Coalition opposes Net Zero Economy Authority

Brandon How

A proposed Net Zero Economy Authority to streamline clean industry investment and support regional workers will need support from the crossbench and the Greens after the Coalition declared its opposition on Monday.

The plan for a new Authority received broad support during a seven-week Senate inquiry that has now recommended establishing the independent authority as soon as possible.

But the opposition is warning it would introduce a top-down “Canberra-centric” approach to industrial transformation and duplicate existing government functions.

The Net Zero Economy Authority (NZEA) is already being set up as an agency within the Department of Prime Minister and Cabinet. The government wants it to  become an independent authority that facilitates energy transition investments and supports workers affected by the phase out of fossil fuels, particularly in regional areas.

Although some stakeholders called for a place-based approach to the work of the NZEA, the government legislation for an authority received wide support across sectors.

The Senate inquiry tabled its report into the NZEA bill on Monday, urging it be passed “as soon as practically possible”.

The Committee’s deputy chair Richard Colbeck said the federal Coalition accepts that communities will face significant challenges in the transition to a net zero economy, but the proposed NZEA’s risks “a top-down, Canberra-centric approach”.

Instead, the Coalition argues that “transformation driven by local communities provides the most effective result where that transformation is actively supported by all levels of government with appropriate supports and economic conditions conducive to new investment and employment creation”.

Senator Colbeck’s dissenting remarks also warn the NZEA’s intended function to facilitate government investment in net-zero industry projects duplicates existing federal funding agencies like the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA).

Greg Combet, who heads the current Net Zero Economy Agency, has said it will continue preparing investment cases for federal funding agencies like CEFC and ARENA.  But it is “certainly not intended to compromise the independence or their investment mandate”.

The Coalition also argued an Authority will duplicate the work of the Major Project Facilitation Agency that speeds up approvals for high value projects as well as the work of state government regional planning initiatives.

The Greens — which had their proposed transition authority rejected by a Senate committee in 2023 — will at least seek five concessions from the federal government in exchange for their support.

The party wants funding for the Authority to be included in law.

Federal government forecasts expect the NZEA to require $52 million a year from 2026-27, which the Greens want set as the Authority baseline operational funding and “indexed in line with CPI in each following year”.

The Greens also want to expand the remit of the NZEA to include facilitation of investment in ‘adaptation’ projects focusing on dealing with the effects of climate change.

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