Labor was willing to commit $5 million a year to climate action projects in a new deal with the Greens, despite the crossbench party's leader saying publicly Labor had refused to guarantee the funding.
The Greens on Wednesday said they would end talks with ACT Labor, leaving the two parties without a formal supply and confidence agreement for the first time since 2008.
Greens leader Jo Clay cited Labor's refusal to commit more climate action funding while still funding the horse racing industry as a reason for walking away from talks to form a new agreement between the two parties.
Chief Minister Andrew Barr said Labor had agreed to dedicate $5 million in new funding for emissions reduction projects in the two remaining budgets of the term.
The Greens on Friday said they had interpreted the wording of Labor's final agreement to mean $5 million spread over two years, rather than $5 million in each year.
The wording of the Greens proposal said: "Dedicate $5 million per annum for the remainder of the term in new funding to implement additional emissions reduction initiatives not yet funded in the Climate Strategy Action Plan. The Greens are to be consulted on the initiative selection process."
The Labor wording said: "Dedicate $5 million in new funding in the 2027-28 and 2028-29 Budgets to implement additional emissions reduction initiatives not yet funded in the Climate Strategy Action Plan. The Greens will be consulted on the initiative selection process."
In an ABC radio interview on Thursday morning, Ms Clay said it was not any one thing that prompted the Greens to back out of the talks but cited inadequate climate action funding and Labor's continued insistence on support for the horse racing industry.
"So, in the end, was this you stamping your feet about not getting your way on phasing out or getting rid of the horse racing industry?" host Ross Solly asked Ms Clay.
Ms Clay said: "That was one of them, the point at which Labor sent back an agreement saying they couldn't commit to providing $5 million a year to fund their own climate action plan, but they would commit to another six years of funding for the horse racing industry.
"And I think in a budget, Ross, when so many community and environment groups who've been around for decades are suddenly having their funding cut overnight, to think that the Labor government hasn't, like they're like, we'll continue [horse racing industry funding] for another six years. Come on, that's just not, it doesn't pass the sniff test."
But Labor had agreed to dedicate $5 million of new funding in both the 2027-28 and the 2028-29 budgets to "implement additional emissions reduction initiatives that are not currently funded through the Climate Strategy Action Plan", Mr Barr said.
The Chief Minister had said on Wednesday the two parties reached agreement on about 25 of the probably 30 different policy areas.
"There were sort of half a dozen thereabouts that we weren't able to reach an agreement on and couldn't find a form of words that would give a pathway forward," he said.
Mr Barr said ACT Labor did not support the Greens' proposal to immediately stop all funding to the territory's horse racing industry when the current memorandum of understanding runs out.
The government had supported Thoroughbred Park's work to diversify its revenue, including through events and possible housing development in the precinct, he said.
"During negotiations, ACT Labor committed to supporting the ACT horse racing industry's transition towards greater self-reliance and commercial sustainability through a phased move to an industry-led funding model," Mr Barr told The Canberra Times in a statement.
"This approach would have involved consultation with the industry over the current and following terms of government to develop an appropriate transition framework.
"ACT Labor's position was that any transition would be informed by the delivery of alternative revenue sources, including progress on the proposed Thoroughbred Park housing development. While this would have established a pathway towards reduced reliance on government support, ACT Labor did not commit to ending the MoU arrangements by a specific date."
Ms Clay issued a press release in mid-August to say the Greens were laying the groundwork for a new agreement with ACT Labor.
Mr Barr and then Greens leader Shane Rattenbury struck a supply-and-confidence agreement after the 2024 election after lengthy talks and the Greens deciding not to sit in a joint cabinet.
The deal expired when Mr Rattenbury retired from the Assembly earlier this year but Ms Clay said she would honour it until new talks could take place.
The government's decision to put environment funding that had long supported volunteer-led catchment groups to an open tender process frustrated the Greens, and the party's deputy leader, Andrew Braddock, had drawn the comparison between the horse racing industry and environment sector funding in budget estimates.
"I am trying to understand why the environmental groups were not able to obtain [a memorandum of understanding] similar to what applied with the horse racing MoU, which was for $40 million over five years, but it did not have to go through any procurement process, as has been described today," Mr Braddock asked in July.
Environment Minister Suzanne Orr said: "The MoU sits with a different minister. My understanding - I have never held that portfolio and I do not have knowledge of the inner workings of it - is that it is a particular approach based on a whole range of reasons that would not apply to this."
The ACT Greens have long opposed public funding for the horse racing industry and have sought to amend the budget in 2022, 2023, 2024 and 2025 to cut the funding, a move defeated on the floor of the Assembly each time by Labor and the Liberals.
