Chalmers pushes $13.7b critical minerals, hydro tax credit plan
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The news: The federal government said it will table a bill to legislate $13.7 billion in tax credits for critical minerals and hydrogen projects, requiring production by 2040.
The numbers: Treasurer Jim Chalmers will introduce the bill on Monday, offering a 10% tax credit for critical minerals processing and a $2 per kilogram hydrogen production incentive for projects operating between 2027-28 and 2039-40.
These measures aim to add value to Australia’s natural resources and support clean energy under Labor’s Future Made in Australia policy.
The context: The legislation will be introduced in the last parliamentary sitting week of the year, which will be packed with votes set to shape the upcoming election race.
Aged care reforms, the social media age limit, and changes to political donations are expected to pass, while Labor’s housing bills, caps on foreign student numbers, and Future Made in Australia reforms are expected to fail but will still go to a vote to highlight Coalition and Greens' stances.
Plans to curb misinformation and disinformation have been abandoned, and no new restrictions on gambling advertising are expected before parliament rises.
What they said: “Our Production Tax Incentives are about more investment and more jobs in Australia’s resources sector and ensuring local communities benefit from the global transformation to net zero,” Treasurer Jim Chalmers said in a statement. “The legislation will give investors clarity and certainty to invest in Australia’s potential to add more value to its natural resources, and help deliver cheaper and cleaner energy.”
The Association of Mining and Exploration Companies said the initiative was a “zero risk approach,” because “if companies don’t produce a value-added product, they don’t receive a tax credit and it costs taxpayers’ nothing. If they do invest, and produce a value-added product, the economic benefits for Australia, massively outweigh the cost of the incentive.”
The Coalition has indicated it will oppose the policy, calling it “billions for billionaires”.
The sources: Treasurer statement, Parliament House
