Labor Infighting Deepens as Australia Weighs Cuts to Clean Energy Subsidies

By Staff, Agencies

Australian Environment Minister Murray Watt has urged Labor colleagues to stop undermining Treasurer Jim Chalmers, as the government faces mounting pressure over its budget and considers cutting popular clean energy subsidies to ease inflationary pressures.

Cabinet ministers met on Monday to discuss potential savings for next month's mid-year budget update, as the government seeks to reduce public spending following a recent interest rate hike by the Reserve Bank of Australia. 

Watt called on ministers to support one another, describing Chalmers as an excellent treasurer operating under difficult economic conditions. 

He acknowledged that the treasurer was facing criticism from within Labor, saying, "It's pretty obvious that there are all sorts of people making all sorts of comments."

The government is also facing declining support in recent opinion polls. The Resolve Political Monitor showed Labor's primary vote falling to 28%, down from 34.6% at last year's election, while One Nation remained at 25%. 

A separate Redbridge poll put Labor at 26%, with One Nation leading at 28% and the Coalition at 25%.

The budget review comes after the Reserve Bank raised interest rates, with Governor Michele Bullock pointing to excessive public and private spending as contributing to inflationary pressures. 

Watt, meanwhile, accused opposition parties of blocking proposed savings worth A$10 billion, including changes to private health insurance rebates for people over 65.

Prime Minister Anthony Albanese has confirmed that public service spending will also face scrutiny, with departments and agencies potentially required to identify further savings. 

Among the measures under review are Labor's A$7 billion home battery subsidy program and incentives for electric vehicle purchases. 

The battery scheme, initially projected to cost around A$2 billion, has supported the installation of more than 600,000 systems, while officials are considering introducing means-testing requirements. Electric vehicle subsidies have also cost the budget considerably more than initially anticipated.

Meanwhile, opposition leader Angus Taylor announced a proposed "red tape razor gang" aimed at reducing regulatory costs and easing the burden on businesses.