Senator is seeking to amend the carbon tax repeal bills to stop $435m in funding being stripped from the clean energy body

Motoring Enthusiast senator Ricky Muir has emerged as a surprise would-be saviour of the $2bn Australian Renewable Energy Agency (Arena), seeking to amend the carbon tax repeal bills to stop $435m in funding being stripped from the clean energy body and promising to try to stop its abolition.



Muir’s amendment is very similar to one already circulated by the Australian Greens, and seeks to stop immediate funding reductions for Arena, which the government is seeking to abolish with separate legislation to be voted on in September.



The move raises the possibility that the crossbench could frustrate the government’s intention to abolish Arena. Palmer United party senators have already promised to stop the government’s plan to abolish the Clean Energy Finance Corporation and the existing renewable energy target.



But the government is already seeking to effectively close Arena ahead of legislation passing, refusing to reappoint board members as their terms expire. The government wants to return $1.3bn in Arena funding to the budget, and then have the industry department oversee around $900m in funding deals that have already been struck.



Muir’s amendment would stop the immediate $435m funding cut announced by the Coalition last September, but a spokesman for the Victorian senator said it was the first step in an attempt to retain the body.



“Ricky wants to preserve Arena. He is in favour of renewable energy and he thinks it is doing great work,” the spokesman said.



Muir’s intervention comes as the Senate prepares to pass the package of bills repealing the carbon tax on Wednesday or Thursday, with the backing of the three Palmer United party senators and others on the new crossbench.



PUP’s Senate leader, Glenn Lazarus, introduced PUP’s only amendment to the main carbon tax repeal bills on Tuesday, reversing the onus of proof so that power retailers must show they have passed on cost savings to households.



As previously reported by Guardian Australia, PUP is also finalising amendments to legislate its dormant ETS, which it has announced will be part of the bill to repeal the climate change authority.



PUP has said its amendments will retain the CCA to advise governments on when a set of conditions are met to activate the Australian ETS. The negotiations are about exactly what actions will be required by trading partners the United States, the European Union, South Korea, Japan and China for the Australian ETS to be enacted.



At times PUP leader Clive Palmer has referred to the other countries having to have an ETS, but another proposal is that they would need to have an “effective” carbon price at a certain level, meaning they might be achieving significant greenhouse gas reductions through different policies.



The uncertainty about the amendment means the Climate Change Authority Repeal Bill will be considered separately to the rest of the carbon tax repeal legislation. It is unclear whether the government is considering the amendment.



Introducing the PUP’s power pricing amendments, Lazarus said the Australian ETS would occur “if the day comes when our American trading partners, the US, China, the EU, Japan and Korea set up an emissions trading scheme.”



Lazarus said the carbon tax repeal was “historic”.



It is understood the PUP senators and independent senator Nick Xenophon and DLP senator John Madigan are still considering how they will vote on the legislation to repeal Arena, but may back the Greens and Muir and refuse to allow its abolition.



Given that Arena may now not be abolished, the Greens leader, Senator Christine Milne, has written to the industry minister, Ian MacFarlane, complaining that he is pre-empting the parliament by refused to renew the contracts of Arena board members.



MacFarlane’s actions will mean that within a few weeks the secretary of the industry department is the only remaining board member of a multi-million-dollar authority.



“As you will be aware, Arena is a statutory authority, and the future of the institution is not subject to the government’s sole discretion. I therefore urge you to appoint board members until the will of the parliament is clear,” she wrote.



“Without appointing board members, the government would frustrate the intention of the act and place an undue workload on the secretary of the department,” she wrote.



Regarding Muir’s amendment, Milne said “the Greens welcome Ricky Muir’s support for the renewable energy agency and we hope that he will bring his Palmer United party colleagues along with him.”



Muir, a former timber worker, has entered a loose voting alliance with PUP, but his advisers have said the parties will not always vote together.



A spokeswoman for Macfarlane said “the government has outlined its plans to bring the management of Arena projects into the Department of Industry. While that process is undertaken the management of Arena contracts and investments is continuing under board oversight as transitional arrangements are made".