It is expected today to throw hundreds of millions of dollars behind clean coal projects and alternative energy in a push to reduce Australia's greenhouse gas emissions.
Federal Treasurer Peter Costello will announce a $A230 million solar power technology package, including a $A125 million solar power plant in northern Victoria, News Limited reports today.
The project will include technology from the Melbourne firm Solar Systems. It will be worth $A400 million when completed.
Other ventures include a coal-drying project in Victoria's Latrobe Valley to burn coal more cleanly than existing technology allows and other procedures at coal-fired power stations to reduce the emission of carbon gases.
Mr Costello will make the announcement with Federal Industry Minister, Ian Macfarlane, hoping the funding will jumpstart up to $A10 billion in environmentally-friendly electricity projects.
The energy announcement will follow an additional $A560 million bailout for drought-affected farmers, outlined yesterday, which pushed the total cost to taxpayers to more than $A2 billion.
More than half the nation's farming land is officially drought-stricken, with 44 more areas declared eligible for exceptional circumstances (EC) assistance.
Mr Costello says the big dry, into its sixth year in some parts of the country, will restrain economic growth.
The federal government yesterday added an extra $560 million to drought relief for struggling farmers across Australia.
Environment minister Ian Campbell last night flagged the government's multimillion dollar investment would be "some of the biggest investment by any government anywhere in the world to address climate change".
About $500 million is expected to be allocated from a low-emissions technology development fund, a $300 million coal industry fund, and funds from the Asia Pacific Partnership on Clean Development and Climate (AP6).
Government money is expected to generate huge commercial projects to offset greenhouse gas emissions, particularly in the coal industry.
Renewable energy groups will be watching for new allocations, particularly to solar projects.
At the same time, Mr Costello said the government should not legislate against future nuclear power projects, and predicted a nuclear plant would be built some time in the next 10 years when it becomes economically viable.
"I think we should legislatively say, provided you meet all of the requirements in relation to safety and export controls and all those sorts of things, environmental consideration, that there is no legislative bar and then I would let the market work," Mr Costello told Fairfax newspapers.
"And the day it becomes commercial, someone will build it."
Queensland and possibly one other state are expected to make similar announcements soon about power projects and other technologies to reduce greenhouse gases, according to News Limited.