Read the passage and mark the letter A, B, C or D on your answer sheet to indicate the best answer to each of the following questions from 2...

Read the passage and mark the letter A, B, C or D on your answer sheet to indicate the best answer to each of the following questions from 27 to 34.

        Comparing public support across energy sectors is far from neat. Definitions diverge, and implicit benefits often elude accountants. Because definitions vary and implicit support is hard to measure, like-for-like comparisons are inherently fraught. Policymakers justify subsidies to catalyse investment, stabilise supply, and protect jobs. Some supports are explicit – tax credits or grants – while others are tacit, emerging through murky pricing of pollution or discounted access to public resources. Hence, totals depend on what is counted, who is counting, and in which developmental stage an industry sits.

        For renewables in Australia, policy scaffolding is extensive. The Renewable Energy Target mandates retailer purchases via tradable certificates; costs largely flow to consumers, not the Commonwealth. The Capacity Investment Scheme uses competitive tenders to underwrite generation and storage revenue. Agencies such as ARENA dispense grants, while the CEFC provides concessional finance. Grid upgrades under Rewiring the Nation enable new transmission. Recent budget settings – e.g., the “Future Made in Australia” package – steer billions toward clean projects, shaping market maturity more than handing out cash.

        Support for coal and gas has deep roots. Earlier public ownership and legacy rules still matter, and studies argue implicit aid can dwarf explicit outlays. The Fuel Tax Credit Scheme alone runs into the billions annually, alongside instruments like the PRRT settings. Governments also co-fund enabling infrastructure – ports, roads, and industrial precincts whose “common use” facilities primarily service gas processing. In short, these factors collectively buoy incumbents: fiscal concessions, capital works, and permissive accounting of environmental externalities.

        Set side-by-side, the two systems of support do not map cleanly. Renewables benefit from market-making mechanisms that crowd in private capital; fossil fuels enjoy entrenched assistance, often hidden in baseline rules. Both streams are consequential, yet their intents differ: one accelerates an emergent sector; the other sustains a mature one. Debates persist over scope – do consumer-funded certificate costs count, or only line-item appropriations? Until a consensus taxonomy emerges, headline claims about “who gets more” will remain contestable.

(Adapted from Energy Fact Check Australia, 22 April 2025)

Question 27. Which of the following is TRUE according to paragraph 1?

A. Explicit subsidies are always larger than implicit ones in every sector.

B. The difficulty in comparison arises partly from divergent definitions of “subsidy.”

C. Policymakers rarely use employment as a justification for subsidies.

D. Industry stage has no bearing on how supports are interpreted.