Environmental reform could slash government spending, lift productivity: expert
The Albanese government has faced continued pressure over Australia's sluggish productivity growth, which is among the worst in the developed world.
Australian Climate and Biodiversity Foundation chair Ken Henry said sweeping environmental reform could be the solution.
The former Treasury secretary will tell the National Press Club in Canberra on Wednesday there is 'no chance' the Labor government will meet its net-zero target while also delivering upon housing and infrastructure commitments without reform to state and federal environmental protection laws.
'The Australian government has an ambition to massively increase critical minerals exports and downstream processing here in Australia,' Dr Henry is expected to state.
'This means more mines, new industrial facilities, and more pressure being loaded onto broken EPBC project assessment and approval processes.'
The Environment Protection and Biodiversity Conservation Act, or EPBC, is Australia's main national environmental legislation.
Dr Henry said the government's pledge to erect 1.2 million homes by 2030 would require more land and transport, meaning more interaction with EPBC assessments.
'These projects, be they wind farms, solar farms, transmission lines, new housing developments, land-based carbon sequestration projects, new and enhanced transport corridors or critical minerals extraction and processing plants, must be delivered quickly and efficiently,' Dr Henry will tell the NPC.
'All these projects will be critical to enhancing economic resilience and lifting flagging productivity growth.
'Boosting productivity and resilience relies upon environmental law reform.
'But the biggest threat to future productivity growth comes from nature itself; more particularly, from its destruction.'
Dr Henry will urge for a breaking of the 'deadlock' to deliver sweeping reforms in a single package.
They would include protecting Matters of National Environmental Significance guidelines by shifting the focus to regional planning, urgent finalisation of the effective
national environmental standards, and formation of a national environmental protection agency.
He will also urge for 'genuine co-operation and a shared purpose' between business and environmental groups as well as between the states and federal government.
'Environmental law reform provides an opportunity to reconstruct the co-operative federal reform capability we developed in the 1990s but have since lost,' Dr Henry will state.
'A strong federal reform capability will be required to deliver other, even more challenging economic reforms. Environmental law reform can provide the template.'
Dr Henry said there was 'no point in building a faster highway to hell', and while approvals needed to be granted faster, the environment needed to be protected.
'In reforming the EPBC Act, we can get this right. We have had all the reviews we need,' he will say.
'All of us have had our say. It is now up to parliament. Let's just get this done.'
The Labor government is contending with a raft of proposals to fix productivity, from superannuation reform to artificial intelligence and disability inclusion.
At the same time, Environment Minister Murray Watt said in May that legislating a federal environment protection agency was a 'very high and immediate' priority.
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Australia's environment protection laws have both failed to stop the degradation of Australia's natural environment and held back economic growth, former Treasury secretary Ken Henry has warned. In a speech being delivered at the National Press Club on Wednesday, Dr Henry is calling for urgent overhaul of Australia's environment laws, saying changes are needed in this term of parliament. "The stakes are high," he argues. "We have whole industries with business models built on the destruction of the natural world. "I am angry at our failures. But we should all be angry at our collective failure to design economic structures, including environmental regulations, that underpin confidence in a better future for our children and grandchildren. Dr Henry is speaking in his capacity as chair of the Australian Climate and Biodiversity Foundation (ACBF), a not-for-profit founded in 2021. He takes the opportunity to plead with Australian policymakers to work together for the good of the nation. "I am here to make the case for the urgent reform of Australia's broken national environment laws, the Environment Protection and Biodiversity Conservation Act 1999 (EPBC)," he says. "Clearly, this is not a small task. There have been three failed attempts in the past 15 years. But reform is essential. And this is the time to get it done. "The EPBC Act has patently failed to halt the degradation of Australia's natural environment. "Report after report tells the same story. The environment is not being protected. Biodiversity is not being conserved. Nature is in systemic decline. "Independent reviews confirm that the environmental impact assessment systems embedded in the laws are not fit-for-purpose. Of particular concern, they are incapable of supporting an economy in transition to net zero and they are undermining productivity," he adds. Dr Henry says economic policy minds around the world have "slowly woken up to the fact" that time is fast running out for the natural world, the foundation of all life on Earth. "It is now well accepted that a degraded natural world poses myriad threats to food systems, the provision of clean air and water, and the continuing supply of other ecosystem services critical to production," he says. "And it is well accepted that things are getting worse, much worse, not better. "In our remnant forests, the habitat of endangered species, including the koala and the greater glider, continue to be logged and cleared. "About 100 million hectares of forests have been cleared since 1788, and remarkably the practice continues with an average of 400,000 hectares of primary and second forest cleared each year between 2015 and 2019. "The most recent National State of the Environment Report confirms a state of crisis, finding that 'our inability to adequately manage pressures will continue to result in species extinctions and deteriorating ecosystem condition, which are reducing the environmental capital on which current and future economies depend,'" he observes. "Rachel Carson's Silent Spring is happening, here in Australia. Not driven by pesticides so much as a determined commitment to clear the bush and to destroy the natural world. And he argues policy paralysis isn't an option anymore. Dr Henry argues Australia has been talking at length about our national problems with housing, productivity growth, the tax system, and the energy transition, but these things are all related to our environment protection laws. "Environmental law reform provides an opportunity to reconstruct the cooperative federal reform capability we developed in the 1990s but have since lost," he says. "A strong federal reform capability will be required to deliver other, even more challenging, economic reforms. Environmental law reform can provide the template. "I am the third speaker since 2021 to address the National Press Club on the need for the reform of national environment laws, following former environment ministers Sussan Ley and Tanya Plibersek. "Both ministers detailed myriad problems with the existing laws. Both pledged to implement the far-reaching reforms recommended by the Independent Review, chaired by my long-time reform comrade Graeme Samuel during 2019 and 2020. "Yet, despite the quality of Graeme's review, and the strong commitment of these ministers, from opposite sides of the political fence, here we are, in the winter of 2025, and nothing has changed. He expresses frustration with the lack of movement. "There has been plenty of activity. Policy papers have been drafted and endorsed at the highest levels of government. Bills have been drafted and debated. "There have been endless rounds of consultation. Acres of literal and virtual newsprint have been generated by those arguing the merits and costs of reforms. Parliamentary committees have come and gone. "But the laws haven't moved an inch. Not a single reform has been implemented. Why?" he laments. Dr Henry argues the EPBC has utterly failed. He says Samuel's review made 38 recommendations to change the trajectory of nature loss, and to ease the burden of the complexity, confusion and meaningless process that has been a cause of frustration to landholders and the business community, and which has undermined our national productivity. "Remarkably, the wide-ranging set of recommendations was supported by both business and environmental organisations," Dr Henry says. "Support from both camps remains strong today, despite two parliamentary terms marked by a failure to pass the necessary legislation." He said core to Samuel's proposed reforms was a set of binding National Environmental Standards and enforceable rules to apply to all environmental decision-making, nationwide. The standards would specify in detail, with a minimum of discretion, how Matters of National Environmental Significance would be managed, protected and, where required, restored. "Graeme recommended removing from the Act all the special carve-outs and exemptions. He also recommended clear and unambiguous principles, language and terms," he says. "Standards would be backed by high integrity data and evidence that would inform decision-making, replacing the project by project, species by species approach hardwired into the EPBC Act with a landscape and regional approach. "Regional plans would enable the identification of areas that should not be developed, areas required for long-term restoration and those areas where development assessments could proceed rapidly," he said. He says under that proposal, the concept of Ecologically Sustainable Development (ESD) would be applied not project by project, but region by region. "Project by project application of ESD is simply nuts. "It is time we stopped pretending we have the cognitive discipline to choose a sustainable balance among economic, social and environmental goals, project by project. "ESD would be applied not project by project, but region by region. In this way, dealing with the spatial and inter-temporal challenges to rational decision-making to which I referred earlier," he says. Finally, he says economists were also realising that they had to change their way of thinking about the world. "Economics is concerned with optimising choices," he notes. "Over the past 100 years or so, economics has, for the most part, ignored the most important constraints on human choices. These are embedded in the immutable laws of nature, in chemistry, physics and biology. "Human development is necessarily constrained by these laws. "Our failure to recognise that the laws of nature affect the set of feasible choices available to us is now having a discernible impact on productivity. And things are getting worse, with accelerating speed. Lifting productivity growth is going to require much better articulation of the natural constraints affecting the choices available to us. These must be written into law, in the form of enforceable National Environmental Standards. "In reforming the EPBC Act, we can get this right. We have had all the reviews we need. All of us have had our say. "It is now up to parliament. Let's just get this done," he concludes.
