Labor-Greens deal spells big trouble for business

Any thoughts that the Albanese government would be able to resist sliding easily into a de facto coalition with the anti-development Greens have been dispelled by the opportunistic, last-minute deal on reforms to the Environment Protection and Biodiversity Conservation Act.

The Greens have achieved a long-cherished aim to wrest control of state forests from state governments and tighten the squeeze on farmers. Gas producers and industry have been left out of provisions that give greater authority to government ministers to get things done.

A new environment protection agency will enjoy sweeping powers, creating new uncertainty for business. The impact of the amendments will be to turbocharge the rollout of highly contested renewable energy projects.

This coincides with the report from the Climate Change Authority on Thursday that the government was well off track from being able to meet its climate targets either for 2030 or 2035. The authority, which is headed by former NSW Liberal MP Matt Kean, said for it to stay on track, the rate of (emissions) reductions must double in the five years to 2030 and triple in the decade to 2035.

It called for a streamlining of approvals for renewable energy projects and an extension of the Capacity Investment Scheme under which the federal government agrees to underwrite the profitability of renewable energy projects.

On climate, the EPBC reforms are one part of a two-card trick. While the nature reforms will work with the Greens to fast-track renewable energy projects, Energy Minister Chris Bowen is effectively running the Greens policies to close down Australia’s fossil fuel industry through his role as president of negotiations of COP31 through the UN.

The Greens parked their ambitions for a climate trigger in environmental law to fight another day but business groups are concerned that the wording around mandatory disclosure for higher emissions projects included in the new bill will be a Trojan horse that will produce more litigation and delay.

By siding with the Greens, the Albanese government has shown itself to be more interested in optics than outcomes for the national economy. The Greens under new leader Larissa Waters have shown they are more willing to compromise, following the party’s drubbing at the last election.

And the Coalition has been left looking like a protest party unable to deliver on the demands of what should be its core constituency – business and the broader economic national interest.

Business had wanted Sussan Ley to strike a compromise deal with Labor to avoid a worse outcome from the Greens, which is what it got. Whether or not Labor was ever genuine in wanting to do a deal with the Coalition is unclear but it is the Opposition Leader who is now accused of not being able to negotiate where it counts.

This is unfortunate, given that the original report by seasoned bureaucrat Graeme Samuel, on which the changes were based, was initiated by Ms Ley when she was environment minister in the Morrison government. Mr Samuel found the EPBC Act was out of date and required fundamental reform.

He said the act was “a barrier to holistic environmental management which, given the nature of Australia’s Federation, is essential for success”. He said elected government should always retain the ability to exercise discretion in individual cases. Such discretion should be a rare exception, demonstrably justified in the public interest.

The warm reception that the new laws received from environment groups tells you all you need to know about what it means for business. The most poetic response was from former Treasury head Ken Henry, who said: “Writing into law an acknowledgment that environmental protection and biodiversity conservation necessarily underpin everything else, and that they must therefore have primacy, is a profound achievement.”

The National Farmers Federation slammed concessions made to the Greens on land clearing, suggesting the bill misunderstood agricultural practices. Australia’s peak gas industry lobby said the deal “will entrench slow approvals which will drive up energy costs, deter investment and further delay the new gas supply Australia urgently needs.”

The Coalition has been outgunned and missed an opportunity to deliver where it counts.