The finance minister, Mathias Cormann, has said the Coalition’s deal with Labor to save some funding for the Australian Renewable Energy Agency (Arena) will be balanced by a new cut to the Clean Energy Innovation Fund – but Labor has denied that was the agreement.
Speaking on Sky News, Cormann said: “Labor has asked for us to restore $800m of that for grants funding so we will do that but the capital available to the Clean Energy Innovation Fund will be reduced accordingly.”
It is understood that would in effect be cutting the Clean Energy Finance Corporation (CEFC) by $800m, because the innovation fund is part of the CEFC.
He also stated that the proposed $1.3bn in cuts to Arena were actually going to be diverted from Arena to the innovation fund, suggesting that the new deal is reversing that move.
“What we did in the context of the last budget was reclassify about $1.26bn worth of grants funding into capital available for concessional loans or equity funding through the clean energy innovation fund,” Cormann said.
It is not clear what Cormann meant, because the $1.3bn cut to Arena’s grant funding was banked in the last budget as a saving.
Furthermore, a government fact sheet makes clear the innovation fund was carved out of CEFC money.
It says: “Through an updated investment mandate, the Government will direct the CEFC to make some of its legislated funds available for the Clean Energy Innovation Fund. Starting with $100 million in 2016-17, an additional $100 million will be available each subsequent year up to the $1 billion total.”
Cormann sought to clarify the situation on Twitter, saying the CEFC would not be cut and would remain at $10bn. It is not yet clear how the innovation fund could be cut, without cutting money from the CEFC, of which it is a part.
For avoidance of any doubt, the agreement with Labor on Omnibus Savings Bill has no impact on capital for CEFC. It remains at $10bn. #auspol
— Mathias Cormann (@MathiasCormann) September 13, 2016
A spokesman for Mark Butler, Labor’s climate and energy spokesman, told Guardian Australia he was confused and surprised by Cormann’s comments.
“Our understanding and expectation is that he is not cutting CEFC,” he said. “The government’s clean energy innovation fund was never the subject of negotiations.
“The discussion was progressed on the basis that any save that fell short of what we needed would be made up for by some other area, and that’s exactly what happened. So no cut to the Clean Energy Innovation Fund is needed.
“From our point of view he doesn’t need to offset the smaller saving in Arena from somewhere outside of the negotiating framework.”
The Greens’ climate and energy spokesman, Adam Bandt, called on Labor and the Coalition to clarify what the finance minister meant.
“It seems the finance minister thinks the government still gets to rip over a billion dollars from clean energy and that Labor has been outplayed,” Bandt said. “Far from saving clean energy, Labor just did a dirty deal with the Liberals to gut renewables.”
