishing to make their homes more energy efficient. The fund aims to enable 110,000 low-interest loans to households looking to improve their energy efficiency performance.

The loans are designed to encourage households to invest in more efficient appliances or improve their energy efficiency in other ways. The loans can go towards upgrades such as double-glazing windows or adding solar panels. $300 million from the total $1.3 billion fund will be directed to upgrading social housing.

Supporting Net Zero

The budget allocates $83 million over four years to create a Net Zero Authority which is aimed at helping workers transition out of heavy-emitting industries.

A further $450 million will go towards helping the country's largest industrial emitters (who are part of the revamped Safeguard Mechanism) make investments that help them reduce their emissions.

Further to the above, $2 billion has been set aside to help drive the development of a clean hydrogen industry in Australia.

Gas industry

The Federal Government will extract an additional $2.4 billion over the forward estimates from oil and gas companies by making changes to the Petroleum Rent Resource Tax. These adjustments will limit how much companies can deduct from their assessable income, fast-tracking tax revenue that was not due to be collected until 2030 or later.

The Government will need to pass legislation to initiate the change, which will require either the support of the Coalition or the Greens and crossbenchers to succeed.

Small business – electrification tax discount

A bonus tax discount to help small businesses electrify will be offered to all businesses with an annual turnover of less than $50 million.

Those small businesses will be able to claim 20 per cent of spending that supports electrification or more efficient energy use on their taxes, including electrified heating and cooling, more efficient white goods, induction cooktops and installing batteries and heat pumps.

The maximum that can be claimed through the 'Energy Incentive' will be $20,000, meaning up to $100,000 worth of spending will be eligible for the incentive.

What does this mean for HIA members?

One of the key policy platforms the Albanese Government took to the last federal election was its environmental credentials. This has been reflected in the first 12 months of the new Government, with their 2022 and 2023 Budgets' primary focus on climate change, energy bills reduction and energy stability.

To what extent these budget measures will directly affect new home building and building businesses is not completely clear. 

However, the $1.3 billion initiative to support energy efficient upgrades for existing homes is encouraging. It reflects HIA's long-term advocacy of further efforts on emissions reductions and bill savings measures being directed at existing homes built prior to 2004, rather than our already well performing new housing stock.  

The full details of how this scheme will work has yet to be announced and HIA will keep members abreast of this as further information comes to hand.